W. S. Carnes, Inc. v. Board of Supervisors

Present: All the Justices

W. S. CARNES, INC., ET AL.

v. Record No. 960352 OPINION BY JUSTICE BARBARA MILANO KEENAN
November 1, 1996
BOARD OF SUPERVISORS OF
CHESTERFIELD COUNTY, ET AL.

FROM THE CIRCUIT COURT OF THE COUNTY OF CHESTERFIELD
Herbert C. Gill, Jr., Judge

The primary issue in this appeal concerns the validity of

two ordinances which impose a $125 increase in the fee charged

for new residential building permits.
The Home Builders Association of Richmond, Inc. (the

Association), and W. S. Carnes, Inc., a Chesterfield County

homebuilder (collectively, the builders), filed a motion for

declaratory judgment against the Board of Supervisors of

Chesterfield County (the Board), and William D. Dupler, the

Chesterfield County Building Official. The builders sought an

order declaring invalid two ordinances adopted by the Board,

which imposed a $125 increase in the permit fee charged for all

new residential construction.

In their motion for declaratory judgment, the builders

contended that the ordinances violate (1) Code § 36-105, which

authorizes a locality to charge building permit fees only to

defray the cost of building code enforcement and related appeals;
1
(2) Uniform Statewide Building Code § 104.3, which states that

building permit fees shall incorporate unit rates; and (3) Code

1
The Uniform Statewide Building Code has been incorporated into

Volume 13 of the Virginia Administrative Code (1996) at 5-60-10.
§ 15.1-37.3:9(B), which prohibits the direct or indirect use of

building permit fee funds for the repair of residences damaged by

moisture-related shrinking and swelling in soil having a high

clay content.

The builders also alleged that the ordinances violate the

"special laws" prohibition of the Virginia Constitution. Va.

Const. art. IV, §§ 14 and 15. Finally, the builders contended

that the revenue received from the ordinances exceed the County's

costs of building code enforcement. The builders sought, among

other things, entry of an order declaring the ordinances invalid.
During a bench trial, Dupler testified that in 1991, the

Board became aware that many houses in the County had cracked

foundations caused by the use of improper construction methods

for building in soil having a high clay content. This type of

soil is commonly referred to as "shrink/swell" soil. Dupler

stated that special construction methods are necessary for

building in this type of soil because the soil places greater

than normal stress on foundations, since the soil expands when

wet and contracts when dry. Dupler testified that the cracked

foundations were evidence of possible violations of the Uniform

Statewide Building Code (building code).

To address this problem, the Board directed the County

Administrator to appoint a task force to work with the Building

Inspection Department to develop a program which became known as

the Citizen's Assistance Program, Phase I (CAP I). The Board

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enacted the CAP I program in 1993.

CAP I provided for an ombudsman to render "assistance to

citizens in resolving shrink/swell soil [problems] and other

construction related issues." CAP I also included a provision

authorizing the hiring of legal advisors to offer free advice to

affected homeowners regarding their available legal remedies.

Under CAP I, homeowners who suspected that their houses had

been constructed on "shrink/swell" soil could submit applications

requesting the County to examine their house foundations. CAP I

authorized the County to obtain the assistance of privately-

employed engineers to work on these requests.
Dupler testified that the private engineering assistance was

necessary because the County staff was unable to handle the large

volume of homeowner requests for investigations. He also stated

that his department did not have the necessary laboratory

facilities to analyze the soil removed from the homeowners'

building foundation sites.

Dupler further stated that, before he retained a private

engineer to provide a foundation study of an existing house, his

department would review the homeowner's CAP application to

determine whether the house had foundation cracks. If Dupler

noted conditions indicating a potential building code violation,

he retained a private engineer on behalf of the County to

determine the nature and extent of foundation damage due to

"shrink/swell" soil. The engineer then prepared a report, for

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the homeowner and the County, detailing the extent of damage, the

recommended repairs, and an estimated cost of repair.

Although Dupler testified that the reports frequently

contained evidence of building code violations, he stated that

his department had not instituted criminal enforcement actions

because such actions would have been barred by the statute of

limitations. However, Dupler used the engineering reports to

determine whether a homeowner's proposed repair plans met

building code requirements and, thus, qualified for the issuance

of a repair permit.
The engineering assistance portion of CAP I was funded from

the $125 increase in permit fees authorized by the ordinances.

The ombudsman and legal advisor portions of CAP I were paid for

out of the general fund and application fees, because these

services were not part of the building code enforcement process.

