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 What is the ''Dillon Rule''

Editor UnAlienable Rights The Dillon Rule in Virginia Law
In a response to an email from Toni Trepanier of Hallwood, Virginia who wrote:

Can you point me in the right direction to obtain a copy of the Dillon Rule. I've researched online and find snippets and reference to it, but not what it actually says. I'd like to have it in my files.

Thanks,

Toni

UARF offers the following:

In 1868, an Iowa judge by the name of John Dillon ruled in the now famous case of Clark v City of Des Moines:

It is a general and undisputed proposition of law that a municipal corporation possesses and can exercise the following powers and no others: First, those granted in express words; second, those necessarily or fairly implied in or incident to the powers expressly granted; third, those essential to the declared objects and purposes of the corporation, not simply convenient, but indispensable. Any fair, reasonable doubt concerning the existence of the power is resolved by the courts against the corporation, and the power is denied.

This ruling became known as the Dillon Rule and adopted by Virginia. This concept of state supremacy is embodied in a fundamental precept of municipal law that the powers of local governments must be sanctioned by the state that is to say that municipalities are creatures of, and subject to the plenary power of, the state. Localities cannot do anything the Virginia code does not expressly allow them to do.  This tenet is firmly embodied in the Dillon’s Rule in this Commonwealth.

For over a century, this general principle has kept local government in proper check and explains relationship between the Commonwealth and its local governments.



The "Dillon Rule" is generally described as a strict construction control of the powers of local government. The Supreme Court has on any number of occasions said . . . "municipal corporations have only those powers that are expressly granted, those necessary or fairly implied from expressly granted powers, and those that are essential and indispensable." City Council of Alexandria v. Lindsey Trust, 258 Va. 424, 427, 520 S.E.2d 181 (1999) (internal citation omitted); Arlington County v. White, 259 Va. 708, 712, 528 S.E.2d 706 (2000); City of Virginia Beach v. Hay, 258 Va. 217, 221, 518 S.E.2d 314 (1999).

City of Portsmouth v. Cederquist Rodriguez Ripley
, 3 Cir. CL062958, 72 Va. Cir. 405 (2007)

This tenet is embodied in the Dillon’s Rule. For over a century, this general principle has explained the relationship between the state and its local governments. Judge John Dillon wrote in a now famous 1868 opinion that the powers of local governments must be sanctioned by the state:

It is a general and undisputed proposition that a municipal corporation possesses and can exercise the following powers, and no others: first, those granted in express words; second, those necessarily or fairly implied in or incident to the powers expressly granted; third, those essential to the accomplishment of the declared objects and purposes of the corporation— not simply convenient, but indispensable. Any fair, reasonable, substantial doubt concerning the existence of a power is resolved by the courts against a corporation, and the power is denied.1

One of Virginia's leading cases on the explanations of the Dillon Rule is found in the outstanding work of Jurist DEAN W. SWORD, JR.:

VIRGINIA: IN THE CIRCUIT COURT OF THE CITY OF PORTSMOUTH

CITY OF PORTSMOUTH

v.

CEDERQUIST RODRIGUEZ RIPLEY, P.C., ET AL.

Case No. CL06-2958

Decided: January 29, 2007

LETTER OPINION BY JUDGE DEAN W. SWORD, JR.:

This opinion letter is addressed to two specific issues: (1) whether the "Dillon Rule" prohibits the enforcement of an arbitration provision contained in a least one of the contracts at issue and (2) whether this is a contract or tort action.

The court finds for the reasons stated hereafter that the answer to the first question is no and, secondly, this is a contract matter. As noted hereafter, my record is not adequate to enter orders resolving all of the issues and I am directing counsel to attempt this task.

Counsel for the defense suggests that the terms of the contract require the parties to engage in arbitration. Indeed, the plain language of the contract does contain such a provision. The city argues that the "Dillon Rule" makes such a provision unenforceable.

(While there are two agreements that exist, the dates maybe significant in a resolution of the issue and it should be noted that the effective dates are March 26, 1999, and April 23, 1999.)

The "Dillon Rule" is generally described as a strict construction control of the powers of local government. The Supreme Court has on any number of occasions said . . . "municipal corporations have only those powers that are expressly granted, those necessary or fairly implied from expressly granted powers, and those that are essential and indispensable." City Council of Alexandria v. Lindsey Trust, 258 Va. 424, 427, 520 S.E.2d 181 (1999) (internal citation omitted); Arlington County v. White, 259 Va. 708, 712, 528 S.E.2d 706 (2000); City of Virginia Beach v. Hay, 258 Va. 217, 221, 518 S.E.2d 314 (1999).

Logically the first place we must look at is the express powers that may have been granted at the time of the subject contracts in 1999. As of 2002, Portsmouth City Code § 12.-254(b)(4) provides:

Subsection (a) shall not be construed to render void any provision of a public construction contract that. . . . 4. Provides for arbitration or any other procedure designed to settle contract disputes.

While § 12-254(a) deals with the issue of delay damages being void, it would seem that at least beginning in 2002 the City has agreed that its contracts may provide for arbitration. How then does this affect our case?

