Court Opinion

ID: 1057954
Source: CourtListenerOpinion
Date Created: 2013-10-09 18:28:11.599819+00
Date Added: 2024-06-11T12:18:21.518109
License: Public Domain

Present: Kinser, C.J., Lemons, Goodwyn, Millette, Mims,
McClanahan, JJ., and Koontz, S.J.

JEAN MOREAU & ASSOCIATES, INC.
                                        OPINION BY
v.   Record No. 101352        JUSTICE LEROY F. MILLETTE, JR.
                                     January 13, 2012
HEALTH CENTER COMMISSION FOR THE
COUNTY OF CHESTERFIELD, d/b/a LUCY CORR VILLAGE

        FROM THE CIRCUIT COURT OF CHESTERFIELD COUNTY
              Frederick G. Rockwell, III, Judge

     Jean Moreau & Associates, Inc. (Jean Moreau) brought this

suit against The Health Center Commission for the County of

Chesterfield (HCC or Commission), seeking a declaratory

judgment and alleging claims for breach of contract and

quantum meruit.   The circuit court, on HCC's plea in bar,

dismissed Jean Moreau's claims.   It held that the breach-of-

contract claim was barred because Jean Moreau did not comply

with the contractual-claims procedure of the Virginia Public

Procurement Act, Code §§ 2.2-4300 through 2.2-4377, and that

the quantum meruit claim was barred by the doctrine of

sovereign immunity because it arose out of HCC's exercise of a

governmental function.   For the reasons that follow, we will

affirm the judgment of the circuit court.

                         I.   BACKGROUND

     In 1993, after finding "that the public health and

welfare . . . require[d] the acquisition, construction, and

operation of public hospital facilities," Chesterfield County

                              1
established HCC "for the purpose of operating nursing homes,

hospital or health center facilities."   Following its

creation, HCC took over operation of Lucy Corr Village, a

nursing-care facility, which had previously been managed by

Chesterfield County.   A few years later, in 1999, HCC expanded

Lucy Corr Village to include an assisted-living facility.

During this time, Lucy Corr Village was operating at a loss of

approximately $1.5 million each year, so Chesterfield County

was providing HCC with "financial assistance and subsidies for

indigent care" to keep Lucy Corr Village solvent.

     HCC decided to expand Lucy Corr Village again in 2002 to

add an independent-living facility.   Such a facility would

allow Lucy Corr Village to become a continuing care retirement

community (CCRC) – a community that offers several levels of

health care on one campus:   an independent-living facility, an

assisted-living facility, and a nursing-care facility.   A CCRC

allows residents to "[a]ge in place," living independently in

single-family homes or apartments as long as possible and then

transferring into skilled-care facilities when assistance with

activities of daily living becomes necessary.   In addition to

making Lucy Corr Village a CCRC, an independent-living

facility would allow the community "to be financially stable

without the need for county subsidy."

                             2
     In 2004, HCC awarded Jean Moreau a five-year contract to

plan and develop the independent-living facility, which would

be named "Springdale at Lucy Corr Village."    Under the terms

of the contract, Jean Moreau was to receive a monthly fee of

$20,000.   It also was to receive a "Development Fee" and a

"Marketing Fee," together totaling $2.25 million (but not to

exceed 6% of HCC's expenditures on the project), after certain

financing and construction conditions had been met.   The

"continuation of the terms . . . of [the] contract beyond June

30 of any year [was] subject to its approval and ratification

by [HCC]."

     On May 4, 2006, HCC voted to "discontinue the contract

with Jean Moreau . . . as of June 30, 2006."   It sent a letter

to Ms. Jean Moreau, Jean Moreau's president, on May 8,

notifying her of the decision.   Roughly one month later, on

June 9, Ms. Moreau responded.    In a letter to HCC, Ms. Moreau

claimed that Jean Moreau was owed "development fees" that had

been "deferred until the Bond financing."   She also said that

she "wanted to give [HCC] a 'heads up' that [she] intend[ed]

to seek legal remedy regarding these fees."

     Ten days later, on June 19, HCC sent a letter to Ms.

Moreau responding to her "comments regarding unpaid fees due

to Jean Moreau."   In that letter, HCC said that it believed

that Jean Moreau had been fairly compensated in accordance

                             3
with the terms of the parties' contract.   If Ms. Moreau

disagreed, it went on to say, then she should have her

attorney submit in writing "the amount owed [and] the

contractual term giving rise to an obligation to [Jean

Moreau]."

     Jean Moreau later submitted nine invoices to HCC for work

performed during the 2005-2006 fiscal year.   HCC paid the

invoices on July 31, 2006.   Almost three months later, on

October 24, Jean Moreau's attorney sent a letter to one of

HCC's members stating that Jean Moreau was willing to mediate

the issue of the claimed deferred development fees.   In a

January 3, 2007 letter, HCC responded that it did not agree

with the position Jean Moreau "appear[ed] to offer" – namely,

that there were additional payments due under the contract –

and that no basis for mediation had been provided.

