Title: D.R. Horton, Inc. v. Bd. of Supervisors
Citation: N/A
Docket Number: 120384
State: Virginia
Issuer: Virginia Supreme Court
Date: February 28, 2013

PRESENT: All the Justices 
 
D.R. HORTON, INC. 
 
 
 
OPINION BY 
v.  Record No. 120384 
JUSTICE ELIZABETH A. McCLANAHAN 
 
 
 
FEBRUARY 28, 2013 
BOARD OF SUPERVISORS FOR THE 
COUNTY OF WARREN 
 
FROM THE CIRCUIT COURT OF WARREN COUNTY 
William H. Ledbetter, Jr., Judge Designate 
 
 
D.R. Horton, Inc. (Horton) challenges the trial court's ruling 
that certain building permit fees it paid to Warren County, which 
were later found to be unlawful, were nonetheless paid "voluntarily" 
under the common law voluntary payment doctrine, thus defeating 
Horton's claim for their return.  We will affirm the judgment of the 
trial court. 
BACKGROUND 
 
At the request of Blue Ridge Shadows, LLC (BRS) (Horton's 
predecessor in title), the Board of Supervisors for Warren County 
(the Board) rezoned a tract of land owned by BRS near the Town of 
Front Royal from agricultural to suburban residential.  As part of 
the rezoning process, BRS made a number of written "proffers" to the 
Board as inducements for the right to develop the property as a 
subdivision containing up to 225 residential units.  The Board 
ultimately accepted BRS's "Revised Rezoning Request Proffer," (the 
revised proffer), in conjunction with approving BRS's rezoning 
application.  In the revised proffer BRS proposed, among other 
things, to construct and operate a centrally located wastewater 
2 
 
treatment plant and water system to service the residential units 
within the development.  BRS also proposed to "make cash payments in 
the total amount of $8,000.00 per residential unit" payable each 
time Warren County (the County) issued a building permit for one of 
the units.1 
 
Afterwards, in a "confidential" letter to the County attorney, 
BRS proposed: (i) that the Board allow BRS to obtain water and sewer 
services for the development from the Town of Front Royal in lieu of 
BRS constructing the proposed water and sewer systems; and (ii) 
that, in exchange, BRS would pay to the County an additional "hook-
up fee" in the amount of $4,000 for "each residential water/sewer 
hookup obtained" from the Town.  The parties never executed an 
agreement regarding this proposal.  The Board, however, voted to 
allow the development to connect to the Town's water and sewer 
systems.  The Board also voted to amend BRS's revised proffer to the 
County by deleting BRS's obligation to construct such systems for 
the development.  
 
Horton, a real estate developer, subsequently purchased from 
BRS most of the property contained within the proposed development 
and identified as the "Blue Ridge Shadows Subdivision" (the 
subdivision).  Horton purchased the subdivision subject to BRS's 
                         
1 These proffered payments were offered to "offset the fiscal 
impacts" of the proposed development on the County's capital 
facilities, as authorized by Code § 15.2-2296. 
3 
 
revised proffer, as amended by the deleted obligation to construct 
the water and sewer systems. 
 
The County issued to Horton a total of 52 building permits 
between May 2006 and January 2010.  For each permit, Horton paid to 
the County a "proffer fee" of $12,000, amounting to $4,000 more than 
the $8,000 fee set forth in the revised proffer. 
 
Horton learned in early 2006 when applying for the first 
building permits that the County would be charging the additional 
$4,000 per permit as the "hook-up" fee BRS previously proposed to 
the County in lieu of constructing the water and sewer systems.  
After investigating the matter, Horton stated its objections to 
paying this fee during a series of meetings between Horton's 
representatives and County officials.  Horton's counsel also sent a 
letter to the County later that year stating that Horton did not 
believe it was obligated to pay the fee pursuant to the terms of the 
revised proffer; that it would pay the fee "until this matter has 
been resolved" in order "to avoid further damage to [Horton]"; and 
that it was paying the fee "only under protest and with a full 
reservation of its rights and remedies." 
 
In 2007 Horton filed a declaratory judgment action asking the 
trial court to declare that the County could not lawfully assess the 
$4,000 fee against it.  The court agreed with Horton and entered a 
4 
 
final order in 2011 (after the fee had been paid on all 52 permits) 
holding that Horton was not obligated to pay the fee.2   
In 2008 Horton instituted the instant restitution action 
seeking reimbursement of the fees by filing a complaint against the 
Board in the form of an appeal to the circuit court, pursuant to 
Code § 15.2-1246.3  In the appeal, Horton challenged the Board's 
denial of its claim for $104,000 based on its payment of the $4,000 
fee on each of its first 26 building permits.4  The Board raised the 
voluntary payment doctrine as an affirmative defense.  The trial 
court consolidated this restitution action and Horton's declaratory 
judgment action for a bench trial.  After ruling in Horton's favor 
in the declaratory judgment action, the court held in this action 
that Horton was nevertheless barred from being awarded reimbursement 
of the unlawful fees because it paid them "voluntarily" within the 
meaning of the voluntary payment doctrine.  
This appeal followed. 
                         
