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LYNCH v. COMMONWEALTH TRANSPORTATION COMMISSIONER, ET AL.


LYNCH v. COMMONWEALTH
TRANSPORTATION COMMISSIONER, ET AL.


January 9, 1998
Record No. 970278

EDWIN W. LYNCH, JR.,

v.

COMMONWEALTH TRANSPORTATION
COMMISSIONER, ET AL.

OPINION BY SENIOR JUSTICE HENRY H. WHITING
FROM THE CIRCUIT COURT OF FAIRFAX COUNTY

F. Bruce Bach, Judge
Present: Carrico, C.J., Compton, Hassell, Keenan, Koontz, and
Kinser, JJ., and Whiting, Senior Justice


The issue in this sequel to a condemnation proceeding involves
a landowner’s liability for refund of that amount of the sum
previously deposited with the court by the condemning authority
and withdrawn by the landowner that exceeded the amount of the
subsequent award.

The Commonwealth Transportation Commissioner (the
Commissioner) planned to take 9.270 acres of a larger tract of
approximately 75 acres owned by Edwin W. Lynch, Jr., in Fairfax
County for the improvement of Interstate Route 95. The 75 acres
was subject to a deed of trust then held by Dominion National
Bank of Virginia, later by First Union Bank of Virginia, Dominion
Bank’s successor in title. Both banks are referred to herein as
the lienholder. The deed of trust secured the payment of Lynch’s
$3,500,000 obligation to the bank and in pertinent part provided
that:

Borrower or Grantor shall appear in and prosecute any such
[condemnation] action or proceeding unless otherwise directed by
Lender in writing. . . . The proceeds of any
award, payment or claim for damages . . . in connection
with any condemnation or other taking, whether direct or indirect
. . . are hereby assigned to and shall be paid to
Lender[.]

. . . Unless Borrower and Lender otherwise
agree in writing, any application of proceeds to principal shall
not extend or postpone the due date of the [monthly installment
payments of principal and interest] or change the amount of such
installments.

Because the Commissioner desired immediate possession of the
9.270 acres and his evaluation of the land taken was $1,016,755,
he deposited that sum with the clerk of the circuit court under
the provisions of Code ? 33.1-120.[1] The Commissioner also executed
and recorded a certificate of take naming Lynch as the owner of
the property.

Lynch then took advantage of Code ? 33.1-124, which
authorized him to petition the court to order the withdrawal of
these funds. His petition alleged that he and Dominion Bank were
the only parties entitled to receive the funds and that the bank
had agreed to release its lien on the property taken
"through a Deed of Partial Release." In a withdrawal
order requested by Lynch, the court ordered the deposited funds
to be paid to Lynch in care of his attorney, who was directed to
"use such funds as are necessary . . . to satisfy
the Deeds of Trust . . . currently owing on the
property." The order also provided that if the award was
less than the deposited funds, judgment for the excess amount of
the deposit shall be entered for the Commissioner against
"any person [who] has been paid any greater sum than that to
which he is entitled as determined by the award."

Upon demand by the lienholder, Lynch endorsed the clerk’s
November 26, 1990, check of $1,016,755, "[p]ay to order of
Dominion Bank for credit to account of Edwin W. Lynch, Jr."
The proceeds of the check were applied by the lienholder in
partial discharge of the obligation secured by its deed of trust.

In December 1991, the Commissioner filed a condemnation
petition naming Lynch as the only defendant. Lynch filed an
answer and grounds of defense in which he asserted that the offer
to purchase "was grossly inadequate."

Following a trial before a condemnation commission, the
commission fixed the value of the land taken at $740,000 with no
damages to the residue. Over Lynch’s objection, the court
confirmed the commission’s report and entered judgment against
Lynch for $276,755, the difference between the amount of the
deposit and the amount of the award. We awarded Lynch an appeal,
reversed the judgment, and remanded the case for a new trial
because of errors in the exclusion of certain evidence. Lynch
v. Commonwealth Transp. Comm’r
, 247 Va. 388, 394, 442 S.E.2d
388, 391 (1994).