     Roughly two weeks after HCC rejected its offer to

mediate, Jean Moreau brought this suit against the Commission,

requesting declaratory judgment of the parties' rights and

responsibilities under their contract, and asserting claims

for breach of contract and quantum meruit.    In its complaint,

Jean Moreau alleged that HCC's termination of the parties'

contract "did not relieve [the Commission] of paying [Jean]

Moreau deferred compensation under the contract."    Jean Moreau

sought $2.25 million.

                             4
     HCC filed a plea in bar.      It contended that the breach-

of-contract claim was barred because Jean Moreau did not

comply with the Procurement Act's contractual-claims

procedure.   HCC further argued that the quantum meruit claim

was barred by the doctrine of sovereign immunity because:       (1)

as an entity created by a county, the Commission was entitled

to absolute immunity; and (2) the development of Springdale

was a governmental function.

     After conducting a hearing and taking evidence, the

circuit court sustained HCC's plea in bar.     As for the breach-

of-contract claim, the circuit court held that it was barred

because Jean Moreau did not follow the Procurement Act's

contractual-claims procedure.      In particular, the circuit

court found that, while Jean Moreau filed a notice of intent

to file a claim with HCC in its June 9, 2006 correspondence,

it subsequently failed to submit the claim or, in the

alternative, submitted it beyond the 60-day limitations period

provided under Code § 2.2-4363(C)(1).     As for the quantum

meruit claim, the circuit court disagreed that HCC was immune

from the claim on the basis of absolute immunity.

Nevertheless, the circuit court ultimately concluded that HCC

was immune from the quantum meruit claim because the

development and operation of Springdale were "actions taken in

                               5
its governmental capacity."     The circuit court accordingly

dismissed Jean Moreau's claims with prejudice.

     Jean Moreau now appeals the dismissal of its claims, and

HCC cross-appeals the circuit court's ruling that it was not

entitled to absolute immunity.

                        II.    DISCUSSION

     We first consider whether Jean Moreau's breach-of-

contract claim is barred.     We then consider whether its

quantum meruit claim is barred and, in doing so, address

whether HCC enjoys absolute immunity.

                      A.    Procurement Act

     The Procurement Act establishes "the public policies

pertaining to governmental procurement from nongovernmental

sources."   Code § 2.2-4300.    It requires that "[a]ll public

contracts with nongovernmental contractors . . . for the

purchase of services . . . shall be awarded" in accordance

with its provisions, "unless otherwise authorized by law."

Code § 2.2-4303.   There is no dispute in this case that the

contract between HCC and Jean Moreau is a "public contract"

under the Procurement Act.

     "The General Assembly has imposed certain procedures and

limitations on the processing and enforcement of contract

claims which are subject to the Procurement Act."     Flory Small

Business Dev. Ctr. v. Commonwealth, 261 Va. 230, 238, 541

                               6
S.E.2d 915, 919 (2001).    Among the procedures it has

prescribed is that

       [c]ontractual claims, whether for money or other relief,
       shall be submitted in writing no later than 60 days after
       receipt of final payment; however, written notice of the
       contractor's intention to file a claim shall be given at
       the time of the occurrence or at the beginning of the
       work upon which the claim is based.

Code § 2.2-4363(C)(1).    "These are mandatory, procedural

requirements which must be met in order for a court to reach

the merits of a case."    Flory, 261 Va. at 238, 541 S.E.2d at

919.

       The circuit court concluded that Jean Moreau failed to

submit a claim within 60 days after final payment, because its

October 24 letter to HCC was "not a claim, [but rather] an

invitation to settle."    "And, even if [that letter] were a

claim," the circuit court alternatively held, "it was more

than 60 days since final payment was made on July 31st, 2006,

[and was] therefore barred by the [Procurement Act]."

       Jean Moreau contends that the circuit court was wrong

because "HCC never provided notice of final payment," and thus

the 60-day limitations period in which to submit a claim never

began to run.   Jean Moreau further argues that, "even assuming

the Court could treat the July 31, 2006 payment as 'final

payment' for the purposes of § 2.2-4363," its June 9 letter to

HCC "assert[ed] a claim for the additional development fees on

                              7
the Springdale project," and "therefore satisfied the

Procurement Act."

