Articles Posted in Supreme Court of Virginia

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The Supreme Court affirmed the State Corporation Commission’s (SCC) denial of claims filed by a group of Kentucky hospitals requesting reimbursement for legal fees and costs from Reciprocal of America (ROA), an insolvent insurer. On appeal, the Hospitals argued that certain agreements constituting an assumption reinsurance transaction provided a contractual basis for the claims requiring ROA to indemnify them for legal fees and costs incurred in certain litigation and that the SCC erred in concluding otherwise. The Supreme Court disagreed, holding that the SCC did not err in concluding that the governing contractual provisions did not obligate ROA to reimburse the Hospitals for legal fees an costs that they incurred in the legal proceedings. View "Appalachian Regional Healthcare v. Cunningham" on Justia Law

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The Supreme Court reversed the judgment of the circuit court sustaining the Tax Department’s decision to rescind $4.9 million in land preservation tax credits it had previously awarded to the Woolford family on the grounds that the Woolfords’ appraiser was not a “qualified appraiser.” Specifically, the circuit court found that the Woolfords’ appraiser lacked the necessary education and experience, as required by applicable federal law incorporated by Va. Code 58.1-512(B), to offer a qualified appraisal. The Supreme Court disagreed and remanded the case, holding (1) the trial court erred in ruling that the Woolfords’ appraiser was not a “qualified appraiser”; and (2) the Department was not constrained from auditing the value of the tax credits claimed by the Woolfords after initially awarding them those tax credits. View "Woolford v. Virginia Department of Taxation" on Justia Law

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The circuit court erred in relying on principles of res judicata to refuse to stay an injunction brought by the City of Staunton’s Zoning Administrator against the landowner in this case pending further proceedings before the City’s Board of Zoning Appeals and erred in granting the injunction against the landowner. The Supreme Court reversed the judgment of the circuit court as to the stay and the injunctive relief sought, holding (1) the doctrine of res judicata that the circuit court relied on was not a proper basis to deny the stay based on prior administrative or circuit court proceedings; and (2) as a result, the final order granting an injunction, when the landowner had not been given the opportunity to exhaust her administrative remedies, was in error. View "Chilton-Belloni v. Angle" on Justia Law

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In these consolidated appeals, the Supreme Court affirmed the decision of the State Corporation Commission upholding the constitutionality of Va. Code 56-585.1:1, which suspended the Commission’s biennial base rate reviews for Appalachian Power Company (APCO) and Virginia Electric and Power Company, d/b/a Dominion Virginia Power (Dominion Power) until the years 2020 and 2021, respectively. Appellants - Old Dominion Committee for Fair Utility Rates, VML/VACO APCO Steering Committee and Karen Torrent - appealed. In affirming, the Supreme Court held that section 56-585.1:1 is constitutional under Va. Const. art. IX, 2 because article IX, section 2 does not prohibit the general assembly from suspending the Commission’s biennial base rate reviews. View "Old Dominion Committee for Fair Utility Rates v. State Corp. Commission" on Justia Law

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Kohl’s Department Stores, Inc. entered into a license agreement with Kohl’s Illinois, Inc., an affiliate of Kohl’s that operates retail stores in select states, but not Virginia, for the use of intellectual property managed and licensed by Kohl’s Illinois. Kohl’s paid royalties to Kohl’s Illinois, and when calculating its federal taxable income, Kohl’s deducted these royalty payments from its income as an ordinary and necessary business expense. Kohl’s Illinois, however, did not pay state income taxes on a substantial portion of the royalties. Kohl’s claimed that the royalty payments fell within the “subject-to-tax” exception to the add back statute. The Virginia Department of Taxation auditor required that the untaxed portion be added back to Kohl’s taxable income and issued a notices of assessment to Kohl’s for certain taxable years. The circuit court affirmed, concluding that only the portion of the royalties that was actually taxed by another state fell within the subject-to-tax exception. The Supreme Court reversed, holding that the circuit court erred by failing to hold that Kohl’s Illinois need not be the entity that pays the tax for the subject-to-tax exception to apply. Remanded for a determination of what portion of the royalty payments was actually taxed by another state and therefore excepted from the add back statute. View "Kohl's Department Stores, Inc. v. Virginia Department of Taxation" on Justia Law

