Board of Supervisors v. Greengael, L.L.C.

Present: All the Justices

BOARD OF SUPERVISORS OF CULPEPER COUNTY

v. Record No. 050461 OPINION BY JUSTICE ELIZABETH B. LACY
March 3, 20061
GREENGAEL, L.L.C., ET AL.

FROM THE CIRCUIT COURT OF CULPEPER COUNTY
J. Howe Brown, Jr., Judge Designate

This case involves a decision of the Board of Supervisors

of Culpeper County denying approval of a preliminary

subdivision plat and its subsequent decision to rezone that

property from residential to light industrial use.

FACTS

In 1999, Ashmeade Company, L.L.C., purchased a parcel of

approximately 96 acres (the Property) in Culpeper County (the

County). The Property was zoned R-4, allowing high-density,

multi-family residential use. In 2000, the Culpeper County

Board of Supervisors (the Board) amended its Comprehensive

Plan, re-designating the Property as "future industrial." It

did not rezone the Property at that time.

Greengael, L.L.C., (Greengael) became the contract

purchaser of the Property on August 1, 2002.2 Greengael

1
This opinion was revised on May 26, 2006.
2
Ashmeade Company, L.L.C., originally executed a contract
for sale of the Property with DESYD, L.L.C., on March 5, 2002.
Douglas Darling, Principal of DESYD, signed the contract.
Darling formed Greengael, L.L.C., in June 2002, and DESYD
assigned its March 5, 2002 contract to Greengael. Darling, as
a member of Greengael, represented Greengael throughout the
planned to build a mixed-residential development (the

Development). Sections 5C-2-1.1 and 5C-2-1.3 of the County's

zoning ordinance required that all dwellings in the R-4 zone

receive "serv[ice from] an approved public water and sewer

system of adequate capacity . . . operated by a municipality

or public service corporation duly authorized by the

Commonwealth of Virginia." The County's subdivision ordinance

required the developer to file a preliminary subdivision plan.

Sections 425.3.1 and 425.4.1 of the subdivision ordinance

required that the developer include as part of the subdivision

plan "a letter from the agency, authority, or utility which

states that it can adequately serve the subdivision" with

water and sewage facilities, respectively (hereinafter "the

utility letter").

Greengael first approached the County seeking water and

sewer service for the Development. In a May 3, 2002 letter to

the Culpeper County Administrator, Frank Bossio, Greengael

requested 1,100 water and sewer taps for use "in a mixed

office/commercial/apartment project." The Culpeper County

Planning Director, John C. Egertson, replied to Greengael by

letter on May 21, 2002, stating that the Development was not

negotiations with the Town and County and the legal
proceedings. In this opinion, "Greengael" refers to the
collective actions of Greengael, L.L.C., and of Douglas
Darling.

2
"in a position to be served" by the County "at this time."

Egertson further explained that a Memorandum of Understanding

between the County and the Town of Culpeper (the Town) was in

place outlining the potential purchase of water and sewer

service capacity by the County from the Town, but that a

formal agreement had not been drafted. Egertson explained

that "it would be premature" for him "to speculate" regarding

whether the Development could receive service. Egertson

acknowledged that water and sewer service would be feasible in

the area but "there are many issues to be resolved," notably

"[c]apacity will be an issue as will the proposed land use

which conflicts with the Culpeper County Comprehensive Plan."

Greengael then went to the Town to secure water and sewer

service for the Development. By letter dated September 9,

2002, the Town Engineer and Planning Director, Charles

Stephenson, rejected Greengael's first application because it

was incomplete. In that letter, Stephenson suggested that

Greengael "may want to research the area with the County to

determine whether it is envisioned to be served by Town or

County utilities and whether the potential development will

likely be approved." Greengael submitted a second application

to the Town on September 18, 2002, along with a letter stating

that it did "not believe that any notification of the County

3
authorities is necessary" and that it would not contact the

County.

In its application to the Town, Greengael stated that the

Development would use approximately 100,000 gallons of water

per day and generate the same amount of waste, that it would

use "the current pump station behind the Teves property," and

that no change or modification to the facility was

anticipated. Greengael also stated it would "undertake . . .

any necessary modification to public facilities on a pro-rata

basis." The application stated that no zoning change would be

necessary for the Development, but did not address the

Development's relationship to the County's Comprehensive Plan

as requested in the application form.

The Town's Technical Review Committee compiled comments

on the application from various staff members and departments.

