[Posted September 4, 2009] The Supreme Court of Virginia today engages in a little desk-clearing in advance of the next opinion day, two weeks hence, by issuing two unpublished orders in cases argued in June.

There aren’t very many opinions dealing with the subject of prejudgment interest, so I was initially dismayed to find that D.R. Horton, Inc. v. Zambrana was decided by order. After all, we can always use more guidance on subjects on which there is comparatively little caselaw. But when I got to the punch line, I understood perfectly well why this one won’t make Virginia Reports.

The Zambranas contracted to buy a home, but the seller didn’t deliver. They sued, and the seller filed a counterclaim. The trial court ruled in favor of the seller, apparently finding that the buyers hadn’t timely applied for financing, thereby breaching the contract. The seller didn’t get a recovery, either, because it had resold the property at a higher price, so the court sent both parties away empty-handed.

The buyers appealed back in 2007, claiming that they at least should have received a refund of their substantial ($81K) earnest-money deposit. The Supreme Court agreed, and in an earlier unpublished order, remanded the case to the trial court, directing that the buyers should receive the deposit back.

After that ruling, the seller decided to do the right thing; it voluntarily refunded the deposit without further proceedings. Ah, the buyers noted; that doesn’t end the matter. We’re entitled to an award of prejudgment interest, since the seller had the use of our money for over three years. The trial court agreed and awarded them judgment for just over $15,000. This time, the seller appealed.

Prejudgment interest is statutory. The trier of fact may (but doesn’t have to) award it when it awards a principal sum to a litigant. In this case, the trial court never entered a principal award in favor of the buyers; to the contrary, it ruled that they had breached the contract. And as the court notes, that ruling is now the law of the case. That means that under the statute, the buyers can’t get any interest. The Supreme Court thus holds the trial court strictly to the terms of its earlier mandate, in which it had remanded solely for an award of the $81K deposit.

There are a couple of unclear points about this ruling. First, since the buyers unquestionably “won” the right to recover their money, shouldn’t they be entitled to its return, with interest? They were unquestionably the prevailing parties in at least that part of their claim. True, the trial court never got around to entering a judgment for the principal amount; but that was only because the seller beat the court to the punch by forking over the loot right away. Can any party avoid liability for prejudgment interest merely by paying the principal as soon as it becomes clear that he’s going to lose?

I doubt it; I think this ruling is a product of the unusual case posture here. The court notes that the only other thing that could have authorized such an award was the earlier mandate, and that was limited to the refund of the deposit.

But that ruling, too, raises a troublesome question. Back in June, the court finally ended the appellate saga of convicted murderer Daryl Atkins, in an opinion denominated, In re Commonwealth. There, the Supreme Court remanded the case and directed the trial court to conduct a new sentencing proceeding (on the issue of mental retardation) to decide whether Atkins, convicted of capital murder, would be sentenced to life in prison or death. Instead of convening that proceeding, the trial court went ahead and sentenced Atkins to life, based ona finding of a Brady violation. The Commonwealth appealed, contending that the Supreme Court’s order was mandatory (that’s why it’s called a mandate), and the trial court had refused to obey it.

A majority of the court voted to affirm, ruling that a remand order for a specific purpose also empowers the trial court to carry out other matters in the case. The court issued this ruling despite (1) the specific language of the remand, limiting further proceedings to conducting the retardation hearing, and (2) a very rare statutory provision that also contains that same limiting language. Two justices dissented, arguing that the trial court is without authority to act beyond the specific directive of a mandate.

Today, the court seems to adopt the position of the dissent back in June, holding that since the mandate “made no provision for pre-judgment interest,” the trial court was powerless to do anything beyond the strict terms of the remand. At a minimum, that looks awfully incongruous to me; is a judge free to ad-lib the remanded proceedings in a capital case, but chained to the four corners of the mandate otherwise?

Such musings, of course, are but idle exercises in philosophical analysis, since today’s ruling is unpublished. From the standpoint of precedent, In re Commonwealth is still the real deal.

Habeas corpus
Strickland v. Washington gets another appellate workout today, in Higgs v. Director, Dep’t of Corrections. Higgs was convicted of murder and two related offenses. He claimed on habeas that his trial lawyer had been ineffective because he failed to move for a mistrial on the basis of a juror who acknowledged that she had attention deficit disorder, that she had a tendency to “confuse facts,” and that she had problems with memory.

That might be enough to warrant a challenge for cause, but the juror made this disclosure after the jury was sworn. The today the Supreme Court rules that “it cannot be said that failure to move for mistrial was prejudicial to Higgs.” It cites caselaw holding that the trial court is in a better position to decide whether a given juror is capable of serving, and finds that the claim of ADD, standing alone, isn’t enough to mandate disqualification of the juror. As such, Higgs can’t meet the second prong of the Strickland test (the requirement that he show that counsel’s alleged error probably affected the outcome of the case).

Since both of these orders are unpublished, they won’t be available on the court’s web site. If you’d like a copy of either, contact me and I’ll send it to you.