Multi-Channel TV Cable Co. v. Charlottesville Quality Cable Corp.

31 Va. Cir. 551, 1992 Va. Cir. LEXIS 120

Opinion

By Judge Jay T. Swett

This matter is before the Court on the respondents’ demurrers and on cross motions for summary judgment. The matters were argued on October 30, 1992. Having considered the arguments and briefs, the following is my decision.

Reference should be made to my letter of June 8, 1992,¹ regarding the identity of the parties and a brief statement of facts. The only significant matter that has occurred since that letter was the addition of Charlottesville Quality Cable Operating Company as an additional defendant in both cases.

As stated in the Bill of Complaint, Adelphia Cable provides cable television service in the City of Charlottesville. Among those to whom service is provided are tenants whose apartments are owned by several of the respondents. Over the past several months, the respondent landowners have entered into contracts with respondent Charlottesville Quality Cable Corporation. In conjunction with those contracts, the owners have notified Adelphia that it no longer may utilize or service the related equipment located on or in the apartment buildings, and it no longer will be given access to the apartment buildings to service the tenants who are its customers. Adelphia seeks injunctive relief claiming that respondents have tortiously interfered with its contracts with the tenants and has tortiously interfered with Adelphia’s right to enter into future contracts for cable television service to tenants at the apartment complexes.

The contracts between Adelphia and the tenants are terminable at will by either Adelphia or the tenants. In order for Adelphia to state a cause of action for tortious interference with contractual relations, Adelphia must allege and prove the following: (1) the existence of a valid contractual relationship or business expectancy; (2) knowledge of the relationship or expectancy on the part of the interferer; (3) intentional interference inducing or causing a breach or termination of the relationship or expectancy and; (4) resultant damage to the party whose relationship or expectancy has been disrupted. Chaves v. Johnson, 230 Va. 112, 120 (1985).

Since the contracts between Adelphia and the tenants are terminable at will, Adelphia must also allege and prove that the intentional interference with the contractual relationships was done by an “improper” method. Duggin v. Adams, 234 Va. 221, 227 (1987). An improper method of interference includes those that are “illegal or independently tortious such as violations of statutes, regulations or recognized common-law rules.” Id.

For purposes of ruling on the respondents’ demurrers, the complaints are sufficient to the extent that they allege facts which, if proven, would meet the four stated elements of Chaves, supra. Since the contracts are terminable at will, Adelphia must show the interference was by an “improper method.” Adelphia claims that the respondents acted improperly because of § 6-3 of the Charlottesville City Code. That ordinance provides as follows:

(a) No person who owns or controls any residential multiple-unit dwelling, trailer park, condominium or apartment complex, or subdivision shall interfere with the right of any tenant or lawful resident thereof to receive service from a cable television system lawfully operating within the city, or demand or accept payment of any fee, charge, or thing of value from such a cable system or any tenant or resident in exchange for giving such tenant or resident access to service from such a cable system, or discriminate in any way against such tenant or resident who requests or receives cable service. It is determined that assuring access constitutes a public use.

(b) However, an owner of such property may receive just and reasonable compensation for such access. Such compensation shall be based upon evidence of: The diminution of investment-backed expectations; the impairment of the premises’ usefulness; the amount of space occupied by the facilities of the system; the prior use, if any, of the space; the continued physical availability of space on the premises for installation of alternative modes of television program reception or delivery; the difference in fair market value of the premises resulting from the installation of system facilities; and other reasonable, nonspeculative factors. Compensation shall not include the holdup value resulting from a landlord’s monopoly control of such access.

Under this ordinance, the city has chosen to regulate an element of the relationship between the owner of an apartment complex and its tenants. Under this ordinance, an owner is prohibited from interfering with any tenant who chooses to receive service from a cable television company such as Adelphia. The ordinance does not by its terms provide a right of action on the part of the tenant who claims that the apartment owner has interfered with the tenant’s desire to have cable television service. Nor does the ordinance by its terms create any claim of right or cause of action to a “cable television system lawfully operating within the City,” in this case, Adelphia. Adelphia claims that the ordinance grants it a “business expectancy” and a “prospective business advantage” such that an owner who denies Adelphia the right to come on the owner’s property to provide cable television service to its tenants is improperly interfering with its contracts with the tenants. Adelphia claims that the owner’s actions in denying Adelphia the right to come on their property constitutes an “improper method” as required by Duggin v. Adams, supra.