     We disagree.   Nothing in Code § 2.2-4363 requires a

public body to give notice that a payment is final before the

60-day limitations period begins to run, and Jean Moreau cites

no other section of the Procurement Act that sets forth such a

requirement.   Nonetheless, HCC's May 8 and June 19 letters to

Ms. Moreau notified Jean Moreau that, after the invoices from

the 2005-2006 fiscal year were satisfied, the Commission would

make no more payments under the parties' contract.      In the May

8 letter, HCC said that it had "voted not to continue and fund

its contract with Jean Moreau . . . beyond the current fiscal

year ending June 30, 2006."    And in the June 19 letter, HCC

said that, "[u]pon legal review, the Commission believes that

you have been fully and fairly compensated, and the Commission

has honored every term of its contract with you."

     Moreover, Jean Moreau's June 9 letter to HCC was not a

claim "in writing no later than 60 days after receipt of final

payment."   Code § 2.2-4363(C)(1).     In that letter, Ms. Moreau

said that she wanted to give HCC "a 'heads up' that [she]

intend[ed] to seek legal remedy regarding [the deferred] fees"

under the parties' contract.       This statement, to be sure, gave

HCC notice of Jean Moreau's intention to file a claim, thereby

satisfying the requirement imposed by Code § 2.2-4363(C)(1)

                               8
that written notice of the intent to file a claim be given "at

the time of the occurrence."       But it was not itself a claim.

     While Code § 2.2-4363 does not prescribe exactly what a

writing must contain to be considered a "claim," our prior

cases suggest that it requires more than what Ms. Moreau

included in the June 9 letter.      For instance, in Flory, 261

Va. at 234, 541 S.E.2d at 917, the contractor's claim

consisted of "invoices for reimbursement of approximately

$89,000 for services rendered and expenses incurred."      And in

Welding, Inc. v. Bland County Service Authority, 261 Va. 218,

227, 541 S.E.2d 909, 914 (2001), the contractor alleged that,

within 60 days of final payment, it made a claim by letter for

$100,000 for additional work.

     Although the notice of intent need not " 'be separate and

distinct from the claim itself,' " Commonwealth v. AMEC Civil

LLC, 280 Va. 396, 409, 699 S.E.2d 499, 506 (2010) (quoting

Flory,   261 Va. at 238, 541 S.E.2d at 919), a claim is not

necessarily submitted when a notice of intent is given.      That

is the case here.   Jean Moreau's June 9 letter gave notice of

its intent to file a claim for the deferred development fees,

but did not make a claim for those fees.      The earliest Jean

Moreau arguably submitted such a claim was in its October 4

letter – more than three weeks after the 60-day limitations

period had expired.

                               9
     In sum, Jean Moreau did not comply with the "mandatory,

procedural requirements" of the Procurement Act in bringing

its breach-of-contract claim against HCC.       Flory, 261 Va. at

238, 541 S.E.2d at 919.    Specifically, it did not submit the

claim to HCC within 60 days after final payment as required

under Code § 2.2-4363(C)(1).       For this reason, we hold that

the circuit court did not err in concluding that the claim was

barred.

                     B.    Sovereign Immunity

     " '[T]he doctrine of sovereign immunity,' " we have often

said, " 'is alive and well in Virginia.' "       Gray v. Virginia

Sec'y of Transp., 276 Va. 93, 101, 662 S.E.2d 66, 70 (2008)

(alteration in original) (internal quotation marks omitted)

(quoting 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.' "     City of Chesapeake v. Cunningham, 268
Va. 624, 633, 604 S.E.2d 420, 426 (2004) (quoting City of

Virginia Beach v. Carmichael Dev. Co., 259 Va. 493, 499, 527
S.E.2d 778, 781 (2000)).

                              10
     Sovereign immunity is an ancient doctrine.   Indeed, as

the United States Court of Appeals for the Fourth Circuit has

observed:

          The jealous protection of the sovereign from suit is
     deeply rooted in the common law and has been considered a
     part of the plan of our Constitution since before its
     ratification. In arguing for the Constitution's
     organization of the judicial branch, Alexander Hamilton
     wrote that "it is inherent in the nature of sovereignty
     not to be amenable to the suit of an individual without
     its consent."

Research Triangle Inst. v. Board of Governors of the Fed.

Reserve Sys., 132 F.3d 985, 987 (4th Cir. 1997) (footnotes

omitted) (quoting The Federalist No. 81, at 511 (Alexander

Hamilton) (B. F. Wright ed. 1961)).

     The shield of sovereign immunity does not just apply to

the State; it also applies to municipal corporations under

certain circumstances.   In Virginia, municipal corporations

perform two types of functions — governmental and proprietary.

Gambrell v. City of Norfolk, 267 Va. 353, 357, 593 S.E.2d 246,

249 (2004).   Municipal corporations are immune from liability

"when performing governmental functions, but are not when

exercising proprietary functions."    Carter v. Chesterfield

County Health Comm'n, 259 Va. 588, 590, 527 S.E.2d 783, 785

(2000).

                            11
        There is no dispute that HCC is entitled to the status of

a municipal corporation, and we have previously treated it as

such.     See id.

