Opinion
Docket No.: CL18-7735
10-10-2018
Re: Freemason Street Area Association, Inc. v. City of Norfolk and Dr. Mark S. Sinesi
Joseph V. Sherman, Esquire
Joseph V. Sherman, PC
324 W. Freemason Street
Norfolk, Virginia 23510 Sully Callahan, Esquire
F. Sullivan Callahan, PLC
327 Duke Street
Norfolk, Virginia 23210 Dear Counsel:
Today, the Court rules on a "Petition for Temporary Injunction" filed by the Freemason Street Area Association, Inc. ("Freemason") seeking to enjoin Dr. Mark S. Sinesi and the City of Norfolk (the "City") from demolishing the building located at 355 W. Freemason Street ("Grandy House"). Sinesi owns the structure, which is a contributing building to the West Freemason Street Area Historical District. The Court finds that, although Freemason has standing to challenge Sinesi's City-ordered demolition of Grandy House, Freemason failed to satisfy the requirements for the Court to grant a temporary injunction. Specifically, the Court finds that—despite the possibility that Freemason may suffer irreparable injury in the absence of the requested temporary injunction—Freemason failed to prove that it is likely to succeed on the merits, that its potential harm without preliminary relief outweighs the potential harm to Sinesi with the temporary injunction, and that the requested temporary injunction is in the public interest. The Court therefore DENIES the "Petition for Temporary Injunction."
Despite Freemason seeking relief from the City in its "Petition for Temporary Injunction," the City is not a party to the petition. Additionally, Freemason did not file the associated "initial" pleading—a "Petition for Declaratory Judgment"—until after both the August 31, 2018, ex parte hearing and the September 19, 2018, hearing, at which both Freemason and Sinesi were represented. Because the City was not a party to the proceedings during the hearings on Freemason's "Petition for Temporary Injunction," the Court declines to entertain any request to enjoin the City.
The building, which is a Georgian Revival-style house, apparently served as the home and office of Dr. Charles Rollins Grandy, a pathologist and leader in the fight against tuberculosis.
Background
Grandy House was built in or about 1901 in the West Freemason Section of Norfolk, Virginia. (Pet'r's Ex. 5.) The City of Norfolk established the West Freemason Historic District (the "Historic District") in 1978, and Grandy House is a contributing building to the Historic District. See Norfolk, Va., Zoning Ordinance § 3.6.8. Sinesi purchased the house in October 2015 with the intent to renovate it and make it his primary residence. (Pet'r's Ex. 10.) He apparently developed construction plans that were approved by the City's Architectural Review Board ("ARB") and expended significant funds in support of this effort.
On December 16, 2016, an arsonist set the house on fire, extensively damaging the porch structure and the interior of the building. (Pet'r's Ex. 1.) In light of the damage, the City issued multiple citations to Sinesi, which required that he make certain improvements to the building. (Pet'r's Ex. 2.) It is undisputed that Sinesi failed to make the required improvements, and there are pending enforcement actions in Norfolk General District Court. (Pet'r's Ex. 11.)
On June 18, 2018—relying on a structural engineer's February 7, 2018, letter and subsequent evaluation and recommendation "noting the damage to the framing of the building"—the City's Building Commissioner determined that Grandy House was "structurally unsafe" according to the Virginia Uniform Statewide Building Code (the "USBC"). (Pet'r's Ex. 3.)
All citations to the USBC in this letter opinion are to the Maintenance Code (Part III) of the USBC. See Va. Unif. Statewide Bldg. Code, Part III (2012).
On August 9, 2018, the structural engineer produced a new evaluation and report (the "Report"). (Id.) In the Report, the engineer recommended that Sinesi demolish the framing associated with the first floor, second floor, attic, and roof and that the "porch structure be demolished as soon as possible to prevent a potential hazard to the public." (Id.) The engineer also opines that
[t]he second-floor framing has partially collapsed on to the first floor and it appears that even the presence of a very light load, such as a trespasser walking on the second floor, could trigger a full collapse of the second floor which would in turn collapse the roof and first floor framing levels. The loss of the first-floor framing could destabilize and cause failure of the basement walls, which currently retain several feet of exterior soil.(Id.) The Report concludes that, although "[t]he building's exterior multi-wythe [brick] walls appear to be structurally sound," "[u]pon the removal of the wood framing, which dangerously stabilizes the exterior walls without a complicated bracing system, it is our opinion [that] the best and most reasonable course of action for this structure is complete demolition." (Id.)
Based on the Report, the City's Building Commissioner forwarded a memorandum to the City's Zoning Administrator that same day. (Id.) In the memorandum, the Building Commissioner states that "this memorandum is being sent to notify you of the required emergency demolition of the historic building located at 355 West Freemason Street" and—based on "new information provided by the structural engineer and [his] professional experience"—declares "the structure 'Unsafe' and, in such condition that could reasonably be expected to cause death or serious physical harm to the public." (Id.)
On August 13, 2018, the Zoning Administrator notified, inter alia, various City officials, the Architectural Review Board Chairman, and members of the City Architectural Review Board of "the required emergency demolition of the historic building located at 355 West Freemason Street," stating that "[t]he condition [of Grandy House] has deteriorated significantly since the fire, and the Building Commissioner has determined that the building, if left in its current condition, 'could reasonably be expected to cause death or serious physical harm.'" (Id.) The Zoning Administrator also informed them that the City's Property Maintenance Official "has been notified to take all necessary action to promptly compel the demolition of the property to protect public safety." (Id.)