The Board later terminated CAP I and adopted a program known

as CAP II, which was limited to providing engineering assistance

to the Building Official. Under CAP II, the private engineers

hired by the County performed essentially the same functions as

the engineers hired by the County under CAP I.

The engineers' reports did not contain any repair

specifications and, therefore, could not be used by the

homeowners' contractors to perform the necessary repair work.

The homeowners were required to retain engineers at their own

expense to draw foundation repair specifications, which were

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submitted to the County with their applications for building

repair permits.

After the Building Official issued a repair permit, the

homeowner's contractor performed the necessary repairs using the

homeowner's repair plan. When the repairs were completed, the

Building Official conducted a final inspection to determine

whether the repairs had corrected the building code violation.

Like the engineering assistance provided by CAP I, the

engineering assistance provided by Cap II was funded by the

Board's adoption of an ordinance which increased by $125 the fee

charged for new residential building permits. The balance of the

permit fee was computed by use of a unit charge of $4.25 for each

$1,000, or fraction thereof, of the estimated construction cost.
The trial court also received evidence concerning the

builders' contention that the total permit fees exceeded the

actual costs necessary to enforce the building code. Their

allegations were based on the results of an audit of the

Chesterfield Building Inspection Department (BID) commissioned by

the Board. The audit, performed by the accounting firm of

Coopers & Lybrand in December 1992, indicated that, between 1981

and 1992, BID's revenues exceeded its costs by almost $2,000,000.

The Board presented evidence that the Coopers & Lybrand

audit did not include the total expenditures relating to building

code enforcement. Specifically, Dupler, James J.L. Stegmaier,

the County's Budget Director, and Christine Zitzow, a cost

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accounting expert, testified that, in order to ascertain the true

cost of building code enforcement, the enforcement-related costs

of three other County departments needed to be added to BID's

expenses.

The three departments, Utilities, Fire, and Environmental

Engineering, review all building plans and perform building

inspections for the Building Official relating to building code

requirements that are within those departments' expertise. The

cost of these reviews and inspections were not reflected in the

Coopers & Lybrand audit because the audit included only BID

budget documents. Stegmaier testified that the revenues received

by the County from the building permit fees, including the

increases authorized by the fee ordinances, were less than the

total cost of building code enforcement in 1993 and 1994.
Finally, the evidence showed that the Association does not

build houses in Chesterfield County and has not paid any building

permit fees such as those at issue in this suit. The Association

is a nonstock corporation, which functions as a trade association

and has members who are homebuilders in Chesterfield County.

The trial court initially ruled that the Association had

standing to bring this action "in a representative capacity."

The court also sustained the County's demurrer to Count III,

ruling that the ordinances in question were not special laws

within the meaning of Article IV of the Virginia Constitution.

The trial court granted the defendants' motion in limine to

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exclude evidence of the Board's minutes taken at the time the

ordinances were passed. The court stated that, because the fee

ordinances adopted by the Board were unambiguous, an examination

of the Board's legislative intent was not appropriate. After

considering the evidence presented, the trial court held that the

CAP ordinances were valid, and that the County did not charge

building permit fees in excess of the cost of building code

enforcement.
On appeal, we first consider the assignment of cross error

raised by the Board and Dupler (collectively, the County), that

the trial court erred in ruling the Association had standing to

bring this declaratory judgment action. The County argues that

the Association does not have any rights which are affected by

the ordinances, and that the Association is not authorized by law

to bring this action on behalf of its member builders.

In response, the Association argues that, as a nonstock

corporation which operates as a trade association for the common

benefit of its members, the Association has standing to bring

this suit. The Association notes that its status as a nonstock

corporation permits it to sue or be sued in its corporate name.

See Code § 13.1-826. The Association further argues that the

declaratory judgment statutes are remedial in nature and must be

liberally interpreted. See Code § 8.01-191. Thus, the

Association asserts that it is a proper party to this declaratory

judgment action. We disagree with the Association.

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 A plaintiff has standing to institute a declaratory judgment

proceeding if it has a "justiciable interest" in the subject

matter of the proceeding, either in its own right or in a

representative capacity. Henrico County v. F. & W., Inc., 222

Va. 218, 223, 278 S.E.2d 859, 862 (1981); Lynchburg Traffic

Bureau v. Norfolk and Western Railway, 207 Va. 107, 108, 147

S.E.2d 744, 745 (1966). In order to have a "justiciable

interest" in a proceeding, the plaintiff must demonstrate an

actual controversy between the plaintiff and the defendant, such

that his rights will be affected by the outcome of the case. See

Code § 8.01-184; Cupp v. Board of Supervisors, 227 Va. 580, 589,

318 S.E.2d 407, 411 (1984).

Here, the Association has failed to demonstrate that it has

any rights that will be affected by the outcome of this case.

