ANALYSIS OF MARCH 4, 2011 SUPREME COURT OPINIONS[Posted March 4, 2011] Today is opinion day in the Supreme Court of Virginia. The court gives us 17 published opinions and two published orders in habeas corpus proceedings. There are lots and lots of criminal-law decisions. Probably the biggest news item of the day is the resolution of the appeal involving the Gloucester 40, so we’ll start with that one.
In Johnson v. Woodard, the court takes up the question of who, exactly, may be sanctioned by a trial court. The complex case involves 40 citizens of Gloucester County who filed petitions seeking removal of four members of the County Board of Supervisors, after those supervisors had been indicted by a grand jury. The removal proceedings were eventually nonsuited by a special prosecutor, but the supervisors succeeded in persuading a judge designate to sanction the citizens $2,000 apiece for what the court felt was a meritless petition drive.
On appeal, the case presented a host of appellate issues, including First Amendment questions about the Petition Clause. But the courts generally decide cases on non-constitutional grounds if possible, and that’s what happens today; the court reverses the sanctions and enters final judgment in favor of the citizens. The key ruling here is a finding that the sanctions statute only applies to parties and their attorneys; nonparties can’t be sanctioned under that statute. And the citizens, by gathering and filing the petitions, weren’t parties to the ensuing removal proceedings, any more than an assault victim is a party to the subsequent criminal prosecution.
This last fact was the subject of considerable dispute in the trial court and on appeal. The supervisors argued in the Supreme Court that the citizens were indeed parties to the removal proceedings. They pointed to the fact that the clerk of the trial court had opened her files using the names of the citizens as “plaintiffs” and the supervisors as defendants. In addition, the judge designate had appointed a special prosecutor to represent the Commonwealth and the citizens.
Several considerations combine to scuttle this set of arguments. The statutes establish that the Commonwealth, not the citizens, is the real party in interest in a removal proceeding. Neither a clerk nor a judge can make someone a party to a case by the sweep of a pen; you need issuance and service of process for that. And it didn’t help that the supervisors’ attorney had argued strenuously in the lower court that the citizens were not parties to the proceeding – the precise opposite argument from what he urged on appeal.
The Supreme Court has issued an unusually large number of opinions related to sanctions in recent years. This one contains an important refinement of sanctions jurisprudence: The supervisors had argued on brief that sanctions could be applied to “the person” (that’s the phrase the statute uses) who files a paper that lacks arguable legal or factual support. “The person” is broader than “the party” would have been, evincing an intention by the legislature to make anyone, not merely plaintiffs and defendants and their lawyers, liable for violative pleadings. They specifically cited amici and intervenors as examples of entities who could be liable for sanctions if their filed documents were not in good faith or otherwise violated the duties imposed by the sanctions statute.
The court rejects this expansive approach. It notes that the statute first imposes only upon attorneys and unrepresented parties the obligation to sign pleadings. It goes on to state that each such signature constitutes a certification that the pleading is filed in good faith and is legally and factually supported. The provision that a court must sanction “the person who signed the paper” necessarily reflects only the persons upon whom the statute imposes the duty described above. If the statute doesn’t impose the duty upon someone, then that person can’t be sanctioned.
There is also an important holding on finality, so Rule 1:1 fans will want to pay attention to this opinion. The sanctions award was entered more than 21 days after entry of the nonsuit order, so under Williamsburg Peking v. Kong, finality is at least a prima facie issue. But the court here worded the nonsuit order so as to specifically “retain jurisdiction” over the sanctions request, and that’s enough, the court holds, to keep the case within the circuit court’s control. This may be as simple as a magic-words intonation – using the phrase “retain jurisdiction” is sufficient to keep the case alive, but “retain the case on the docket” isn’t. (Credit City of Suffolk v. Lummis Gin for that key distinction.)
In 2006, when the Rules of Court were amended to crate a single form of action, the rules relating to relief from default were amended and placed into new Rule 3:19(b) and (d). Five years later, we have our first appellate interpretation of the revised rules, in AME Financial v. Kiritsis.
