Supreme Court reverses sanctions
Lawyer was hit for his persistence

By Alan Cooper, Virginia Lawyers Weekly – 5/28/2010
 
When does zealous representation cross the line and become harassment and unnecessary delay?

A circuit judge in Chesterfield County thought filing a third motion to reconsider a pleading to set aside a default judgment was on the harassment side and ordered attorney Richard C. Ferris II to pay an $800 sanction under Virginia Code § 8.01-271.1.

The Supreme Court of Virginia reversed the sanction in an unpublished order on May 14 in Ferris v. Kiritsis (VLW 010-6-059).

L. Steven Emmert, the Virginia Beach appellate specialist who represented Ferris, said he suspected the court had not published its decision because of a concern “that lawyers would view it as open season on unlimited motions to reconsider.”

Emmert insisted that would be an unwarranted reading of the situation that confronted Ferris.

A Chesterfield couple filed suit against AME Financial Corp., a Georgia mortgage company, alleging that it had changed the terms of an adjustable rate mortgage and used an invalid power of attorney to assign the note to another company.

AME’s president called the couple’s attorney, Bradley P. Marrs, who told a judge later that he had informed the executive that he needed to retain a Virginia attorney to respond to the complaint.

Instead, an AME vice president filed an answer that would have been timely if a Virginia attorney had filed it but was defective because a non-attorney had filed it.

Marrs moved to strike the pleading and for a default judgment. AME retained Ferris, but the hearing on the default motion had been held before Ferris learned of it.

Ferris promptly filed a motion for relief from default, but Judge Michael C. Allen denied it. At the first motion to reconsider, Allen invited Ferris to file a second motion to rehear because of Marrs’ statement about his advice to the AME president.

However, Allen denied the motion for relief from default at the third hearing.

Allen then discovered a conflict, and the case was reassigned to Judge Cleo E. Powell before she was elevated to the Virginia Court of Appeals.

Ferris filed the third motion to reconsider despite a warning by Marrs that he would file a motion for sanctions if he did so.

Marrs filed the request for sanctions and Powell granted after concluding that there was nothing new in the request for reconsideration.

On appeal, Emmert argued,“Ferris could plausibly perceive that [Powell] might receive his request more favorably than had her predecessor,” Emmert wrote in an appellate pleading.

“Litigants are entitled to do this,” he added. “So long as the trial court retains jurisdiction over a case, it retains the authority to change previous interlocutory rulings, even upon consideration by a different judge.”

Emmert said after the Supreme Court’s ruling that repeated requests to the same judge to rehear the same arguments could lead to sanctions that the high court would be unlikely to review.

But a close analysis of Ferris’ actions showed that wasn’t the case with Ferris, Emmert said. The first judge had invited the second motion to reconsider, and Ferris had an opportunity to have a second judge consider the issue only because Allen withdrew from the case.

Emmert emphasized in his appellate papers that there was no argument by Marrs or finding by Powell about the specific factors in Code § 8.01-271.1 that Ferris had violated. The Supreme Court adopted that rationale in reversing the sanctions.

Virginia Beach lawyer Kevin E. Martingayle was in the courtroom when Emmert argued the case. He said the court peppered Emmert with questions and appeared to be concerned about encouraging multiple motions to reconsider.

The court’s rationale in reversing the case should have foreclosed that concern, Martingayle said, and its analysis would have provided guidance to attorneys about how to draft a motion for sanctions specifying the violations of Code § 8.01-271.1 and to incorporate those violations into the final order if the judge agreed with the argument.

The validity of the default judgment for the homeowners was argued the same day as the sanctions appeal.

The primary issue there is whether revisions to Part 3 of the Rules of Court in 2006 provided more leeway for the correction of a brief technical default.

The court is expected to issue its decision in AME Financial Corp. v. Kiritsis, Record No. 091244, next month.