Present: Carrico, C.J., Compton,1 Lacy, Hassell, Keenan, Koontz, 

and Kinser, JJ. 

CITY OF VIRGINIA BEACH 

 OPINION BY 

v. Record No. 990919 JUSTICE LAWRENCE L. KOONTZ, JR. 

March 3, 2000 

CARMICHAEL DEVELOPMENT COMPANY 

FROM THE CIRCUIT COURT OF THE CITY OF VIRGINIA BEACH 

H. Thomas Padrick, Jr., Judge 

In this appeal, we consider whether the trial court erred 

in entering judgment against a locality for alleged tortious 

interference with a contract. 

BACKGROUND 

The Virginia Beach Society for the Prevention of Cruelty to 

Animals (the SPCA) acquired land (the property) in the City of 

Virginia Beach near the corner of General Booth Boulevard and 

Oceana Boulevard from the City for the operation of an animal 

shelter. The original agreement between the SPCA and the City 

provided that the property would revert to the City if the SPCA 

discontinued its use of the property. Subsequently, the City 

agreed to waive the reversion right and deeded the property to 

the SPCA in fee simple so that the SPCA might benefit from a 

sale of the property. 

 

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Justice Compton participated in the hearing and decision of 

this case prior to the effective date of his retirement on 

February 2, 2000. 
The SPCA thereafter relocated its shelter operation, but 

was unable to find a purchaser for the property. To enhance the 

marketability of the property, the SPCA obtained a rezoning of 

the property from agricultural to commercial use in 1986. As 

part of the rezoning, the City required the SPCA to dedicate “an 

appropriately sized controlled access and scenic easement along 

the frontage on General Booth Boulevard.” 

In April 1997, the SPCA entered into a contract for the 

sale of the property to Carmichael Development Company 

(Carmichael) for $610,000. Carmichael intended to develop the 

property as a shopping center and employed an engineering firm 

to draft a site development plan. Because the site development 

plan would require approval from the City director of planning 

or his assignee (the City planning office) for several 

modifications to the property, Carmichael and the SPCA 

subsequently amended their contract to include a condition that 

Carmichael obtain approval of a site plan for the proposed 

shopping center from the Virginia Beach City Council by April 3, 

1998. Relevant to this appeal, Carmichael desired to obtain 

approval for a “curb cut” on General Booth Boulevard. A “curb 

cut” is an opening from a highway into a parking lot cut through 

a curb and/or the sidewalk. 

Pursuant to Virginia Beach City Code, App. C, § 3.1, 

Carmichael requested a “preapplication conference” with the City 

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planning office. Under this ordinance, a “preapplication 

conference” is an informal meeting between a developer and the 

City planning office to discuss a general proposal for 

development. The request for a conference does not constitute a 

formal application for approval of a site development plan or 

otherwise satisfy the requirements for filing such a plan. 

After reviewing Carmichael’s “preliminary site plan,” the 

City planning office advised Carmichael that the proposed curb 

cut would not be approved because of public safety concerns over 

anticipated traffic problems the proposed curb cut would create 

on General Booth Boulevard. Although Carmichael’s engineers 

wrote the planning officials several times indicating that 

Carmichael wished to receive a formal decision on the proposed 

curb cut so that the matter could be “appealed” to the City 

Council, a formal site plan application was never submitted to 

the City planning office for a recommendation, nor did 

Carmichael pay a filing fee as required by the City code. 

Accordingly, the City planning office took no action on 

Carmichael’s request and the matter was not forwarded to the 

Office of the City Manager to be placed on the City Council’s 

agenda. 

The SPCA informed the City that the failure to approve the 

curb cut would defeat the consummation of its contract with 

Carmichael, and that it would result in the organization losing 

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needed revenue. The SPCA asked the City to reconsider the 

decision to disapprove the curb cut. Thereafter, the City 

planning office began to explore the option of the City 

purchasing the property from the SPCA as part of a policy to 

acquire “troublesome parcels” to control development. On March 

26, 1998, the City made a formal written offer to purchase the 

property from the SPCA for the same price Carmichael had 

offered. 

On April 3, 1998, Carmichael informed the SPCA that it 

intended to file suit against the City to obtain an injunction 

to prohibit the City from acquiring the property. Carmichael 

requested an extension of its contract right to May 3, 1998 and 

offered to increase the purchase price by $5,000. The SPCA 

declined Carmichael’s request for an extension and subsequently 

agreed to sell the property to the City. 

On April 3, 1998, Carmichael filed a bill of complaint 

contending that the City tortiously interfered with Carmichael’s 

contract to purchase the property from the SPCA by refusing to 

approve the requested curb cut and subsequently offering to buy 

the property from the SPCA.2 Carmichael sought monetary damages 

in addition to injunctive relief. 

 

2

Carmichael subsequently argued to the trial court that the 

City further interfered with the contract by denying Carmichael 

a hearing before City Council on its curb cut request. Although 

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On July 31, 1998, the trial court denied Carmichael’s 

request for a temporary injunction to prohibit the sale of the 

property to the City, finding that Carmichael had an adequate 

remedy at law. Thereafter, the parties agreed to transfer the 

case from the chancery docket to the law docket and to limit the 

issue of the suit to monetary damages for the City’s alleged 

tortious interference with Carmichael’s contract with the SPCA. 