AME is a Georgia lender that got sued by two homeowners in Chesterfield County who claimed that the mortgage company had fraudulently changed their deed of trust pursuant to a power of attorney. When the suit papers were served, a vice president of the lender called the homeowners’ lawyer to talk about the case. The lawyer advised the VP that the company would have to hire a Virginia lawyer to defend itself in court. The VP didn’t take that advice; he prepared, signed, and filed (timely) an answer with the clerk. The homeowners moved to strike the answer; the lender didn’t show up for that hearing, and the court struck the answer and declared the lender to be in default.
The lender hired a Virginia lawyer to investigate things. When he went over to the courthouse to check on the state of the case, he discovered, to his surprise, the default order. He went straight back to his office and prepared a motion for relief under the brand-new Rule 3:19(b). The trial court denied it, and after two years of further developments, including a hearing on damages, eventually entered a final judgment against the lender.
This is a good time for a short digression on relief from default. Before 2006, if you missed a deadline for filing a responsive pleading, even by a couple of days, you were in deep trouble; Virginia law on relief from default was draconian. The new rule created three discrete time frames, with differing rules for trial courts to decide whether to grant relief or not:
* Before entry of judgment, all the defendant had to show was “good cause,” a not-too-troublesome standard.
* Within 21 days after judgment, more factors kick into the calculus, including prejudice to the plaintiff and the “extent and causes of the defendant’s delay.”
* After 21 days, the defendant is left with Code §8.01-428, a daunting prospect.
When the new rules were announced, one learned treatise on Virginia Civil Procedure forecast that a motion filed in the first phase should almost always result in relief:
No showing of excuse, or reason, or reasonableness of the defendant’s conduct in falling into default is needed. Given the evident policy of the new Rules, which favor deciding cases on the merits rater than relying on procedural defaults and timing bars to determine the rights of Virginia citizens, and consideration which casts the defendant’s conduct in a light other than a bald-faced effort to delay or obstruct the plaintiff, will likely be accepted as “good cause” under Rule 3:19.
I invite my readers to consult the next edition of this treatise (which I respect very much), because as a result of this opinion, this section will get a complete rewrite. The Supreme Court today affirms the trial court’s decision to refuse relief from default under the new rule, citing the company’s knowledge, based on the advice of the homeowners’ attorney, that it needed Virginia counsel. The court also cites the one-month delay between service of the notice of motion for default, and the eventual appearance by a Virginia lawyer, as reasons to uphold the court’s decision not to allow relief.
My sense is that this ruling reflects the Supreme Court’s deference to trial courts in discretionary matters; the opinion will cheer trial judges significantly as they realize that the Supreme Court has their backs. Plaintiffs will also gain plenty of ammunition in comparable default situations, because the Supreme Court has shown that it will uphold these exercises of discretion.
There’s a fascinating legal issue in Fairfax Redevelopment & Housing Authority v. Riekse. The Authority sold a parcel to Harry & Mrs. Homeowner (no relation to the homeowners in the AME Financial case above) in 1989. The deed contained a remarkable 30-year right of first refusal, allowing the Authority to buy the property back if the Homeowners died or “determine[d] to sell” the land.
Instead of doing either of those things, the Homeowners decided to separate. Harry conveyed his interest in the property to Mrs., and she mortgaged it. Two guesses what happened next: The property went into foreclosure. It was sold at auction to Purchaser #1 in 2002; in turn, Purchaser #2 bought it in 2003. This last buyer mortgaged it for roughly three times the original buy-back price, a right held by the Authority.
You can see where this is going: The Authority sued, claiming that it still held a right of first refusal, one that specifically ran with the land. The owner responded that neither of the two contingencies had occurred; the Homeowners had neither died nor “determined” to sell. (The substitute trustee no doubt made that “determination” for them.) The trial court ruled that the Authority did not have the right to compel the conveyance, or to obtain a declaration that the deed into Purchaser #2 was void ab initio.
