Present: All the Justices
CHESTERFIELD COUNTY
OPINION BY
v. Record No. 002942 JUSTICE LAWRENCE L. KOONTZ, JR.
November 2, 2001
MARGARET B. STIGALL, TRUSTEE, ET AL.
FROM THE CIRCUIT COURT OF CHESTERFIELD COUNTY
Michael C. Allen, Judge
In this appeal, we consider whether Code § 58.1-3241(A)
authorizes Chesterfield County to assess “roll-back” taxes,
defined in Code § 58.1-3237, against certain real property as a
result of conveyances of the entire property in two separate
parcels by the owner, in the absence of a change in the use of
the property.
BACKGROUND
The material facts are not in dispute. In 1954, Charles W.
Stigall acquired, by single deed, two contiguous parcels of real
property consisting of approximately 135 acres in Chesterfield
County. The larger of the two parcels, denominated by the
parties in this case as the “Falling Creek” parcel, consisted of
approximately 120 acres. The smaller parcel, denominated by
those parties as the “A.G. Tyler” parcel, consisted of
approximately 15 acres. 1
1
For clarity we will hereafter omit any reference to the
A.G. Tyler parcel even though the record reflects that a portion
In 1975, pursuant to the applicable provisions of the
statutory scheme for Special Assessment for Land Preservation
contained in Code § 58.1-3229 et seq., Chesterfield County
adopted an ordinance providing for reduced assessment and
taxation of real estate devoted to agricultural, horticultural,
forest, or open space use (special land use tax program).
Thereafter, the Falling Creek parcel was devoted to forest use,
as defined in Code § 58.1-3230, and accepted by the County as
qualified for reduced assessment and taxation under its special
land use tax program.
In 1979 or 1980, the Commonwealth acquired by eminent
domain a portion of the Falling Creek parcel for the
construction of the Powhite Parkway, “a limited access,
interstate grade freeway.” The Powhite Parkway bisected the
Falling Creek parcel into two unequal sections; one with
approximately 26 acres lying north of the freeway and the other
with approximately 84 acres lying south of the freeway.
Although the two sections of the Falling Creek parcel were
physically separated by the construction of the Powhite Parkway,
of it was involved in the various proceedings and conveyances
which we will subsequently relate. We do so because there is a
discrepancy in the record regarding the total acreage of that
parcel impacted by those proceedings and conveyances, and the
parties agree that taxation of the A.G. Tyler parcel is not at
issue in this appeal.
2
the County continued to tax the Falling Creek parcel as a single
unit under its special land use tax program. At the time of the
eminent domain taking of a portion of this parcel, Charles
Stigall did not record a subdivision plat or otherwise take any
action that would reflect in the County’s land records a legal
separation of the parcel into two separate tracts.
Following the death of Charles Stigall in 1998, the Falling
Creek parcel became the property of his widow, Margaret B.
Stigall. On October 7, 1999, for the purpose of estate
planning, Margaret Stigall conveyed that portion of the Falling
Creek parcel lying south of the Powhite Parkway by deed to The
Margaret B. Stigall Living Trust, a revocable inter vivos trust.
On the same date and for the same purpose, she conveyed that
portion of the Falling Creek parcel lying north of the Powhite
Parkway by deed to The Stigall Family Limited Partnership.
These deeds along with a 1988 plat reflecting the physical
division of the Falling Creek parcel were duly recorded in the
County land records. No change in the use of the property
occurred as a result of these conveyances.
On December 27, 1999, the County, pursuant to Code § 58.1-
3241(A), assessed roll-back taxes against the Falling Creek
parcel in the amount of $22,087.74 based on the above described
conveyances by Margaret Stigall. The amount of the tax
represented the difference between the actual tax paid under the
3
special land use tax program and the tax which would have been
due had the real estate been taxed on its fair market value
assessment during “the five most recent complete tax years.”