Comments by these departments expressed concerns that until

the "new McDevitt relief sewer is constructed," the additional

wastewater produced by the Development could not be served

through the Teves pump station, and that "[c]ritical data

. . . includ[ing] technical and public facilities systems

data, land use implications, and conformance with the Town

Comprehensive Plan and the County Comprehensive Plan" were not

provided. The comments indicated further that, from a

planning perspective, the staff had "serious land use

4
concerns" about providing the service to the Development as an

area "not identified on the [Town's] potential water/sewer

expansion map," and that service to the Development would

require " 'leap-frogging' " because the Property did not front

on "Lover's Lane," a road located just outside of and running

parallel to the Town's corporate boundary.

The Town's Public Works Committee reviewed the

application and staff comments and submitted a report to the

Town Council. The report included as appendices Greengael's

application, the staff comments, and a description of the

Development. The report recommended that "Council authorize

the Town Manager to request approval . . . from the County for

the extension of public water and sewer service to [the

Development]." The report further stated that if "conditional

approval is granted," Greengael should have to comply with

certain conditions including commissioning analyses of both

the water and wastewater systems "with the additional load"

that the Development would impose, submitting the analyses to

the Town for review, and obtaining approval of a site plan

from the County. Greengael received a copy of the report

along with notification of the date of the Town Council's

hearing on its request. The Town Council considered the

matter on November 12, 2002 and voted unanimously to deny the

application.

5
 On January 30, 2003, Greengael submitted to the County an

application for approval of a 12-lot preliminary subdivision

plat. The staff of the County Planning Commission reviewed

Greengael's subdivision request and issued a report addressing

deficiencies in the application, including the omission of a

Virginia Department of Transportation study, a storm water

study, and the required utility letter. On March 12, 2003,

the County Planning Commission held a public meeting during

which Egertson presented the report. At the meeting

Greengael's principal, Douglas Darling, who had not previously

seen the staff report, admitted that he was "sure the comments

have great merit, . . . but we haven't addressed them quite

frankly yet." The Planning Commission recommended that the

Board deny the application based on Greengael's failure to

comply with the provisions of the ordinance as identified in

the report.

The Board was originally scheduled to review the Planning

Commission's recommendation on April 1, 2003; however,

Greengael requested and received two deferrals so that it

could address the deficiencies mentioned in the report. The

hearing was ultimately set for June 3, 2003.

Prior to the Board's meeting on the application, Egertson

"wanted to update the information for the Board [regarding the

Town's denial of Greengael's request for utility service] to

6
make sure that the reasons for their denial were still

current." On June 2, 2003, Egertson wrote a letter to J.

Brannon Godfrey, the Town Manager, asking for confirmation

that the Town Council had denied a staff-recommended,

conditional approval of Greengael's application and asking

whether Greengael had addressed the staff's conditions for

approval, notably performing impact analyses of the proposed

Development upon the Town's water and sewer systems and

offering a plan to fund all or part of any necessary

improvements to the infrastructure. Godfrey responded that

same day, stating that "conditions . . . remain unchanged."

At its June 3 meeting, the Board reviewed the Planning

Commission's report and the letters Egertson and Godfrey

exchanged. The Board unanimously denied Greengael's

application. At that same meeting, the Board entered into a

Water and Sewer Agreement (formal agreement) with the Town

which rescinded the Memorandum of Understanding and required

the Town to sell to the County available excess water and

sewer capacity, "in amounts to be determined solely at the

discretion of the County," so that the County could extend

such services to commercial and industrial users in the

County.

On July 1, 2003, the Board passed a resolution directing

the Planning Commission to make recommendations with regard to

7
rezoning the Property from R-4 to LI, "Light Industrial."

According to the resolution, the LI zoning designation was

"more consistent" with the surrounding parcels. The Planning

Commission voted to recommend the rezoning on September 10,

2003, and the Board approved the rezoning on October 7, 2003.

PROCEEDINGS

On July 2, 2003, Greengael and Ashmeade Company, L.L.C.,

(collectively "Greengael") filed an appeal and bill of

complaint appealing the Board's decision denying approval of

the subdivision application pursuant to Code § 15.2-2260(E)

and seeking a declaratory judgment, monetary damages, and

injunctive relief against the Board and its members in their

individual and official capacities, the Culpeper County Water

and Sewer Authority and its members in their individual and

official capacities, the Planning Commission and Egertson in

his individual and official capacity as Planning Director, and

the Town Council. Each defendant filed a demurrer and plea of

sovereign immunity. The Board demurred to all counts except

Count I, Greengael's appeal of the denial of the subdivision

application, asserting that all claims for monetary damages

should be dismissed because Greengael failed to submit them

first to the local governing body in accordance with Code

§ 15.2-1248, because Greengael did not allege that it lost

either all economic use of or any specific appurtenant right

8
in the Property as a result of the Board's denial of the

preliminary subdivision plat, and because a party appealing

under Code § 15.2-2260(E) is not entitled to damages.