The issue in this case, as phrased in the introduction to the opinion, is whether the holder of a right of first refusal can enforce it by demanding performance from the current owner’s predecessor in title. In nine short, well-crafted pages, the court today rules against the Authority, distinguishing several previous rulings involving determinations that similar rights could be enforced. The court holds that the conveyance into Purchaser #2 was not void ab initio, and then rules that the trial court correctly ruled that it could not compel Purchaser #1 to sell to the Authority, because that party no longer owned it.
The trial court had held that the Authority could enforce its rights by filing an action of ejectment, and the Supreme Court doesn’t disagree, although today’s opinion stops short of ruing that such an action would be meritorious. Accordingly, this may not be the end of the dispute, but it’s the end of this avenue of attack.
I’ll warn you in advance that something in Rowland v. Commonwealth is going to sound counter-intuitive. A robber walked unseen into the rear of a closed restaurant. Two employees were inside, but the first time either of them saw the bad guy was when one employee turned around and saw him brandishing a gun.
The question in this appeal is whether the evidence is sufficient to convict the defendant of using a firearm in the commission of burglary. Of course it is, right? No, it isn’t, the justices unanimously rule today. While it seems obvious that he committed burglary (entering a building with the intent of committing a felony therein) and that he had a gun at the time (I believe my daughter’s generation’s term for this element is “duh!”), keep in mind what the predicate substantive offense is – burglary, not robbery. The crime of burglary is complete once you enter the building with the requisite intent. No one saw Rowland enter the building, so we have no way of knowing whether he used (as contrasted with possessed) the gun in the process of doing that. Since there’s no evidence to establish that he used the gun in entering, the evidence is insufficient to convict him on this charge.
Lest any of you express concern for Mr. Rowland’s current and future housing prospects, be comforted; the Department of Corrections has arranged for room and board for him for the foreseeable future, courtesy of his two convictions of robbery, his two companion firearm charges, and the underlying statutory burglary convictions, none of which were at issue in this appeal.
I have to credit the appellant in Kozmina v. Commonwealth for coming up with a remarkably creative approach to challenging a refusal conviction: He argued that since refusal, first offense, is a civil proceeding, the local Commonwealth’s Attorney doesn’t have the right to prosecute him for it. The trial court didn’t bite for that, so it was off to the Supreme Court.
Not the Court of Appeals, you wonder? Well, in a sense, Kozmina is right. The CAV has jurisdiction over criminal appeals, but this isn’t among the categories of civil appeals that it can touch. (A first offense is civil; subsequent offenses are criminal, and those convictions do go first to the CAV.) The question is whether the Commonwealth’s Attorney has the right to be in the well of the courtroom when a first offense is charged.
It turns out that he does. The court answers this question by referring to a statute that holds that procedure in circuit court for refusal trials “shall be the same as provided by law for misdemeanors.” Prosecutors appear all the time on misdemeanors, so this one dies a quick death (6½ pages).
“Now, there’s something you don’t see every day, Chauncey.” The case of Smith v. Commonwealth presents the unusual spectacle of a criminal appellant begging the Supreme Court to dismiss his appeal for a procedural default. You read that right; Smith asked the Supreme Court to reverse the CAV’s decision not to dismiss his appeal for the failure to timely file a necessary transcript. (The transcript got filed, but eight days after the formerly inflexible deadline; the July 2010 revisions to the rules would probably have saved this one, but they came too late for this case.)
Why on Earth would an appellant do that? Because of a quirk in the delayed-appeal statutes. They state that the appellant can have a delayed appeal where his appeal is dismissed due to a missed deadline. The Court of Appeals has noticed that this doesn’t apply where a conviction is affirmed on the merits; just where it’s procedurally dismissed. The judges can therefore avoid delayed appeals, forcing appellants to go the tougher route of habeas corpus relief, by simply declining to dismiss; instead, they regard the fact issues as waived pursuant to Jay v. Commonwealth, and they placidly affirm.