               1.   The immunity of municipal corporations
                          from quantum meruit claims.

       Jean Moreau contends that municipal corporations are not

immune from quantum meruit claims, regardless of whether the

claims arise out of the exercise of governmental or

proprietary functions.     To make this argument, it relies on

Mount Jackson v. Nelson, 151 Va. 396, 145 S.E. 355 (1928).        In

that case, the town of Mount Jackson contracted with the

owners of a gas station to build a water main.     Id. at 399,

145 S.E. at 355.     The main was intended to allow the town to

sell surplus water to new customers at a profit, an exercise

of its proprietary or business function.     Id. at 404, 145 S.E.

at 357.    The owners built the main, but the town refused to

pay.    Id. at 399, 145 S.E. at 355.   The owners thereafter sued

the town.    On appeal, we held that they could recover on a

quantum meruit claim,     Id. at 407, 145 S.E. at 358.   We

explained:

       The town has retained and controls this main designed for
       the benefit of consumers generally through which they can
       deliver water at a profit. In such circumstances the
       obligation to pay is as complete as it would be to pay
       for a right of way bought and held for this pipe. No one
       would claim that it could keep such an easement and not
       pay for it.

                               12
Id.

      Roughly ten years later, we confronted similar facts in

Leonard v. Town of Waynesboro, 169 Va. 376, 193 S.E. 503

(1937).   There a homeowner sued the town of Waynesboro to

recover the costs of constructing a water main.    Id. at 378,

193 S.E. at 503.   The town was using the main without the

homeowner's consent to sell water to her neighbors.    Id. at

380, 193 S.E. at 504.   Relying on Mount Jackson, we held that

"where a town takes over and controls a water line built by

others and uses it for the benefit of the town and consumers

generally, and through it delivers water for a profit, it is

obligated to pay, on a quantum meruit, those who constructed

the line."   Id. at 383, 193 S.E. at 506.   We reasoned:

           When a municipality enters into the business of
      operating a water plant it is acting in its proprietary,
      or quasi private, capacity for the private advantage of
      its inhabitants and of the municipality itself. It
      exercises business functions rather than those
      governmental in their nature. In the exercise of those
      functions the municipality is governed largely by the
      same rules as those applicable to private corporations or
      individuals engaged in the same business. Transactions
      touching such business should receive the same
      construction by the courts as like ones between private
      corporations or individuals.

Id. at 383-84, 193 S.E. at 506.

      In a more recent decision, citing Mount Jackson and

Leonard, we noted that "[r]ecovery on the basis of quantum

meruit has been allowed against a municipality exercising a

                            13
proprietary function."    Flory, 261 Va. at 237 n.3, 541 S.E.2d

at 919 n.3.   We have not before now, however, specifically

addressed whether recovery on the basis of quantum meruit is

also allowed against municipal corporations exercising

governmental functions.   Jean Moreau urges us to hold that

"[t]he rationale set forth in Mount Jackson applies equally to

proprietary or governmental functions."

     We disagree.    In Flory, we reaffirmed that the

Commonwealth is immune from quasi-contractual claims.    Id. at

237, 541 S.E.2d at 918.   We began our analysis by summarizing

the applicable principles:

     Under the common law, sovereign immunity did not shield
     the sovereign from liability for its valid contracts.
     However, quasi-contractual doctrines are premised on the
     absence of a valid contract. The Commonwealth's common
     law liability for its contracts does not encompass quasi-
     contractual claims, and any relief based on such claims
     must be authorized through a statute abrogating the
     Commonwealth's sovereign immunity.

Id. at 236-37, 541 S.E.2d at 918 (internal quotation marks and

citation omitted).   Finding no "statutory or case authority

. . . for the proposition that the Commonwealth has waived its

immunity from liability under theories of quasi-contract," we

went on to conclude that it could not be held liable on claims

for quantum meruit or contract implied in law.    Id. at 237,

541 S.E.2d at 919.

                             14
     When municipal corporations exercise governmental

functions, they act as arms or agencies of the State.

Southern Railway Co. v. City of Danville, 175 Va. 300, 305, 7
S.E.2d 896, 898 (1940).   For this reason, we have long held

that municipal corporations share in the Commonwealth's

immunity from tort claims when they are performing such

functions.   See, e.g., Carter, 259 Va. at 590-91, 527 S.E.2d

at 785.   We see no reason why we should hold differently for

quasi-contractual claims.   If municipal corporations act as

arms or agencies of the State when they exercise governmental

functions, then they should be protected — like the

Commonwealth — from both tort and quasi-contractual claims.

We therefore conclude that municipal corporations performing

governmental functions are immune from quantum meruit claims

and that recovery against municipal corporations on a quantum

meruit basis is limited to proprietary functions.