On August 14, 2018, the City issued Sinesi a "Notice of Violation" (the "Notice"), in which it reported its finding that Grandy House was "unsafe and uninhabitable." (Resp't's Ex. 4.) The Notice ordered that, pursuant to the USBC, the structure "must be repaired or demolished and removed within 10 days of the date of this notice." (Id. (referencing Va. Unif. Statewide Bldg. Code § 105.1).) It went on to state that, per the USBC,
should you fail to repair or demolish and remove the structure[,] the City of Norfolk . . . will cause the structure to be demolished and removed by contract or arrangement with a private demolition contractor[, and t]he cost of demolition and removal shall be charged against the real estate upon which the structure is located and a lien shall be placed upon the real estate.(Id.) The Notice further pointed out that, pursuant to Section 106.5 of the USBC, Sinesi had the right to appeal to the Local Board of Building Code Appeals ("LBBCA") within fourteen days of service of the Notice. (Id.) Sinesi testified that he subsequently commenced the process of obtaining a demolition company to take down the structure.
Freemason filed a "Petition for Temporary Injunction" against Sinesi on August 30, 2018, asking the Court to enjoin Sinesi from taking any actions to demolish Grandy House. The Court held an emergency ex parte hearing on August 31, 2018 (the "Initial Hearing"). During that hearing, the Court commented to Freemason's counsel that Freemason needed to file a corresponding initial pleading seeking permanent relief. At the conclusion of the hearing, the Court granted a fourteen-day temporary injunction—enjoining Sinesi from taking any steps to demolish Grandy House—in order to maintain the status quo while the parties made arrangements for a hearing during which they both could appear before the Court. The Court did not enjoin the City, as it was not a party to the temporary injunction action.
The Court held a subsequent hearing on the "Petition for Temporary Injunction" on September 19, 2018 (the "Second Hearing"), during which both parties had representation. At the conclusion of that hearing, the Court took the matter under advisement and granted the parties leave to file post-hearing briefs on the issue of whether the Court had subject matter jurisdiction. The Court also extended the temporary injunction issued at the conclusion of the Initial Hearing for thirty days or until further order from the Court, whichever occurred first.
Freemason filed a related "Petition for Declaratory Judgment" on September 21, 2018, naming both Sinesi and the City of Norfolk as defendants.
Positions of the Parties
Freemason's Position
Freemason argues that the City's determination that the post-arson condition of Grandy House demanded immediate demolition was arbitrary and capricious. (Mem. Supp. Mot. Temp. Inj. 4-5.) It notes that the decision was made more than twenty months after the arson and claims that the condition of the structure remained relatively unchanged throughout this time period, despite periodic extreme weather events. (Id. at 4-5.) Freemason further asserts that the City's determination was based on a structural engineer's report—obtained by Sinesi—which concluded that although the porch structure required immediate demolition, the exterior walls were stable. (Id. at 5.) The Report recommended complete demolition of the building only because renovation was not "feasible." (See Pet'r's Ex. 3.)
Freemason contends that Sinesi is manipulating the situation in order to, inter alia, bypass the review and appeal procedures of the Norfolk, Virginia, Zoning Ordinance (the "Zoning Ordinance") that pertain to historic districts, facilitate immediate demolition of his house, and make a financial profit through the sale of the lot without improvements and the concomitant historic district requirements. (Mem. Supp. Mot. Temp. Inj. 4-5.) Instead of relying on the emergency demolition procedures of the USBC, Freemason asserts that Sinesi should be required to proceed under the certificate-of-appropriateness demolition procedure of the Zoning Ordinance, which requires the applicant to demonstrate to the Architectural Review Board (the "ARB") that preservation of the contributing building is "economically infeasible." (Id. at 3, 5); Norfolk, Va., Zoning Ordinance § 2.4.D(3). Further, Freemason points out that if an application for a demolition certificate of appropriateness is denied by the ARB and, if appealed, the disapproval is upheld by the City Council, Sinesi would be required to market the property—at a price reasonably related to its fair market value—for twelve months before the structure could be demolished. See Norfolk, Va., Zoning Ordinance § 2.4.D(3)(e).
Sinesi's Position
Sinesi contends that, after purchasing Grandy House in October 2015, he developed plans that were approved by the ARB to make substantial improvements to the building. (Memo. Opp. Pet. Temp. Inj. ¶¶ 1, 5.) He asserts that an arsonist set fire to the structure in December 2016, which caused substantial damage to the building and resulted in the City ordering that he repair and remediate the damage. (Id. ¶¶ 2-3.) Sinesi claims that he subsequently requested an engineering firm inspect Grandy House and prepare a structural engineering report. (Id. ¶ 6-7.) Based largely on the Report, the City ultimately notified Sinesi to repair or demolish the structure. (Id. ¶¶ 8-9.) Sinesi asserts that he then took actions to have his house demolished until the Court entered an injunctive order. (Id. ¶¶ 10, 12.)
Sinesi argues that he simply was doing what the City properly ordered him to do. (Id. ¶¶ 15-16.) Based on the City Building Commissioner's recommendation that complete demolition of Grandy House was required, the City ordered him to repair or demolish the structure within ten days. (Id. ¶¶ 8-9.) Sinesi testified that, according to the Notice, if he failed to demolish his house, the City could arrange for demolition and hold him responsible for all associated costs via a charge to the real estate and a lien. (See Resp't's Ex. 4.)