Defendants have rankled at Pyrrhic victories like this, and in this appeal, Smith asked the justices to rule that the failure to file a necessary transcript meant that the appellate court didn’t have jurisdiction, so the appeal had to be dismissed. Hello, delayed appeal. The Supreme Court (predictably, in my view) refuses this invitation, noting that this isn’t a matter of subject-matter jurisdiction. Appeals get decided all the time without transcripts; sometimes there’s a written statement, and sometimes a transcript is superfluous, as when a civil case is dismissed on a demurrer.
The court accordingly affirms, leaving defendants tantalizingly close to the promise of a remedial delayed appeal, but unable to take advantage of it. This is something that justices probably can’t do anything about; the CAV has the absolute discretion in these cases to determine whether to dismiss an appeal or just affirm. Only the legislature can close this gap, if it is so inclined, by incorporating situations like this within the aegis of the delayed-appeal statute.
Saunders v. Commonwealth answers the question of whether a juvenile, having been once tried as an adult, can later be sentenced by a jury in a felony prosecution. Saunders, then 16 years old, was involved in a Lynchburg street gang, and committed multiple violent offenses in that context. He pleaded guilty, while being tried as an adult, of shooting into an occupied dwelling and received a prison term. Three months later, he had three other charges (the basis of this appeal) certified by the JDR court; in this crime, an innocent victim was shot in the head and suffered permanent paralysis.
Before trial on these charges, he moved that in the event of a conviction, the judge sentence him instead of a jury. (It’s a well-known fact in criminal-defense circles that on guilt or innocence, sometimes the judge is better, and sometimes the jury is better, But everyone knows that juries don’t suspend sentences.) The court refused, noting his prior conviction as an adult; the court turned to a statute that says that once a juvenile is adjudicated as an adult, he’s an adult for the purposes of all future criminal acts. The jury, as you might expect, hammered him, giving him 53 years to serve.
The Supreme Court today affirms. The only issue here is the propriety of jury sentencing. Saunders points to a separate statute that holds that when juveniles are tried, the jury can convict but only the judge can sentence. The court finds today that that general provision, applying to all juveniles, must yield to the specific statute mentioned above, involving only juveniles who have been previously convicted as adults.
Let’s assume that a prosecutor seeks an indictment of a defendant for several felonies. The grand jury receives the evidence, and at the conclusion of the proceedings, a document is returned in open court marked, “A true bill.” That’s a valid indictment, right? Well, suppose the foreman of the grand jury hasn’t signed it, leaving us to speculate as to whether the cleaning crew at the courthouse made the mark? Is that a valid indictment? We find out today in Reed v. Commonwealth, involving five felony convictions, including murder.
This isn’t a direct appeal of a criminal conviction; all that happened years ago. Reed’s lawyer didn’t raise the issue of the defect in the indictments before or during the trial or on direct appeal. Nor is it a habeas corpus proceeding. Reed tried that years ago, too, this time including the assertion that his lawyer should have spotted the defect. He lost that in the trial court, then failed to timely pursue the matter in the Supreme Court.
This case came to Richmond in an unusual procedural posture. Reed filed a pro se motion to vacate his sentence, asserting that it was void because of the defect. The trial court speedily denied it, without even waiting for the Commonwealth to file anything in response. Reed then filed a pro se petition for appeal, and surprisingly enough, he got his writ – a remarkable piece of lawyering for a non-lawyer.
Unfortunately, Reed’s assignments of error, drafted by an amateur, ultimately cost him dearly in this appeal. The record contained a bare but unsupported assertion that the indictments were returned in open court. That makes a huge difference, because a return in open court effectively validates a signature-free indictment; Virginia caselaw specifically so holds. Reed’s assignments didn’t challenge the trial court’s statement about an open-court return, so that fact is considered established in this appeal. The rest of the case falls in predictable order; the absence of the signature had to have been raised before the verdict, or by statute, it’s waived for non-constitutional defects. That means the convictions are affirmed.