Code § 58.1-3237(B). Thereafter, on May 25, 2000, Margaret
Stigall, in her capacity as trustee of her inter vivos trust,
and The Stigall Family Limited Partnership (collectively, the
taxpayers) filed a joint application in the Circuit Court of
Chesterfield County for correction of erroneous assessment of
these roll-back taxes.
Upon the filing of the County’s responsive pleading and the
parties’ agreement that the material facts were not disputed,
the trial court permitted the taxpayers to make an oral motion
for summary judgment. 2 In a letter opinion dated August 21,
2
The County styled its pleading responding to the taxpayers’
application as a “demurrer” and subsequently filed a “Memorandum
in Support of Demurrer.” Within these pleadings, however, the
County contested the factual allegations of the application and,
thus, its challenge to the suit cannot be viewed as constituting
a “demurrer” and proper supporting argument for that form of
pleading, which admits the truth of the facts contained in the
pleading to which it is addressed. Cox Cable Hampton Roads,
Inc. v. City of Norfolk, 242 Va. 394, 397, 410 S.E.2d 652, 653
(1991). It is evident from the record, however, that the County
consented to the case being resolved by the trial court on the
taxpayers’ oral motion for summary judgment because the facts
asserted in the taxpayers’ application were not disputed for
purposes of resolving the legal issue before the trial court.
Accordingly, we will review the judgment of the trial court
under the standard of review applicable in such cases. Shelor
Motor Co. v. Miller, 261 Va. 473, 478, 544 S.E.2d 345, 348
(2001).
4
2000, and subsequently adopted by reference in the final order,
the trial court, applying what it characterized as the “ordinary
and commonly understood meanings” of the terms used in Code
§ 58.1-3241(A), initially ruled that the Falling Creek parcel
“was not separated and split[-off] when [Margaret] Stigall made
the conveyances of 1999, but years earlier – when the
Commonwealth built the Powhite Parkway.” Because this
separation did not result from an “action of the owner,” the
trial court concluded that the roll-back tax assessment
permitted by Code § 58.1-3241(A) was not triggered. The trial
court further ruled that following the 1999 conveyances to the
trust and the partnership, the taxpayers “made the necessary
attestation that the properties will continue to be devoted to
‘forest use,’ and each of the parcels is of sufficient acreage
to qualify for inclusion in the land use [tax] program
authorized by Code § 58.1-3231” and, thus, “satisfy the
requirements of Code § 58.1-3237(D).”
In its final order, entered on September 12, 2000, the
trial court incorporated by reference its prior letter opinion,
granted the taxpayers’ motion for summary judgment, and ordered
that the County “exonerate [the property in question] of all
roll-back taxes imposed in 1999.” In an order dated February
23, 2001, we awarded the County this appeal.
5
DISCUSSION
Beyond question the statutory scheme invoked by this case
regarding a special land use tax program that provides for
reduced assessment and taxation of real estate devoted to
agricultural, horticultural, forest, or open space use is
intended by the legislature to promote the preservation of such
real estate for the public benefit. The key to that
preservation is the amelioration of the pressure that forces
landowners to convert their property to more intensive uses.
One source of that pressure is the assessment of property
devoted to one or more of these uses at values incompatible with
such use. See Code § 58.1-3229 (1984 Repl. Vol.).
In this context, one intended goal of this statutory scheme
is the continued qualifying use of property which has qualified
previously for the reduced taxation provided by a special land
use tax program following a proper application by the owner.
Code § 58.1-3234. Thus, under Code § 58.1-3237(A), when the
qualifying use of particular real property changes to a
“nonqualifying use” or the zoning of that property is changed to
a “more intensive use” at the request of the owner or his agent,
that portion of the property which no longer qualifies for
reduced assessment and taxation “shall be subject to additional
taxes . . . referred to as roll-back taxes.” Pertinent to the
present case, Code § 58.1-3237(D) expressly provides that
6
“[l]iability to the roll-back taxes shall attach when a change
in use occurs . . . . Liability to the roll-back taxes shall
not attach when a change in ownership of the title takes place
if the new owner . . . continues the real estate in the use for
which it is classified” prior to the transfer of title to the
new owner.
