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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