On the other hand, the respondents argue that Charlottesville City Ordinance § 6-3 does not give Adelphia any present right to be on the owners’ property. To construe the ordinance in a way to grant Adelphia the right to have access to the owners’ property over their objection would, argue the respondents, mean the City has effectively granted an easement to Adelphia over the property. Such an easement would constitute a taking of their property without just compensation in violation of the Fifth Amendment to the United States Constitution and Article I, § 11, of the of the Virginia Constitution.

In response, Adelphia argues that the ordinance is a lawful exercise of the police power, and if the ordinance constitutes a “taking” under constitutional standards, the ordinance provides an adequate and appropriate remedy. Adelphia points to § 6-3(b), which states that an owner is entitled to claim “just and reasonable compensation” for granting access to the cable television company.

In 1982, the United States Supreme Court decided the case of Loretto v. Teleprompter Manhattan CATV Corp., 458 U.S. 419 (1982). The dispute in Loretto was over a New York statute that prohibited a landlord from interfering with the installation of cable television equipment on a landlord’s property where the purpose was to provide cable television service to the landlord’s tenants. Prior to the passage of the New York law, a landlord had granted Teleprompter permission to affix its lines to the sides of its apartment building. After the enactment of the statute, the new purchaser of the apartment building, Mrs. Loretto, brought suit for trespass against Teleprompter seeking damages. She contended that the cable television company’s installation of its wires and equipment constituted an unlawful trespass and “insofar as it relied on [the New York law] for a defense to the suit, there was an unconstitutional taking without just compensation.” 458 U.S. at 424.

In deciding the case, the Supreme Court did not question the determination by the New York Court of Appeals that the passage of the statute constituted a legitimate exercise of the State of New York’s police power.² The issue was the extent and nature of the resulting interference with Mrs. Loretto’s property rights under the Fifth Amendment Taking Clause. In deciding the case, the Court declined to adopt the balancing analysis described in Penn Central Transportation Co. v. New York City, 438 U.S. 104 (1978). An analysis under Penn would have required a balancing of a number of factors to determine whether the particular governmental regulation of property would require compenstion in order for it to be a constitutionally permitted exercise of governmental power. Rather, the Supreme Court held that the New York law effectively required landlords to grant a third party, in this case a cable television company, a right to permanently occupy a physical part of the landlord’s property. Since the law required a “physical occupation authorized by government,” even though a minimum one, there was a taking requiring just compensation without regard to the public interests served. 458 U.S. at 426.

The New York law in Loretto differs somewhat from § 6-3 of the Charlottesville City Code. Under the New York law, the statute directed the landlord not to interfere with the installation or service of cable television on the landlord’s property. Under the Charlottesville ordinance, the focus is on the relationship between the landlord and tenant. It restricts the owner of the property from interfering with the tenant’s right to have access to cable television. Thus, Adelphia is not in the same position as was Teleprompter under the New York law in Loretto. However, for purposes of resolving the two suits now before me, I will assume that Adelphia has sufficient standing to assert some right under § 6-3 of the Charlottesville Code.

In order to give effect to § 6-3(a) of the ordinance, the respondent owners’ are required to permit Adelphia to come on to their property to install and service its equipment whether or not the owners grant permission. Thus, to the extent that Adelphia claims a right under § 6-3 as part of its suit against respondents, then Charlottesville has effectively authorized a permanent physical occupation or invasion of the respondent owners’ property. Under Loretto, supra, this constitutes a taking which requires just compensation under the Takings Clause.