In the present case, the County concedes that the real
estate in question has not undergone a change in use and in
subsequent years will qualify for reduced assessment and
taxation under its special land use tax program so long as that
real estate continues to be devoted to forest use by the new
owners. Nonetheless, the County contends here, as it did in the
trial court, that Code § 58.1-3241(A) authorizes it to assess
roll-back taxes against that real estate as a result of the 1999
conveyances by Margaret Stigall.
Code § 58.1-3241(A) provides that:
Separation or split-off of lots, pieces or
parcels of land from the real estate which is being
valued, assessed and taxed under an ordinance adopted
pursuant to this article, either by conveyance or
other action of the owner of such real estate, shall
subject the real estate so separated to liability for
the roll-back taxes applicable thereto, but shall not
impair the right of each subdivided parcel of such
real estate to qualify for such valuation, assessment
and taxation in any and all future years, provided it
meets the minimum acreage requirements and such other
conditions of this article as may be applicable. Such
separation or split-off of lots shall not impair the
right of the remaining real estate to continuance of
such valuation, assessment and taxation without
7
liability for roll-back taxes, provided it meets the
minimum acreage requirements and other applicable
conditions of this article.
No subdivision of property which results in
parcels which meet the minimum acreage requirements of
this article, and which the owner attests is for one
or more of the purposes set forth in § 58.1-3230,
shall be subject to the provisions of this subsection.
The County asserts that although the Falling Creek parcel
was physically “separated” as a result of the prior eminent
domain taking of a portion of it by the Commonwealth, Code
§ 58.1-3241(A) contemplates a legal separation, which occurred
when the remaining acreage of that parcel was conveyed in
separate parcels to two different owners in 1999 by Margaret
Stigall. The County further asserts that the “safe-harbor”
provision provided by the second paragraph of Code § 58.1-
3241(A) is not applicable because the taxpayers concede that the
purpose of the 1999 conveyances was for estate planning and,
thus, Margaret Stigall could not, and did not, attest that the
purpose of the legal separation was for one or more of the
purposes of agricultural, horticultural, forest, or open space
use set forth in Code § 58.1-3230.
In response, the taxpayers first contend that the trial
court properly ruled the eminent domain taking by the
Commonwealth caused the separation of the Falling Creek parcel
rather than the 1999 conveyances by Margaret Stigall.
Continuing, the taxpayers further contend that because the
8
eminent domain taking did not subject the property to liability
for roll-back taxes at that time, Code § 58.1-3242, the trial
court correctly determined that Code § 58.1-3237(D) rather than
Code § 58.1-3241(A) controlled whether roll-back taxes were to
be assessed against the “separated” parcels. Finally, the
taxpayers maintain that even if the 1999 conveyances potentially
subjected these parcels to liability for roll-back taxes under
Code § 58.1-3241(A), the safe-harbor provision of that statute
applies because the separated parcels continue to be used “for
one or more of the purposes set forth in Code § 58.1-3230.”
We do not agree with the contentions of either party in
their entirety. However, for the reasons that follow, we are of
opinion that the trial court reached the correct result although
for the wrong reason. Accordingly, we will assign the correct
reason and affirm that result. See Mitchem v. Counts, 259 Va.
179, 191, 523 S.E.2d 246, 253 (2000).
Under familiar principles, when we construe a statute we
endeavor to ascertain and give effect to the intention of the
legislature. In doing so, we must assume that the legislature
chose, with care, the words it used in enacting the statute, and
we are bound by those words when we apply the statute. Barr v.
Town & Country Properties, 240 Va. 292, 295, 396 S.E.2d 672, 674
(1990). Moreover, we examine a statute in its entirety, rather
than by isolating particular words or phrases. Shelor Motor
9
Co., 261 Va. at 479, 544 S.E.2d at 348. With respect to a
special land use tax program, we also are of opinion that the
relief it affords in the form of a special assessment “operates
as an exemption or deferral from taxation. Consequently, all
provisions of the [authorizing] Act ought to be strictly
construed against the taxpayer.” 1978-79 Op. Va. Att’y Gen.