Following a hearing on September 4, 2003, the trial court

sustained the defendants' demurrers and pleas for the reasons

stated in those pleadings. The trial court also dismissed all

defendants except the Board.

On October 8, 2003, Greengael filed its second bill of

complaint seeking reversal of the Board's rezoning action,

asserting that the Board's action violated the procedural and

notice requirements for rezoning. Code §§ 15.2-2204, -285.

The trial court consolidated Greengael's appeal in the

subdivision case with its appeal of the rezoning case.

Following a bench trial, the trial court issued a letter

opinion in which it concluded that the preliminary subdivision

plat "should have been approved" and the rezoning should be

invalidated, not because the rezoning was unreasonable or a

piecemeal downzoning, but because Greengael had vested rights

to develop the property under R-4 zoning. The trial court

stated:

The evidence shows that the developer tried
diligently to obtain the letters, first from the
County, then from the Town, then again from the
County. Darling was caught in a bureaucratic
nightmare in which he was told by the County to go
to the Town, told by the Town to go to the County,
told by the County that he could not obtain

9
 approval because the Town turned him down, and all
the while told by the County that he was wasting
his time because the County wanted industrial and
not residential development on the site. . . . The
County knew when the plan was disapproved that
there was in the planning stage improvements to the
water and sewer facilities which would in the
foreseeable future provide adequate service to the
entire Ashmeade project. If Ashmeade had been an
industrial project the County itself could have
supplied the water and sewer under an agreement
between the Town and County, ironically signed the
same day as the Board rejected Ashmeade's
subdivision, June 3, 2003. . . . An example of how
cooperation between the County and the Town results
in water and sewer service to projects the County
wants to approve may be found in Plaintiff's
Exhibit #95. . . . A fair reading of the minutes
of the Town Council meeting . . . demonstrates that
the Town was willing to make water and sewer
available provided the County approved, and
provided the developer did studies to help
determine exactly what improvements were necessary.
The Town's real objective was to coordinate with
the County. The County used the Town's action as a
shield to avoid approving the plan, knowing that
water and sewer soon would be available.

On December 10, 2004, the trial court entered a final order

approving the subdivision plat, requiring the County to "work

with" Greengael to secure water and sewer from the Town, and

invalidating the rezoning to LI use.

The Board appealed from the trial court's rulings

approving the preliminary subdivision plat and striking the

rezoning of the Property. Greengael assigned cross-error to

the trial court's finding that the rezoning was not piecemeal

downzoning and its dismissal of "all damage and other counts

10
(except one) of the Bill of Complaint in the Subdivision Case

without a hearing on the merits and without leave to amend."

DISCUSSION

I. Board's Appeal

A. Approval of Subdivision Plat

We begin with the Board's contention that the trial court

erred in reversing the decision of the Board and approving the

preliminary subdivision plat.

When a local governing body's decision regarding an

application for approval of a preliminary subdivision plat is

appealed, a trial court must sustain the decision unless the

local governing body failed to comply with the applicable

subdivision ordinances or acted arbitrarily and capriciously

in denying the application. Code § 15.2-2260(E); Hanover

County v. Bertozzi, 256 Va. 350, 355, 504 S.E.2d 618, 620

(1998). On appellate review, the trial court's judgment is

presumed correct and will not be set aside unless the judgment

is plainly wrong or unsupported by the evidence. Ravenwood

Towers, Inc. v. Woodyard, 244 Va. 51, 57, 419 S.E.2d 627, 630

(1992).

The Board claims that the trial court did not make an

explicit finding that the Board either failed to comply with

the applicable subdivision ordinances or acted arbitrarily and

capriciously. Regardless, the Board asserts that it rejected

11
Greengael's preliminary subdivision plat based on the

undisputed fact that Greengael failed to comply with the

requirement of the subdivision ordinance regarding submission

of the utility letter. Therefore, the Board contends that its

action was in accordance with the subdivision ordinance, was

not arbitrary and capricious, and should have been sustained

by the trial court.

Greengael claims that the trial court's discussion in its

letter opinion of the actions of the Board and County

officials constituted a finding of arbitrary and capricious

behavior sufficient to justify reversal of the Board's

decision. The premise of Greengael's argument and the trial

court's decision is that although Greengael "diligently" tried

to obtain the utility letter from both the County and the

Town, the Board and County officials manipulated the

subdivision process to prevent Greengael from obtaining the

utility letter and to avoid approving the subdivision plat for

residential use. Greengael supports this conclusion by citing

the trial court's recitation that the Board knew that ongoing

improvements to the infrastructure surrounding the property

would make adequate water and sewer services available in the

"foreseeable future," the Board wanted to service industrial

and commercial users with water and sewer as evidenced by its

formal agreement with the Town executed the same day as the

12
denial of Greengael's subdivision application, and finally the

Board used the Town's denial of Greengael's application as a

"shield" for the Board's own denial, when a fair reading of

the Town Council's meeting minutes indicated the Town only

denied the application because it wanted to cooperate with the

Board to bring service to the Development.

