Construction Law Insights

Kalergis v. Comm’r of Highways, 294 Va. 260, 805 S.E.2d 395 (Oct. 26, 2017)

The Kalergis family (“Kalergis”) owned a farm in Albemarle County that featured certain structures which constituted improvements upon the land. In February 1994, VDOT acquired just over half of the property, which included said improvements, from the Kalergis for $1,150,000 for use in a future highway project called the Western Bypass. The price had been determined by an appraisal of the market value, which valued the land at $286,110 and the improvements at $863,890.

In April 2014, VDOT was notified that Kalergis was exercising the right under Code § 33.2-1005(A) to require VDOT to reconvey the land “for its original purchase price” of $286,110, the value from the 1993 appraisal as the transportation project had not commenced within 20 years. In November 2014, VDOT offered to reconvey the land for the original $1,150,000 purchase price pursuant to Code § 33.2-1005(A), or for the current $780,000 fair market value of the land pursuant to Code § 33.2-1005(B). In January 2015, Kalergis sued VDOT seeking specific performance to reconvey the land for $286,110 and a declaration that VDOT violated the provisions of § 33.2-1005(A).

The circuit court concluded that Section A did not apply in this case, because the property had been significantly altered. The circuit court held that Section B was the better provision by which to bring the claim. It therefore dismissed with prejudice Kalergis’s claims based on Section A and dismissed without prejudice as to any claim or cause of action based on Section B or other statutes.

The Supreme Court determined that if the General Assembly had intended for the courts to use the “appraised value” instead of the “original purchase price,” the legislature would have used that language in Code § 33.2-1005(A). Thus, “appraised value” is not synonymous with “original purchase price,” and the General Assembly did not intend the property to be reconveyed at a price determined by the appraisal.

The Court concluded that, in this case, “original purchase price” clearly referred to the amount paid by VDOT to Kalergis when it took the land by advance acquisition. It therefore affirmed the circuit court’s sustaining of the Commissioner’s demurrer.

PLDR Law Mark Burgin 1 PLDR Law Scott Kowalski 1 Wolf Tom v2 Stout Kenneth 2016

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