Sinkhole gives rise to condemnation claim

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An oil-change company seeking to recover lost profits after access to its business was limited by the county’s alleged unreasonable delay in repairing a sinkhole has sufficiently pleaded an inverse condemnation claim.

Overview

Plaintiff PM Lube operates an oil change service in a shopping center. Plaintiff sought a declaration that defendant Loudoun County was liable for lost profits because it delayed repair of a large sinkhole, which blocked the primary access to plaintiff’s business. The sinkhole formed when a pipe 25 feet under the ground collapsed. The pipe was part of the county’s storm water management system.

Plaintiff said that the county told plaintiff’s landlord that it was responsible for the repairs. However, according to plaintiff, the county did not undertake repairs for six months.

Plaintiff claimed that it lost $258,000 in profits during the period of limited access to its business. It arrived at this figure by comparing revenue to the same period for the previous two years. Plaintiff also said business did not return to normal levels after the repairs were made.

The county filed a combined demurrer and a motion craving oyer. The county argued plaintiff did not state an inverse condemnation claim, and that the copy of the lease between plaintiff and the shopping center, which plaintiff included in its pleadings, was missing an attachment.

Demurrer

A demurrer tests the legal sufficiency of a complaint and can be sustained if a plaintiff has not pleaded a valid cause of action. To state an inverse condemnation claim, the petitioner must allege that it owns private property or has a private property right, that the property or right has been damaged by the government, that the taking or damaging was for public use, and that the government did not pay just compensation.

Because plaintiff is not bringing its claim based on the ownership of real property, it must show that it has some private property right.

“This action is based on plaintiff’s basic private property right, as the owner of the business being lawfully operated in the lease space, to have reasonable ingress and egress to and from that business for its customers. That right of reasonable access to the property, plaintiff implicitly asserts in the amended complaint, includes the legal right to use the service road, which the County damaged by its unreasonable delay in repairing the sink hole and restoring the service road.”

There is caselaw support for plaintiff’s position. The court concludes that even though plaintiff is a lessee, it has a basic right as a business owner to have reasonable access to and from its property for its customers. This private right is protected by the Virginia Constitution, and is “the proper subject of an inverse condemnation claim” under the facts as alleged by plaintiff.

The county argues that in plaintiff’s amended complaint, as in its original complaint, there are no allegations that property rights were damaged by any “purposeful act or omission” by the county. This was so in the original complaint, and the county’s demurrer was sustained, in part, on that basis.

However, the county argues that the amended complaint fails to allege that “any damages to Plaintiff’s property rights ‘ever occurred beyond the initial sinkhole, and that the ‘allegations that the County elected to delay repairs to the sinkhole to free up resources for other projects do not demonstrate the occurrence of any new damage’ to plaintiffs property rights.”

But the county’s alleged choice to delay repairs to the sinkhole and service road “in the face of the evident damage that the sinkhole and lack of reasonable access would likely clause plaintiff and any other similarly situated merchants, constitutes ‘the type of governmental conduct that will support liability and inverse condemnation.’”

The county’s demurrer is overruled.

Motion craving oyer

In a motion craving oyer, a defendant may seek documents that form the basis of a plaintiff’s claim, but the motion should be granted if the document sought is “essential to the plaintiff’s complaint.” In this case, neither the lease or any other unidentified writing that grants plaintiff property rights in the “common area.”

Plaintiff is not basing its claim on any lease terms or its right to use to use the service road. The county can seek such documents during discovery.

The demurrer is overruled, as is the county’s plea at bar, which is based on the same legal arguments contained in the demurrer. The motion craving oyer is denied.

PM Lube v. County of Loudoun. Case No. CL 109212, Dec. 18, 2018; Loudoun Cir. Ct. (Irby). J. Chapman Petersen, David L. Amos for plaintiff; Leo P. Rogers, Jason S. Hobbie for Defendant. VLW 018-8-111, 12 pp.