ANALYSIS OF AUGUST 16, 2018 SUPREME COURT OPINION

 

(Posted August 16, 2018) Trouble in God’s house. That’s the setting for today’s ruling in Pure Presbyterian Church of Washington v. Grace of God Presbyterian Church, which comes to Richmond from the Fairfax Circuit Court. The issue underlying the trial was whether two churches had validly merged into one successor church. But today’s appeal turns on the issue of subject-matter jurisdiction.

Pure Presbyterian was a small congregation in Fairfax that had what looks like a terrific facility. It also had a lot of bills. Late in 2015, the church filed a bankruptcy petition. When word of that got out, another church – Grace of God Presbyterian – approached one of Pure’s elders and asked if Grace could buy Pure’s church property. Alternatively, “we could always merge …”

Not wanting to abandon its mission, Pure decided to explore merger instead. In February 2016, each congregation voted on a formal merger proposal, and each voted yes.

Denominational leaders determined that the two had no doctrinal conflicts, so the merger process began. In March, the two congregations met for a joint Easter service. Grace listed and promptly sold its former site in Falls Church, and assumed liability for Pure’s debts. Leaders of the two congregations drafted a merger agreement that settled who would preach, which elders would govern, and so forth. Pure submitted a reorganization plan to bankruptcy court based on this arrangement; the court approved the plan in September.

That seemed to settle matters once and for all. Except it didn’t. Justice McCullough explains:

On November 6, 2016, leaders of the unified church received an email stating that Pure Presbyterian wished to withdraw from the “proposed” merger. This announcement came as a surprise to the leaders originally from Grace Presbyterian. At that point, Grace Presbyterian had sold its building and the two congregations had been worshipping together for almost seven months. On December 5, 2016, the pastor and a deacon discovered that they were locked out of the church building. A notice was posted on the door, which stated, in part: “Please do not trespass. Property of Pure Presbyterian Church Members Only! Violators will be prosecuted.” In addition, Pure Presbyterian attempted to sell the property to a third party.

Grace understandably reacted by filing suit, seeking a declaration that the merger agreement was valid and an injunction to allow it into the building. Pure replied that it had never agreed to merge; just to a trial period to see if everyone could get along. The case proceeded to a jury trial. The jury found that the merger agreement was valid, and the court entered judgment accordingly.

On appeal, Pure argued for the first time that this was an internal church matter, and that Virginia’s courts thus had no jurisdiction to adjudicate the matter. In most instances, the failure to raise an issue in the trial court is fatal to an appeal on that ground, but subject-matter jurisdiction is a well-established exception to that rule. The Supreme Court thus goes ahead and analyzes the argument before concluding that the courts can indeed adjudicate this issue.

Mr. Jefferson’s “wall of separation between church and state” does bar our courts from deciding ecclesiastical or theological questions. But this isn’t an issue of church doctrine; this is plain-vanilla contract law. Both the SCV and SCOTUS have ruled that the courts can rule on matters like this. “[A]s long as courts avoid religious questions, church property disputes can be resolved just like other property disputes within a voluntary association.” Justice McCullough’s opinion also notes that if courts didn’t have subject matter jurisdiction over pure church-contract issues, that would make churches second-class citizens when it comes to property and contract rights.

The Supreme Court goes on to hold that the trial court had jurisdiction to award declaratory relief, and that the bankruptcy court’s approval of the reorganization plan meant that the circuit court was free to entertain the subsequent lawsuit here.

 


HOW FORTUNATE ARE WE?

 

(Posted August 14, 2018) Life here in the Commonwealth is good. It’s not perfect; but all things considered, I’d rather be here than anywhere else.

Take our neighbor to the west, for example. I’ve enjoyed my visits to what they call West-By-God Virginia. Whether it’s fly fishing in Grant County, whitewater rafting in the middle of the state, or a trip to the stately Green-briah, West Virginia has plenty to offer. But yesterday’s news out of Charleston underscores my sense that life here is so very much better than it is over there.

Yesterday, the West Virginia House of Delegates passed articles of impeachment against all remaining members of the state supreme court. I say “all remaining members” because one justice has already resigned and has pleaded guilty to a federal wire-fraud charge; another has been suspended in the wake of a 23-count federal indictment. The legislature decided to go ahead and clean house by impeaching the other three, too.

