City of Manassas v. Board of County Supervisors

Present: All the Justices

CITY OF MANASSAS

v. Record No. 941189 OPINION BY JUSTICE LEROY R. HASSELL
June 9, 1995
BOARD OF COUNTY SUPERVISORS OF
PRINCE WILLIAM COUNTY

BOARD OF COUNTY SUPERVISORS
OF PRINCE WILLIAM COUNTY

v. Record No. 941206

CITY OF MANASSAS

FROM THE CIRCUIT COURT OF PRINCE WILLIAM COUNTY
Thomas S. Kenny, Judge Designate

In these appeals, we consider issues relating to a decree

requiring the City of Manassas to make efforts to cede

jurisdiction of a portion of the City to Prince William County.

I.

The Town of Manassas, formerly a part of Prince William

County, became a city of the second class independent of the

County in 1975. The newly created City and the County executed

an Agreement, described as an inter-jurisdictional agreement, to

facilitate the transition of the Town's status to a city. The

Agreement sought to resolve numerous governmental issues relating

to: public schools; water; library and police services; and

jurisdiction.

The City filed this action at law, seeking a declaration

that an area of land and improvements thereon, referred to as the

Courthouse Complex, is within the City limits and subject to its

jurisdiction. The County filed a counterclaim, asserting that

jurisdiction had been "equitably converted" to it and,

alternatively, sought an award of monetary damages based upon the

City's failure to cede jurisdiction to the County pursuant to the
terms of the Agreement. The City demurred to the counterclaim

and filed a special plea in bar, contending that the County's

counterclaim was barred by the applicable statute of limitations.

The trial court sustained the demurrer and plea, holding that

the County's claim for damages was barred by the five-year

statute of limitations for written contracts. The trial court

also transferred the case to the equity side of the court.

Subsequently, the County filed an amended counterclaim,

seeking a declaration that the Courthouse Complex was under the

County's jurisdiction because such jurisdiction had been

"equitably converted" to the County or, in the alternative,

seeking specific performance of the Agreement. The City filed a

demurrer and special plea asserting, inter alia, that the
County's claims are barred by the statute of limitations and

laches.

At a trial on the merits, the chancellor held, inter alia,

that: the City retained jurisdiction over the Courthouse

Complex; the County's counterclaim is not barred by the statute

of limitations or laches; and the City is required to institute

proceedings to cede jurisdiction of the Courthouse Complex to the

County as required by the Agreement. Both the County and the

City appeal.

II.

The chancellor made numerous findings of fact, relevant to

these appeals, that are not challenged by the litigants. The

Courthouse Complex, situated upon 38.4 acres of land, is owned by

the County, and the City has a 20% ownership interest in the

Courthouse Complex. For many years before the incorporation of
the City in 1975, the County's courts, jail facilities, police

facilities, and other administrative offices were located in the

Courthouse Complex. Presently, many of these facilities,

including the County courts, remain located in the Courthouse

Complex.

During the negotiations relating to the Town's transition to

city status, the City wanted the County to retain its courthouse

within the Courthouse Complex because the courthouse provides

substantial economic and symbolic benefits to the City. The City

made certain inquiries and learned that Fairfax City had created

a geographical configuration described as a "doughnut hole"

within its boundaries, in which Fairfax County had jurisdiction.

Fairfax City instituted certain proceedings in 1967 by adopting

an ordinance pursuant to Code § 15.1-1059, which was subsequently

approved by the Fairfax Circuit Court and the General Assembly.

When it executed the Agreement, the City of Manassas anticipated

that it would institute legal proceedings to cede jurisdiction

over the Courthouse Complex to Prince William County in a manner

similarly utilized by Fairfax City and Fairfax County.
The Agreement includes the following paragraph, which is

germane to these appeals:
D. COURTHOUSE COMPLEX

City agrees to institute proceedings necessary to
exclude from its corporate boundaries and from the
jurisdiction of the City the contiguous property
constituting the courthouse complex as per the attached
map, provided that such property shall again become
incorporated within the City corporate limits in the
event that the Prince William County Courthouse is
relocated, and Council and Supervisors agree that any
court order or legislation entered in furtherance
hereof shall contain a reversionary clause to such
effect.
 In 1976, an assistant city attorney sent a letter to the

acting county attorney, requesting that the County provide a

legal description of the Courthouse Complex. The assistant city

attorney also raised concerns about the constitutional validity

of certain statutes that authorized the Fairfax jurisdictional

arrangement. The County failed to respond to this letter.

