ANALYSIS OF AUGUST 23, 2018 SUPREME COURT OPINION
(Posted August 23, 2018) Virginia’s common law grows incrementally today with the release of a single published opinion by the Supreme Court of Virginia. In Primov v. Serco, Inc., the justices evaluate the effect of a condition precedent to filing suit.
Primov worked for Serco for two years. He later sued the company, claiming that he was underpaid by about $60,000. The company defended in part by citing a provision in the employment agreement:
The parties shall attempt in good faith to resolve any dispute arising out of or relating to this Agreement promptly by confidential mediation. If the dispute has not been resolved by mediation within 60 days of a written request to mediate made by one of the parties, then either party may bring suit in the state or federal courts located in Fairfax County, Virginia.
That seems to make mediation – or at least a request to mediate – a prerequisite to filing suit. The employee hadn’t offered to mediate; he just charged straight into court. The parties worked the case up for trial before the employee nonsuited and refiled. In the refiled action, the employer filed a plea in bar, based on the employee’s failure to satisfy a condition precedent.
In reply, the employee showed the court a letter that he had sent to the employer during the first action, including this key language: “[The employee] would not be opposed to pursuing mediation concurrently with the court proceedings, so long as Mr. Primov does not have to incur any portion of the expense related to that process.” The trial court was unmoved. It ruled that an expression of willingness isn’t the same thing as a request to mediate. The court dismissed the complaint with prejudice for failure to satisfy a condition precedent.
With prejudice? The employee felt that was a tad harsh, since this was a condition that he could satisfy with a one-sentence letter. He appealed, and got a writ from the justices.
Today’s opinion, written by Justice Goodwyn, begins by noting that the court reviews this decision for abuse of discretion. When a trial court finds the failure to satisfy a condition precedent, it has some leeway in fashioning an appropriate remedy, considering the totality of the circumstances. Here, the court could have dismissed without prejudice, or even stayed the proceedings long enough to allow the parties to consult a good mediator.
The justices today find that dismissal of the action, as opposed to staying it, was well within the court’s discretion. The ultimate question, then, is whether a dismissal with prejudice was an abuse of that discretion.
Justice Goodwyn notes that this situation is unlike a dismissal for something like immunity, where refiling is futile. The employee can cure the deficiency. That means that a dismissal without prejudice is the appropriate remedy, as long as there’s no unfair prejudice to the opposing party.
Today’s opinion contains that holding at the bottom of page ten in an eleven-page opinion. When I got to the bottom of that page, I fully expected a reversal on the last page. Surprise! The court affirms, holding that the employee’s long delay in requesting mediation, including working the case up for trial and pressing the refiled action thereafter, does prejudice the employer:
Considering the efforts expended by the parties in the Initial Action and Primov’s repeated failures to comply with the Mediation Provision, we cannot say that the circuit court committed “a clear error of judgment” by dismissing this case with prejudice.
There are a couple of important lessons here. First, this is another appeal where the standard of review is case-dispositive. In the past, I’ve written that that standard is outcome-determinative in perhaps 85% of all appeals, and you can make a plausible argument for 100%. If the justices had made the initial call on what to do, or had been reviewing this ruling de novo, it’s entirely plausible that they would have found that a dismissal without prejudice was the way to go. But appellate review is often, as here, more deferential than that to the trial judge’s original call.
Second, this is another reminder not to play around with conditions precedent, even if you think they’ll be fruitless. I presume that that’s why the employee didn’t pursue the matter before suing; he probably thought that the employer would never agree to anything meaningful, so mediating would be just a waste of time. Instead, the failure to request mediation ends up wasting this cause of action.