Although we accord the trial court's findings of fact a

presumption of correctness, Sansom v. Board of Supervisors,

257 Va. 589, 595, 514 S.E.2d 345, 349 (1999), we conclude that

the record in this case does not support the trial court's

conclusion that the Board manipulated or "used" the Town's

actions as a "shield" to avoid approving the application, nor

does it support the conclusion that the Board otherwise acted

arbitrarily and capriciously in denying the application.

Greengael argues, and the trial court's letter opinion

implies, that County officials were involved in Greengael's

failure to secure the utility letter. The record does not

support this proposition. The County denied Greengael's

initial request for water and sewer service because of the

undisputed fact that the County operated no such service

beyond that to its airport and because it had no formal

agreement with the Town to resell such service to County

customers. Though the Town, which Greengael next approached

to request service, did operate water and sewer facilities, it

13
was not required to provide service to customers in the County

located outside Town boundaries. Provision of such utility

services is a proprietary decision, exercised at the

discretion of a town. Town of Rocky Mount v. Wenco of

Danville, Inc., 256 Va. 316, 320, 506 S.E.2d 17, 20 (1998).

As the trial court observed, the minutes of the Town

Council's meeting regarding Greengael's application to the

Town include a discussion as to whether, under the Memorandum

of Understanding then in place between the County and the

Town,3 Greengael's request for water and sewer service should

first be presented to the County to determine whether the

County wanted to provide the service; however, nothing in the

minutes indicates that the County influenced this discussion

or the vote of the Town rejecting the request.4 Accordingly,

the record, while showing that the Town wanted to cooperate

with the County, illustrated that such cooperation was related

3
The Memorandum of Understanding addressed the ability of
the County to provide water and sewer service directly to
customers through a proposed capacity purchase from the Town.
It did not address County approval of utility service the Town
proposed to provide to County customers.
4
The Board assigned error to the admission of the minutes
of the Town Council arguing that the action of the Council was
legislative and the opinions expressed in the minutes were
irrelevant. As stated, the action of the Council was a
discretionary, proprietary act and the trial court did not err
in admitting the minutes into evidence. See Wenco, 256 Va. at
319, 506 S.E.2d at 19.

14
to process, not to rejection of the request for water and

sewer service.

Regardless of the Town's reasons for rejecting

Greengael's request, nothing in the record supports the

conclusion that the County "manipulated" this process. The

record shows that from the time of Egertson's letter until the

Town's denial of Greengael's request for water and sewer

services, there was no communication between Town and County

officials or any of their respective agents.5 Thus, there is

no support for the trial court's finding that members of the

Board or County officials influenced the Town's decision to

reject Greengael's application for water and sewer services.

Greengael cites several other circumstances referenced in

the trial court's letter opinion to support the trial court's

decision. First, the County denied Greengael's application

with knowledge that the upgrades to the Town's utility

services were "in the planning stage" and would "in the

foreseeable future" provide adequate service to the

development. The trial court further commented that based on

the formal agreement between the County and Town signed

"ironically" the same day the County rejected Greengael's

application, the County could have provided the service itself

5
Egertson testified he learned of the Town's decision
from a newspaper article.

15
if the Development was an industrial project. Neither of

these circumstances supports a conclusion that the County

acted in a capricious or arbitrary manner.

The subdivision ordinance does not require that utility

facilities be in place at the time an application for

preliminary subdivision approval is presented. It only

requires that an applicant produce evidence of an agreement to

provide such services. Neither the County's knowledge of

planned upgrades in Town water and sewer facilities nor the

execution or substance of the formal agreement provides an

adequate basis for establishing the required assurance that

the Town or County could or would provide water and sewer

services to the Development.

The record is clear that at the time of Greengael's

application, the Town had insufficient wastewater treatment

and pumping capacity to serve the Development and would need

to undertake significant line extensions, such as the

completion of the "new McDevitt relief sewer." Even though

certain system upgrades to enhance capacity were in the

"planning stage," as the trial court noted, the record is also

clear that such system upgrades had not occurred even at the

time of trial.

