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Kalergis v. Commissioner of Highways

Supreme Court of Virginia

October 26, 2017

DAVID KALERGIS, ET AL.
v.
COMMISSIONER OF HIGHWAYS, COMMONWEALTH OF VIRGINIA, ET AL.

         FROM THE CIRCUIT COURT OF ALBEMARLE COUNTY Cheryl V. Higgins, Judge

          OPINION

          CLEO E. POWELL JUSTICE

         David and Mary Kalergis (collectively, "Kalergis") appeal from a decision of the Circuit Court of Albemarle County ("circuit court"). Kalergis sought to compel the Commissioner to reconvey property, previously acquired in advance of a transportation project, pursuant to Code

         § 33.2-1005(A). On appeal, Kalergis argues that the circuit court erred in sustaining a demurrer filed by the Commissioner of Highways ("Commissioner") in his capacity as chief executive officer of the Virginia Department of Transportation ("VDOT"). For the following reasons, we affirm the judgment of the circuit court where it found that it "[did] not have the authority based on the appraisal to insert a purchase price of $286, 110 where the wording of the General Assembly is 'original purchase price.'"[1]

          I. BACKGROUND

         Kalergis owned a 55-acre farm in Albemarle County ("the Property") that featured a house, guest house, swimming pool, stables, fencing, and terraces (collectively "Improvements"). In February 1994, VDOT acquired 26.01 acres ("the Land") of the Property, which included the Improvements, from Kalergis for $1, 150, 000 for use in a future highway project called the Western Bypass. The original purchase price was recorded in the offer letter and on the deed. The price was determined by an appraisal of the "market value of the Fee Simple ownership of the subject property." The appraisal valued the Land at $286, 110 and the Improvements at $863, 890, for a total value of $1, 150, 000.[2]

         On or about April 21, 2014, VDOT was notified in writing that Kalergis was exercising the right under Code § 33.2-1005(A) and its predecessor statute (Code § 33.1-90) to require VDOT to reconvey the Land "for its original purchase price" of $286, 110, the value from the 1993 appraisal, as the transportation project had not commenced within 20 years. VDOT either denied or did not respond to the first demand or the four subsequent demands made by Kalergis requesting reconveyance of the Land for $286, 110. In July 2014, the Commonwealth Transportation Board cancelled the Western Bypass project.

         In November 2014, VDOT offered to reconvey the Land for the original $1, 150, 000 purchase price pursuant to Code § 33.2-1005(A), or for the current $780, 000 fair market value of the Land pursuant to Code § 33.2-1005(B). Kalergis refused the offer and again demanded that VDOT reconvey the Land for $286, 110.

         On January 30, 2015, Kalergis sued VDOT seeking specific performance to reconvey the Land for $286, 110 and a declaration that VDOT violated the provisions of Code § 33.2-1005(A). VDOT demurred arguing that there was no legal basis for Kalergis's requested relief, because the plain language of Code § 33.2-1005(A) only provides for the reconveyance of property "upon repayment of the original purchase price, " not for some portion of the appraised value.

         In response, Kalergis argued that "purchase price" in Code § 33.2-1005(A) refers to the "price paid for the property that is subject to reconveyance, " and the statute "cannot be read to permit the Commonwealth to profit from a taking without constructing anything for the public benefit" or to "render meaningless the General Assembly's instruction to itemize the price for the property - land and improvements - taken from the owner." Kalergis argued that Code § 33.2-1005(A) "requires that the landowner first be given an opportunity to purchase the property back for the original price, " and the fair market value process in Code § 33.2-1005(B) only applies if the original owner declines.

         Thereafter, the circuit court issued a letter opinion sustaining the demurrer. The circuit court found that Code § 33.2-1005(A) did not apply, because "[t]he property in this case has been significantly altered and therefore the [c]ourt does not find that it fits within the language of

         'such property' . . . as is required by Virginia Code § 33.2-1005(A)." The circuit court noted that that language "seem[ed] to intend that the property would be conveyed as the same piece of property that was originally acquired." The circuit court also held that it

[did] not have the authority based on the appraisal to insert a purchase price of $286, 110 where the wording used by the General Assembly is "original purchase price[.]" In this particular case where there has been such a substantial modification of the property, the Court finds Section B is the better statute.

         The final order dismissed with prejudice Kalergis's "claims based on Virginia Code § 33.2-1005(A), but such dismissal is without prejudice as to any claim or cause of action based on ...


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