Would it have changed the outcome if an appellate lawyer had drafted the assignments, and had known to assign error to this unsupported assertion? It might well have. I saw the oral argument in this case, and the absence of the signature troubled more than one justice. In the absence of any evidentiary basis to conclude that these indictments really were returned in open court, we might well be looking at a remand here, and a retrial on seven-year-old murder charges. As did CNH America v. Smith in the January session, this case points out the importance of phrasing your assignments of error with great care. They often end up being case-dispositive.
I covered Howard v. Commonwealth back in December 2009 when the Court of Appeals published its opinion affirming his convictions (click here to see that analysis), and I won’t repeat that discussion here. The Supreme Court affirms the CAV’s holding that a defendant has to object to sua sponte continuances by the court if he wants to make a Speedy Trial Act challenge based on delay. The court also holds today that the delay of five months and fifteen days doesn’t create a cognizable challenge based on either the state or federal constitutions.
Startin v. Commonwealth deals with the question of whether a non-firing replica of a handgun will suffice to convict a defendant of display of a firearm in the commission of a felony. Startin robbed a drug store by showing the pharmacist what looked for all the world like a .45. But it wasn’t real; it was a “John Wayne Replica” that didn’t have a firing pin. It was sold as a commemorative edition, probably in an ad that ran on television after 11:30 pm.
The en banc Court of Appeals ruled last year that the appearance was all that mattered in a charge of displaying a firearm; this one looked perfectly lethal to the victim, so the conviction stuck in that court. It sticks here, too; the Supreme Court affirms on basically the same premise as the CAV did. The court notes that there is a different definition of a firearm for this statute, which criminalizes a threat, and the statute prohibiting possession of a firearm by a convicted felon, which criminalizes possession of a dangerous instrument. This replica would not be enough to get a felon convicted of possession. But when used to effect a robbery, it looks real enough to pass the test.
This case illustrates that sometimes transferring definitions from one Code section to another won’t work.
Another appeal involving the same statute and a similar factual dispute is Courtney v. Commonwealth. Courtney approached a victim one night when she got out of her car in her driveway, and attempted to rob her. When she initially hesitated, he specifically told her that he had a gun; he was holding his hand inside his shirt at the time. He eventually grabbed her purses and her mobile phone and fled.
Five minutes later, the police caught Courtney, pretty much red-handed, three miles away. They found on him a cap gun – obviously a toy, right down to the orange tip on the muzzle.
Courtney was convicted of robbery, and that conviction is not involved in this appeal. This one’s about the companion firearm offense. The question here is whether Courtney did any of these things: “use or attempt to use any pistol, shotgun, rifle, or other firearm or display such weapon in a threatening manner while committing or attempting to commit” a robbery.
In 1994, the court decided Yarborough v. Commonwealth, in which it held:
the Commonwealth must prove that the accused actually had a firearm in his possession and that he used or attempted to use the firearm or displayed the firearm in a threatening manner while committing or attempting to commit robbery . . .
In Yarborough, the evidence never established that the perpetrator had a gun; it merely established that the victim was led to think that he had one. The court in that case ruled that the evidence fell short of proof beyond a reasonable doubt that the defendant actually used a firearm.
Against this backdrop, you may be surprised to learn that a divided court votes today to affirm Courtney’s conviction. The majority, authored by Justice Lemons, notes that Courtney’s own words furnished evidence of his use of a firearm and that the finder of fact could have credited that statement in reaching its verdict. It cites a 2004 decision, Powell v. Commonwealth, in which just such evidence was used to convict a defendant of this charge, despite the fact that no one ever saw Powell with a gun, and indeed, no gun was ever found.