The primary origin of the impeachments is sordid: overspending on renovations to judicial chambers. The four impeached justices spent about $1 million in upgrading their judicial digs. I read yesterday that one of them had his floor inlaid with custom-cut wood in the shape of the state, with different colors for each county.

(Now, I like maps. The Boss tells people that I sleep with an atlas under my pillow. That’s a gross exaggeration; it’s actually on the bedside table. But for my purposes, I’m happy to rely on an old-fashioned folding map, instead of looking at the floor.)

Back to our story. In West Virginia, as in many other states, the voters choose the supreme court justices. The admittedly political process here in the Old Dominion is, in comparison, a model of stability. The concept of judges’ campaigning for votes, appealing to John Q. Citizen with whatever message the voter will like, is stomach-churning to me. But it’s normal in 22 states across the nation.

The current Supreme Court of Appeals of West Virginia has a mix of Democrats and Republicans. But if they’re removed from office – remember, an impeachment is just an accusation, and the justices will get a trial in the state senate – the governor will get to appoint replacement justices. There’s an interesting dynamic there, too: Governor Jim Justice was elected as a Democrat, but about six months after taking office, he switched to the Republican Party. That means that a Republican governor will, if he chooses, be able to appoint all Republicans to fill the court until the next judicial election, which I believe is in two years.

Democratic politicians have understandably described the impeachment proceedings as a power grab; Republicans in the House insist that they’re just doing what’s necessary to address malfeasance in office. The court’s September session begins in 22 days, and I seriously doubt that these impeachment proceedings will conclude by then. Speaking as an appellate advocate, how do you act when your entire court is facing removal from office? What if you argue the case and the state senate empties the court before an opinion comes down? Yeesh.

West Virginia isn’t alone; about three years ago, the Kansas legislature passed an act on judicial selection that contained a scary provision. It said that if the Kansas Supreme Court declared the act unconstitutional, the judicial branch of government would be defunded. (The court went ahead and struck down the law, and the legislature backed down.)

And that brings us back to where we started: Life here in the Commonwealth is wonderful, especially when compared with how it’s unfolding elsewhere.

Update 3:55 p.m.: The Wall Street Journal is reporting that  one of the Democratic justices has resigned in protest of what she deems a hyper-partisan “disaster for the rule of law.” She did so just before the filing deadline for this November’s election, presumably to permit the voters, rather than he governor, to select her successor.

 


ANALYSIS OF AUGUST 9, 2018 SUPREME COURT OPINIONS

 

(Posted August 9, 2018) The justices continue to clear off their desks with three published opinions this morning.

 

Qui tam proceedings

We’ll pay a rare visit to the world of false-claims law in Commonwealth v. Commonwealth ex rel. Hunter Laboratories, LLC. This appeal stems from a proceeding under the Fraud Against Taxpayers Act, which is the Virginia version of the federal False Claims Act. The Virginia act provides that when an action results in a recovery, the relator is entitled to a percentage share of the proceeds.

The question in this appeal is whether that percentage is calculated on the gross or the net recovery. This was an action to recover Medicaid overpayments. As you may know, Medicaid is a joint program administered by states and the federal government. Since Uncle Sam and Aunt Virginia split the costs 50-50, that means the feds get 50 cents out of each dollar recovered.

This proceeding produced a gross recovery of $1.25 million. The Commonwealth and the relator agreed that the relator’s share would be 28%. But they unwisely didn’t specify whether that was 28% of gross or net. The difference is about $210,000, an amount worth litigating.

The trial court ruled in favor of the relator, and today the justices unanimously affirm. The plain language of the statute doesn’t limit the relator’s recovery to a portion of the net recovery, and in many other instances, the General Assembly has been careful to spell out when it means “net, not gross.” The court also turns aside the Commonwealth’s contention that viewing things its way would mean more money in public coffers – a desirable thing if you’re in the governing business. But Justice McCullough’s opinion reveals the weakness in that view:

A significant reduction in the relator’s share will discourage relators from bringing these lawsuits. The Commonwealth receives nothing when a relator decides to stay home and foregoes the risk and expense associated with a qui tam suit. Speculation about the potential for the Commonwealth to recover less from qui tam actions constitutes an insufficient basis upon which to depart from what constitutes the most natural, plain language reading of Code § 8.01-216.7(B)

 

Criminal law

I saw a report this week saying that Dubai, in the United Arab Emirates, is the most cosmopolitan city in the world, with 83% of its residents born outside the country. I don’t know how far down the list our own Arlington is, but that’s the setting for Tirado v. Commonwealth, involving a confession by a native of Guatemala.