There is nothing in this section to suggest that state law (or the lack thereof) would not allow contracts to provide for the arbitration and this section simply acknowledges that part (a) of the statute shall not be construed as a voiding rule.

At the time, 1999, of the execution of these contracts, public contracting authority was found in Chapter 7 of Title 11 of the Code of Virginia. This Chapter was repealed in toto effective October 1, 2001. I am, however, of the opinion that the now repealed sections control in this case.

It seems that Virginia Code § 11-71.1 answers the Dillon Rule argument:

Public bodies are authorized to enter into agreements to submit disputes arising from contracts entered into pursuant to this chapter to arbitration and to utilize mediation or other alternative dispute resolution procedures. . . .

Clearly state law as it existed in 1999 provides the express power for a locality to enter into a contract providing for arbitration. While a viable argument could be made that the city council could provide by ordinance that arbitration provisions shall not be valid, the court is unaware of any such ordinance and cannot come to the conclusion that § 12-254(b)(4) is such a provision. In fact a reasonable reading of that ordinance would seem to the contrary and it simply acknowledges the validity of such an agreement.

Lastly, the court is unsure of the procedural status of the arbitration issue. Clearly, the "Dillon Rule" argument fails and it would seem that the matter is subject to arbitration. What is less clear is whether all of the issues are subject to arbitration or whether all of the defendants may take advantage of the provision. Therefore, counsel are invited to confer in an attempt to work this out and, if they are unable to do so, schedule a hearing to resolve these issues.

The second issue is whether or not the city may recover damages based upon a theory of negligence or whether the damages must be based upon a breach of contract. This question raises a second issue as to the application of the "economic loss rule."

This action essentially alleges that the defendants were engaged in their professional capacity to perform architectural and engineering services in the design of a fire station for the city. Simply stated, the claim is the failure of the respective defendants to properly perform these services, which then caused damage to the property of the city.

While "professional liability" cases frequently contain pleadings alleging neglect, carelessness, or failure to perform at the applicable level of professional standards, the underlying question must be where did the duty to the plaintiff originate. If the duty may be found in the common law then some remedy at tort may apply. On the other hand, if the duty arises out of a contract then the law of contract must be the basis for the claim.

An examination of the allegations in this case reveal that the relationships between the parties are all based upon written contracts. No allegations are made that would suggest a duty to the city that can be attributed to the common law.

Sensenbrenner v. Rust, Orling & Neale, 236 Va. 419, 374 S.E.2d 55 (1988), is factually similar to this case and, in my opinion, controlling. Sensenbrenner involved a construction contract between the plaintiff and O'Hara and Company, Inc. (not a defendant) for the construction of a home with an enclosed swimming pool. As a part of the process O'Hara entered into two subcontracts: (1) with KDI Sylvan Pools for the pool installation and (2) with Rust, Orling and Neale for architectural design of the entire project including the pool. The suit filed against Rust and KDI alleged negligent design and construction work. In finding that these claims were in fact breach of contract matters, the Supreme Court observed:

The controlling policy consideration underlying tort law is the safety of person and property . . . from losses resulting from injury. The controlling policy consideration underlying the law of contracts is the protection of expectations bargained for. If that distinction is kept in mind, the damages claimed . . . may more readily be classified between claims for injuries to persons or property on one hand and economic losses on the other.

Sensenbrenner at p. 425.

The case of Blake Construction Co. v. Alley, 233 Va. 31, 353 S.E.2d 724 (1987), is also factually similar to our matter and comes to a similar conclusion.

The architect's duties both to owner and contractor arise from and are governed by the contracts related to the construction project. While such a duty may be imposed by contract, no common law duty requires an architect to protect the contractor from purely economic loss.

Blake at p. 34.

The court, therefore, finds that the various allegations contained in the complaint are firmly grounded in contract and not in tort.

Again, my record does not allow me to apply the ruling to all of the outstanding issues, and, therefore, I request counsel to confer and attempt to work out these matters. If this is not possible, we should schedule a hearing to make an appropriate order.

City of Portsmouth v. Cederquist Rodriguez Ripley, 3 Cir. CL062958, 72 Va. Cir. 405 (2007)



74 Cases on "DILLON RULE"

City of Portsmouth v. Cederquist Rodriguez Ripley 3 Cir. CL062958 100 %

Eberth v. County of Prince William 49 Va. App. 105 93 %

Board of Supervisors v. Countryside Invest. Co. 258 Va. 497 91 %

Arlington County v. White 259 Va. 708 86 %

City of Virginia Beach v. Hay 258 Va. 217 80 %

Bono Film & Video, Inc. v. Arlington Cty. Human Rights Comm'n 17 Cir. 06812 78 %

Commonwealth v. Arlington County Bd. 217 Va. 558 76 %

Ancient Art Tattoo Studio v. City of Chesapeake 1 Cir. N001 76 %

Town of Purcellville v. Bd. of Supervisors of Loudoun County 20 Cir. CL45351 72 %