Justice Koontz dissents, principally citing Yarborough (a case the majority opinion does not discuss at all). He finds the statute to unambiguously require the use or attempted use of an actual firearm – not a toy, and not an assailant’s finger held inside his pocket to mimic a gun – to support this specific conviction. (Again, please remember that this is not the underlying robbery charge, as the evidence was clearly sufficient to support that conviction.) He discards as sheer speculation the majority’s implicit reliance on the prosecutor’s theory of the case (“He could have had a real gun for all we know. He certainly had an opportunity to discard one.”).
The only clear distinction that I can see between these two incongruous holdings is the perpetrator’s statements, in Powell and here, of possession. (It’s distinguishable from Startin, above, because the victim here never saw anything that looked like a gun.) Powell and Courtney each said that they had a gun, so their convictions are affirmed; Yarborough kept his mouth shut, so his conviction was reversed. But because the statute, as it is phrased, criminalizes actual or attempted use of an actual weapon, not oral threats to use one, I think Justice Koontz has a legitimate point here, one that exposes an analytical weakness of the Powell decision and the one handed down today. The court often notes that it is not free to add language to an unambiguous statute, but in my view, Powell and now Courtney add the phrase, or threaten to use to the current statute.
It’s hard to picture the circumstances of Ellis v. Commonwealth without a diagram, but the opinion assures us that Ellis was reasonably close to a convenience store when he pulled a gun in an alley and opened fire on someone he felt deserved a bullet or two. At least one of the bullets crashed through a glass door. Based on the opinion, I infer that no one inside was hurt.
The question in this appeal is whether Ellis can be convicted of shooting at or against an occupied building. A grand jury indicted him for maliciously discharging the weapon, but at trial, the court convicted him of the lesser included offense of unlawfully shooting at the building. The difference, my discerning readers will already have noted, is that there’s definitely a specific-intent component to shooting maliciously; but perhaps not one with unlawful shooting.
The Court of Appeals refused Ellis’s petition for appeal, finding that he knew or should have known that the store was in his line of fire. That issue plays an important part in today’s decision, which turns on whether there’s a specific-intent component to the unlawful-shooting charge. The court finds that there isn’t, so the conviction is affirmed. The court notes that ”the legislative purpose of the statute is meant to prohibit unlawful conduct, whether malicious or merely criminally reckless, which has the potential to endanger the lives of persons inside occupied buildings, without regard to the shooter’s actual motive or intent in unlawfully discharging a firearm.” It’s therefore enough that the shooter should have known that a building is in his line of fire, even if he didn’t intend to hit the building.
Judges and lawyers often use the word forthwith to convey a requirement of immediacy. Indeed, the dictionary I use defines the word solely by a synonym: immediately. Bryan Garner’s A Dictionary of Modern Legal Usage is a bit more helpful in understanding the nuances of the word, describing it as “a usefully vague term” conveying “every shade of meaning from ‘instantly’ to ‘within 24 hours’ to ‘within a reasonable or convenient time.’ It is a fuzzy word with no pretense of precision.” Today, in Hicks v. Commonwealth, we get the Supreme Court’s take on the word in the context of search warrants.
Based in part on information received from a historically reliable confidential informant about drug transactions, Richmond police officers got a search warrant for a home in an area just north of Church Hill. The warrant, as all warrants do, required that it be executed forthwith. But the investigating officers took their time with this one, waiting 13 days until activity picked up at the house. When a surveillance officer noticed significant pedestrian traffic going in and out of the house, each visitor staying a very few moments, it was time. They executed the warrant and reaped a bountiful harvest of contraband and evidence. They also got Hicks, the boyfriend of the woman who lived there.
Hicks moved to suppress the fruits of the warrant on two grounds. The first is a challenge to probable cause that, from the outset, looks destined to fail. My sense here is that if this were the only issue in today’s appeal, we’d be looking at an unpublished order; the court today quickly concludes that there was ample probable cause to issue the warrant. The real meat of this decision is the second challenge, implicating the staleness of the warrant and the immediacy requirement.