Of note, the City is not a party to Freemason's "Petition for Temporary Injunction."
Sinesi asserts that the City's Building Commissioner reasonably concluded that public safety concerns warranted emergency demolition of the structure. (Memo. Opp. Pet. Temp. Inj. ¶ 8.) He also contends that Freemason had the opportunity to appeal the Building Commissioner's decision to the LBBCA but opted not to do so, thereby failing to exhaust its administrative remedies and making judicial intervention inappropriate. (Id. ¶¶ 11, 12, 17-18.)
Analysis
Legal Standard
Virginia's Declaratory Judgment Act provides as follows:
In cases of actual controversy, circuit courts . . . shall have power to make binding adjudications of right, whether or not consequential relief is, or at the time could be, claimed and no action or proceeding shall be open to objection on the ground that a judgment order or decree merely declaratory of right is prayed for. Controversies involving the interpretation of deeds, wills, and other instruments of writing, statutes, municipal ordinances and other governmental regulations, may be so determined, and this enumeration does not exclude other instances of actual antagonistic assertion and denial of right.Va. Code § 8.01-184 (2015 Repl. Vol.).
The City's Zoning Ordinance provides procedures to obtain a certificate of appropriateness for any development proposed within a historic district to ensure compatibility with the historic character of the district. Norfolk, Va., Zoning Ordinance § 2.4.10. The ordinance provides several conditions that are exempt from the certificate-of-appropriateness requirements, including emergency demolition:
The emergency demolition of any structure or any portion of a structure which is in such a dangerous, hazardous or unsafe condition that it has been ordered
demolished by the Building Commissioner or the Fire Marshal when they have determined that such condition could reasonably be expected to cause death or serious physical harm. The Building Commissioner or Fire Marshal, as appropriate, shall notify the [Zoning Administrator] about the demolition of the structure and the [Zoning Administrator] shall notify the chairperson of the [Architectural Review Board] and any other interested person as soon as practicable after such a determination has been made by the Building Commissioner or Fire Marshal.Id. § 2.4.10.B.(2)(c).
Section 105 of the USBC provides as follows:
This section shall apply to existing structures which are classified as unsafe or unfit for human occupancy. All conditions causing such structures to be classified as unsafe or unfit for human occupancy shall be remedied or as an alternative to correcting such conditions, the structure may be vacated and secured against public entry or razed and removed. . . . Notwithstanding the above, when the code official determines that an unsafe structure or a structure unfit for human occupancy constitutes such a hazard that it should be razed or removed, then the code official shall be permitted to order the demolition of such structures in accordance with applicable requirements of this code.Va. Unif. Statewide Bldg. Code § 105.1 (2012); see also Norfolk City Code § 11.1-1.1 (adopting the Va. Unif. Statewide Bldg. Code).
Regarding required notice, the USBC provides, in pertinent part, as follows:
When a structure is determined to be unsafe or unfit for human occupancy by the code official, a written notice of unsafe structure or structure unfit for human occupancy shall be issued by personal service to the owner, the owner's agent or the person in control of such structure. The notice shall specify the corrections necessary to comply with this code, or if the structure is required to be demolished, the notice shall specify the time period within which the demolition must occur.Va. Unif. Statewide Bldg. Code § 105.4.
The USBC further provides the following:
[W]henever an owner of an unsafe structure or structure unfit for human habitation fails to comply with a notice to demolish issued under Section 105.4 in the time period stipulated, the code official shall be permitted to cause the structure to be demolished. In accordance with . . . the Code of Virginia, the legal counsel of the locality may be requested to institute appropriate action against the property owner to recover the costs associated with any such emergency repairs or demolition and
every such charge that remains unpaid shall constitute a lien against the property on which the emergency repairs or demolition were made . . . .Id. § 105.9. The Code section has a note that states, in pertinent part, that "historic building demolition may be prevented by authority granted to local historic review boards in accordance with . . . the Code of Virginia unless determined necessary by the code official." Id.
The USBC defines an "unsafe structure" as
[a]n existing structure (i) determined by the code official to be dangerous to the health, safety and welfare of the occupants of the structure or the public, (ii) that contains unsafe equipment, or (iii) that is so damaged, decayed, dilapidated, structurally unsafe or of such faulty construction or unstable foundation that partial or complete collapse is likely. A vacant existing structure unsecured or open shall be deemed to be an unsafe structure.Id. § 202. It defines a "structure unfit for human occupancy" as
[a]n existing structure determined by the code official to be dangerous to the health, safety and welfare of the occupants of the structure or the public because (i) of the degree to which the structure is in disrepair or lacks maintenance, ventilation, illumination, sanitary or heating facilities or other essential equipment, or (ii) the required plumbing and sanitary facilities are inoperable.Id.
Regarding rights of appeal, Section 106.5 of the USBC states the following:
Any person aggrieved by the local enforcing agency's application of this code or the refusal to grant a modification to the provisions of this code may appeal to the LBBCA. The applicant shall submit a written request for appeal to the LBBCA within 14 calendar days of the receipt of the decision being appealed. . . . The application shall be marked by the LBBCA to indicate the date received. Failure to submit an application for appeal within the time limit established by this section shall constitute acceptance of a code official's decision.Id. § 106.5.