Police brought Tirado in to ask questions about an alleged rape of his cousin, a juvenile. The questioning – which appears from the opinion to have been fairly low-key – began in English, but Tirado switched to Spanish when another police officer came into the room. An officer fluent in Spanish and English acted as a translator.

The officers went over Tirado’s Miranda rights with him in Spanish. At each step, he indicated that he understood his rights; he even read the Miranda form back to the police in Spanish. He thereafter made one or two statements that you would likely regard as highly inculpatory. Thereafter, the officers asked him if he would like to write a letter of apology to his cousin. He agreed, and when they gave him pen and paper, he wrote it in Spanish – with 22 spelling and grammatical errors, but well enough for a translator to understand what he was writing.

At a motion to suppress, Tirado insisted that his native language was not Spanish but Mam, a language of Mayan origin that’s spoken in Guatemala. The trial judge watched the video of the interview and heard from the interrogator, but not the translating officer. The court denied the suppression motion, finding that Tirado understood what he was doing in waiving his right to remain silent. At trial, both officers testified. During cross-examination at the jury trial, Tirado admitted that he spoke Mam until he was six years old, and then shifted to Spanish.

That was good enough for the jury, which got ‘im. The Court of Appeals refused his petition for appeal, but a panel of the Supreme Court granted him a writ.

That was the last of Tirado’s victories; today the justices unanimously affirm the conviction. While Tirado makes much of the translator’s failure to testify at the suppression hearing, she did testify at trial. In evaluating suppression-motion appeals, appellate courts consider all relevant evidence, including what’s adduced at trial.

As for the merits, Tirado is undone by that ruthless slaughterer of appeals, the standard of review. Appellate courts review the admission or exclusion of evidence for abuse of discretion. The justices find today that the trial court’s admission of the video recording was an appropriate exercise of discretion. They also reject the contention that the confession was not knowing and voluntary, again bowing to the trial court’s superior knowledge of the circumstances (since the judge watched the video and heard witnesses testify).

Land use

Let’s step into the arcane world of lawful nonconforming uses to take up Prince William County v. Archie.

The county fathers (and no doubt the mothers, too) up in Prince William have no appetite for auto graveyards within their jurisdiction. The county’s zoning ordinance, enacted in 1958, doesn’t allow the facilities anywhere in the county. That doesn’t mean that they don’t exist; in fact, there’s a great big one on Minnieville Road in Woodbridge.

The reason that graveyard still exists, and presumably thrives, is because it was established in 1954. A use that predates a zoning ordinance is grandfathered and may continue as a lawful nonconforming use. That privileged status can vanish if the use ceases for two years. And that sets up our tale.

The Archie family has long owned the property, which was originally intact but now comprises three contiguous lots. Justice Goodwyn explains the layout: “The three parcels are ‘stacked up like boxcars,’ with Parcel 20 fronting Minnieville Road, Parcel 20B in the back, and Parcel 20A in the middle between Parcels 20 and 20B.” The family partitioned it in 1974, assigning the front and back parcels to Mr. and Mrs. Archie and the middle one to a relative we’ll call Aunt Dorothy. At all relevant times, the place simply teemed with vehicular cadavers, regardless of the lot lines.

In 1987, Aunt Dorothy sold her lot to a company. That company sued the Archie family, essentially saying, “Get your %#&!! dead cars off my property.” The court in that case ordered the Archies to remove the cars within 30 days.

I will admit that as I read this far into the opinion, I figured that a month was nowhere near enough time to clear out a junkyard. It turns out that I was right; the family never got the body count below 100 or so. That led the court to hold the family in contempt. But the parties eventually submitted a consent order, calling for the family to pay money to the company for what looks to me like rent.

Meanwhile, the county’s zoning folks initiated enforcement proceedings against all three lots, claiming that the use was illegal. Testimony established the grandfathered use for Parcels 20 and 20B, and the company certified that it had reached agreement for the Archies to clear off 20A. Based on that, the court let the company out of the zoning case and declared the uses on 20 and 20B to be lawful.