At the new trial, a different condemnation commission fixed
the value of the land taken at $451,000 with no damages to the
residue. The court confirmed the commissioners’ report but
retained jurisdiction to resolve a dispute concerning the
identity of the "person, firm or corporation (if any) which
must refund the excess [of $565,755 representing the amount by
which the deposit exceeded the commissioners' award] and against
which judgment should be entered pursuant to [Code] ? 33.1-128."

At the same time, the court ordered the lienholder to be
joined as a party to the action "for the purpose of
determining [the lienholder's] liability to return excess
condemnation proceeds pursuant to [Code] ? 33.1-128."
Following argument and submission of memoranda, in a written
opinion, Judge Richard J. Jamborsky ruled that since Lynch had
withdrawn the amount of the deposit, he, not the lienholder,
became liable to the Commissioner for the repayment of the excess
under the provisions of Code ? 33.1-128.
Later, Judge F. Bruce Bach entered an order in conformity with
Judge Jamborsky’s opinion. Lynch appeals.

Code ? 33.1-128
provides in pertinent part:

In the event of an award in a condemnation proceeding
being of a lesser amount than that deposited with the court,
the Commissioner shall recover the amount of such excess and,
if any person has been paid a greater sum than that to
which he is entitled as determined by the award, judgment
shall be entered for the Commissioner against such person for
the amount of such excess.

(emphasis added).

Well-settled rules of statutory interpretation guide us in
determining whether Lynch is liable for payment of the excess
deposit.

If language is clear and unambiguous, there is no need for
construction by the court; the plain meaning and intent of the
enactment will be given it. School Board of Chesterfield
County v. School Board of the City of Richmond
, 219 Va. 244,
250, 247 S.E.2d 380, 384 (1978). When an enactment is clear and
unequivocal, general rules of construction of statutes of
doubtful meaning do not apply. Id. at 250-51, 247 S.E.2d
at 384. Therefore, when the language of an enactment is free from
ambiguity, resort to legislative history and extrinsic facts is
not permitted because we take the words as written to determine
their meaning.

Brown v. Lukhard, 229 Va. 316, 321, 330 S.E.2d 84, 87
(1985).

Lynch contends that there is no ambiguity in the language of
the quoted portion of Code ? 33.1-128
and that the withdrawal order "tracks" this language.
We agree. Therefore, under the principles articulated in Brown,
we do not consider Lynch’s extended discussion of (1) whether he
"received" the proceeds of the check, or (2) the
differing statutory language governing eminent domain proceedings
which expressly refers to an "owner" and the statute
under consideration which refers to "any person [who] has
been paid." We simply apply the statute and order as written
and determine whether Lynch "has been paid" the
deposit.

The Commissioner and the lienholder maintain that Lynch was
paid because he received the deposit.[2] Lynch
responds that he has not been "paid" within the meaning
of the statute and order for the following reasons.

First, Lynch asserts he was not "paid" because in
the deed of trust he assigned the "deposit" to the
lienholder. We will assume, but not decide, that Lynch is correct
in his contention that the earlier-quoted language of the deed of
trust encompassed an alleged assignment of any deposit as well as
any later award in a condemnation action. However, Lynch also
reasons that this "assignment operates as a complete
divestiture of all rights from the assignor and vests those
rights in the assignee." We do not agree.

The deed of trust provided that Lynch "shall appear in
and prosecute any such [condemnation] action or proceeding unless
otherwise directed by Lender in writing." The lienholder
never directed "otherwise," and, in fact, Lynch did
"appear in and prosecute" the action. His
"prosecution" included his filing a petition to
withdraw the deposit. Indeed, at Lynch’s request the court
ordered the deposit "disburse[d]" to him. Thus, the
alleged assignment did not divest Lynch of all rights in the
deposit.