                2.   HCC's claim of absolute immunity.

     In its assignment of cross-error, HCC asserts that the

circuit court erred in holding that it was not entitled to

absolute immunity from quantum meruit claims.   HCC contends

that it should enjoy the same level of immunity that is

afforded to the entity that created it — Chesterfield County.

Because counties, as opposed to municipalities, are entitled

to absolute immunity as local subdivisions of the State, see

                             15
Mann v. County Board of Arlington County, 199 Va. 169, 174, 98
S.E.2d 515, 518-19 (1957), HCC maintains that it, too, is

entitled to absolute immunity.    HCC accordingly claims that it

is immune from Jean Moreau's quantum meruit claim, regardless

of whether the development and operation of Springdale serves

a proprietary or governmental function.

     In support of its argument, HCC relies on Virginia

Electric & Power Co. v. Hampton Redevelopment and Housing

Authority, 217 Va. 30, 225 S.E.2d 364 (1976).    There we

considered, among other things, whether the Housing Authority

was a municipal corporation.     Id. at 33, 225 S.E.2d at 367.

In concluding that it was, we said that, "for purposes of

uniformity in determining tort liability, a municipal housing

authority should be held to occupy the same status as the

municipality which brings it into existence and oversees its

activities."   Id. at 34, 225 S.E.2d at 368.

     While a number of years ago the Attorney General's office

read this language from Hampton Redevelopment to mean that

entities created by counties enjoy absolute immunity, see 1997

Op. Atty. Gen. 123, 124; 1995 Op. Atty. Gen. 72, 73, the

circuit courts have not routinely agreed, and today we reject

such an interpretation.   A close reading of Hampton

Redevelopment makes plain that we did not intend to formulate

a new test for determining the appropriate level of immunity

                            16
due a municipal corporation.      The language that HCC points to

must be viewed in context.   It was taken from our analysis of

whether the Housing Authority was a municipal corporation.       In

the sentence preceding it, we said, in reference to an earlier

decision, City of Richmond v. Richmond Metropolitan Authority,

210 Va. 645, 172 S.E.2d 831 (1970), that there was "no valid

reason for declaring that an entity occupies the status of a

municipal corporation for tax refund purposes and not

declaring that a similar entity occupies the same status for

purposes of determining its immunity from tort liability."

Hampton Redevelopment, 217 Va. at 34, 225 S.E.2d at 368.     It

was against this backdrop that we held that the Housing

Authority was entitled to the status of a municipal

corporation for purposes of determining its tort immunity.

Id.   We did not intend that a municipal corporation created by

a county have a different status for immunity purposes than a

municipal corporation created by a municipality.

      Indeed, in the 30-plus years since Hampton Redevelopment

was decided, we have not once interpreted the language that

HCC relies on in the manner that it urges.     Rather, we have

consistently reaffirmed that whether an entity is an arm or

agency of the State, and therefore entitled to absolute

immunity, depends on the nature of the entity.      See, e.g.,

Prendergast v. Northern Virginia Regional Park Authority, 227

                             17
Va. 190, 194, 313 S.E.2d 399, 401 (1984) ("The correct

approach is the one we have long employed in the Commonwealth:

the attributes of the particular entity which seeks immunity

must be examined to determine whether it is an 'arm' of the

Commonwealth.").

     In Prendergast, the circuit court held that the Northern

Virginia Regional Park Authority was "generally immune from

liability in tort" because it was created under the Park

Authorities Act, former Code §§ 15.1-1228 through -1238.1, *

which was enacted pursuant to Article XI, Section 1 of the

Constitution.    Id. at 192-93, 313 S.E.2d at 400-01.   We

reversed, concluding that, because the Park Authority was "a

creature of one or more localities and [was] essentially

subject to their control," it was not an arm or agency of the

State, and accordingly was not entitled to absolute immunity.

Id. at 194, 313 S.E.2d at 401.     In our analysis, we said that

we were applying the same approach that was applied in Hampton

Redevelopment – in which, after concluding that the Housing

Authority was a municipal corporation, we addressed whether

its operation and maintenance of a housing complex served a

governmental or proprietary function.    217 Va. at 34, 225

S.E.2d at 368.

     *
         See current Code §§ 15.2-5700 through 15.2-5714.
                              18
     If Hampton Redevelopment meant what HCC now contends that

it does, then we would surely have considered as part of our

analysis in Prendergast whether the Park Authority was created

by counties or municipalities, or a combination of both (which

it was).    For if it were really true that entities created by

counties enjoy absolute immunity under Hampton Redevelopment,

then that inquiry would have been a crucial step in our

analysis — but it played no part.

     Because HCC's interpretation of Hampton Redevelopment is

not supported by our precedents, and because it would lead to

like entities performing the same function being treated

differently, we reject it.   We consequently hold that an

entity is not entitled to absolute immunity simply because it

was created by a county and not a municipality.