"[A movant] seeking a [temporary] injunction must establish [(1)] that he is likely to succeed on the merits, [(2)] that he is likely to suffer irreparable harm in the absence of preliminary relief, [(3)] that the balance of equities tips in his favor, and [(4)] that an injunction is in the public interest." Winter v. Nat. Res. Def. Council, Inc., 555 U.S. 7, 20 (2008).
Discussion
The Court has considered the pleadings, evidence and oral arguments presented at the Second Hearing, and applicable authorities. The Court now rules as follows.
As an initial matter, the Court inquired of the parties during the Second Hearing whether, based on Freemason's possible failure to exhaust administrative remedies, the Court had subject matter jurisdiction over the dispute and asked the parties to provide post-hearing briefs on the issue. The Court notes that courts have viewed the failure to exhaust administrative remedies inconsistently; some have viewed it as a jurisdictional bar, while others have viewed it as a required condition precedent often raised as an affirmative defense. See, e.g., Davis v. Fort Bend Cty., 893 F.3d 300, 303-04 (5th Cir. 2018) (discussing the different approaches). Virginia has not addressed the issue directly, although it appears to favor the latter position. See 1A M.J., Administrative Law, § 17 ("The general requirement of the exhaustion of administrative remedies is not a jurisdictional doctrine, but is a matter of comity." (relying in part on United States ex rel. Tobias v. Laird, 413 F.2d 936 (4th Cir. 1969); Sitwell v. Burnette, 349 F. Supp. 83 (W.D. Va. 1972))).
Although the Court considers this issue—in light of the evidence presented at the Second Hearing—in its evaluation of Freemason's likelihood of success on the merits at trial, discussed infra, the Court declines at this time to rule on the issue of exhaustion of remedies without providing the parties an opportunity to present additional evidence. A. Freemason Has Standing to Pursue this Matter.
As a threshold matter, the Court finds that Freemason has standing to request that the Court enjoin Sinesi from taking steps to demolish Grandy House.
The suit underlying the request for preliminary relief is a Petition for Declaratory Judgment. Under Virginia's Declaratory Judgment Act, the Court has the power to issue declaratory judgments in "cases of actual controversy" and in "instances of actual antagonistic assertion and denial of right." Va. Code § 8.01-184 (2015 Repl. Vol.). This statute is remedial and is to be "liberally interpreted and administered with a view to making the courts more serviceable to the people." Id. § 8.01-191. "A plaintiff has standing to bring a declaratory judgment proceeding if he has 'a justiciable interest' in the subject matter of the litigation, either in his own right or in a representative capacity." Bd. of Supervisors v. Fralin & Waldron, Inc., 222 Va. 218, 223, 278 S.E.2d 859, 862 (1981) (quoting Lynchburg Traffic Bureau v. Norfolk & W. Ry., 207 Va. 107, 108, 147 S.E.2d 744, 745 (1966)).
In determining whether Freemason has a justiciable interest in the potential demolition of Grandy House, the Court finds it instructive to analyze whether Freemason would have standing to challenge Sinesi's demolition of his house pursuant to both the City's Zoning Ordinance and the USBC, which Norfolk has adopted. See Norfolk City Code § 11.1-1.1
It is undisputed that Grandy House is a contributing building to the West Freemason Historic District. Under the Certificate of Appropriateness section of the Zoning Ordinance, "any person owning real property in the same Historic . . . District" has standing to appeal decisions of the ARB concerning applications for certificates of appropriateness, including for demolition. Norfolk, Va., Zoning Ordinance § 2.4.10.E. At the hearings in this matter, real property owners within the Historic District provided testimony. Moreover, Freemason—as an organization—has standing to seek relief as long as at least one property owner within the Historic District is a member of Freemason, which is the case here. See Philip Morris USA, Inc. v. Chesapeake Bay Found., Inc., 273 Va. 564, 577, 643 S.E.2d 219, 226 (2007) (citing Hunt v. Wash. State Apple Advertising Comm'n, 432 U.S. 333, 343 (1977)) (holding that representational standing requires that (a) at least one of the organization's members would otherwise have standing to sue in their own right, (b) the interests the organization seeks to protect are germane to the its purpose, and (c) neither the claim asserted nor the relief requested requires participation of individual members in the lawsuit).
Of significant note, emergency demolition is exempt from the Zoning Ordinance's section regarding historic districts. Norfolk, Va., Zoning Ordinance § 2.4.10.B.(2)(c); see also Va. Code § 36-105.C.6 (2014 Repl. Vol.). The ordinance states the following:
The emergency demolition of any structure . . . which is in such a dangerous, hazardous or unsafe condition that it has been ordered demolished by the Building Commissioner . . . when [he] ha[s] determined that such condition could reasonably be expected to cause death or serious physical harm. The Building Commissioner . . . shall notify the [Zoning Administrator] about the demolition of the structure and the [Zoning Administrator] shall notify the chairperson of the [Architectural Review Board] and any other interested person as soon as practicable after such a determination has been made . . . .Norfolk, Va., Zoning Ordinance § 2.4.10.B(2)(c). In the absence of governing historic district zoning procedures, the USBC governs because the USBC applies to all structures in the City of Norfolk. See Va . Code § 36-105; Norfolk City Code § 11.1-1.1. The USBC expressly addresses emergency demolition procedures.