Blue Horseshoe Tattoo v. City of Norfolk 4 Cir. CL063214 72 %

Owens v. City Council of the City of Norfolk 06 Va. S. Ct. UNP 052618 70 %

Rock River Trust Co. v. Board of Supervisors 20 Cir. 42875 67 %

City Council of Alexandria v. Lindsey Trusts 258 Va. 424 67 %

Logan v. City Council of the City of Roanoke 275 Va. 483 64 %

City of Richmond v. Confrere Club 239 Va. 77 64 %

Lawless v. County of Chesterfield 21 Va. App. 495 64 %

Board of Supervisors v. Washington, D.C. 258 Va. 558 64 %

Karunakarum v. Town of Herndon 19 Cir. C20054013 63 %

Norton v. City of Danville 268 Va. 402 63 %

City of Chesapeake v. Gardner Enterprises 253 Va. 243 62 %

Rowe v. Commonwealth 08 Vap UNP 3196061 62 %

Board of Zoning Appeals of Fairfax County v. Board of Supervisors of Fairfax County 19 Cir. L200611777 62 %

Town of Herndon v. Eick 19 Cir. M10061 62 %

In Re: Zoning Ordinance Amendments 20 Cir. C03ZOA00000 61 %

Broad Run Village v. Board of Supervisors 20 Cir. C21099 61 %

Madison v. Loudon County 20 Cir. C25274 61 %

Owens v. City Council of the City of Norfolk 4 Cir. L075025 60 %

Kansas-Lincoln v. County Bd. of Arlington 17 Cir. C04326 59 %

Stallings v. Wall 235 Va. 313 59 %

Fowler v. Fairfax County Police Officers Retirement System 19 Cir. 169977 58 %

Richmond City Council v. Wilder 13 Cir. CL072426 57 %

Fowler v. Fairfax County Police Officers Retirement System 19 Cir. 169977 57 %

Alexandria City Council v. Mirant Potomac River 273 Va. 448 57 %

Greene v. Urban County Board of Sup. 19 Cir. C126133a 57 %

Curry v. Planning Comm. of Clarke County 26 Cir. C913044 56 %

Hoy v. City of Alexandria 18 Cir. CH0500294 55 %

Little Piney Run Estates v. Bd. of Supervisors of Loudoun County 20 Cir. CL43792 55 %

Brantley v. City of Danville 96 Vap UNP 1061943 54 %

Modern Continental South v. Fairfax County Water Authority 19 Cir. L225019 54 %

Commonwealth v. Rivera 18 Va. App. 103 54 %

Holland v. Commonwealth 28 Va. App. 67 52 %

Sobin v. Fairfax County 19 Cir. L153340 51 %

Logan v. The City Council for the Ciry of Roanoke, VA 23 Cir. CH0500002800 51 %

Stickley v. Board of Supervisors 26 Cir. C16621 50 %

Board of Sup. of Culpeper v. Greengael, L.L.C. 271 Va. 266 50 %

Baker v. Planning Commission 20 Cir. CH20836 49 %

O'Banion v. Commonwealth 33 Va. App. 47 48 %

Ticonderoga Farms v. County of Loudoun 242 Va. 170 48 %

Carolinas Cement Co. v. Zoning Appeals Board 26 Cir. L99158 47 %

Boyd v. County of Henrico 42 Va. App. 495 46 %

In Re: Zoning Ordinance Amendments 20 Cir. C03ZOA00000 46 %

Gum Springs v. Loudoun County 20 Cir. C20677 45 %

Glaser v. Titan Corp. 19 Cir. L159607 45 %

Cornerstone Realty Income Trust, Inc. v. City of Richmond 13 Cir. LE2548 45 %

Gwinn v. Jefferson Green Unit Owners Association 19 Cir. C162197 44 %

City of Alexandria v. Potomac Greens Assoc. 245 Va. 371 44 %

Resource Conservation Mgmt. v. Bd. of Sup. 238 Va. 15 44 %

Collins v. Commonwealth 30 Va. App. 443 44 %

Tabler v. Fairfax County 221 Va. 200 43 %

Trible v. Bland 250 Va. 20 43 %

O'Banion v. Commonwealth 30 Va. App. 709 42 %

Nat'l Rural Utilities v. Bd. of Sup. 19 Cir. L118982a 41 %

General Excavation, Inc. v. Fairfax County 19 Cir. L123939 40 %

Randolph Williams, Inc. v. Bd. of Sup. 19 Cir. C135805 38 %

Fairfax County v. Southern Iron Works 242 Va. 435 37 %

R&B Tysons Corner v. County of Fairfax 19 Cir. L134034 37 %

County Board v. Brown 229 Va. 341 36 %

Bd. of Supervisors v. Horne 216 Va. 113 36 %

Hylton v. Prince William Co. 220 Va. 435 27 %

Town of Ashland v. Ashland Investment Co. 235 Va. 150 27 %

Cupp v. Board of Supervisors 227 Va. 580 25 %

Fairfax County v. M.&S., Inc. 222 Va. 230 22 %

Bd. of County Sup. v. Sie-Gray Dev. 230 Va. 24 21 %

Fairfax Zoning Board v. Cedar Knoll 217 Va. 740 14 %




 
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