The City admitted, and the chancellor found, that the City

did not repeat its request for information, nor did it seek

legislation or institute court proceedings to transfer

jurisdiction of the Courthouse Complex to the County. However,

the County did not complain about these matters until a dispute

arose in 1990, when the County sought to expand its jail and

Judicial Center, located in the Courthouse Complex.
III. THE CITY'S APPEAL

A.

The chancellor held that the County's counterclaim is exempt

from the statute of limitations and laches. The City asserts

that the County is merely seeking to vindicate a private

contractual right and, thus, the County, like any private

litigant, is bound by laches and the statute of limitations. The

County, relying upon City of Portsmouth v. City of Chesapeake,
232 Va. 158, 349 S.E.2d 351 (1986), argues the chancellor

correctly held that laches and the statute of limitations are not

defenses that may be asserted against a municipality acting in a

governmental capacity. We agree with the County.

In City of Portsmouth v. City of Chesapeake, we considered

whether the City of Portsmouth's petition to ascertain and

establish the boundary line between Portsmouth and the City of
Chesapeake was barred by the doctrine of laches. Portsmouth had

filed an action against Chesapeake in 1982, seeking to establish

and ascertain certain boundary lines that were created in

annexation proceedings brought by Portsmouth against the County

of Norfolk, now Chesapeake, in the 1950s. According to

Chesapeake, the suit papers in the annexation proceedings had

disappeared, and Chesapeake did not have the benefit of a plat

depicting the boundaries of the area awarded.
Portsmouth had filed identical petitions to establish

boundaries in the Circuit Courts of Portsmouth and Chesapeake,

and the Circuit Court of Chesapeake granted Chesapeake's motion

to dismiss on the ground that Portsmouth's petition was barred by

the doctrine of laches. Reversing that judgment, we held:
[L]aches or estoppel is not available as a defense
against a municipality acting in its governmental
capacity. See Segaloff v. City of Newport News, 209
Va. 259, 261, 163 S.E.2d 135, 137 (1968); Supervisors
v. N. & W.R. Co., 119 Va. 763, 790, 91 S.E. 124, 133
(1916); Norfolk & W.R. Co. v. Supervisors, 110 Va. 95,
103, 65 S.E. 531, 534 (1909). Protecting municipal
boundary lines is governmental activity.

Id. at 164-65, 349 S.E.2d at 354.

Recently, we restated our longstanding rule, albeit a

minority view, that certain equitable defenses, such as laches,

do not apply to state or local governments when acting in a

governmental capacity. Dick Kelly Enterprises v. City of

Norfolk, 243 Va. 373, 381, 416 S.E.2d 680, 685 (1992); accord
Board of Supervisors v. Booher, 232 Va. 478, 481, 352 S.E.2d 319,

321 (1987) (laches does not apply "to a local government in the

discharge of its governmental functions."). Likewise, we have

held that neither laches nor the statute of limitations may be

asserted as a defense in an equitable proceeding to bar the state
from asserting a claim on behalf of the public. Supervisors v.

N. & W.R. Co., 119 Va. 763, 790, 91 S.E. 124, 133 (1916); Norfolk

& W.R. Co. v. Supervisors, 110 Va. 95, 103, 65 S.E. 531, 534

(1909).

Applying this established precedent, we hold that the

chancellor correctly ruled that the County's counterclaim was not

barred by either the statute of limitations or laches. Here, as

in City of Portsmouth v. City of Chesapeake, the County's claim

is asserted in furtherance of a governmental activity. The

County is seeking to acquire jurisdiction, including the right to

exercise its police and zoning powers, over the Courthouse

Complex. We also observe that the County's reasons for pursuing

this litigation, expansion of its jail and Judicial Center, are

also in furtherance of governmental activities.
B.