On September 9, 1998, the City filed a motion for summary 

judgment asserting, inter alia, that it was protected by 

sovereign immunity because the actions of which Carmichael 

complained fell within the proper governmental function of 

controlling land development and regulating and controlling 

traffic for public safety and welfare. The City was 

subsequently granted leave to file an amended answer asserting a 

defense of sovereign immunity. 

The trial court heard argument on the motion for summary 

judgment immediately prior to trial and granted the City partial 

summary judgment on the ground that the approval or denial of a 

curb cut was a governmental function protected by sovereign 

immunity and, therefore, that it could not form the basis for a 

 

this theory was not expressly pled in the bill of complaint, the 

trial court apparently accepted that it was subsumed within the 

allegations relating to the denial of the curb cut by the City’s 

planning officials. 

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tort claim against the City. The trial court permitted 

Carmichael’s case to go forward on the theory that the City’s 

offer to purchase the property tortiously interfered with 

Carmichael’s contract with the SPCA. The case was also 

permitted to go forward on the theory that the actions of the 

City planning office denied Carmichael the opportunity to 

present the request for a curb cut to City Council and, thus, 

interfered with its efforts to meet the condition of its 

contract with the SPCA. See note 2, supra. 

After evidence in accord with the above-recited facts was 

presented, the trial court, consistent with a concession made by 

Carmichael, instructed the jury “that the mere fact that the 

City made an offer to purchase the SPCA parcel is not improper.” 

The jury was further instructed that “[i]f you find that the 

City’s refusal to allow the “curb cut” on General Booth 

Boulevard was the only reason that Carmichael did not purchase 

the property, then you shall find that the City’s inaction was 

the proximate cause of Carmichael’s inability to complete the 

contract to purchase” the property. The jury was also 

instructed to find its verdict for Carmichael if it found “by 

the greater weight if the evidence . . . that the City used 

improper methods to cause the SPCA to terminate the contract.” 

 The jury returned its verdict for Carmichael and awarded 

damages of $74,000. The trial court denied the City’s motion to 

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set aside the verdict, Carmichael’s motion for additur, and 

entered judgment on the jury’s verdict. We awarded the city 

this appeal. 

DISCUSSION 

Although the City challenges the judgment against it on 

several grounds, the dispositive issue in this appeal is whether 

the trial court erred in determining that the doctrine of 

sovereign immunity did not shield the City from Carmichael’s 

claim of tortious interference with a contract relationship 

under the specific facts of this case. 

“The doctrine of sovereign immunity is ‘alive and well’ in 

Virginia.” Messina v. Burden, 228 Va. 301, 307, 321 S.E.2d 657, 

660 (1984). Sovereign immunity is “‘a rule of social policy, 

which protects the state from burdensome interference with the 

performance of its governmental functions and preserves its 

control over state funds, property, and instrumentalities.’” 

Hinchey v. Ogden, 226 Va. 234, 240, 307 S.E.2d 891, 894 (1983) 

(quoting 72 Am.Jur.2d States, Territories, and Dependencies § 99 

(1974)). Most importantly, the doctrine of sovereign immunity 

provides for “smooth operation of government” and prevents 

“citizens from improperly influencing the conduct of 

governmental affairs through the threat or use of vexatious 

litigation.” Messina, 228 Va. at 308, 321 S.E.2d at 660; accord

Lentz v. Morris, 236 Va. 78, 81, 372 S.E.2d 608, 610 (1988). 

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It is a frequently recited proposition that a municipality 

is authorized to perform both “governmental” and “proprietary” 

functions. Governmental functions, as the term implies, are 

powers and duties to be performed exclusively for the public 

welfare. When a municipality exercises, or fails to exercise, a 

governmental function, it is shielded from liability by 

sovereign immunity on the theory that the municipality is 

performing as an agency of the state. In contrast, proprietary 

functions are privileges and powers performed primarily for the 

benefit of the municipality and, thus, do not enjoy the shield 

of sovereign immunity. See Hoggard v. Richmond, 172 Va. 145, 

147-48, 200 S.E. 610, 611 (1939). The regulation of traffic or 

a similar activity intended to protect the general public safety 

is a governmental function of a municipality. See, e.g., 

Transportation Inc. v. Falls Church, 219 Va. 1004, 1006, 254 

S.E.2d 62, 64 (1979). The routine maintenance of a 

municipality’s streets, however, is a proprietary function. 

See, e.g., Bialk v. City of Hampton, 242 Va. 56, 58, 405 S.E.2d 

619, 620 (1991). As just these few examples illustrate, while 

the principle of law is clear and well-established, the 

application of it to various municipal activities is sometimes 

difficult. This is particularly so in cases where the activity 

in question has aspects of both governmental and proprietary 

functions. However, when governmental and proprietary functions 

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coincide, “the governmental function is the overriding factor” 

and the doctrine of sovereign immunity will shield the locality 

from liability. Taylor v. Newport News, 214 Va. 9, 10, 197 

S.E.2d 209, 210 (1973). 