Adelphia argues that even if the ordinance is a taking under Loretto, then § 6-3(b) provides an appropriate remedy. Under subsection (b), the owners of property affected by the ordinance are entitled to receive “just and reasonable compensation” for granting access to Adelphia. The ordinance lists several factors to be considered in arriving at the compensation due to the owners. Adelphia argues that this remedy is sufficient for any constitutional deprivation of an owner’s property rights who is compelled to comply with the ordinance.

However, for the reasons put forth by the respondents, I am persuaded that this argument must fail. If the Charlottesville ordinance, as applied here, constitutes a taking by authorizing a permanent physical occupation of the owners’ property by Adelphia, then the proper method to accomplish such a taking is for Charlottesville to exercise its power of eminent domain. To not require that the eminent domain procedure be followed would effectively sanction Adelphia’s continued physical occupation of the owners’ premises while the matter of just compensation is litigated in some collateral proceeding.³ This would put the cart before the horse. If, under § 6-3(a), the City of Charlottesville intended that property owners must grant Adelphia the right to permanently occupy a portion of the owners’ private property, then the City should exercise its power of eminent domain to acquire an easement. This would protect and preserve the rights of all of the parties.

For these reasons, the Court sustains the demurrers of the respondents. Thus, to the extent that Adelphia claims that § 6-3 grants it a right sufficient to be the basis for its contractual interference claim, that argument is rejected. To accept that position would be at the expense of the respondent owners’ property rights which, under Loretto, are constitutionally protected from being deprived without just compensation. Since that has not occurred, Adelphia can claim no right under this ordinance.

Since the demurrers of the respondents have been granted, the Court does not rule on the cross motions for summary judgment. Based on the representations of counsel for the parties at oral argument that the construction of § 6-3 resolves the claims presented in these two actions, the Court declines to grant Adelphia leave to amend its Bill of Complaint.

SUBJECT INDEX Abuse of process see Torts Actions see also Limitation of actions; Pleadings; Settlements; Trials Delay, prejudice from, 32 Reasonable inquiry, duty, 163 Ad damnum see Damages Administrative agencies, authority, 263 Administrative law see also Administrative agencies; Appeals Generally, 216 Adoption, 47 Alimony see Divorce, spousal support Appeals Employment Commission, 131 Equity, 513 Health Commission, 263 Notice, 426, 513 School board actions, 426 Time limits, 513 Arbitration see also Liens, mechanic’s Generally, 179 Arbitrators, 7 Arrest see Criminal law and procedure Attorneys see also Criminal law and procedure; Foreclosure sales Clients, privilege, 7 Contempt of court, 451 Effective assistance, 153 Fees, 88, 133 Malpractice, standard, 105 Sanctions, grounds, 163 Automobiles see Criminal law and procedure, forfeiture; Insurance; Motor vehicles Bail, 451 Bankruptcy, 507 Banks and banking see also Checks; Negotiable instruments Joint accounts, tax levy, 124 Liens, 124 Bonds, 112 Business see Corporations Cable television, 551 Caveat emptor, 147 Certificate of public need, 263 Checks Date, role of, 18 Negotiability, 18 Teller’s, 183 Children see also Adoption; Torts Custody Agreements on, 348 Shared, 193 Paternity, 284 Support Change in circumstances, 193, 480 Duty to provide, 47 Nonpayment, 484 Subsequent discovery of non-paternity, 484 Choice of law, 457 Circuit courts see Courts; Equity Cities, counties and towns Attorney’s fees, 133 Contracts, 177 Court costs, 133 Housing authorities, 490 Powers, 490 557