This section shall apply to existing structures which are classified as unsafe or unfit for human occupancy. All conditions causing such structures to be classified as unsafe or unfit for human occupancy shall be remedied or . . . vacated and secured against public entry or razed and removed. [W]hen the code official determines that an unsafe structure or a structure unfit for human occupancy constitutes such a hazard that it should be razed or removed, then the code official shall be permitted to order the demolition of such structures in accordance with applicable requirements of this code.Va. Unif. Statewide Bldg. Code § 105.1.
The USBC further provides that "[a]ny person aggrieved by the local enforcing agency's application of this code" can appeal that decision to the LBBCA within fourteen days of receiving the decision. Id. § 106.5 (emphasis added). Regarding the interpretation of "person 'aggrieved,'" the Virginia Supreme Court has opined as follows:
The term "aggrieved" has a settled meaning in Virginia when it becomes necessary to determine who is a proper party to seek court relief from an adverse decision. In order for a petitioner to be "aggrieved," it must affirmatively appear that such person had some direct interest in the subject matter of the proceeding that he seeks to attack. The petitioner "must show that he has an immediate, pecuniary and substantial interest in the litigation, and not a remote or indirect interest." Thus, it is not sufficient that the sole interest of the petitioner is to advance some perceived public right or to redress some anticipated public injury when the only wrong he has suffered is in common with other persons similarly situated. The word "aggrieved" in a statute contemplates a substantial grievance and means a denial of some personal or property right, legal or equitable, or imposition of a burden or obligation upon the petitioner different from that suffered by the public generally.Va. Beach Beautiflcation Comm'n v. Bd. of Zoning Appeals, 231 Va. 415, 419-20 (citation omitted) (quoting Nicholas v. Lawrence, 161 Va. 589, 593, 171 S.E. 673, 674 (1933)).
Here, the demolition of Grandy House would have a direct impact—both cultural and financial—on the other property owners within the Historic District and on Freemason itself. Hence, Freemason has a direct interest in the subject matter of this proceeding, and this interest is different from that suffered by the non-Historic District public generally. The Court therefore finds that Freemason is a "person aggrieved" under the USBC.
Based on the language of Virginia's Declaratory Judgment Act, and in the context of the Zoning Ordinance and the Building Code, the Court finds that Freemason has standing to pursue a temporary injunction against Sinesi. B. Freemason Has Not Adequately Demonstrated the Necessary Factors for a Temporary Injunction.
A temporary injunction under Virginia law, like a federal preliminary injunction, is considered an extraordinary remedy. Levisa Coal Co. v. Consolidation Coal Co., 276 Va. 44, 61, 662 S.E.2d 44, 53 (2008). Unfortunately, the Virginia General Assembly and Virginia appellate courts have not provided guidance regarding how Virginia circuit courts should evaluate motions for temporary injunctions. In 1988, when evaluating a federal preliminary injunction related to an underlying claim that the defendant had violated a Virginia statute, the U.S. Court of Appeals for the Fourth Circuit opined that "there is no great difference between federal and Virginia standards for preliminary injunctions" and that "[b]oth draw on the same principles." Capital Tool and Mfg. v. Maschinefabrik Herkules, 837 F.2d 171, 173 (4th Cir. 1988). Since then, many Virginia circuit courts implicitly have relied on the Fourth Circuit's proclamation and have applied federal preliminary injunction law when analyzing Virginia temporary injunctions.
Notably, the Virginia Civil Benchbook clearly endorses this practice. See Virginia Civil Benchbook for Judges and Lawyers § 8.06[3][b] (2018-19 ed. Matthew Bender).
Against a backdrop where virtually every federal circuit court of appeals evaluated preliminary injunctions differently, the United States Supreme Court in 2008 decided Winter v. Natural Resources Defense Council, Inc., 555 U.S. 7 (2008). There, the Court held that "a [movant] seeking a preliminary injunction must establish [(1)] that he is likely to succeed on the merits, [(2)] that he is likely to suffer irreparable harm in the absence of preliminary relief, [(3)] that the balance of equities tips in his favor, and [(4)] that an injunction is in the public interest." Id. at 20.
The first post-Winter preliminary injunction case presented to the Fourth Circuit was The Real Truth About Obama, Inc. v. Federal Election Commission, which was decided in 2009. 575 F.3d 342 (4th Cir. 2009), vacated on other grounds, Citizens United v. Fed. Election Comm'n, 558 U.S. 310 (2010), aff'd, The Real Truth About Obama, Inc. v. Fed. Election Comm'n, 607 F.3d 355 (4th Cir. 2010) (per curiam). The Fourth Circuit held that "[b]ecause a preliminary injunction affords, on a temporary basis, the relief that can be granted permanently after trial, the party seeking the preliminary injunction must demonstrate by 'a clear showing' that, among other things, it is likely to succeed on the merits at trial." Id. at 345 (quoting Winter, 555 U.S. at 22). The court then declared that "the Supreme Court articulated clearly what must be shown to obtain a preliminary injunction" and pointed out that "all four requirements must be satisfied." Id. at 346. The court went on to state the following:
Of note, the various federal circuit courts of appeals did not interpret Winter consistently. For a description of the various post-Winter approaches adopted, as well as a recommendation on how courts should apply the test for Virginia temporary injunctions, see David W. Lannetti, The "Test"—or Lack Thereof—for Issuance of Virginia Temporary Injunctions: The Current Uncertainty and a Recommended Approach Based on Federal Preliminary Injunction Law, 50 U. Rich. L. Rev. 273, 299-311, 318-22 (2015).