273, 274.
With these principles in mind, we begin our analysis by
addressing the trial court’s initial conclusion that the eminent
domain taking by the Commonwealth of a portion of the Falling
Creek parcel constituted a “separation or split-off” of that
property as contemplated by Code § 58.1-3241(A). Undoubtedly,
this taking and, more particularly, the barrier created by the
subsequent construction of the Powhite Parkway resulted in a
physical division of the Falling Creek parcel. By its express
terms, however, this statute is only applicable to a “conveyance
or other action of the owner.” A taking by eminent domain is
not an action of the owner in any sense. Moreover, this
statute, viewed in its entirety, clearly evinces a legislative
intent that the triggering “subdivision of property” into “lots,
pieces or parcels of land” be a legal separation rather than a
mere physical separation.
The creation of new lots, pieces, or parcels of land is a
legal separation of property because it results from action by
10
the owner and involves, at a minimum, a change in the legal
description of the property, either by metes and bounds or by
plat, which is duly recorded in the appropriate land records.
Such was exactly the case when Margaret Stigall recorded the
1999 deeds and the 1988 plat in the County’s land records,
legally separating the Falling Creek parcel into two separate
parcels owned by the taxpayers. Accordingly, we hold that the
trial court erred in ruling that the eminent domain taking of a
portion of the Falling Creek parcel caused a “separation or
split-off” of that property as contemplated by Code
§ 58.1-3241(A).
As we have previously noted, the trial court’s conclusion
that the Falling Creek parcel was separated by the eminent
domain taking of a portion of that parcel, rather than by
Margaret Stigall’s conveyances, logically led it to then apply
the provisions of Code § 58.1-3237(D) which, if applicable,
would support the ultimate result reached by the trial court
that the property in question was not liable to the assessment
of roll-back taxes. This would be so because the County
concedes that no change in the use or zoning of the property had
occurred and the taxpayers, as new owners, continued to devote
the property to forest use for which it had qualified for
reduced assessment and taxation under the County’s special land
use tax program. We are of opinion, however, that the proper
11
construction of Code § 58.1-3241(A) nonetheless supports the
result reached by the trial court under the facts of this case.
Code § 58.1-3241(A) is only applicable when the conveyance
or other action of the owner of real estate causes a separation
or split-off of lots, pieces, or parcels of land “from the real
estate which is being valued, assessed and taxed” under a local
special land use tax ordinance. (Emphasis added). The
“remaining real estate” continues to receive the benefit of
reduced assessment and taxation “without liability for roll-back
taxes” provided it continues to qualify for beneficial
treatment. Thus, by its express terms, this statute
contemplates a separation or split-off of a portion of the real
estate in such a manner that there is a “remaining” portion of
the original parcel. 3 It does not contemplate or address the
conveyance of the original parcel in its entirety by the owner.
Rather, when the owner conveys the real estate in its entirety
to a new owner or owners either as one parcel or as separate
“lots, pieces or parcels,” the liability to roll-back taxes, if
any, is controlled by the provisions of Code § 58.1-3237(D). In
addition, the owner need not satisfy the safe-harbor provision
3
In the present case, the County concedes that it did not
treat either of the two parcels created by the 1999 conveyances
as the “remaining real estate” that was not subject to roll-back
taxes. Rather, the County taxed both parcels.
12
of Code § 58.1-3241(A) by attesting that the subdivision of the
property is for one or more of the purposes set forth in Code
§ 58.1-3230 because the potential liability to roll-back taxes
under Code § 58.1-3241(A) has not been triggered by such a
conveyance or conveyances.
In the present case, it is undisputed that only a change in
ownership occurred and the property continued to be devoted to
forest use and qualified for reduced assessment and taxation
under the County’s special land use tax program. Accordingly,
we hold that the trial court reached the right result that the
property in question was not liable to the roll-back taxes
assessed against it by the County.
CONCLUSION
For these reasons, we will affirm the judgment of the trial
court in favor of the taxpayers.
Affirmed.
13