The formal agreement between the County and Town allowed,

but did not obligate, the County to purchase capacity from the

16
Town, even for industrial customers. Finally, Greengael's

application was originally scheduled for consideration on

April 1, 2003. Execution of the formal agreement on the same

day the Board rejected Greengael's application, June 3, 2003,

was a function of the two deferrals Greengael requested and

received for consideration of its application, not a function

of nefarious action by the Board.

Greengael also cites as support for the trial court's

decision, the trial court's statements that County officials

told Greengael that it was "wasting its time" in seeking to

develop the Property as residential "because the County wanted

industrial and not residential development on the site."6

Regardless of any statements made by individual county

officials, the County had determined in 2000 that commercial

and industrial development of the Property was more desirable

for the County and amended its Comprehensive Plan accordingly.

After the adoption of the Plan, the planned commercial and

industrial development in the area was public knowledge to all

6
Supervisor John Coates stated that because of the
comprehensive plan and the industrial and commercial character
of developments adjacent to the Property, the Property "to me,
presented itself to be industrial property." However, he
testified that he voted against the subdivision application
"because water and sewer was not available." Supervisor
William C. Chase stated he believed the "die was cast" for
industrial or commercial development in the area, but he
claimed he did not vote to deny Greengael's application on
that basis.

17
investors who purchased property, including Greengael. This

preference by the County is not arbitrary or capricious.

Finally, the trial court discussed as part of its

rationale examples of "cooperation" between the County, Town,

and other developers that resulted in provision of water and

sewer service for "projects that the County wants to approve."

Greengael argues that this cooperation resulted in three-party

agreements, which the County accepted thereby "waiving" the

utility letter requirement. The County's failure to "waive"

the requirement in a similar manner for Greengael or to

consider the requirement satisfied by its own investigation,

according to Greengael, was arbitrary and capricious.

Greengael's "waiver" argument is unavailing. The Board

cannot waive a provision of a subdivision ordinance.7 Code

§ 15.2-2254 provides that a developer cannot subdivide land

"without fully complying with the provisions" of the

subdivision ordinance. See Parker v. County of Madison, 244

Va. 39, 42, 418 S.E.2d 855, 856 (1992). Any independent

investigation regarding the provision of water and sewer

service undertaken by the County, regardless of the

7
Section 960 of the County Subdivision Ordinance allowed
for variations or exceptions to general subdivision ordinance
regulations under certain circumstances. See Code § 15.2-
2242(1). However, Greengael did not seek relief from the
Board under this section.

18
information acquired, cannot substitute for the written

assurance that water and sewer would be provided.8

Furthermore, the projects to which the trial court and

Greengael refer as examples of "cooperation," including a

Lowes Homestore, a Ryan Homes regional office, and a Richmond

American Homes residential development, have little in common

with the circumstances of this case. While the exhibits and

testimony regarding these projects do not always make clear

whether the developers first approached the Town or County for

service, they do illustrate that each project conformed to the

County's Comprehensive Plan, that the Town approved extension

of water and sewer service based on its determination that it

could presently or in the near future provide adequate water

and sewer service to the proposed developments, and that the

developers sought County approval for the Town's agreements to

extend water and sewer service. In contrast, Greengael's

project did not conform to the Comprehensive Plan, Greengael

did not receive Town approval of its request for extension of

water and sewer service, and Greengael categorically refused

to include the County as a party to its negotiations with the

Town.9 The trial court's discussion of cooperation therefore

8
Egertson testified that written approval was always
required under the subdivision ordinance.
9
Correspondence between Town Engineer Stephenson and
Greengael's counsel illustrates that Greengael rejected

19
does not support a finding of arbitrary and capricious

behavior on the part of the Board.

In sum, the County had no means of providing water and

sewer service to Greengael when asked to do so; the County was

not asked to approve or acquiesce in the Town's provision of

such service to Greengael; the Town had no obligation to

provide water and sewer service to Greengael; and there is no

evidence that the County influenced the Town's decision to

reject Greengael's application. Because Greengael's

application did not contain the utility letter required for

approval of a preliminary subdivision application, the Board

acted in compliance with the applicable subdivision ordinance

in denying approval, and its decision was not arbitrary and

capricious. Accordingly, we will reverse that part of the

trial court's judgment overturning the Board's decision and

approving the preliminary subdivision plat.

B. Rezoning

The trial court declared invalid the Board's action

rezoning Greengael's property from an R-4 designation to an LI

Stephenson's suggestion of notifying the County of its request
and "research[ing]" whether the County desired to serve the
project. Counsel responded that the Town was not legally
required to obtain County approval for extensions to County
customers and that he desired not to inform the County because
the County sought to "use water and sewer as a land use
control" and to prevent any development "without a commercial
component."