 
2 The trial court's decision was based on its finding that 
"there was never an agreement finalized that was . . . intended to 
be binding [between] the [C]ounty [and BRS] with respect to this 
[fee]."  Therefore, the court concluded, the fee could not lawfully 
be assessed against Horton.  
3 Code § 15.2-1246 establishes the procedure by which a party 
may challenge by an appeal to a circuit court the "disallowance" of 
a monetary claim by the decision of a county's governing body.  
4 Although the record does not show that Horton amended its 
complaint in this case, both Horton and the Board indicate in their 
respective appellate briefs that the amount in dispute is $208,000 
based on Horton's payment of the $4,000 fee on all 52 building 
permits issued for the subdivision between May 2006 and January 
2010. 
5 
 
ANALYSIS 
 
Horton argues on appeal that it paid the unlawful building 
permit fees involuntarily.  The trial court erred, Horton contends, 
in denying its claim for reimbursement of the fees upon a 
misapplication of the voluntary payment doctrine and rejecting its 
argument on equitable grounds. 
 
Well-settled principles govern our review of the trial court's 
decision.  We will not disturb the trial court's findings of fact 
unless they are plainly wrong or without evidence to support them, 
but we will review de novo its conclusions of law.  City of Richmond 
v. SunTrust Bank, 283 Va. 439, 442, 722 S.E.2d 268, 270 (2012). 
The voluntary payment doctrine, as established under Virginia 
common law, provides as follows:  
"Where a party pays an illegal demand with a full knowledge 
of all the facts which render such demand illegal, [i] 
without an immediate and urgent necessity therefor, or [ii] 
unless to release his person or property from detention, or 
[iii] to prevent an immediate seizure of his person or 
property, such payment must be deemed voluntary, and cannot 
be recovered back. And the fact that the party at the time 
of making the payment, files a written protest, does not 
make the payment involuntary." 
  
Barrow v. County of Prince Edward, 121 Va. 1, 2-3, 92 S.E. 910, 910 
(1917) (quoting Lamborn v. County Commissioners, 97 U.S. 181, 187 
(1878)).  Furthermore, in the context of this doctrine, we have held 
that "[a]ll payments are presumed to be voluntary until the contrary 
is made to appear."  Town of Phoebus v. Manhattan Social Club, 105 
6 
 
Va. 144, 149, 52 S.E. 839, 840 (1906).  Therefore, the plaintiff has 
the burden "to show that its payment was not voluntary."  Id.   
 
This doctrine has been strictly applied in Virginia for more 
than a century and a half.  See Mayor of Richmond v. Judah, 32 Va. 
(5 Leigh) 305, 315-321 (1834); Williams v. Consolvo, 237 Va. 608, 
613, 379 S.E.2d 333, 336 (1989).  During that time when the doctrine 
has been implicated, this Court has held in "decidedly few" cases 
that payment of an unlawful demand was, in fact, involuntarily paid.  
Id. at 614, 379 S.E.2d at 336; see, e.g., Vick v. Siegel, 191 Va. 
731, 734-36, 62 S.E.2d 899, 900-01 (1951) (landowner's payment of 
trustee's unlawful demand to avoid losing sale of property was 
involuntary).  The Court has acknowledged that the doctrine may 
appear to be somewhat "harsh."  Town of Phoebus, 105 Va. at 149, 52 
S.E. at 840.5  Early on, however, the Court explained the 
significance of the doctrine in advancing certainty and finality 
between parties in the resolution of their legal affairs; and aptly 
noted that, without it, "the payment of money would soon become but 
the parent of a suit, and the settlement of an account the harbinger 
of litigation."  Judah, 32 Va. (5 Leigh) at 322 (Tucker, J., 
concurring).  
                         