Hicks argued that any probable cause that may have existed on September 12, when a magistrate issued the warrant, had dissipated by the 25th, when it was finally executed. One large problem with that argument is the existence of a statute that requires that all search warrants be executed within 15 days, or else be returned and voided. As a matter of pure statutory interpretation, the execution was timely. But Hicks contended that the facts upon which probable cause was initially based nearly two weeks earlier had dissipated, so that the execution was an unreasonable search.
The Supreme Court rejects this argument as well. It notes that while the warrant was indeed directed to at least one substance that traditionally doesn’t last too long in one place – heroin – it also called for seizure of more “durable” items, such as paraphernalia, weapons, and financial records. The court concludes that the probable cause that existed for those items on the 12th still existed on the 25th.
The always-troubling boundary between tort claims and contract claims gets a little fine-tuning today in Kaltman v. All American Pest Control. The Kaltmans, yet another set of Homeowners, hired All American to treat their home quarterly. During one of the visits, an employee used the wrong kind of pesticide, leaving an awful, durable stench in the house. In addition, the Homeowners pleaded, the material was dangerous to human health, to the point that it wasn’t approved for use in residential buildings. They sued for negligence, willful and wanton conduct, and negligence per se.
The company responded that this wasn’t a true negligence claim, because its only relationship with the Homeowners arose within the four corners of the contract. The company demurred to all the tort claims, and the trial court sustained that pleading, dismissing the case. The Homeowners got a writ.
The Supreme Court has given us plenty of guidance on this boundary over the years, but it still leaves things a bit murky in many cases, such as this one. The court clears that fog aside by ruling that these duties arise independent of the contract, so the negligence claims should not have been struck. There are statutes that regulate the use of pesticides, and that’s in the interest of public health; not merely for the pecuniary benefit of private parties. The key language here will be helpful in future litigation where a plaintiff seeks a tort recovery against a contractor like this one: “Just because the application of pesticides is included in AAPC’s contractual duty to control pests, it does not follow that the Kaltmans have contracted away their common law and statutory rights.”
Similarly, the negligence per se counts stated claims for which relief could be granted. The Homeowners were among the class of people for whose benefit the pesticide statutes were crafted. The pleading clearly stated a violation of a public-safety statute, so the only issue left for adjudication – proximate cause – was a jury question.
The contractor doesn’t come away entirely empty-handed; the willful and wanton counts were correctly struck, the appellate court rules today. The court holds that the facts as stated describe nothing more than ordinary negligence. That means the Homeowners won’t be able to claim punitive damages in the upcoming trial.
This decision is important because of the number of times this issue arises in trial courts. In tort cases, there are often millions of dollars at stake over contracts for thousands (or perhaps even hundreds) of dollars. Plaintiffs looking for a way to shape their pleadings to take advantage of the availability of tort damages will pay close attention to the lessons here.
Sexually violent predators
The court resolves a small but important procedural point in SVPA jurisprudence in Commonwealth v. Amerson. Amerson was determined to be a sexually violent predator, but he was apparently close enough to the cusp to warrant release to an outside facility for treatment and monitoring. The rub here is that that agency is in the District of Columbia, not here in Virginia.
The statutes that allow outpatient treatment don’t authorize release outside Virginia, but as Amerson pointed out in the trial court, they don’t forbid it, either. The judge accepted that reasoning and agreed to release Amerson to the DC outfit. But the Commonwealth got a writ and a stay of the order (thus keeping Amerson in Virginia pending the appeal), and today the Supreme Court reverses. It reads the several relevant statutes together and draws the conclusion that they permit release only to Virginia agencies. One key reason is enforcement: If a predator becomes a greater danger to the public, he can be taken back into custody if he’s in Virginia; but an arrest warrant issued here might not play well in other jurisdictions. The court notes that if the legislature had wished to authorize foreign placements, it could have done so, but the court won’t read language into the statute that it doesn’t find there.