20
designation, stating that because Greengael "had a vested

right to the subdivision plan under the then-current zoning,

the Board could not take away that right by rezoning the

property." The Board argues that the trial court erred in

holding that Greengael had a vested right to develop the

proposed subdivision and that even if such right existed, it

would not preclude the Board from rezoning the property. The

Board is correct.

A local governing body is not precluded from rezoning

property because a property owner has established vested

rights to use the property in a manner allowed under the

former zoning designation but prohibited under the new

designation. Code § 15.2-2307 provides that vested rights of

a landowner established pursuant to that section "shall not be

affected by a subsequent amendment to a zoning ordinance."

Vested rights only protect a landowner's right to develop a

specific project under existing zoning conditions and allow

continuation of the non-conforming use when that zoning

designation is amended or changed.

The trial court also erred in holding that Greengael had

a vested right to develop the Property as described in the

subdivision plan. A landowner has a vested right in a

specific use of property if it "(i) obtains or is the

beneficiary of a significant affirmative governmental act

21
which remains in effect allowing development of a specific

project, (ii) relies in good faith on the significant

affirmative governmental act, and (iii) incurs extensive

obligations or substantial expenses in diligent pursuit of the

specific project in reliance on the significant affirmative

governmental act." Code § 15.2-2307. The "significant

affirmative governmental act" relied upon by the trial court

in this case was its own order approving the subdivision plat.

Without deciding whether such an order could qualify as a

significant affirmative governmental act under Code § 15.2-

2307, the claim of a vested right based on that order fails in

this case because of our holding reversing such order.

Greengael claims as an alternate argument that the R-4

zoning designation qualified as a significant affirmative

governmental act for purposes of establishing vested rights

under City of Suffolk v. Board of Zoning Appeals, 266 Va. 137,

580 S.E.2d 796 (2003). We reject this argument. In City of

Suffolk, the developer and an adjacent property owner

requested and received in 1988 a rezoning of their properties

from "Rural Residential" to "Planned Development Housing" for

the purpose of constructing a mixed commercial and residential

development. Id. at 141, 580 S.E.2d at 797. Proceeding

without the neighbor, the developer then received approval for

a Master Land Use Plan and submitted to the City, among other

22
things, a preliminary recreation plan, preliminary site plan,

and a traffic study, before the City rezoned the property for

commercial or office park use. Id. at 141-42, 580 S.E.2d at

797-98. We held that under Code § 15.2-2307, which lists as a

specific governmental act approval by a governing body of "an

application for rezoning for a specific use or density," the

developer had established vested rights because it obtained

the rezoning for "an identifiable property and project." Id.

at 146, 580 S.E.2d at 800.

In contrast, the facts of this case contain none of the

elements that qualified the 1988 rezoning in City of Suffolk

as a significant affirmative governmental act. The R-4 zoning

designation was a general rezoning, was not enacted at

Greengael's request, and was not directed specifically to

Greengael's project.

For these reasons we will reverse that part of the trial

court's judgment that Greengael had a vested interest in the

subdivision plan and that the rezoning of the property to an

LI designation was invalid.10

II. Cross-Error

Greengael raises two assignments of cross-error: (1) The

trial court erred in holding that the rezoning of the property

10
In the light of these rulings, we need not reach the
Board's remaining assignment of error.

23
from R-4 to LI was valid and did not constitute illegal

piecemeal downzoning; and (2) The trial court erred in

granting the defendants' demurrers and pleas and dismissing

Counts II through VI of its Appeal and Bill of Complaint

without leave to amend and without a hearing on the merits.

We consider these in order.

A. Piecemeal Downzoning

Greengael assigns cross-error to the trial court's

finding that the Board's rezoning of its Property was

reasonable and not piecemeal downzoning.

When a court reviews the legitimacy of a zoning

amendment, it presumes the action is "valid so long as it is

not unreasonable and arbitrary." Board of Supervisors of

Fairfax County v. Snell Construction Corp., 214 Va. 655, 658,

202 S.E.2d 889, 892 (1974) (quoting Board of Supervisors v.

Carper, 200 Va. 653, 660, 107 S.E.2d 390, 395 (1959)). The

opponent of the action bears the burden of proving that the

action is "clearly unreasonable, arbitrary or capricious, and

that it bears no reasonable or substantial relation to the

public health, safety, morals, or general welfare." Id., 202

S.E.2d at 892-83. The court will uphold the ordinance if

its reasonableness is "fairly debatable." Id., 202 S.E.2d

893.