5 See also Judah, 32 Va. (5 Leigh) at 319 (explaining that the 
doctrine "may sometimes, indeed, operate hardly . . . but not more 
so than the statute of limitations, or many other principles of the 
law, which have been adopted with a view to general policy"). 
7 
 
 
Horton makes four alternative arguments for why its payment of 
the subject fees was involuntary so as to negate the County's 
voluntary payment defense.  First, Horton argues that it paid the 
fees involuntarily because the County's refusal to issue the 
building permits without payment of the fees constituted a seizure 
of a property right consisting of Horton's right to develop the 
subdivision.  We agree with Horton that "[d]evelopment rights are 
property rights" protected under Virginia law.  Bentley Funding 
Group, L.L.C. v. SK&R Group, L.L.C., 269 Va. 315, 331, 609 S.E.2d 
49, 57 (2005).  We reject Horton's contention, however, that a 
seizure of such a right was effected by the County's unlawful demand 
for fee payments as Horton did not in any way "los[e] the right to 
develop its property" as a result of that demand; and indeed 
proceeded with development.  City of Virginia Beach v. Bell, 255 Va. 
395, 403, 498 S.E.2d 414, 419 (1998) (emphasis and internal 
quotation marks omitted) (inverse condemnation case).6 
 
Next, Horton asserts that it paid the fees involuntarily 
because it "face[d] other proceedings or actions if [it] refused to 
pay the fee and build without a building permit or refused to 
build."  Specifically, Horton claims it faced criminal charges if it 
proceeded without obtaining the permits from the County, or, 
alternatively, it faced breach of contract actions by third parties 
                         
 
6 Accordingly, Horton's reliance on condemnation cases such as 
Bell to advance the argument that the County seized its property is 
misplaced. 
8 
 
if it refused to go forward with its residential construction to 
avoid paying the fees.  We see no evidence in the record, however, 
that the County was threatening Horton with any criminal action or 
that Horton had executed any contract with a third party for 
construction of a residence in the subdivision.  Furthermore, 
neither circumstance could be considered under the voluntary payment 
doctrine as a basis for establishing an involuntary payment without 
Horton showing as a threshold matter that there was an "immediate 
and urgent necessity" for paying the County's unlawful demand, as we 
address in response to Horton's next argument.  Barrow, 121 Va. at 
2, 92 S.E. at 910.  
 
For its third argument, Horton asserts that an immediate and 
urgent need to pay the fees rendered its payments involuntary.  Such 
a need existed, Horton contends, because it "faced an immediate and 
urgent necessity" to "do what it could to build and sell houses," 
which included paying the fees to obtain the permits authorizing 
their construction.  To establish the requisite necessity to pay an 
unlawful demand, a plaintiff must prove that it "did not have time 
and opportunity to relieve [itself] of [its] predicament by 
resorting to legal methods."  Vick, 191 Va. at 735-36, 62 S.E.2d at 
901.  Thus, Horton had to show that it had no time or opportunity 
before paying the County's unlawful demand to at least seek an 
appropriate legal remedy.  Horton failed to do so. Horton acquired 
the permits on which it paid the fees over a period of three and a 
9 
 
half years.  For that period, Horton did not establish any reason 
why it could not have sought injunctive relief before acquiring any 
one of the permits.  See Williams, 237 Va. at 615, 379 S.E.2d at 337 
(plaintiff could have secured injunction before paying unlawful 
demand).  Instead, Horton paid the fees to the County on its own 
both before and after filing the declaratory judgment action and the 
instant restitution action; and it continued doing so for the three 
and a half years until it had paid all of the fees to the County. 
 
Horton's fourth argument for why its fee payments were 
involuntary is that it adequately protested the assessment of the 
fees through its representatives' meetings with County officials, 
its protest letter to the County and ultimately its filing of the 
declaratory judgment action.  This argument is without merit because 
simply protesting an unlawful demand does not render payment of the 
demand involuntary under the voluntary payment doctrine, as 
explained above in Barrow.  See also Town of Phoebus, 105 Va. at 
149, 52 S.E. at 840 ("The mere declaration of the plaintiff when it 
made payment, that it was made under 'protest' does not show that it 
was not voluntarily made.").  
 
Finally, Horton argues that the trial court erred in rejecting 
its assertion that the County's retention of the fees unjustly 
enriched the County and was inherently inequitable.  Those claims 
constitute the basis for a restitution action, which is the nature 
of Horton's instant action seeking reimbursement of the fees.  
10 
 
However, the voluntary payment doctrine provided the County a valid 
defense to this action.  See Skyland Metro. Dist. v. Mountain West 
Enter., LLC, 184 P.3d 106, 127 (Colo. App. 2007) ("The [voluntary 
payment] rule is a defense to claims asserting unjust enrichment." 
(citation omitted)). 
CONCLUSION 
 
For the reasons stated above, we conclude the trial court did 
not err in holding that Horton's action for reimbursement of the 
disputed fees was barred under the voluntary payment doctrine.  We 
will therefore affirm the judgment of the trial court. 
Affirmed.