Lee v. Norfolk answers the question of whether a city owes compensation to the owner of a dilapidated house when the city bulldozes it. Lee knew perfectly well that the house wasn’t in great shape; he got a permit to perform renovations. But a city inspector noticed that the extensive work he was doing amounted to far more than half the value of the house, so he declared the permit void under an appropriate ordinance. The city gave Lee notice that the property was a public nuisance and had to be removed. The notice advised hi of his right to appeal within 21 days.
That got Lee’s attention. He hired a lawyer and the two met with city officials to try to resolve things. That meeting bought him a temporary reprieve, but eventually the city became dissatisfied with his progress. After again notifying him, the city demolished the building.
Lee sued on three theories. The first is a §1983 claim based on deprivation of property without due process. The Supreme Court rules today that Lee received due process, in the form of the notices and the opportunity to appeal (which he never exercised, by the way). The second claim is one for inverse condemnation – a taking of private property for public purposes without just compensation. The court rules today that this wasn’t a garden-variety taking; it was an abatement of a public nuisance. Caselaw establishes fairly clearly that no just compensation is due for removal of nuisances.
Lee’s final count was for property damage – a sort of “wrongful demolition” claim. The city wins this one, too, under a principle that’s very familiar to me as a former municipal lawyer. Abatement of nuisances is a governmental function, for which the city is absolutely immune from state-law tort liability. (There are exceptions for things like municipal nuisances, but those aren’t relevant here.)
There’s one important procedural point to mention here. The trial court had decided this case on a special plea, but took no evidence on that plea. (If it had taken evidence, Lee could have demanded a jury trial on that plea, thanks to Bethel Investment v. City of Hampton.) The court notes that when no evidence is taken on such a plea, the court must view the facts as they are alleged in the complaint, treating the pleading essentially as a demurrer. Practitioners should take note of this provision; when you have a special plea, the existence of factual disputes signals a right to trial by jury, while a plea that tests the sufficiency of the complaint may often be decided by a judge.
Today’s only tax opinion, Ford Motor Credit v. Chesterfield County, contains a discussion that will fascinate tax jocks and that might bore everyone else to tears. But wait; there’s actually an interesting legal issue that produces some dissention (or at least a dissenting opinion).
At issue here is Business, Professional and Occupational License taxes. Those are collectable by a locality based on gross receipts of regulated businesses. The dispositive issue in this case is where such receipts occur for Ford Motor Credit, which primarily provides car loans to purchasers, but which also finances car dealers’ inventories. Ford had a local office in Chesterfield County, one of 300 around the nation. That branch was responsible for making lots and lots of car loans, and the county taxed it based on the gross amount of the loans.
Ford, which had paid these taxes for years without question, eventually realized that it could claim an overpayment based on a form of apportionment of labor. While the local office originated the loans, once the paperwork was completed it was generally shipped off to another Ford office, usually out of Virginia, for servicing (including default collections, if necessary). The company sought a refund of $1.4 million of these taxes, paid over a period of a few years, because it contended that only a portion of the gross amounts of the loans should be apportioned to this particular office.
The trial court refused to order a refund, but today, a divided Supreme Court reverses. The chief justice, writing for the majority, finds that while the Virginia office closes the deal, all the company thereby acquires is receivables, not “gross receipts.” The court notes that there’s a difference between these two terms (a fact most lawyers are keenly aware of as the year draws to a close), and holds that determining gross receipts based solely on the execution of a contract ignores the contribution that those other offices, located elsewhere, play in generating actual receipts.
Senior Justice Lacy, joined by Senior Justice Carrico, disagrees. She poses the following conundrum, paraphrased slightly: If only receipts, not receivables, are taxable, how can the county charge any tax at all, when the consumers’ loan payments are all mailed to Detroit? In that event, the Chesterfield office generated no receipts at all. The dissent would affirm the judgment on the basis that the activities in other jurisdictions did nothing to either produce the gross receipts or add value to the product sold (loan proceeds; not cars).