The City argues that the chancellor erred by awarding

specific performance of the Agreement. First, the City argues

that the County has an adequate remedy at law, and, thus,

specific performance is not appropriate. The County asserts, and

we agree, that it has no adequate remedy at law.

It is true, as the City asserts, that we have recognized

that a litigant who seeks specific performance must demonstrate

the lack of an adequate remedy at law. See Chattin v. Chattin,

245 Va. 302, 307-08, 427 S.E.2d 347, 350 (1993). And, we do not

depart from this elementary principle.

Contrary to the City's contention, however, the County lacks

an adequate remedy at law to enforce the provisions of Paragraph

(D) of the Agreement. As the chancellor found, the County
desires jurisdiction over the Courthouse Complex so that it can

expand the jail and Judicial Center and exercise zoning and other

police powers over the Courthouse Complex. Even though the

County initially sought monetary damages when it filed its

counterclaim, which was dismissed by the chancellor, a judgment

at law is not an adequate legal remedy for the right that the

County seeks to vindicate.

C.
Next, the City argues that the chancellor erred by ordering

specific performance because the City says that Paragraph (D) of

the Agreement "lack[ed] certainty and definiteness."

Specifically, the City says that there "is no provision in

Paragraph D, apart from the ambiguous reference to institute

proceedings, as to what the parties intended to be done." We

disagree with the City.

We have held that:
The granting of specific performance is addressed
to the sound discretion of the trial court. Although
it is not a matter of absolute right, "where the
contract sought to be enforced is proved and is in its
nature and circumstances unobjectionable, it is as much
a matter of course for courts of equity to decree
specific performance as it is for a court of law to
give damages for a breach of it."

Haythe v. May, 223 Va. 359, 361, 288 S.E.2d 487, 488 (1982)

(quoting Pavlock v. Gallop, 207 Va. 989, 995, 154 S.E.2d 153, 157

(1967)). We have also stated:
When the contract sought to be enforced . . . has been
proven by competent and satisfactory evidence, and
there is nothing to indicate that its enforcement would
be inequitable to a defendant, but will work injury and
damage to the other party if it should be refused, in
the absence of fraud, misapprehension, or mistake,
relief will be granted by specific enforcement.

First Nat. Bank v. Roanoke Oil Co., 169 Va. 99, 117, 192 S.E.
764, 771 (1937).

Additionally, the terms of the contract sought to be

specifically enforced must be definite. Hoster's Comm. v.

Zollman, 122 Va. 41, 45, 94 S.E. 164, 165 (1917); Van Dyke v.

Norfolk & S.R. Co., 112 Va. 835, 849, 72 S.E. 659, 664 (1911).

Finally, we also observe an equally important pertinent

principle:
The law does not favor declaring contracts void
for indefiniteness and uncertainty, and leans against a
construction which has that tendency. While courts
cannot make contracts for the parties, neither will
they permit parties to be released from the obligations
which they have assumed if this can be ascertained with
reasonable certainty from language used, in the light
of all the surrounding circumstances. This is
especially true where there has been partial
performance.

High Knob, Inc. v. Allen, 205 Va. 503, 507, 138 S.E.2d 49, 53

(1964).

Applying these principles, we hold that Paragraph (D) of the

Agreement is sufficiently definite to permit specific

performance. According to the plain language in that paragraph,

the City agreed to institute necessary proceedings or seek

appropriate legislation that would authorize the City to cede

jurisdiction of the Courthouse Complex to the County.

We also observe that the chancellor permitted the litigants

to introduce evidence at trial regarding the City's intent when

it agreed to the 1976 Agreement. Many witnesses, including Harry

J. Parrish, who was the City's mayor when the Agreement was

executed, acknowledged that the City intended to convey

jurisdiction of the Courthouse Complex to the County. Numerous

other witnesses testified that the City and County intended to

utilize the same method that Fairfax City and Fairfax County had
used to create a similar geographical configuration.