558 Subject Index Procurement Act, 177 Civil conspiracy see Torts, conspiracy Clerks of court, 513 Collateral see Sales Collateral estoppel see Estoppel Committees see Prisoners Compromise and settlement see Settlements Condemnation see Real property Condominiums see Real property Conflict of law see Choice of law Conspiracy see Torts Consumer protection see Caveat emptor Contempt of court see Courts Contracts see also Caveat emptor; Cities, counties and towns; Divorce, settlement agreements; Fraud; Insurance; Real property; Torts Breach Not tort, 421 Remedies, 417 Choice of law/forum, 457 Corporate, 457 Illegal, 328 Interference with, 413, 457 Mistake of fact, 78 Parol evidence, 78 Privity, 421 Rescission, 78 Third party beneficiary, 335, 345 Void/voidable, 12, 170 Contribution see Impleader; Indemnification Corporations Lawsuits, damages, 371 Stockholders, suits by, 371 Counties see Cities, counties and towns Court costs Generally, 133 Court reporter/transcription fees, 238 Discovery costs, 354 Court reporters see Court costs Courts see also Appeals; Court costs; Jurisdiction; Trials Contempt of court, 451, 484 Credit, 544 Criminal law and procedure see also Evidence Arrest, warrantless, 541 Attempts, 190 Counsel, effective assistance, 153 Forfeiture, 364 Habitual offender, 317, 342 Immunity, 101 Interrogation, 250 Larceny, 259 Search and seizure Consent, proof of, 218 Exigent circumstances, 84 Expectation of privacy, 84 Stops, 109 Traffic stops, 541 Warrants, unnecessary, 84 Wiretaps, 468 Separate trials, 129 Solicitation to commit crime, 190 Statements, suppressed, 250 Traffic offenses, 541 Cy pres doctrine see also Probate Generally, 380 Damages see also Court costs; Real property Amount sued for, mention at trial, 7 Contract, 371 Punitive, amount, 206 Death see Torts Debt collection see Foreclosure sales

Subject Index 559 Default judgment Generally, 254 Entitlement to relief, 513 Defenses Statute of frauds, 411 Usury, 411 Demurrer see Statute of frauds Depositions see Discovery Disability benefits see Workers’ compensation Disabled persons see also Employment Discrimination, 220 Discovery see also Evidence Cost, 354 Depositions, person subject to, 7 Privilege, informer’s, 326 Safety studies, 465 Sanctions, 120, 229 Divorce see also Children Settlement agreements, 348 Spousal support, 120 Doctors see also Health care providers; Medical malpractice Good Samaritan protections, 397 Driver’s license see Habitual offender Easements see Real property Eminent domain see Real property Emotional distress see Torts Employees see also Unemployment benefits; Workers’ compensation Generally, 457 Employer, suits against see Grievances and proceedings; Workers’ compensation Employment see also Grievances and proceedings; Occupational safety; Torts; Unemployment benefits; Workers’ compensation At will Exceptions to, 90 Interference with, 551 Retaliatory dismissal, 220 Disabled persons, 220 Employment Commission see Appeals; Unemployment benefits Endangered species, 140 Entrustment see Goods Equity see also Appeals Unclean hands, 484 Estates see Probate; Wills Estoppel see also Res judicata Generally, 404 Relitigation barred, 490 Evidence see also Criminal law and procedure; Discovery; Witnesses Blood/breath tests, 317 Experts, 200 Privilege, spousal, 101 Weight, 151 Executors see Probate Expert witness see Evidence; Witnesses Family allowance see Probate Federal preemption doctrine, 465 Fetus see Medical malpractice; Torts Fiduciary, duty to disclose, 96 Fireman’s rule, 1 Fixtures see Limitation of actions Foreclosure sales, attorney’s fees, 88 Foreign court decrees/judgments see Judgments

