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Home builder wants county to refund permit fees

Joe Beck -- jbeck@nvdaily.com

Home builder D.R. Horton is asking the Virginia Supreme Court to overturn a Circuit Court ruling that allows Warren County to keep $208,000 in building permit fees collected from the company in a dispute arising over water and sewer services.

The ruling by retired Circuit Judge William H. Ledbetter Jr. gave Horton a partial victory by prohibiting the county from imposing a fee of $4,000 for each building permit it obtains. The permits are for a 225-unit development of townhouses and single-family homes near the Blue Ridge Shadows golf course off U.S. 522.

But Horton had already paid the county $208,000 in fees before Ledbetter's ruling, and Ledbetter ruled the county could keep the money. Now the company, through its attorney Jon F. Mains of Fairfax, wants the money back and is appealing Ledbetter's ruling. The Supreme Court has yet to decide whether it will take the case.

The county obtained the $208,000 in fees while issuing 52 building permits to Horton between April 2006 and January 2010. In court documents and hearings before Ledbetter, county attorneys argued the county was not obliged to refund the money under the state's voluntary payment doctrine.

In a ruling issued Nov. 15, Ledbetter explained the doctrine prevents someone from recovering payment arising from an unjust demand if the payment was made with "full knowledge of the facts" and "even though he may have protested against it."

"Fifty two-payments over more than three years, reaping the benefits of the permits, and protesting only once during the spring of 2006 - these circumstances, combined with the other facts in the case, require the court to characterize these transactions as voluntary under the doctrine enunciated above," Ledbetter wrote.

The dispute began in 2004 with Horton's purchase of 126 acres of residentially-zoned property from Blue Ridge Shadows, an earlier owner of the development. In 2003, the Warren County Board of Supervisors, with the cooperation of the town of Front Royal, had agreed to allow Blue Ridge Shadows to connect to town water and sewer lines in return for a $4,000 fee for each connection from the development.

Blue Ridge agreed to pay the fee in return for the county dropping an earlier requirement that the developers build a centrally located wastewater treatment plant and central water system.

According to court documents, Blue Ridge sold 126 acres to Horton in 2004. Horton's attorneys insist in court documents that the company did not learn of the $4,000 building permit fee until March 2006.

Horton went on to pay for the 52 building permit fees, but 43 of them came after the company filed suit contesting the fees, according to court documents.

"Faced with the choice of abandoning a $10 million plus housing project or paying the fees in order to build the houses, Horton, consistent with its legal obligation to mitigate the damages, paid the fees, and after, four years of litigation, was the told the fees were indeed unlawful," Mains wrote in one of his filings.

County Attorney Blair Mitchell said the $208,000 at issue is a small sum of money compared to the entire county budget but is still worth fighting for.

"It's not the world, but it's something we don't want to pay back, and we don't think we have to," Mitchell said. "The judge didn't think so either."

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