Several members of the County's Board of Supervisors

testified that the City agreed to take whatever steps were

necessary to convey jurisdiction of the Courthouse Complex to the

County. Finally, the chancellor found that the County had

performed all its obligations under the Agreement, but that the

City, which has reaped economic and symbolic benefits

attributable to the location of the Courthouse Complex, has not

performed its obligation to initiate proceedings to transfer

jurisdiction to the County.
D.

The City argues that the chancellor's decree is inconclusive

in nature and indefinite. To buttress its argument, the City

says that the decree directed it to "make a good faith effort to

return the Complex to County control, whether it uses the Fairfax

model or something else" and "[t]hus, the decree seemingly

permits the City to elect the type of proceedings it must

institute but at the same time puts the City at risk of making

the wrong election because it must use a 'means (involving one or

more steps) reasonably calculated to offer the best chance of

success.'" The County asserts, and we agree, that the

chancellor did not err by decreeing that the City make a good

faith effort to cede jurisdiction of the Courthouse Complex to

the County. We have said that
[e]quity will decree that as done which by agreement is
agreed to be done and is proper to fully effectuate the
intentions of the parties concerned.

Pleasants v. Pleasants, 221 Va. 1017, 1021, 277 S.E.2d 170, 172

(1981).
 The chancellor, in the proper exercise of his equitable

jurisdiction, directed the City to comply with its agreement by

making a good faith effort to cede jurisdiction over the

Courthouse Complex to the County. Simply stated, the chancellor

has merely required the City to perform the very task that the

City agreed to perform. Contrary to the City's argument, the

chancellor's decree is not indefinite, but a reasonable and

practical solution that will prevent the City, which has received

economic benefits from the County's full performance, from

avoiding its contractual obligation.
E.

The City argues that it cannot lawfully cede the Courthouse

Complex to the County, nor may the County lawfully accept

jurisdiction over the Courthouse Complex. The City says that

"[n]o statute in 1976 or now empowers the City to institute court

proceedings to effectuate the transfer of jurisdiction and the

reversion called for in Paragraph D of the 1976 Agreement.

Hence, Paragraph D is void and unenforceable as a matter of law

because of the absence of statutory authority for the City to

carry it out."

We disagree with the City's contentions. The City fails to

recognize its obligation under Paragraph (D). There, the City

agreed to institute the appropriate legal proceedings and, if

necessary, seek appropriate legislation so that the City could

cede jurisdiction of the Courthouse Complex to the County. We

simply fail to understand how the City can characterize as

unlawful its contractual obligation to make good faith efforts to

transfer jurisdiction to the County.
 F.

The City argues that the chancellor "erred in failing to

consider the hardship which would result to the City if the

contract is specifically enforced." The City contends that it

should have been permitted to introduce evidence to demonstrate

its purported hardship and inequity.

The County filed a motion in limine to prohibit the City

from adducing evidence on the issue of laches. The chancellor

advised the City that it may present evidence, which would

otherwise be inadmissible, to prove laches if that evidence was

admissible under some other theory or if the evidence related to

some other issue in the case.
The City sought to admit evidence of hardship, but the

County's objection was sustained. Subsequently, the City

proffered the testimony of its mayor, Robert L. Browne, that

related solely to the issue of laches. Counsel for the City

described the parameters of the City's proffered testimony as

follows:
The testimony of Mr. Robert Browne is being proffered
for the record in accordance with the Rules of Court
because the trial judge has ruled that the City is not
entitled to present evidence of laches on the part of
the County and, therefore, the City would not be
entitled to submit evidence as to the prejudice to the
City by virtue of the County's failure to insist on the
City performing under Paragraph D of the 1976 Agreement
or failure to bring an action to enforce Paragraph D.

The City failed to proffer any evidence of any hardship or

inequity that might harm the City if the chancellor granted

specific performance. And, as we have said, "this Court will not

consider an error assigned to the rejection of testimony unless

such testimony has been . . . made a part of the record in the
manner prescribed by the Rules of Court." Brown v. Commonwealth,

246 Va. 460, 465, 437 S.E.2d 563, 565 (1993) (quoting Whittaker

v. Commonwealth, 217 Va. 966, 969, 234 S.E.2d 79, 81 (1977));

accord Blue Cross v. Commonwealth, 221 Va. 349, 357, 269 S.E.2d

827, 832 (1980).