560 Subject Index Forfeiture, 364 Fraud see also Fraudulent transactions; Limitation of actions Generally, 50 Attomey/client privilege, 7, 50 Contracts, 170 Fact/opinion, 328 Real property, relating to, 170, 434, 442 Frauds, statute of see Statute of frauds Fraudulent transactions, 434, 442 Full faith and credit, 513 Good Samaritan see Doctors; Torts Goods Delivery, tender, 36 Entrustment, 137 Refusal, 36 Repossession, 137 Grievances and proceedings Generally, 216 Grievable issues, 426 Habitual offender Generally, 70, 271, 317 License suspension period, 70 Offenses included, 23 Reissue of operator’s license, 271 Restricted permits, 342 Handicapped see Disabled persons Health care providers see also Medical malpractice Certificate of need, 263 Health Commission see Appeals Homesteads, allowances, 368 Hospitals see Health care providers Husband and wife see also Divorce Necessaries doctrine, 388 Immunity see Criminal law and procedure; Sovereign immunity Indemnification, 26, 183 Industrial Commission see Workers’ compensation Infants see Children Instruments see Negotiable instruments Insurance see also Workers’ compensation Automobile Non-resident motorist, 197 Use Authorized/permissive, 37 Furnished by employer, 164 Gunshots, 240 Children’s benefit rider, 40 Claims, good faith, duty of, 227 Contracts, interpretation, 40 Liability for, judgment interest, 145 Negligence, 306 Third party beneficiary, 345 Underinsurance, 274 Uninsured motorists, gunshots/shootings, 240 Interest see Insurance; Judgments Intestacy see Probate Joint tenancies see Real property Joint tort-feasors see Indemnification Judgments see also Default judgment; Estoppel; Res judicata; Summary judgment Confession of, 74, 544 Enforcement, 484 Foreign, 513 Interest Postjudgment, 145 Prejudgment, 145 Void/voidable, 23 Jurisdiction Appearances, general, 253 Forum selection, 457 In personam, 457 Lack of, sanctions for, 23, 513 Minimum contacts, 276, 457

Subject Index 561 Landlord-tenant see also Leases Leases, superseded, 490 Security, 490 Larceny see Criminal law and procedure Leases see also Landlord-tenant Superseded, 490 Legal malpractice see Attorneys Liens see also Foreclosure sales; Pleadings; Real property; Settlements Automobile, 137 Judgment, 410 Mechanic's Generally, 385 Amount, statement of, 313, 548 Arbitration, 256 Blanket, 256 Parties, 256 Pleadings, 46 Property, included/subject, 313 Statement of account, 46 Timing, 278 Residence, 388 Tax, 124 Limitation of actions Commencement of action, 160 Fraud, 160 Mechanic’s liens, 548 OSHA enforcement, 32 Long arm statute see Jurisdiction Malpractice see Attorneys; Medical malpractice Marriage see Divorce Master/servant see Employment; Workers’ compensation Mechanic’s liens see Liens Mediation see Arbitration Medical malpractice Generally, 7 Fetuses, 298 Fraudulent concealment, 50 Informed consent, 50 Medical records, 7 Mental suffering see Torts Migratory Bird Treaty, 140 Minors see Children Mistake of fact see Contracts Motor vehicles see also Insurance Sales of, 137 Municipal corporations see Cities, counties and towns Negligence see also Attorneys, malpractice; Fireman’s rule; Insurance; Torts Generally, 306 Statute, violation, 140 Willful and wanton, 306 Negotiable instruments see also Checks Holder in due course, 320 Security interest, 320 Notice see Specific subjects in this index Nuisance Generally, 322 Attractive, 472 Sovereign immunity, 322 Occupational safety Investigations, disclosure of information, 326 Violations, contested, 32 Oyer, 417 Parent and child see Children Parties see Liens, mechanic’s Partition Generally, 209, 498 Proceeds, division of, 498 Timber, 209