Indeed, the Court in Winter rejected a standard that allowed the [movant] to demonstrate only a "possibility" of irreparable harm because that standard was "inconsistent with our characterization of injunctive relief as an extraordinary remedy that may only be awarded upon a clear showing that the [movant] is entitled to such relief."Id. (emphasis added) (citations omitted). The Fourth Circuit reiterated that "Winter articulates four requirements, each of which must be satisfied as articulated." Id. (emphasis added) (citations omitted).
Since the Fourth Circuit decided Real Truth, most Virginia circuit courts have evaluated temporary injunctions using the Real Truth sequential analysis. See, e.g., CG Riverview, LLC v. 139 Riverview, LLC, 2018 Va. Cir. LEXIS 3, at *8-9 (City of Norfolk, Jan. 9, 2018); In re Volkswagen "Clean Diesel" Litigation, 94 Va. Cir. 189, 206 (Fairfax Cty., 2016); Wings, LLC v. Capitol Leather, LLC, 88 Va. Cir. 83, 89 (Fairfax Cty., 2014); McEachin v. Boiling, 84 Va. Cir. 76, 77 (City of Richmond, 2011); Strong Found. Youth Initiative LLC v. Ashford, 2009 Va. Cir. LEXIS 140, at *1 (City of Richmond, Nov. 4, 2009). Consistent with this approach, the Virginia Civil Benchbook refers to the Winter four-factor test—and the Fourth Circuit's interpretation of the Winter factors as applied in Real Truth—in the section regarding motions for temporary injunctions. See Virginia Civil Benchbook for Judges and Lawyers § 8.06[3][b] (2018-19 ed. Matthew Bender).
This is consistent with Virginia circuit courts' prior reliance on another Fourth Circuit decision, Blackwelder Furniture Co. of Statesville, Inc. v. Seilig Manufacturing Co., 550 F.2d 189 (4th Cir. 1977), which was overturned by Real Truth. See, e.g., Midgette v. Arlington Props., 83 Va. Cir. 26, 28 (City of Chesapeake, 2011); Owens v. City Council, 75 Va. Cir. 91, 101 (City of Norfolk, 2008); Long & Foster Real Estate, Inc. v. CLPF - King St. Venture, L.P., 74 Va. Cir. 87, 89 (City of Alexandria, 2007); S. Auburn, L.P. v. Old Auburn Mills, L.P., 69 Vir. Cir. 145, 145 (Loudoun Cty., 2005); Int'l Limousine Serv. v. Reston Limousine & Travel Serv., 68 Va. Cir. 84, 85-86 (Loudoun Cty., 2005); Hardinge, Inc. v. Buhler, 72 Va. Cir. 39, 39 (Amherst Cty., 2006); Wilson v. Henry Cty. Zoning Appeals Bd., 68 Va. Cir. 317, 317-18 (Henry Cty., 2005) (citing Child Evangelism v. Montgomery Cty., 373 F.3d 589, 593 (4th Cir. 2004) and E. Tenn. Nat. Gas Co. v. Sage, 361 F.3d 808, 828 (4th Cir. 2004), which "follow[ed] Blackwelder"); Villalobos v. City of Norfolk, 62 Va. Cir. 158, 158 (City of Norfolk, 2003); Democratic Party of Va. v. State Bd. of Elections, 1999 Va. Cir. LEXIS 551, at *4 (City of Richmond, Oct. 19, 1999); Cubic Toll Sys., Inc. v. Va. Dep't of Transp., 37 Va. Cir. 522, 522 (Fairfax Cty., 1993); In re Smith, 1999 Va. Cir. LEXIS 743, at *5-6 (Loudoun Cty., June 4, 1999); Newell Indus. Corp. v. Lineal Techs., 43 Va. Cir. 412, 413 (City of Roanoke, 1997); MFS Network Techs. v. Commonwealth, 33 Va. Cir. 406, 408-09 (City of Richmond, 1994); Plate v. Kincannon Place Condo. Unit Owners' Assn. Bd. of Dirs., 30 Va. Cir. 323, 325 (Fairfax Cty., 1993).
1. Freemason has demonstrated that it likely will suffer irreparable injury in the absence of preliminary relief.
As part of its four-part analysis, "Winter requires that the plaintiff make a clear showing that it is likely to be irreparably harmed absent preliminary relief." Real Truth, 575 F.3d at 347 (emphasis added) (citing Winter, 555 U.S. at 19-23). Freemason's alleged irreparable injury is the loss of a contributing building to an established historic district. In addition to the traditionally recognized uniqueness of real property, Grandy House is an acknowledged historical structure that is more than a century old. If demolished, it simply cannot be replaced.
When evaluating preliminary relief, the irreparable injury analyzed is the harm without the preliminary relief, i.e., prior to the trial on the merits. The implication of granting a temporary injunction is that judicial intervention will prevent the irreparable injury about which the movant is concerned. The Court notes that here, however, the potential irreparable injury is present with or without the requested temporary injunction. Without the injunction, Sinesi likely will immediately demolish Grandy House, as he has been ordered to do by the City. With the temporary injunction, the City potentially could nevertheless have the building demolished because it appears that the City has the authority to order demolition, it already has ordered the demolition, it has the right and ability to conduct the demolition itself, and it is not a party to Freemason's request for preliminary relief.