       3.    HCC's immunity from Jean Moreau's quantum meruit

                                  claim.

     As HCC does not share in the absolute immunity enjoyed by

Chesterfield County, whether it is immune from Jean Moreau's

quantum meruit claim depends on whether the development and

operation of Springdale serves a governmental or proprietary

function.   This is because, as we held above, municipal

corporations enjoy immunity from quantum meruit claims when

exercising governmental functions, but not when performing

proprietary functions.

                             19
        Jean Moreau asserts that the circuit court erred in

ruling that HCC's development and operation of Springdale

served a governmental function.    Whether a function is

governmental or proprietary is a mixed question of law and

fact.    "Because the circuit court heard the evidence ore

tenus, its factual findings are entitled to the same weight as

a jury verdict, and [we are] bound by [its] findings of fact

unless they are plainly wrong or without evidence to support

them."    Mulford v. Walnut Hill Farm Group, LLC, 282 Va. 98,

106, 712 S.E.2d 468, 473 (2011) (first alteration in original)

(internal quotation marks and citation omitted).    We review de

novo, however, the ultimate conclusion as to whether the

development and operation of Springdale served a governmental

or proprietary function.     See id.

     "A function is governmental in nature if it is directly

related to the general health, safety, and welfare of the

citizens."    Gambrell, 267 Va. at 357, 593 S.E.2d at 249; see

also Ashbury v. City of Norfolk, 152 Va. 278, 282, 147 S.E.
223, 224 (1929) ("The performance of duties that relate to the

preservation of the public health and the care of the sick is

[a] concern to the public as a whole; in executing this

function the municipality . . . perform[s] governmental . . .

duties." (internal quotation marks and citation omitted)).

"In contrast, a function is proprietary in nature if it

                              20
involves a privilege and power performed primarily for the

benefit of the [municipal corporation]."      Gambrell, 267 Va. at

357, 593 S.E.2d at 249.      "[W]hen governmental and proprietary

functions coincide, the governmental function is the

overriding factor and the doctrine of sovereign immunity will

shield the [municipal corporation] from liability."

Carmichael, 259 Va. at 499, 527 S.E.2d at 782 (internal

quotation marks and citation omitted).

       This is not the first time that we have had to consider

whether HCC was engaged in a governmental or proprietary

function.   In Carter, 259 Va. at 590, 527 S.E.2d at 784, the

administrator of Vance W. Carter Jr.'s estate sued HCC

alleging that the negligent acts of Lucy Corr Village

employees caused Carter's death.     HCC filed a special plea of

sovereign immunity.    Id.    The circuit court sustained the

plea, holding that the operation of Lucy Corr Village was a

governmental function and that, as a result, HCC was immune

from the administrator's claim.      Id.   We affirmed, concluding

that "the provision of nursing services by [HCC] was not a

ministerial act of a proprietary nature, but an exercise of

[Chesterfield] County's police power for the common good and,

thus, was governmental in nature."      Id. at 594; 527 S.E.2d at

787.

                               21
     Jean Moreau claims that Springdale is distinguishable

from the nursing-care facility at issue in Carter.     It argues

that, while operating a nursing-care facility for the general

welfare may be a governmental function, providing an

independent-living facility is not.   According to Jean Moreau,

"[t]he resolution creating HCC did not declare any public need

for such a development, and constructing residential

neighborhoods for independent seniors certainly was not one of

the declared purposes [of the Commission]."   "Rather," Jean

Moreau contends, "Springdale is directly analogous to the

housing complex" at issue in Hampton Redevelopment, the

operation and maintenance of which we held served a

proprietary function.   217 Va. at 36, 225 S.E.2d at 369.

     To support its contention that Springdale is a

proprietary function, Jean Moreau points to the following

facts:   (1) "HCC [is] not licensed to provide any nursing care

at Springdale"; (2) "HCC intend[s] Springdale to be a discrete

component of [the Lucy Corr Village] campus, with few economic

or physical links binding it to the nursing-home and assisted-

living facilities"; (3) "HCC registered with the State

Corporation Commission as a 'Type C' CCRC," that is, a CCRC

"in which the independent-living residents [are] not provided

guaranteed rates or guaranteed admission to HCC's assisted-

living and nursing-home facilities"; (4) "Springdale ha[s] a

                            22
separate entrance from the other parts of the [Lucy Corr

Village] campus"; and (5) "not only could Springdale's

finances be assessed independently from HCC's assisted-living

and nursing-home components, but Medicare actually required

HCC to do so."