The company eventually defaulted on its mortgage. At the ensuing foreclosure sale, Aunt Dorothy reacquired it. She sold it in 1995 to the owners’ son, whom we’ll call Junior, so that Junior now owned all three lots. (I infer that Junior inherited Parcels 20 and 20B when his parents passed away.)

Let’s fast-forward to 2015. Junior still operated the family business, but to be safe, he asked the county to confirm that he had a lawful nonconforming use on all three parcels. The Zoning Administrator said yes for 20 and 20B, but no dice on 20A, since there had been an interruption in ownership, and the company hadn’t consented to the continued use.

Junior appealed to the BZA, which ruled against him by a 3-2 vote. He appealed to circuit court and found better luck there; the learned judge read the ordinance differently, holding that actual use, regardless of who the owner is, governs. Several witnesses testified that there had been cars all over Parcel 20A for many, many years. The judge bought that and ruled in favor of Junior.

The county got a writ, but today the justices affirm. The court respects the trial judge’s factual finding that the use was continuous, so no matter who the owner was or what his intent was – those factors are actually immaterial – the extended, continuous use of the property as an auto graveyard means that the use is grandfathered across all three parcels.

At this point, you’re wondering if there’s anything those county fathers and mothers can do to rid themselves of a business they don’t like. The answer is yes, but they may not like their options: They can offer to buy the property from Junior, or they can condemn it, assuming they can find a public use for the land.

 


NOTES ON RECENT (AND FUTURE) APPELLATE DEVELOPMENTS

 

(Posted July 31, 2018) As we’ve seen from the last two SCV opinion days, there are no summer doldrums in the Virginia appellate world. Let’s peer around and see what’s happening.

 

Important evidentiary ruling from CAV

As society evolves, the law has to keep pace. Today, the Court of Appeals of Virginia hands down a published opinion that addresses the business-records exception for documents stored in the cloud. The case is Melick v. Commonwealth, involving a grand-larceny conviction from Hampton.

Melick stood charged with stealing jewelry and selling it to a local buyer, a store that wasn’t quite a pawn shop because it didn’t make loans. But the shop did follow a Hampton ordinance that required it to gather certain identifying information from any person who comes in to sell property. The store then uploads the information to a website named LeadsOnline, which gathers information and makes it available to police departments, so they can investigate thefts.

That website had nine hits for Melick, including the purloined jewelry. As his bench trial, Melick objected to the introduction of inculpatory printouts from the site. The printouts contained photos of Melick and listings of what he had sold at the store. The prosecution insisted that the documents, while admittedly hearsay, were nevertheless admissible under the business-records exception in Rule 2:803(6).

While there are several decisional goodies in Judge Russell’s opinion for a unanimous panel, the primary focus of this opinion is on the admissibility of the printouts. The trial court had admitted them, and today the CAV panel affirms. The key holdings include:

  • There’s enough evidence in the record to enable the trial judge to find that the records were made at or near the time of the sale;
  • The description of the process satisfies the “made and kept in the course of a regularly conducted activity of a business” requirement;
  • The store regularly made the purchase records for each transaction;
  • A “custodian or another qualified witness” testified to authenticate the records; and
  • There’s nothing untrustworthy about the process or the records.

Of these, a couple of items are worth particular individual mention. First, the court approves the storage of records offsite – here, at an extrinsic website. These are still the store’s records, even though LeadsOnline maintains it. (The phrase “made and kept” doesn’t require that the records be physically kept by the person or business making them.) The fact that neither store witness who testified at trial claimed to be the custodian doesn’t disqualify the documents, because the rule allows “another qualified witness” to do so, and the panel finds that these two witnesses’ testimony was ample for that purpose.

Melick also objected because neither of the two clerks could specifically remember uploading the information to the LeadsOnline website. Judge Russell offers this effective riposte:

Melick’s fixation on their lack of specific memories is misplaced because one of the main rationales for the business records exception is that an individual clerk will record the particulars of a transaction accurately when it occurs but that he or she will have no recollection of the specifics of the transaction, days, months, or even years later.