Considering the facts as presented to the Court at this early juncture and in light of the express language of Winter, however, the Court finds that Freemason has demonstrated that it likely will suffer irreparable harm—the destruction of Grandy House—in the absence of preliminary relief.
2. Freemason failed to clearly show that it likely will succeed on the merits of its Petition for Declaratory Judgment.
"[T]he Supreme Court in Winter, recognizing that a preliminary injunction affords relief before trial, requires that the plaintiff make a clear showing that it likely will succeed on the merits at trial." Real Truth, 575 F.3d at 346 (emphasis added) (citing Winter, 555 U.S. at 19-20, 22-23). In other words, Freemason must prove that it is likely to succeed on the merits of its underlying claim, i.e., its petition for a declaration that the City's decision ordering emergency demolition of Grandy House was improper.
Based on the facts known at this early stage of the case, it appears that the City Building Commissioner's conclusion that emergency demolition of Grandy House was required—ostensibly considering the building's contribution to the Historic District and the potential impact on the neighboring historic property owners—was based primarily on the findings and recommendations contained in the Report as well as his own professional experience. The Court notes that the Report does not expressly opine that immediate takedown of the building is necessary. Rather, it concludes that "the best and most reasonable course of action for this structure is complete demolition." The Report does, however, recommend immediate demolition of the partially collapsed porch structure "to prevent a potential hazard to the public." It also opines that "a very light load, such as a trespasser walking on the second floor," could cause a catastrophic chain of events—collapse of the second floor, and then the roof, and then the first-floor framing, followed by failure of the basement walls and potentially the exterior walls, i.e., a collapse of the entire structure. Additionally, the Zoning Administrator noted in his memorandum that the condition of the structure "has deteriorated significantly since the fire," implying that further deterioration can be expected absent intervening action.
At trial, "the duty of the court with respect to issues of fact shall be to determine whether there was substantial evidence in the agency record to support the agency decision." Va. Code § 2.2-4027 (2017 Repl. Vol.). "The 'substantial evidence' standard, adopted by the General Assembly, is designed to give great stability and finality to the fact-findings of an administrative agency." Va. Real Estate Comm'n v. Bias, 226 Va. 264, 269, 308 S.E.2d 123, 125 (1983). Freemason therefore will bear the heavy burden of proving at trial that, "considering the record as a whole, a reasonable mind would necessarily come to a different conclusion," i.e., that emergency demolition of the structure is not required. Id. Based on the limited information known at this time, the Court finds that Freemason likely will not be able to satisfy this burden.
Judicial review of USBC decisions normally is governed by the Virginia Administrative Process Act. See Va . Code § 36-114 (2014 Repl. Vol.) ("Proceedings of the [State] Review Board shall be governed by the provisions of the Administrative Process Act (§ 2.2-4000 et seq.), except that an informal conference pursuant to § 2.2-4019 shall not be required.").
Perhaps more importantly, Freemason's apparent failure to exhaust its administrative remedies could be fatal. Pursuant to the USBC, Freemason—as an aggrieved party—was required to note any appeal of the City's decision ordering the emergency demolition of Grandy House to the LBBCA within fourteen calendar days. Va. Unif. Statewide Bldg. Code § 106.5 (2012). On August 14, 2018, the City directed Sinesi to demolish Grandy House, and Sinesi testified that he received and made arrangements to comply with the Notice. Based on this evidence, it appears that the date on which Sinesi received the appealable decision was on or about August 14, 2018. It therefore appears that any aggrieved party, including Freemason, would have had to file an appeal with the LBBCA on or before August 28, 2018. Counsel for Freemason stated on September 19 at the Second Hearing—upon viewing the Notice when it was offered into evidence—that he had not previously seen the Notice. The USBC expressly provides that "[f]ailure to submit an application for appeal within the time limit established by this section shall constitute acceptance of a code official's decision." Id. Hence, based on the evidence presented thus far, it appears that Freemason may have failed to exhaust its administrative remedies before resorting to judicial intervention.
Had Freemason's appeal to the LBBCA been unsuccessful, it could have further appealed the decision to the State Review Board. Va. Unif. Statewide Bldg. Code § 106.5.
The Court makes no ruling at this time regarding whether Freemason, as a potentially aggrieved party, was entitled to receive a copy of the Notice. The Court notes, however, that recipients of the City's Zoning Administrator's August 13, 2018, memorandum included the "Architectural Review Board Chairman" and "Architectural Review Board Members." Additionally, several of the witnesses for Freemason at the Second Hearing apparently are members of both the ARB and Freemason.
Based on the facts as currently known, the Court finds that Freemason failed to clearly demonstrate that it likely will succeed on its Petition for Declaratory Judgment at trial.
Although the movant seeking a temporary injunction must satisfy all four temporary injunction factors in order to prevail, Real Truth, 575 F.3d at 346, the Fourth Circuit recently held that a district court did not err in denying preliminary injunctive relief by not evaluating other factors once it found that the movant failed to prove irreparable injury, Henderson v. Bluefield Hosp. Co., No. 16-2331/2332, 2018 U.S. App. LEXIS 24334, at *15 (4th Cir. Aug. 28, 2018). In light of the fact that Henderson involved the failure to demonstrate irreparable injury—which is not the case here—and the lack of clear precedent regarding what exactly constitutes a "clear showing" that the movant will succeed on the merits at trial, the Court elects to address the remaining preliminary relief factors.