Next, Lynch argues that he was not "paid" any money.
He reasons that

[a]lthough the Clerk’s check was made payable to him, [he] had no power to cash the check and no control or discretion
as to how to apply the proceeds. It must be remembered that
pursuant to the Payment Order . . . the check was
disbursed in care of Lynch’s attorney, who was ordered to
"use such funds as are necessary, if any, to satisfy or
partially satisfy the Deeds of Trust . . .
currently owing on the property."

Lynch concludes that because the withdrawal order required his
counsel to use the funds to satisfy the lienholder’s deed of
trust, he was "a mere conduit whose only role was to endorse
the check — the real payee was the [lienholder]." We
disagree.

If the language of the deed of trust gave Lynch no right to
these proceeds, as he apparently contends, then he need not have
petitioned for an early withdrawal and thus subjected himself to
possible liability for a refund of the excess. Moreover, if the
lienholder exercised its right under the deed of trust to require
Lynch to petition for such withdrawal, as he contends, then on
his motion, the court could have protected him from liability for
payment of any possible excess.

Lynch was the payee of the check and the order only required
his attorney to "use such funds as are necessary, if any, to
satisfy or partially satisfy" Lynch’s deed of trust. The
attorney could have negotiated with the lienholder for a
proration of the deposit between Lynch and the lienholder, based
on the value of the property taken in relation to the residue of
the land still covered by the deed of trust. And, if they could
not agree, under the provisions of Code ? 33.1-124, Lynch could
have petitioned the court for a hearing to resolve this issue and
to give him appropriate protection against liability for a return
of any excess deposit ultimately paid by Lynch to the lienholder.

In pertinent part, Code ? 33.1-l24
states that "if the record in the proceeding discloses any
. . . dispute as to the persons entitled to such
distribution [of the deposit] or to any interest or share
therein, the court shall direct such proceedings as are provided
by [Code] ? 25-46.28
for the distribution of awards." Code ? 25-46.28 provides in
part that "[i]f it appears to the court that there exists a
controversy among claimants to the fund . . ., the
court shall enter an order setting a time for hearing the case
and determining the rights and claims of all persons entitled to
the fund or to any interest or share therein."

These statutory provisions, coupled with Rule 3:9A, authorized
Lynch to petition the court to join the lienholder as a party and
petition the court either to order the check made payable to the
lienholder or make specific provisions for the lienholder’s
liability for refund of any excess withdrawal.[3] Lynch filed no such
petition; in fact, he simply requested that the court enter the
withdrawal order which imposed liability for the excess upon
anyone to whom the excess was "paid." And we are of
opinion that under the circumstances of this case, Lynch was the
person who was "paid" within the meaning of the statute
and order.

For these reasons, we conclude that the trial court correctly
imposed liability upon Lynch for payment of such excess.
Accordingly, we will affirm the trial court’s judgment.

Affirmed.

 

 

 

FOOTNOTES:

[1] Code ? 33.1-120 provides in
pertinent part that "[t]he Commissioner shall pay
. . . to the clerk . . . such sum as [the
Commissioner] shall estimate to be the fair value of the land
taken . . . before entering upon, or taking possession
of, such land [prior to filing a condemnation proceeding]."

[2] On appeal, the Commissioner
contends that the lienholder was also "paid" within the
meaning of the statute. We do not consider the Commissioner’s
argument that the lienholder thus became jointly and severally
liable with Lynch to the Commissioner for the excess deposit. The
record does not indicate that this argument was asserted in the
trial court, Rule 5:25, and the Commissioner did not assign
cross-error to the action of the court in entering judgment
solely against Lynch, Rule 5:18.

[3]
As pertinent, Rule 3:9A provides:

A person who is subject to service of process may be
joined as a party in the action if (1) in his absence
complete relief cannot be accorded among those already
parties, or (2) he claims an interest relating to the subject
of the action and is so situated that the disposition of the
action in his absence may (i) as a practical matter impair or
impede his ability to protect that interest or (ii) leave any
of the persons already parties subject to a substantial risk
of incurring double, multiple, or otherwise inconsistent
obligations by reason of his claimed interest.

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