24
 A court conducts a more expansive review, however, when a

rezoning is a piecemeal downzoning, which is defined as a

rezoning (1) that the local governing body initiates on its

own motion, (2) that selectively addresses the landowner's

single parcel, and (3) that "reduces the permissible

residential density below that recommended by a duly-adopted

master plan." Id. at 658, 202 S.E.2d at 893. An aggrieved

landowner can make a prima facie case that the rezoning is

piecemeal downzoning upon a showing that "since the enactment

of the prior ordinance there has been no change in

circumstances substantially affecting the public health,

safety, or welfare." Id. at 659, 202 S.E.2d at 893. At that

point, the burden shifts to the governing body to offer

evidence of mistake, fraud, or changed circumstances

"sufficient to make reasonableness fairly debatable." Id.

We must first examine whether Greengael established a

prima facie case for a piecemeal downzoning. Greengael

sufficiently pleads two of the elements of a piecemeal

downzoning discussed in Snell: the Board initiated the zoning

amendment on its own motion, and it selectively directed that

amendment to Greengael's Property. However, the trial court

held, and we agree, that Greengael has not established that

the rezoning reduced the density of development below that

recommended by the Comprehensive Plan. Id.

25
 Greengael argues that the rezoning was a piecemeal

downzoning because it was "against [Greengael's] will" and

violative of what Snell referred to as a landowner's

" 'legitimate profit prospects.' " Id. According to

Greengael, its profit prospects are especially important

because this rezoning makes a drastic shift from residential

to industrial, rather than simply a change in intensity of

land use within the same zoning classification, such as the

higher intensity to lower intensity residential change

featured in Snell. Greengael claims that the Property was far

more valuable when zoned R-4 and discusses the "glut[] of

vacant industrial land [in Culpeper County] with no

foreseeable prospects for users."

Greengael's arguments are not availing. We agree with

the trial court that the use of the land, rather than the

profit expectation, is determinative of whether a rezoning is

a downzoning. See, e.g., Turner v. Board of County

Supervisors, 263 Va. 283, 289, 559 S.E.2d 683, 686 (2002)

(finding a piecemeal downzoning partly based on reduction of

residential density below that recommended by County's master

plan); Code § 15.2-2286(A)(11) (defining downzoning in context

of agreements between localities and landowners to mean a

zoning action resulting "in a reduction in a formerly

permitted land use intensity or density"). Further, we agree

26
with the Board's argument that adopting Greengael's definition

of downzoning would require governing bodies desiring to enact

zoning amendments to undertake speculative and costly analyses

of the future profit potential of the affected properties

under multiple development scenarios.

Applying the intensity of use analysis, we find the

rezoning was not a downzoning because the LI designation

allows more intense coverage of land than the R-4 designation,

50% versus 35% respectively, and more expansive uses than R-4,

including manufacturing, dry cleaning, fabricating metal

products, printing and publishing, broadcasting, and disposing

of waste. We also conclude that in rezoning the Property, the

Board acted reasonably. As the trial court ruled, the

amendment "brought the property into conformance with the

comprehensive plan," which first designated the property as

"future industrial" in 2000, and the Board followed proper

procedure by first passing a resolution, then considering the

Planning Commission's recommendation, and finally holding a

public meeting after providing proper notice. Thus, we reject

Greengael's assignment of cross-error.

B. Dismissal of Counts II through VI

Greengael asserts that the trial court erred in

sustaining the defendants' demurrers and pleas to Counts II

27
through VI.11 Greengael divides the dismissed counts into two

categories: (1) allegations that certain portions of the

Culpeper County Subdivision Ordinance were invalid; and (2)

allegations that Greengael was entitled to damages for harm it

suffered because the County, Board, and Egertson violated

principles of due process and equal protection and engaged in

willful misconduct.

With regard to the validity of the subdivision ordinance,

Greengael pled that Sections 425.3.1 and 425.4.1 of the

ordinance were invalid because they

fail to provide 'reasonable' provisions in that, as
applied, they do not permit any installed water and
sanitary sewer facilities for residential
subdivision that the County arbitrarily and
capriciously chooses not to approve.

Greengael argues the provisions were invalid as applied to it

because the Board arbitrarily and capriciously chose not to

11
The dismissed Counts asserted claims that provisions of
the Culpeper zoning ordinance violated the Dillon Rule and the
due process and equal protection provisions of the Virginia
and United States Constitutions, (Count II), that in denying
the subdivision plat application, the County, Board, and
Egertson committed an unlawful taking of Greengael's property
in violation of the equal protection and due process clauses
of the Virginia and United States Constitutions, (Count III),
that the County, Board, and Egertson unlawfully withheld
utility service as a mechanism for land use control
constituting an illegal moratorium on development, (Count IV),
that Egertson committed fraud and acted ultra vires, (Count
V), and that the members of the Board and Egertson were liable
in their official and individual capacities to Greengael for
damages under 42 U.S.C. § 1983, (Count VI).