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Boasso American Corporation appealed an adverse decision by the Zoning Administrator for the City of Chesapeake to the Board of Zoning Appeals. The Board affirmed. Boasso then filed a petition for writ of certiorari. The Zoning Administrator moved to dismiss on the ground that Boasso had failed to name or serve the City Council for the City of Chesapeake, a necessary party by statute. Boasso then sought leave to amend to include the City Council and the City Attorney. The Acting City Clerk, on behalf of the Mayor, moved to quash service of process and filed a plea in bar arguing that Boasso’s failure to name or serve the City Council within thirty days of the Board’s decision was fatal to the petition. The circuit court dismissed Boasso’s petition with prejudice. The Supreme Court affirmed, holding (1) a litigant who appeals the judgment of a board of zoning appeals under Va. Code 15.2-2314 must identify the governing body as a necessary party in the petition and must do so within thirty days of the board’s final decision; and (2) if those requirements are not met, the circuit court lacks the discretion to permit amendment of the petition and, if asked, must dismiss the case for lack of a necessary party. View "Boasso America Corp. v. Zoning Administrator of the City of Chesapeake" on Justia Law

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The Tax Commissioner of Virginia directed Chesterfield County to issue refunds to Verizon Online LLC for local taxes it paid for tax years 2008, 2009 and 2010 on set top boxes it owned. The circuit court upheld the Tax Commissioner’s determination that the set top boxes were not subject to local taxation but concluded that Verizon was not entitled to refunds for tax years 2008 and 2009 due to its failure to file a timely appeal with the local commissioner of revenue. The Supreme Court affirmed in part and reversed in part, holding (1) the circuit court did not err in ruling that Verizon’s set top boxes are not subject to local taxation; but (2) the issue of the timeliness of Verizon’s local appeal was not preserved for review by the circuit court, and therefore, the circuit court erred in ruling that Verizon was not entitled to refunds for tax years 2008 and 2009. View "Verizon Online LLC v. Horbal" on Justia Law

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Western Refining Yorktown, Inc. was the owner of a refinery that was subject to the machinery and tools tax. Western challenged the Commissioner of Revenue’s 2010 and 2011 assessments in the circuit court. The trial court upheld the valuation of the refinery’s machinery and tools for purposes of levying the machinery and tools tax, concluding that Western did not carry its burden of proof to show that the property in question was valued at more than its fair market value. The Supreme Court affirmed, holding (1) the trial court did not err in upholding the assessment; and (2) the County of York did not assume inconsistent positions in successive litigation. View "Western Refining Yorktown v. County of York" on Justia Law

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Miller & Rhoads Building, LLC (MRB) purchased a building that was subject to a city-wide real estate tax and an annual special district tax. MRB sought a partial exemption from real estate taxes for the property under the City of Richmond’s Tax Abatement for Rehabilitated Real Estate Program (the Partial Exemption). The City applied the Partial Exemption to the base real estate tax but refused to apply it to the special district tax. MRB paid the special district taxes under protest and brought an action to correct the alleged erroneous assessments. At issue at trial was whether the Partial Exemption also applied to the City’s computation of the special district tax. The trial court ruled in favor of the City, concluding that the Partial Exemption did not apply to the special district tax. The Supreme Court affirmed, holding that the special district tax, while a real estate tax, is a different type of real estate tax that is not subject to the Partial Exemption. View "Miller & Rhoads Bldg., LLC v. City of Richmond" on Justia Law

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These consolidated appeals arose from a Va. Code Ann. 56-542(D) investigation by the State Corporation Commission of the tolls charged by Toll Road Investors Partnership II, LP for the Dulles Greenway, a privately owned toll road located primarily in Loudoun County. The Board of Supervisors of Loudoun County and David Ramadan (collectively, Appellants) requested that the Commission reduce the tolls. After concluding the investigation, the Commission issued an order in which it decided not to substitute new toll rates for the Greenway under the authority of section 56-542(D). The Supreme Court affirmed, holding (1) the Commission did not err in its construction and application of section 56-542(D); and (2) the Commission did not err in its factual findings that the Greenway’s existing toll rates satisfy the section 56-542(D) criteria while Appellants’ proposed rates did not. View "Bd. of Supervisors of Loudoun County v. State Corp. Comm’n" on Justia Law