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.