Carmichael has not assigned cross-error to the trial 

court’s finding that the denial of the curb cut requested by 

Carmichael in its preliminary site plan was a governmental 

function protected by sovereign immunity and, therefore, could 

not constitute tortious interference with the contract in 

question. Accordingly, that aspect of the trial court’s ruling 

is not subject to review in this appeal. The City contends, 

however, that the trial court’s judgment that sovereign immunity 

barred any claim premised on the denial of the curb cut should 

have been dispositive of Carmichael’s entire claim and that the 

trial court erred in not extending that judgment to its 

“necessary and logical conclusion.” 

Carmichael responds that the City “does not understand this 

case.” Carmichael asserts that while the decision to deny the 

curb cut requested in the preliminary site plan was a 

governmental function shielded by sovereign immunity, “what the 

City [planning office] did to prevent . . .a hearing” of 

Carmichael’s appeal of that decision before the City Council 

constituted tortious interference. In effect, Carmichael is 

asserting that while the governmental function of reviewing the 

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preliminary site plan would be subject to sovereign immunity, 

allegedly improper actions of the City’s employees relevant to 

that review would not be shielded from liability. As previously 

noted, it was on this theory of liability that the trial court 

permitted Carmichael to proceed at trial. 

While the City’s contention is facially compelling, we need 

not address whether sovereign immunity applies to this theory of 

liability for the sufficient reason that Carmichael’s own 

evidence contradicts its allegation that it was denied a hearing 

before the City Council because of the actions, improper or 

otherwise, of the City’s officials. See Massie v. Firmstone, 

134 Va. 450, 462, 114 S.E. 652, 656 (1922). The record is clear 

that Carmichael never complied with the procedures for obtaining 

a formal decision concerning the curb cut designated in its site 

plan from the City planning office. To the contrary, the record 

shows that Carmichael’s engineers sought only to have the 

informal opinion offered at the “preapplication conference” 

reviewed by the City Council. There is no mechanism provided in 

the City’s ordinances for such a review. Moreover, since 

Carmichael failed to file the appropriate site plan and pay the 

required fee, it is self-evident that there was no formal action 

by the planning office upon which the City Council could have 

ruled. 

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During oral argument, counsel for Carmichael contended that 

submission of the appropriate site plan for a formal decision 

would have been redundant since the planning officials had 

already indicated that the plan, as reviewed in the informal 

conference, would not be approved. However, there is nothing 

redundant about following the procedures required by law. 

Carmichael was cognizant of the necessary procedures and cannot 

be heard to complain that it was denied a hearing before the 

City Council when it failed to follow the procedures required to 

obtain that hearing. 

Finally we address the City’s contention that its offer to 

purchase the property was a governmental act protected by 

sovereign immunity. Although at trial Carmichael conceded, and 

the jury was instructed, that the City’s offer to purchase the 

property was not per se improper since the contingent provision 

for approval of the curb cut in Carmichael’s contract with the 

SPCA had not occurred, Carmichael contends that the City’s 

purpose in denying approval of that curb cut was to facilitate 

the City’s acquisition of the property and, thus, that the offer 

to purchase the property constituted tortious interference. 

Unquestionably, when a locality acquires real estate for a 

valid governmental purpose, whether by contract or condemnation, 

that act is governmental in nature. Carmichael contends, 

however, that in this instance, the City acquired the property 

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for a strictly proprietary purpose. Carmichael noted at trial, 

for example, that the property was assessed at almost twice the 

proposed purchase price and, thus, the City might have been 

motivated by a desire for profit. 

We agree that the City’s policy of acquiring by contract 

and then reselling or leasing “troublesome parcels” has a 

proprietary aspect. However, that policy also has an aspect 

that is a governmental function. The facts developed at trial 

showed that the principal purpose of that policy is to resolve, 

efficiently and without resort to litigation, disputes over the 

proposed use of vacant land within the City in order to control 

and direct development consistent with the City’s public safety 

concerns of vehicular traffic impacted by that development. 

In addition, the record further undercuts Carmichael’s 

contention that the City was motivated solely by a proprietary 

interest in acquiring the property. First, it is undisputed 

that the City was willing to resell the property to Carmichael 

at the same price for which it was acquired, providing only that 

Carmichael should accept the limitation that there would be no 

curb cut on General Booth Boulevard. Second, the City’s 

motivation in originally deeding the property to the SPCA and 

then subsequently reacquiring it was consistent with the City’s 

stated purpose to benefit the charitable purposes of the SPCA 

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that benefited the City and its citizens, which is an 

appropriate act for a local government. See Code § 15.2-953(A). 

In short, while there was a proprietary aspect to the 

City’s act of acquiring the property, we are of opinion that on 

the facts of this case the overriding factor in the City’s 

action was a governmental function to benefit the welfare and 

safety of the public. Thus, we hold that the City’s actions 

were shielded by sovereign immunity and could not constitute 

tortious interference with Carmichael’s contract with the SPCA. 

CONCLUSION 

 For these reasons, we will reverse the judgment of the 

trial court and enter final judgment for the City. 

Reversed and final judgment. 

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