Okay, we get it: the text of a statute is the text, and it says what it says. And Virginia's "buyback" statute -- which says that if a condemning agency hasn't started the project for which property was condemned within 20 years, the agency must reconvey it to the owner upon demand -- dictates that the owner must buy it back at the "original purchase price."
And the Virginia Supreme Court in Kalergis v. Commissioner of Highways, No. 161347 (Oct. 26, 2017) concluded that "original purchase price" means exactly that -- the price for the property which the condemning agency paid back in the day, regardless of whether or how the agency altered the property in the intervening 20 years. And there's something about that conclusion that doesn't quite sit right.
There, VDOT acquired the property from Mr. and Mrs. Kalergis in 1994, taking about 1/2 of their 26-acre improved property for future use as a highway. The land was improved with a house, guest house, swimming pool, stables, fencing, and terraces. The appraisal valued the land at $286,110, and the improvements at $863,890, for a total purchase price of $1,150,000. VDOT tore out the house, guest house, swimming pool, stables, fencing, and terraces. But after 20 years, it had not used the land for the project, and the Kalergis eventually exercised their statutory right to demand VDOT reconvey the property to them at the "original purchase price."
In the Kalergis' view, that meant the price of the land. Because, after all, VDOT had removed all of the improvements. So they demanded that VDOT sell back to them at the original purchase price for the land, $286,110. Not so fast, argued VDOT, the "original purchase price" of the property back in 1994 was way more, $1,150,000, and that's what you have to pay us in order to get the property back. That makes no sense, argued the Kalergis, that price was for the land plus the improvements, all of which you've destroyed?
The Virginia Supreme Court sided with VDOT, concluding that "original purchase price" means the amount the Kalergis paid, not the component parts of the appraised value. Whether that made sense or not didn't trouble the court, because the court is stuck with the text of the statute which says "original purchase price." That the court implicitly concluded the legislature meant to say something ridiculous was of no moment: "If the General Assembly had intended for courts to use the 'appraised value' instead of the 'original purchase price,' the legislature would have used that language in [the statute]." Slip op. at 5. The fact that the parts were appraised separately didn't matter, what mattered was the total price, regardless of how the agency had altered the property in the interim.
So the former owners have to buy back the raw land at about 300% more than VDOT originally purchased it for, all because the agency tore out the improvements.
Thus, the lesson from this case is for condemning agencies which don't want to be bothered by the statutory buyback provision to alter the land so that it wouldn't be worth it for the former owner to buy it back if the agency doesn't eventually use it. The lesson for property owners and their lawyers is to try and structure the original purchase price to not simply recognize appraised values, but perhaps force the agency to purchase each component separately, if that is possible.
Finally, we ask: is the result in this case really what the Virginia legislature intended when it adopted the buyback requirement? To us, this case illustrates the way that a statute which is well-intended cannot account for the myriad situations that could arise. Will the Virginia legislature revisit the statute in light of this case and tweak it? We'll see.
Kalergis v. Commissioner of Highways, No. 161347 (Va. Oct. 26, 2017)