     Because the determination whether the development and

operation of Springdale served a governmental or proprietary

function is a mixed question of law and fact, it is necessary

for us to review the circuit court's factual findings.    Unlike

the findings and record presented for review in Hampton

Redevelopment, 217 Va. at 34, 225 S.E.2d at 368, where the

circuit court merely stated that the operation of a housing

complex would " 'obviously be, as a normal matter, a

proprietary function,' " the circuit court here listed a host

of factors indicating a governmental function:

     (1)The creation of HCC in 1993 upon the Chesterfield
     County Board of Supervisors' resolution citing "the
     public health and welfare, including the welfare of
     persons of low income in the county and surrounding
     areas, require the acquisition, construction, and
     operation of public hospital facilities, particularly
     nursing homes, for inhabitants of the County and
     surrounding areas."

     (2) The 2003 Chesterfield County Committee on the Future
     Report's recommendation that the county should encourage
     residential development catering to older adults to meet
     the needs of its aging population.

     (3) Lucy Corr Village became a CCRC in 2005 after
     beginning to add the independent-living component.

                           23
     (4) Health care commissions are authorized, by statute,
     to operate, among other things, nursing homes, assisted-
     living facilities, continuing-care facilities, self-care
     facilities, and facilities for the residence or care of
     the elderly.

     (5) "In order to be accepted by the State Bureau of
     Insurance as a registered continuing care facility,
     [Lucy Corr Village] was legally required to make
     available to its residents board and nursing services,
     which it did in this case."

     (6) "[T]he property for Springdale was donated by a
     public entity, Chesterfield County, to another public
     entity, HCC. Local governments are not permitted to
     give away valuable public assets to private businesses
     whose purpose is to enrich [their] owners."

     (7) Springdale "provides 24-hour emergency response and
         passive check in system."

     (8) "Springdale . . . is [a] part of the continuum of
     care" offered at Lucy Corr Village and cannot be
     separated from the nursing-care or assisted-living
     facilities.

     Despite Jean Moreau's attempt to distinguish Springdale

from the nursing-care facility at issue in Carter, we agree

with the circuit court that it, too, serves a governmental

function.   To begin with, we disagree with Jean Moreau that

HCC's purpose does not encompass Springdale.   As noted

earlier, Chesterfield County created HCC for the purpose of

operating (among other things) "hospital or health center

facilities."   These facilities, by statute, include

"continuing care facilities" and "facilities for the residence

or care of the elderly."   Code § 15.2-5201.   Springdale falls

under both categories:   it is a necessary component of a

                            24
continuing care facility (Lucy Corr Village), and it is a

facility for the residence of the elderly (the average age of

residents is 80).

     We further disagree with Jean Moreau that Springdale is

analogous to the housing complex at issue in Hampton

Redevelopment.   As the circuit court found, Springdale is more

than just a residential development; it is "a part of a

continuum of health care services beginning with the nursing

home care facility" and "cannot [be] separate[d]."     Springdale

serves the needs of those Chesterfield County seniors who do

not yet require the higher level of care that is provided at

the other Lucy Corr Village facilities.      In particular, it

allows them to continue to live on their own as long as they

are able, while still offering them the security of such

services as "24-hour emergency response and passive check in

system."

     Because Springdale fits comfortably within HCC's purpose,

and because it is an inseparable part of the continuum of care

offered at Lucy Corr Village, we conclude that, like the

nursing-care facility, it serves a governmental function.        We

accordingly hold that the circuit court did not err in

concluding that HCC was immune from Jean Moreau's quantum

meruit claim for its development and operation of Springdale.

                        III.    CONCLUSION

                               25
     For the foregoing reasons, we will affirm the judgment of

the circuit court.

                                                       Affirmed.

JUSTICE McCLANAHAN, concurring in part and dissenting in part.

     I concur in Part II.A. of the majority opinion holding

that the circuit court did not err in concluding Jean Moreau’s

breach of contract claim against HCC was barred for failure to

comply with the Procurement Act’s contractual claims

procedure.    I dissent, however, from Part II.B. of the

majority opinion holding that the circuit court did not err in

concluding that HCC was immune from Jean Moreau’s quantum

meruit claim. 1

     “Sovereign immunity protects municipalities from tort

liability arising from the exercise of governmental

functions.”    City of Chesapeake v. Cunningham, 268 Va. 624,

634, 604 S.E.2d 420, 426 (2004) (emphasis added).    We have not

heretofore recognized any such protection for municipalities

from liability upon quantum meruit.    To the contrary, we have

allowed recovery from municipalities upon quantum meruit.

See, e.g., Leonard v. Town of Waynesboro, 169 Va. 376, 193

     1
        As to this claim, the only issue before the Court
is whether it is barred by the doctrine of sovereign
immunity. Thus, we do not address the underlying merits
of Jean Moreau's quantum meruit claim.
                             26
S.E. 503 (1937); Mount Jackson v. Nelson, 151 Va. 396, 145
S.E. 355 (1928).    In fact, as we have noted, it is “well

settled in most jurisdictions that a municipality . . . may

become obligated upon implied contract to pay the reasonable

value of benefits accepted or appropriated by it as to which

it has the general power to contract.”      Leonard, 169 Va. at

384, 193 S.E. at 506 (internal quotation marks and citation

omitted). 2   Therefore, liability will be imposed “where money

or other property of a party is received under such

circumstances that the general law, independently of the

express contract, implies an obligation upon the city to do

justice with respect to the same.”    Id.