The Association does not build houses in Chesterfield County and

has not paid any building permit fees for new residential

construction. Thus, the Association has not shown that an actual

controversy exists between it and the County.

This conclusion is not altered by the fact that the

Association purports to act in a "representative capacity" on

behalf of its members. An individual or entity does not acquire

standing to sue in a representative capacity by asserting the

rights of another, unless authorized by statute to do so. See,

e.g., Code §§ 8.01-69, 20-88.45, 37.1-141. Therefore, we

conclude that the trial court erred in ruling that the

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Association had standing to bring this action. Nevertheless,

since W. S. Carnes, Inc. (Carnes) paid several building permit

fee surcharges to Chesterfield County, the present action remains

viable based on the controversy existing between Carnes and the

County. See Cupp, 227 Va. at 589-90, 318 S.E.2d at 411.

We next consider Carnes's argument that the trial court

erred in sustaining the County's demurrer to Count III of the

motion for judgment, which alleged that the fee ordinances

violate "the prohibition against special laws contained in

Article IV, Sections 14 and 15, of the Constitution of Virginia."

Carnes argues that the issue whether the ordinances were special

laws was a matter for proof at trial, not susceptible of

disposition as a matter of law. We disagree.
A demurrer will be sustained if the pleading, considered in

the light most favorable to the plaintiff, fails to state a valid

cause of action. See Luckett v. Jennings, 246 Va. 303, 307, 435

S.E.2d 400, 402 (1993); Hop-In Food Stores, Inc. v. Serv-N-Save,
Inc., 237 Va. 206, 209, 375 S.E.2d 753, 755 (1989). A demurrer

tests only the legal sufficiency of a pleading, not matters of

proof. Luckett, 246 Va. at 307, 435 S.E.2d at 402; Cox Cable

Hampton Rds., Inc. v. City of Norfolk, 242 Va. 394, 402-03, 410

S.E.2d 652, 656 (1991). The facts admitted on demurrer are those

expressly alleged in the motion for judgment, those which fairly

can be viewed as impliedly alleged, and those which can be

reasonably inferred from the facts alleged. Rosillo v. Winters,

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235 Va. 268, 270, 367 S.E.2d 717, 717 (1988).

We conclude that the trial court properly sustained the

County's demurrer, because the fee ordinances are general, rather

than special, laws. 2 "A law is general though it may immediately

affect a small number of persons, places or things, provided,

under named conditions and circumstances, it operates alike on

all who measure up to its requirements." Bray v. County Board,

195 Va. 31, 36, 77 S.E.2d 479, 482 (1953) (quoting Gandy v.
Elizabeth City County, 179 Va. 340, 344, 19 S.E.2d 97, 99

(1942)). By contrast, a law is "special" in a constitutional

sense when it contains an inherent limitation that arbitrarily

separates some persons, places, or things from those on which,

without such separation, it would also operate. Id. at 36-37, 77

S.E.2d at 482.

Here, the fee ordinances are general laws because, by their

plain wording, they operate alike on any individual or entity who

obtains a building permit for new residential construction. This

result is not changed by Carnes's allegation in Count III that

the underlying purpose of the fee ordinances was to benefit

County residents who had sustained certain damage to their homes.

The alleged purpose of the fee ordinances cannot change their

2
Based on this conclusion, we do not reach the issue whether

Va. Const. art. IV, §§ 14-15, is applicable to the passage of

local ordinances.

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content or effect.

Carnes next argues that the trial court erred in granting

the Board's motion in limine and in excluding from evidence all

minutes of the Board meetings, except actual motions,

resolutions, ordinances, and the votes cast on those items.

Carnes contends that the excluded minutes would have provided "a

clearer understanding of the purpose and the intent" of the

ordinances.
We conclude that the trial court properly excluded the

proffered evidence of the Board's minutes. Generally, evidence

of the Board's intent or motive in enacting ordinances is

irrelevant to our consideration whether they are valid laws. As

this Court stated in Blankenship v. City of Richmond, 188 Va. 97,

49 S.E.2d 321 (1948),
[c]ourts are not concerned with the motives which
actuate members of a legislative body in enacting a
law, but in the results of their action. Bad motives
might inspire a law which appeared on its face and
proved valid and beneficial, while a bad and invalid
law might be, and sometimes is, passed with good intent
and the best of motives.