3. Freemason failed to show that the balance of the equities tips in its favor.
Freemason also must prove that the balance of the equities tips in its favor. Stated differently, Freemason must demonstrate that the harm it would suffer without a temporary injunction outweighs the harm to Sinesi with a temporary injunction. This analysis necessarily focuses on the pretrial time period.
The harm to Freemason without the requested preliminary relief flows from the anticipated demolition of Grandy House. In addition to the loss of this unique and irreplaceable structure, there likely would be an associated diminution in value of the individual neighboring historic properties as well as a decrease in the historical and cultural value of the Historic District as a whole. The harm to Sinesi with the temporary injunction, on the other hand, consists of the consequences associated with his failure to comply with the City's Notice to demolish his house—including any concomitant civil fines and the potential assessment of the City's costs to demolish the building—as well as the potential liability for any injuries to third parties caused by the property's condition, which injuries may not be insurable considering the current state of the structure. Additionally, the temporary injunction will prevent Sinesi from moving forward with demolition of Grandy House and any future plans he might have for the property.
As noted supra, the requested temporary injunction does not prevent the City from taking steps to demolish Grandy House.
Based on the limited evidence presented, the Court finds that Freemason has failed to demonstrate that the equities tip in its favor.
4. Freemason failed to demonstrate that the temporary injunction is in the public interest.
Lastly, Freemason must demonstrate that the requested temporary injunction is in the public interest, i.e., that prior to a trial on the merits without preliminary relief, the public interest outweighs the possible irreparable harm to Freemason. The United States Supreme Court discussed this factor at length in Winter, noting that the related analysis is far-reaching. See Winter v. Natural Resources Defense Council, Inc., 555 U.S. 7, 24-26 (2008) (pointing out in a marine environmental case that the public interests "must be weighed against the possible harm to the ecological, scientific, and recreational interests that are legitimately before this Court"). The Court opined that "[i]n exercising their sound discretion, courts of equity should pay particular regard for the public consequences in employing the extraordinary remedy of injunction." Id. at 24 (emphasis added) (quoting Weinberger v. Romero-Barcelo, 456 U.S. 305, 312 (1982)).
As discussed supra, the possible pretrial irreparable harm to Freemason without preliminary relief is the potential loss of Grandy House, which is a contributing building to the established Historic District. The countervailing public interest, or harm to the public with the temporary injunction, is infringement upon Sinesi's and similarly situated property owners' rights to possess and control their realty as they see fit in the context of the Historic District zoning requirements and its emergency demolition exemption. More significantly, the City's Building Commissioner assessed the current condition of Grandy House—which would be preserved if the Court granted preliminary relief—and declared 'the structure 'Unsafe' and, in such condition that could reasonably be expected to cause death or serious physical harm to the public." Based on this declaration, the City's Zoning Administrator directed the City's Property Maintenance Official "to take all necessary action to promptly compel the demolition of the property to protect public safety." The City clearly concluded, and harbors great concern about, the possibility that the current state of the structure could immediately cause death or serious physical harm to the public. The Court recognizes that Freemason disagrees with the City's assessment, but the Court is reluctant—based on the City's concerns and the minimal evidence produced in support of the request for preliminary relief—to discount the City's dire assessment. When the City issued the Notice, it was fully aware that Grandy House is a historic building, and the City has an interest in both preserving designated historic districts and protecting the public. In light of this, the Court feels bound to seriously heed the City's conclusion that public safety outweighs the preservation of a historic building.
The City's Zoning Administrator's memorandum stating that the Building Commissioner has determined that Grandy House "could reasonably be expected to cause death or serious physical harm" expressly identifies the structure as "the historic building located at 355 West Freemason Street" (emphasis added).
In consideration of the foregoing, the Court finds that the requested temporary injunction is not in the public interest.
Conclusion
The Court fully appreciates that Granby House—at least prior to the 2016 arson—contributed to the historic and cultural status of the West Freemason Historic District and, more generally, the City of Norfolk. The Court also understands that the structure is irreplaceable in the eyes of the law, making the injury to Freemason stemming from its demolition irreparable. As discussed above, however, the Court finds that Freemason failed to adequately demonstrate that it is likely to succeed on the merits of its Petition for Declaratory Judgment, that the balance of the equities tips in its favor, and that the possible irreparable harm without preliminary relief outweighs the public interest. As such, the Court finds that Freemason has not satisfied all four temporary injunction factors and therefore cannot prevail.
The Court DENIES Freemason's "Petition for Temporary Injunction," despite the possibility that Freemason may suffer irreparable injury in the absence of the requested temporary injunction. The Court notes that, as is the case whenever a court denies preliminary relief, Freemason can seek monetary damages associated with any pretrial injury should it ultimately prevail at the trial on the merits.
Because the movant must prove the inadequacy of damages, i.e., irreparable injury, to prevail at a trial on an equitable claim, money damages by definition will be insufficient to make the movant whole. Nonetheless, to the extent that the irreparable injury the movant sought to prevent via a temporary injunction already has occurred, money damages are the best a court can offer. --------
Attached is an Order consistent with the ruling in this letter opinion. Signatures are waived pursuant to Rule 1:13 of the Rules of Supreme Court of Virginia. The parties shall file any objections with the Court within fourteen days.
Sincerely,
/s/
David W. Lannetti
Circuit Court Judge DWL/gbs
cc: City of Norfolk (Adam Melita, Esq.)