Present: Carrico, C.J., Compton, Lacy, Hassell, Keenan, and
Kinser, JJ., and Whiting, Senior Justice
BOARD OF SUPERVISORS OF
FAIRFAX COUNTY
v. Record No. 962533 OPINION BY JUSTICE BARBARA MILANO KEENAN
October 31, 1997
FCS BUILDING ASSOCIATION
FROM THE CIRCUIT COURT OF FAIRFAX COUNTY
M. Langhorne Keith, Judge
In this appeal, we consider whether the trial court erred in
awarding interest on a refund of erroneously assessed real estate
taxes when the local ordinance authorizing the payment of such
interest was repealed prior to entry of the final judgment order.
In December 1995, FCS Building Association (FCS) filed a
second amended motion for judgment and application for correction
of assessments against the Board of Supervisors of Fairfax County
(Board) for the 1990-1995 tax years regarding two parcels of land
owned by FCS. In a bench trial, the court modified the
assessments for tax years 1990, 1991, 1993, 1994, and 1995, and
ordered the Board to refund FCS the principal amount of
$129,353.18. The trial court also ordered interest on the refund
for tax years 1990 and 1991 from the dates the taxes were paid.
The Board appealed the trial court's judgment solely with respect
to the award of interest.
The Board argues that interest cannot be awarded against a
local government on a refund of erroneously assessed taxes
without its consent. The Board notes that the ordinance
authorizing such interest was repealed in 1992, more than four
years before entry of the final order in this case. Prior to its
repeal in April 1992, former Fairfax County Code § 4-4-4 provided
that
[f]or tax year 1980 and subsequent years, all
erroneously assessed taxes and any penalty and interest
paid thereon . . . shall be repaid with interest at the
same rate imposed for delinquent taxes. Such interest
shall run from the date such taxes were due or were
paid, whichever is later.
The ordinance repealing this provision * specified that the
repeal was effective immediately, and it did not contain a
"savings clause" authorizing the payment of interest on any tax
refunds ordered after the effective date of the repeal. Thus,
the Board argues that the trial court lacked authority to award
interest to FCS, although FCS paid the erroneously assessed taxes
for 1990 and 1991 before the ordinance was repealed.
In response, FCS asserts that, since former Fairfax County
Code § 4-4-4 was effective when the erroneously assessed taxes
were paid, FCS acquired a substantive right to interest on its
excess payments at the time the payments were made. FCS alleges
that this substantive right could not be disturbed by retroactive
application of the repeal of former Fairfax County Code § 4-4-4.
Thus, FCS contends that it is entitled to interest provided by
the former ordinance despite its repeal. We disagree with FCS.
Interest may be awarded against a sovereign only by its
consent. Railway Express Agency, Inc. v. Commonwealth, 196 Va.
1059, 1066, 87 S.E.2d 183, 187 (1955); Commonwealth v. Safe
Deposit & Trust Co., 155 Va. 458, 460, 155 S.E. 897, 898 (1930).
A trial court may order interest on a refund of erroneously
*
See Fairfax County Code § 22-92.4
assessed local taxes only if the payment of interest is
authorized by an ordinance enacted pursuant to Code § 58.1-3991.
City of Winchester v. American Woodmark Corp., 250 Va. 451, 460,
464 S.E.2d 148, 153 (1995); see Code § 58.1-3987.
Code § 58.1-3991 permits the governing body of any county,
city, or town to enact an ordinance requiring the payment of
interest on refunds of erroneously assessed local taxes. The
statute requires that any such ordinance provide that interest
shall run from the date the taxes were due or were paid,
whichever is later. Absent such an ordinance, the local
government has not furnished the consent required under the
common law for the payment of interest by a sovereign. See
American Woodmark, 250 Va. at 460, 464 S.E.2d at 153; Railway
Express Agency, Inc. v. Commonwealth, 196 Va. 1069, 1072, 87
S.E.2d 188, 190 (1955); Safe Deposit & Trust, 155 Va. at 460, 155
S.E. at 898.
An ordinance enacted pursuant to Code § 58.1-3991 does not
create a substantive right but is purely remedial in nature.
Substantive rights are included in that part of the law
addressing the creation of duties, rights, and obligations.
Commonwealth v. Rafferty, 241 Va. 319, 323, 402 S.E.2d 17, 20
(1991); Rotonda Condominium Unit Owners Ass'n v. Rotonda Assoc.,
238 Va. 85, 89, 380 S.E.2d 876, 879 (1989); Shiflet v. Eller, 228
Va. 115, 120, 319 S.E.2d 750, 754 (1984). In contrast, remedial
or procedural laws prescribe methods of obtaining redress or
enforcement of substantive rights. Rafferty, 241 Va. at 323, 402
S.E.2d at 20; Shiflet, 228 Va. at 120, 319 S.E.2d at 754. Thus,
remedial laws do not create rights but merely operate in
furtherance of already existing rights. See Walke v. Dallas,
Inc., 209 Va. 32, 35, 161 S.E.2d 722, 724 (1968).
Former Fairfax County Code § 4-4-4 was a purely remedial law
because it provided a taxpayer a means of redress that was
available only after the taxpayer established a substantive right
to a refund under Code § 58.1-3984. Once a trial court
determined that taxes were erroneously assessed against a
taxpayer and ordered a refund, the former ordinance provided a
means of redress in furtherance of the taxpayer's already
existing right to the refund.
As a remedial provision, this section was subject to repeal
at the will of the Board as long as reasonable opportunity and
time were allowed for the enforcement of substantive or vested
rights. See Harris v. DiMattina, 250 Va. 306, 312, 462 S.E.2d
338, 340 (1995); Creteau v. Phoenix Assurance Co., 202 Va. 641,
645, 119 S.E.2d 336, 340 (1961); Phipps v. Sutherland, 201 Va.
448, 452, 111 S.E.2d 422, 425 (1959); Duffy v. Hartsock, 187 Va.
406, 416, 46 S.E.2d 570, 574 (1948). In repealing the ordinance,
the Board exercised its authority to withdraw consent to pay
interest on refunds of erroneously assessed taxes. See Railway
Express, 196 Va. at 1073, 87 S.E.2d at 190. Since the repeal
provision contained no "savings clause" authorizing interest on
taxes erroneously paid prior to the repeal, the trial court erred
in awarding FCS interest pursuant to a repealed ordinance. See
Terry v. McClung, 104 Va. 599, 601, 52 S.E. 355, 356 (1905).
For these reasons, we will reverse the trial court's award
of interest to FCS, modify the judgment accordingly, and enter
final judgment in favor of FCS.
Reversed in part,
modified,
and final judgment.