Id. at 105, 49 S.E.2d at 325 (citations omitted).

We next consider Carnes's arguments that the fee ordinances

are invalid. The trial court's rulings were based on its

application of the evidence to the three statutes cited by

Carnes. Under Code § 8.01-680, the trial court's judgment will

not be set aside unless it appears from the evidence that the

judgment is plainly wrong or without evidence to support it.

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

627, 630 (1992). Since the trial court heard the evidence ore

tenus, its factual findings are entitled to the same weight as a

jury's verdict. RF&P Corporation v. Little, 247 Va. 309, 319,

440 S.E.2d 908, 915 (1994). Thus, on appeal we examine the

evidence in the light most favorable to the County, the

prevailing party at trial, and determine whether the evidence

supports the trial court's decision. See Ravenwood Towers, Inc.,

244 Va. at 57, 419 S.E.2d at 630.
Carnes first contends that the fee ordinances violate Code

§ 36-105, which provides, in relevant part, that "[building

permit] [f]ees may be levied by the local governing body in order

to defray the cost of [building code] enforcement and appeals."

During oral argument in this case, Carnes contended that such

enforcement is limited to the criminal prosecution and appeal of

building code violations. We disagree.

The Building Official has many duties, only one of which is

to prosecute building code violations under USBC § 112.3. The

Building Official is also charged with responsibility for

examining all plans and applications for building permits (USBC

§ 105.6), issuing permits when satisfied that the proposed work

conforms to building code requirements (USBC § 109.1), and

conducting inspections to ensure compliance with the building

code (USBC § 110.1). Under USBC § 103.3, the Building Official

may delegate these duties and powers.

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 Here, the evidence showed that the engineering assistance

funded by the fee ordinances was necessary to enable the Building

Official to perform these enforcement-related duties. The

ombudsman and legal services provided under CAP I also did not

violate Code § 36-105 because those services were paid for out of

the general fund, rather than from the permit fee increases.

Thus, the trial court's finding that the fee ordinances do not

violate Code § 36-105 is supported by the evidence.
We next hold that the record supports the trial court's

finding that the fee ordinances do not violate USBC § 104.3,

which provides, in relevant part, that "local government[s] shall

establish a [building permit] fee schedule. The schedule shall

incorporate unit rates which may be based on square footage,

cubic footage, cost of construction or other appropriate

criteria." The evidence showed that the County's building permit

fees incorporate both the $125 flat fee and a unit rate of $4.25

for each one thousand dollars of estimated construction cost.

This provision complies with USBC § 104.3, because that section

requires only that the fee schedule incorporate unit rates, not

that it be based exclusively on unit rates.

We also conclude that the record supports the trial court's

finding that the fee ordinances do not violate Code § 15.1-

37.3:9(B), which permits a local governing body to enact an

ordinance authorizing the use of public funds to repair

foundation failures caused by "shrink/swell" soil. The statute

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provides that public funds expended for this purpose shall be

derived only from tax revenues from real and personal property,

not from any special fee, assessment, or other tax or charge.

The statute also states that localities "may not use fees

collected for building permits . . . directly or indirectly, for

purposes authorized under this subsection."

The evidence showed that the engineering reports funded by

the permit fees under the CAP programs were not used to repair

foundation failures, but were used to help the Building Official

ascertain building code compliance during the various stages of

the homeowners' repair efforts. Thus, the expended funds were

not used, directly or indirectly, for purposes prohibited by Code

§ 15.1-37.3:9(B). 3

Carnes next contends that the trial court erred in finding

that the building permit fees did not exceed the cost of building

code enforcement and appeals. Carnes relies on the results of

the audit conducted by Coopers & Lybrand in support of its

position. We disagree with Carnes's contention.

As stated above, the Coopers & Lybrand audit did not include

3
Based on this conclusion, we need not address Carnes's

argument that, prior to the enactment of Code § 15.1-37.3:9(B) in

July 1993, a local governing body did not have the authority to

expend public funds to repair existing foundations damaged due to

"shrink/swell" soil.

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all costs of building code enforcement, nor did the audit cover

the time frame in which the CAP programs operated. Additionally,

Stegmaier's testimony showed that building code enforcement costs

for the years 1993 and 1994 had exceeded the building permit fees

collected in those years. Thus, we hold that the evidence

supports the trial court's ruling that the expenditures funded by

the fee ordinances were rationally related to the cost of

building code enforcement.
For these reasons, we will affirm in part, and reverse in

part, the trial court's judgment and enter final judgment in

favor of the County.
Affirmed in part,
reversed in part,
and final judgment.

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