Y’know, the man has a point …

 

Appellate summits draw nigh

I’ve mentioned before the two appellate summits this autumn. Details are emerging:

The Virginia Appellate Summit will convene on September 20 at McGuireWoods’s office in downtown Richmond. It’s an all-day program that should be approved for six hours of MCLE credit. This is advanced-level training, and features some of the best appellate lawyers in Virginia on the faculty, plus enough judges to keep us behaving responsibly. I’m lucky to be sharing a segment with Justice Steve McCullough and my pal Robert Loftin, with Erin Ashwell moderating. Here’s a link to the registration page, on which you’ll find a link for the program agenda.

If you’re serious about your appellate practice here in the Commonwealth, you need to be at this one. All of your competitors will be.

A bit later down the road, the ABA Appellate Summit will meet for four days in Atlanta, November 8-11. This is the Virginia Summit on steroids. Typically around 400 appellate judges and lawyers from around the nation attend, and the programming is superb. You can get details and register here.

I hope to see you at both summits.

 

SCV road shows

I always enjoy publicizing this each year: Two writ panels of the Supreme Court of Virginia will convene in locations outside Richmond on August 30. The panels will meet in Nelson County (Lovingston) and here in sunny Virginia Beach. There will, as usual, be one panel in the Supreme Court Building the previous afternoon.

These traveling panels, which court insiders lovingly call road shows, offer a wonderful opportunity to see the court in action, even if you’re a long way from Richmond. Because writ arguments are just ten minutes long, you can stay for just two hours and see perhaps a dozen oral arguments. You’ll get a feeling for how writ panels operate and how energetic the justices are at questioning. You’ll see some excellent arguments, and maybe a couple that … are useful in a negative-teaching sort of way. Go! It’s highly educational.

You may have wondered if the court ever sets an argument for a remote location, far from appellate counsel’s office. The Chief Staff Attorney’s Office, which calendars all writ arguments throughout the year, has a heart; they try to set the argument for the location that’s closest to the office of lead counsel for the appellant.

 


 

FIRST-HALF 2018 STATISTICS

 

(Posted June 29, 2018) Now that the dust is starting to settle from all that federal appellate news this week, it’s safe to return to Virginia courts. At the midpoint of 2018, let’s see what the Virginia appellate numbers show.

 

SUPREME COURT OF VIRGINIA

Decisions

The Supreme Court of Virginia has handed down 34 published opinions and orders, and 12 unpublished orders. For comparison’s sake, the court decided 79 appeals by opinion and 59 by order in calendar 2017.

 

Writs

The court’s website lists 49 writs that have been granted since the beginning of the year. It is conceivable but not likely that there may be a couple more that aren’t showing up on the page because they’ve already been decided. (The court removes appeals from the writs-granted page after an opinion comes down.) Last year, the court granted 112 writs, including one certified-question case.

 

Upcoming panels and sessions

The justices will convene three more sets of writ panels in 2018, in addition to the three that are already in the books. In late August, we’ll get the annual road shows, where the court sends two panels out of Richmond to hear arguments. This year’s road shows will convene in Lovingston (Nelson County) and here in Virginia Beach, both on August 30. We’ll also see one in Richmond, probably on August 29. After that, conventional panels (all in the Supreme Court Building in Richmond) will meet October 16 and December 4.

There are two sessions (where lawyers argue merits appeals to the full court) left: the weeks of September 10-14 and October 29-November 2. Four sessions are already in this year’s rearview mirror.

 

The David/Goliath Index

As I promised you on May 11, I will quarterly announce how the Big Guys and the Little Guys are faring at Ninth and Franklin. (See that essay for a description of the concept.) For the second quarter, David won four appeals in published opinions and Goliath won eight times, for a D-GI of 33/67. While that may sound lopsided, David actually has won almost twice as frequently as he did in 2017 and 2016. For the year, the Index is 32/68.

 

COURT OF APPEALS OF VIRGINIA

Decisions

Thus far the CAV has decided 29 appeals by published opinions and 137 by unpub. (The CAV releases far more of these decisions because by statute, it has to explain the reasons for each ruling. Most appeals in the SCV die with a one-sentence refusal order that virtually no one sees.)

 

David-Goliath Lite

It’s possible to calculate something of a David-Goliath Index for the Court of Appeals, too, using two case areas: criminal appeals and Workers’ Comp cases. The court has decided 12 Comp appeals and the employee has gone 4-8, resulting in a 33/67 D-GI in that field.

In the other field, Goliath is running away with it. The prosecution has won 89 out of the 97 criminal decisions thus far in 2018; that adds up to an Index of 8/92.