28
approve water and sewer facilities. First, we note that

nothing in the cited ordinance provisions involves County

approval of water and sewer facilities in conjunction with its

approval of a preliminary subdivision plat. More importantly,

Greengael's arguments fail because, as we have concluded, the

Board's denial of the preliminary subdivision plat application

based on Greengael's failure to comply with these provisions

was not arbitrary or capricious.12

The second set of allegations Greengael contends the

trial court improperly dismissed were the alleged actions of

the County, Board, and Egertson that manipulated the

subdivision process and constituted fraud and violations of

due process and equal protection. According to Greengael, in

finding that "the County and certain of its officials acted in

an arbitrary and capricious manner," the trial court "found,

in sum, that County conduct constituted willful misconduct."

As we have held, however, the denial of the preliminary

subdivision plat was not arbitrary and capricious and, as

Greengael conceded at oral argument, claims based on that

conduct are moot.

12
We do not consider whether the ordinance provisions are
facially invalid, an argument Greengael raised in its brief
filed in this Court in support of the trial court's order
approving the preliminary subdivision plat. Greengael did not
assert this argument in its pleadings, memoranda, or argument
of counsel in the trial court. Rule 5:25.

29
 Finally, we address Greengael's allegation in its

pleading that the denial of the preliminary subdivision plat

based on its failure to comply with the requirement of a

utility letter was an unconstitutional taking in violation of

its rights under the Virginia and United States Constitutions.

To establish an unconstitutional taking, a landowner must

suffer either a categorical taking or a regulatory taking. A

categorical taking is a deprivation of all economic use of

property. A regulatory taking "places limitations on land

that fall short of eliminating all economically beneficial use

[but render an] economic effect on the landowner [and]

interfere[] with reasonable investment-backed expectations,"

among other harms. Palazzolo v. Rhode Island, 533 U.S. 606,

617 (2001) (citing Penn Central Transp. Co. v. New York City,

438 U.S. 104, 124 (1978)).

Greengael does not assert a categorical taking because it

has not been denied all economic use of its property. It does

claim that the Board's action resulted in a regulatory taking.

In evaluating allegations of regulatory takings, a court

uses the principles originally set out in Penn Central. Id.

at 630. Though there is no "set formula" for such

evaluations, the United States Supreme Court has identified

three "significan[t]" factors: "The economic impact of the

regulation on the claimant, . . . the extent to which the

30
regulation has interfered with distinct investment-backed

expectations, . . . and the character of the governmental

action." Penn Central, 438 U.S. at 124.

Though the regulations Greengael challenges were in

effect when it acquired the property, this fact does not per

se preclude Greengael from raising a regulatory taking claim.

Palazzolo, 533 U.S. at 627 (allowing challenge to preexisting

regulation when landowner "assert[s] that a particular

exercise of the State's regulatory power is so unreasonable or

onerous as to compel compensation").13 However, in applying

the relevant principles, we conclude that Greengael's

challenge here has no merit.

The R-4 zoning ordinance requires that residential

dwellings be served by an approved public water and sewer

system of adequate capacity, operated by a municipality or

public service corporation. The subdivision ordinance

requires that written evidence of an agreement to provide such

service accompany the request for preliminary subdivision

approval. No credible argument can be made that these

regulations place unreasonable restrictions on the use of land

13
To the extent our decision in Board of Supervisors v.
Omni Homes, 253 Va. 59, 68-69, 481 S.E.2d 460, 464-65 (1997),
precludes landowners from prevailing on a regulatory taking
claim if they acquired their property subject to the ordinance
they subsequently challenge as a taking, Palazzolo has
overruled that per se preclusion.

31
for residential purposes. Indeed, in seeking to develop land

for residential purposes, one expects that provision of water

and sewer service will be necessary. Reasonable investment-

backed expectations for property that does not include such

service then necessarily would include an understanding that

such service must be acquired or otherwise made available and

that risk accompanies the acquisition of that service. As the

trial court stated, Greengael "assumed the risk that there

might not be sewer and water available" when it purchased the

Property.14

SUMMARY

For the reasons stated, we will affirm the trial court's

judgment sustaining the defendants' demurrers to Counts II

through VI and dismissing all defendants but the Board of

Supervisors and reverse the trial court's judgment approving

the preliminary subdivision plat and invalidating the LI

zoning ordinance.

Affirmed in part,
reversed in part,
and final judgment.

14
We repeat our previous holding that the denial of the
preliminary subdivision plat based on the absence of a utility
letter was not arbitrary and capricious, and to the extent
Greengael's taking argument is based on the ordinance as
applied to Greengael, that argument is rejected.

32