G.

As previously mentioned, Paragraph (D) provides, in part,

"in the event that the Prince William County Courthouse is

relocated, . . . Council and Supervisors agree that any court

order or legislation entered in furtherance hereof shall contain

a reversionary clause to such effect." The chancellor found that

"many of the more significant executive and legislative functions

have been moved off the Complex" since the date the Agreement was

signed. The City argued at trial, and assigns as error, that

"even if the County was entitled to jurisdiction of the Complex

that this massive relocation of County buildings and functions

triggered the reverter because the term 'Courthouse,' as used

therein, was intended to refer to the entire Courthouse Complex."

We disagree with the City.
The chancellor considered evidence and held that a reversion

did not occur because the word "courthouse" as used in the

Agreement means the location where the judges sit, and the Prince

William County Courthouse has not been relocated. Numerous

witnesses testified, without dispute, that the courthouse remains

in the Courthouse Complex. Accordingly, we hold that the

chancellor's findings are supported by credible evidence, and

such findings may not be disturbed on appeal.

H.
 The City argues that "Paragraph D was entered into under

mistake and misapprehension" and "a contract entered into under

mistake and misapprehension will not be enforced." The City,

relying upon Haythe v. May, 223 Va. at 361, 288 S.E.2d at 488,

argues that a court of equity will not award specific performance

where there is evidence of fraud, misapprehension, or mistake.

We disagree. The chancellor did not find, and the record is

devoid of any evidence of fraud, misapprehension, or mistake.

Thus, we hold that the City's argument lacks merit.
IV. THE COUNTY'S APPEAL

As we previously have stated, the chancellor held that the

City has jurisdiction over the Courthouse Complex. The County

argues that "[p]rinciples of equity dictate that jurisdiction

over the Courthouse Complex vested in the Board of County

Supervisors after the County performed all of its obligations

pursuant to the 1976 compact between the City and the County,

which provided for transfer of jurisdiction of the Complex to the

County, and when it became apparent that the City would not

follow through with its obligation to convey such jurisdiction

voluntarily." The City argues that "[t]here are no equitable

principles recognized in Virginia which authorize the court to

divest jurisdiction of the Complex from the City and invest that

jurisdiction in the County." We agree with the City.

We discussed the doctrine of equitable conversion in Clay v.
Landreth, 187 Va. 169, 172-73, 45 S.E.2d 875, 877 (1948):
That the doctrine of equitable conversion exists
in Virginia cannot be doubted. In the early case of
Dunsmore v. Lyle (1891), 87 Va. 391, at p. 392, 12 S.E.
610, the doctrine was stated thus: "The principles
upon which courts of equity decree specific performance
of contracts for the sale of real estate are well
understood and familiar to the profession, yet it will
 be convenient, in the view we have taken of this case,
to briefly recur to first principles; and we will
remark that it is one of the principles of equity that
it looks upon things agreed to be done as actually
performed; and, consequently, as soon as a valid
contract is made for the sale of an estate, equity
considers the buyer as the owner of the land, and the
seller as a trustee for him; and, on the other hand, it
considers the seller as the owner of the money, and the
buyer as a trustee for him."

Contrary to the County's assertions, the principles of equitable

conversion simply have no application here. We also reject the

County's contention that the chancellor, under the exercise of

his general equitable power, may grant jurisdiction of the

Courthouse Complex to the County. Accordingly, we hold that the

chancellor did not err by refusing to apply the doctrine of

equitable conversion here. V.
In view of our holdings, we do not consider the remaining

arguments of the City and County. Accordingly, we will affirm

the chancellor's decree, and we will remand these proceedings so

that the chancellor may retain continuing jurisdiction.
Record No. 941189 -- Affirmed and remanded.
Record No. 941206 -- Affirmed and remanded.