562 Subject Index Paternity see Children Personal injury see Medical malpractice; Torts Personal property see Criminal law and procedure, forfeiture Personnel decisions see Employment; Grievances and proceedings Persons under a disability see Prisoners Pleadings see also Summary judgment Affirmative defenses, 411 Late filings, 253 Mechanic’s liens, 46 Statement of account, 46 Sufficiency of, 413 Police see Fireman’s rule Preemption doctrine, 465 Prisoners Civil litigation, transportation to, 377 Committee for, 377 Guardian ad litem, 377 Probate see also Homesteads; Taxation; Wills Cy pres doctrine, 380 Divestiture, power of, 410 Executors, powers, 410 Family allowance, 368, 437 Heirs, illegitimate, 284 Intestacy, 284, 380 Survivor’s elections, 437 Tax refunds, 368 Process see Torts, abuse of process Products liability see Torts Profert and oyer, 417 Promissory notes see Negotiable instruments Property see Real property Punitive damages see Damages Railroads, crossings, 465 Real property see also Fraud; Limitation of actions; Nuisance; Partition; Probate; Taxation; Torts; Zoning Condemnation proceedings, costs and expenses, 354 Condominiums, 12 Contract of sale Caveat emptor, 147 Financing, suitable, 243 Misrepresentations, 147 Specific performance, 243 Void/voidable, 170 Covenants, restrictive, 331, 356 Easements, 551 Eminent domain, 551 Financing, 170, 243 Fraudulent conveyances, 434, 442 Home owners associations, 331 Inspection of property, 147 Liens, 388 Restrictive covenants, 331, 356 Roads, maintenance, 356 Tax liens, 338 Tenancies, joint, 498 Timber, 209 Title, transfer, 442 Remedies see also Damages Election of, 417 Repose, statute of see Limitation of actions Res judicata see also Estoppel Generally, 404, 484 Roads see Real property Sales see also Foreclosure sales Bulk, 507 Notice of sale, 507 Ordinary course of business, 137 Surplus, distribution, 338 Sanctions see Attorneys; Discovery; Jurisdiction

Subject Index 563 Schools and colleges see also Appeals; Sovereign immunity Buses, 164, 477 Search and seizure see Criminal law and procedure Security interests see Liens; Negotiable instruments Settlements, reduction of medical/legal liens, 302 Shareholders see Corporations, stockholders Sovereign immunity see also Nuisance School buses, 164, 477 Specific performance see Real property Spousal support see Divorce Statute of frauds, pleading, 411 Statute of limitations see Limitation of actions Statutes Interpretation, 12 Retroactivity, 475 Stockholders see Corporations Summary judgment, issues of disputed fact, 90 Suretyship, 26 Taxation see also Liens Assessment, adjustment, grounds, 294 Estates, 437 Real property, 294, 338, 391 Refunds, ownership, 368 Roll-back taxes, 391 Unemployment compensation rates, 429 Telephones see also Criminal law and procedure, search and seizure Tape recording of, 468 Third party practice see also Contracts; Insurance; Torts; Workers’ compensation Generally, 249 Timber see Partition; Real property Torts see also Damages; Employment; Insurance; Limitation of actions; Nuisance; Workers’ compensation Abuse of process, 345 Conspiracy, 50 Contracts, breach, 421 Emotional distress, 200 Employment, interference with, 551 Fetus, injury to, 298 Fireman’s rule, 1 Good Samaritan, 397 Hazards, hidden, 472 Intentional interference with business, 413 Licensee, 472 Products liability, lessor or product, 206 Strict liability, 421 Third-party, crimes by, 322 Ultra-hazardous activity, 421 Wrongful death, 200 Towns see Cities, counties and towns Trials Closing argument, 96 Joint/separate, 129 Trustees see Fiduciary Ultra-hazardous activities see Torts Unemployment benefits see also Appeals “Good cause”, 281 Misconduct, 151 Refusal of employment, 42 Resignation, 281 Strikes, 42 Uninsured motorist see Insurance Usury, 411 Verdicts, set aside, 96 Warrants see Criminal law and procedure

564 Subject Index Wife see Divorce; Husband and wife Wills see also Homesteads; Probate Refusal of devise, 380 Witnesses Credibility, 151 Expert, qualifications, 200 Workers’ compensation Coworkers, 531 Discharge for filing a claim, 220 Industrial Commission, authority, 345 Insurer, promise to pay, 345 Subrogation, 274 Third parties, 531 Wrongful death see Torts Zoning Land use program, 391 Use permits, 391

1 28 Va. Cir. 220. [Reporter’s Note]

2 The New York Court of Appeals accepted the argument that the statute served a legitimate public purpose, the elimination of landlord fees and other conditions that inhibit cable television development thereby promoting important educational and community benefits.

3 This even assumes that Charlottesville would choose to exercise its eminent domain power. The City is not a party to these suits and has taken no position regarding the ordinance even though it granted Adelphia an exclusive franchise to provide cable television in the City.