     In neither Leonard nor Mount Jackson did this Court

suggest that sovereign immunity was available to

     2
        See, e.g., City of St. Marys v. Stottler Stagg &
Assocs., 292 S.E.2d 868 (Ga. Ct. App. 1982) (quantum meruit
available against city); Lanphier v. Omaha Public Power Dist.,
417 N.W.2d 17 (Neb. 1987) (public power district entitled to
quantum meruit recovery where it conferred benefit on city in
providing services); Morgenroth & Assocs., Inc. v. Town of
Tilton, 431 A.2d 770 (N.H. 1981) (town not immune from
liability for implied in law contracts); Wanaque Borough
Sewerage Auth. v. Township of West Milford, 677 A.2d 747 (N.J.
1996) (township liable in quasi-contract for benefits
received); Hurdis Realty, Inc. v. Town of North Providence,
397 A.2d 896, 897 (R.I. 1979) (“A municipality, no less than a
private individual, may be liable upon the principle of unjust
enrichment when it has enjoyed the benefit of work performed
and when no statute forbids or limits its power to contract
therefore.”); City of Ingleside v. Stewart, 554 S.W.2d 939
(Tex. Civ. App. 1977) (contractor could seek recovery under
quantum meruit against city).
                              27
municipalities for quantum meruit claims that were related to

the exercise of governmental functions. 3   And the distinctions

we have made between governmental and proprietary functions in

the context of tort liability have no logical application to

claims under quantum meruit.     Whereas a governmental function

has been protected by sovereign immunity because it entails

“the exercise of an entity’s political, discretionary, or

legislative authority,” a proprietary function has not been

afforded such protection because it “is a ministerial act and

involves no discretion.”   Cunningham, 268 Va. at 634, 604

S.E.2d at 426.   In my view, the decision to accept benefits

without payment therefore is, by its very nature, a

ministerial act involving no discretion.    As we stated in

Leonard, the obligation to pay the reasonable value of

benefits accepted is an obligation “'to do justice,'” 169 Va.

at 384, 193 S.E. at 506 (citation omitted), and, thus, should

     3
        In Flory Small Business Dev. Ctr. v. Commonwealth, 261
Va. 230, 237 n. 3, 541 S.E.2d 915, 919 n.3 (2001), we stated
that recovery was allowed “against a municipality exercising a
proprietary function” in Leonard and Mount Jackson. However,
there was no discussion of sovereign immunity in Leonard and
Mount Jackson. Indeed, in Cunningham, we rejected the
plaintiff’s claim that our decision in Leonard stood for the
proposition that sovereign immunity is unavailable in all
claims related to municipal waterworks. We explained that
Leonard involved “the liability of a municipality under a
theory of quantum meruit for the construction of a water
line.” 268 Va. at 635 n.7, 604 S.E.2d at 427 n.7. In doing
so, we clarified that recovery was allowed in Leonard because
the claim was in quantum meruit, not because it involved a
proprietary function.
                            28
not depend on the classification of the obligation as either

governmental or proprietary.

     Nevertheless, even if I could agree with the majority

that a municipal corporation should be immune from quantum

meruit claims when acting in a governmental capacity, I see no

appreciable distinction between this independent living

facility and the housing project in Virginia Electric & Power

Co. v. Hampton Redevelopment & Housing Authority, 217 Va. 30,

225 S.E.2d 364 (1976).   The Court’s rationale for finding the

operation of the housing project to be proprietary is equally

applicable here.

     In operating and maintaining its housing project, the
     Authority assumes the role ordinarily occupied by a
     private landlord, and performs functions which could as
     well be performed by private enterprise. The special
     service performed by the Authority inures to the benefit
     of a few rather than to the common good of all. And the
     necessity for the service bears only incidental relation
     to the protection of the life, health, property, and
     peace of the citizens of the whole municipality where the
     service is performed.

Id. at 36, 225 S.E.2d at 369 (internal quotation marks and

citations omitted).   Furthermore, the claim in this case does

not arise out of the operation of the facility or the

provision of services within this facility.   Cf. Carter v.

Chesterfield County Health Comm'n, 259 Va. 588, 527 S.E.2d 783

(2000).   Instead, it arises out of the ministerial and

proprietary act of allegedly retaining an unearned benefit.

                            29
     Therefore, I would hold that the HCC was not entitled to

the protection of sovereign immunity for Jean Moreau’s quantum

meruit claim.

                           30