The Supreme Court confirmed the unremarkable proposition in Fernandez v. Commissioner of Highways, 2020 Va. LEXIS 57 (May 28, 2020), that no private cause of action for payment of relocation expenses exists under the Virginia Relocation Assistance Act (which is in keeping with the interpretation afforded the federal Uniform Relocation Act, which similarly does not afford a private cause of action). The importance of the decision is this: when seeking relocation benefits, landowners need to cooperate with the condemnor. Little is gained by seeking recourse in court before the landowner (1) works to help the condemnor help her, and (2) exercises and exhausts her administrative remedies.
The facts in Fernandez present a not uncommon relocation scenario that went awry.
On December 2, 2015, the Virginia Department of Transportation sent Dr. Michael Fernandez, D.D.S. a letter informing him that he would be required to relocate his dental practice to accommodate an interstate road project. VDOT explained:
- he was entitled to relocation expenses
- VDOT intended to “assist [him] in [his] relocation to minimize any inconveniences caused by [his] move.”
- he would be given thirty days’ written notice before he needed to vacate his dental office
- it was identifying for him available properties that could potentially house his dental practice.
Dr. Fernandez rejected the suggested properties as unsuitable and, instead, selected an office space that was not equipped for a dental practice and required “extensive build-out and renovation allegedly costing several hundred thousand dollars to make it useable for a dental practice.”
After almost four months, VDOT wrote to Dr. Fernandez that he would need to move in thirty days. Dr. Fernandez did not do so and VDOT had to initiate eviction proceedings several months later. The suit was settled by a consent order in which Dr. Fernandez agreed to vacate his office the following year, which was almost sixteen months after he was first advised by VDOT that he would need to move his office due to the road project.
After he finally relocated his dental practice, Dr. Fernandez submitted a claim to VDOT for $567,278.87 for relocation assistance. VDOT responded that it would “expeditiously and carefully review” all the documentation that Dr. Fernandez provided so that VDOT could “make an informed determination of any reimbursements available.”
Section 25.1-406 of the VRAA provides that when a state agency acquires real property that ends up displacing a person, it “shall make fair and reasonable relocation payments to the displaced person for” reasonable moving expenses, direct losses of tangible personal property, expenses for searching for a replacement business or farm, and reasonable expenses incurred in re-establishing the business (not to exceed $25,000).
Ultimately, VDOT approved $35,346.68 in reimbursements (as well as a $255 payment for time spent planning the move). VDOT informed Dr. Fernandez that it could not make a decision about the rest of his claim until he submitted additional documentation detailing his expenses. Dr. Fernandez chose not to do so and he never appealed VDOT’s decision. This was a mistake.
Instead, Dr. Fernandez filed suit in circuit court, seeking a declaration ordering the Commissioner of Highways to provide him with benefits under the VRAA. Concluding that no private cause of action existed under the VRAA, the trial court sustained the demurrer. And the Supreme Court affirmed the granting of the demurrer. (This is, by itself, interesting. The justices are not shy in telling trial courts to “cool it” in granting pretrial motions dismissing cases. However, it has not gone unnoticed that the Supreme Court has affirmed recently a host of trial court rulings “short circuiting” litigation, imposing more stringent pleading requirements and permitting broader use of tools such as the motion to crave oyer, permitting incorporation of essential documents referenced in—but not attached to— the complaint).
The Supreme Court made clear that there was neither an express, nor an implied private cause of action within the VRAA, notwithstanding the statute’s mandate that the agency “shall make fair and reasonable relocation payments to the displaced person.” And it was not lost on the Supreme Court that Dr. Fernandez did himself no favors in not providing the very documents needed by VDOT to review his claim and, then, in failing to exhaust his administrative and judicial remedies. Specifically:
- There exists a two-level administrative review of the agency’s decision on relocation benefits. “An interim appeal is heard in the district office. If the appellant is not satisfied on completion of the interim appeal, a final appeal may be addressed to the Commissioner of Highways.” 24 VAC § 30-41-90(A). If still dissatisfied following the Commissioner’s final decision, she has “the right to seek judicial review.” 24 VAC § 30-41-90(C).
- Even if evidence existed that VDOT ignored or refused to decide Dr. Fernandez’s relocation claim, he was not without recourse. He could have (a) sought a writ of mandamus (used when a public official refuses to perform a duty required by law), or (b) filed suit under the Virginia Administrative Process Act, which authorizes courts to “compel agency action unlawfully and arbitrarily withheld or unreasonably delayed.” Virginia Code 2.2-4029.
The VRAA is aimed at helping a displaced person or business successfully move and receive any necessary financial assistance and relocation support. The Supreme Court’s decision in Fernandez confirms that the hallmark of any successful move is cooperation between the agency and the displaced person, not litigation.
Jeff Geiger leads Sands Anderson’s Eminent Domain Law Team and assists state and local governments with condemnation issues. If you have any questions about this post or any other condemnation issues, please reach out to Jeff or any member of the Eminent Domain Law Team.