ANALYSIS OF APRIL 22, 2005 SUPREME COURT OPINIONS
This morning, April 22, 2005, the Supreme Court of Virginia handed down opinions in sixteen cases in several different areas of the law. These rulings are analyzed in the essay below.
Unquestionably the major news story of the day from the Court is today’s affirmance of the conviction in Muhammad v. Commonwealth, the first major test of the Commonwealth’s anti-terrorism law enacted in 2002. Muhammad was convicted and sentenced to death in connection with a well-publicized series of sniper attacks in the autumn of 2002.
The Court’s opinion runs 139 pages, which is probably a record for this court. (This author has no intention of sifting through 270 volumes of Virginia Reports to make sure.) Muhammad assigned error in 102 separate instances, although the Court found that he abandoned 16 of those by not making an identifiable argument in support of them, as required by Rules 5:17(c) and 5:27 . Still, the majority opinion takes some 34 pages just to wade through the facts and the procedural history of the case.
Among the many other rulings, the majority unanimously upholds the constitutionality of the new statute, and reaffirms that the death penalty is not cruel and unusual. The majority opinion notes that Muhammad does not even challenge the sufficiency of the evidence against him on the terrorism charge.
The Court also decides today a Double Jeopardy challenge in Commonwealth v. Hudgins. There, the defendant was acquitted in a bench trial of a charge of robbery, arising out of the theft of a bicycle from an 11-year-old child. He was immediately thereafter indicted and prosecuted for grand larceny from the person for the same event. The trial court overruled his plea of former jeopardy, but the Court of Appeals reversed in 2004, holding that grand larceny from the person is a lesser included offense of robbery.
Today, in a rare appeal by the Commonwealth, the Supreme Court reverses the Court of Appeals and reinstates the conviction. The Court notes that the plea is evaluated under the Blockburger factors, and the relevant test here is whether the two crimes each have at least one element that is not found in the other. The Court notes that robbery requires proof of violence or intimidation, while larceny does not; larceny requires proof that the value of the item taken exceeds $5, while robbery does not. The Court held that another argument (which may well have succeeded), that the acquittal of the robbery charge was an implicit acquittal of larceny, was not properly preserved in the trial court, and thus waived under Rule 5:25.
The Court decides three tort cases today, beginning with a case involving a claim for medical expenses for personal injuries to a minor. In Baumann v. Capozio, the Court reaffirms that a claim by parents for medical expenses arises independently of the minor’s claim for personal injuries.
The Baumanns are the parents of a son who sustained injuries in a fight with Capozio. They filed a next-friend suit on behalf of their son, then aged 17 years. (For a discussion of the danger of doing this from the attorney’s perspective, see the Court’s January 14 opinion in Zelnick v. Adams.) In their suit, the parents sought a recovery for medical expenses incurred; in discovery, they listed such bills and provided copies of them.
And then, while the case was still pending, their son reached majority. With his new-found freedom, he did what every other adult litigant has the right to do: He settled his claim, pocketing $75,000 in exchange for a complete release of all his claims. The parents did not join in the release.
The parents then filed a separate civil suit, in which they claimed necessary medical expenses. Capozio pleaded release, and argued that the parents had waived their right to an independent suit by seeking a recovery for the medical expenses in the next-friend case. Today, the Court declines to find such a waiver, noting the separate causes of action that arise when a minor is injured (one for the child for the injuries, and one for the parents, to recover necessary medical expenses). It remands the case for trial on the parents’ claim for medical expenses. The case is noteworthy for the Court’s clarification of the burden of proof on a party who asserts the doctrine of implied waiver; the Court confirms that that standard is clear and convincing.
There is a clear message here for attorneys representing insurance carriers where the plaintiff is a minor. You are potentially liable for two different claims, with different sets of claimants as soon as the minor reaches his eighteenth birthday. Releases therefore should be executed by all such claimants.
In Jenkins v. Pyles, the Court reverses a trial court’s decision to strike the plaintiff’s evidence. After a trial for personal injuries arising out of a motor vehicle collision, the jury returned a Bowers verdict (exactly the amount of the plaintiff’s special damages). Faced with the necessity of a new trial, the trial court instead set the verdict aside and granted summary judgment in favor of the defendant, ruling that the plaintiff was contributorily negligent as a matter of law.
The Supreme Court finds today that the evidence on contributory negligence was disputed at trial, so the trial court improperly took the issue away from the jury. On remand, it rejected the defendant’s request for a new trial on all issues, finding instead that the jury’s verdict on liability was supported by credible evidence. As a result, the case returns to the trial court on the issue of damages alone.
In one respect, the defendant was at a disadvantage in this appeal. Ordinarily, after a trial, the Court views the evidence in a light most favorable to the prevailing party, meaning the appellee. This standard of review is case-dispositive in a great many appeals. But here, the postures are reversed, since the jury had found in favor of the plaintiff, and the trial judge had taken that verdict away. This decision reemphasizes that in such cases, the appellant is in the driver’s seat on factual determinations. In today’s ruling, the Court views the evidence in a light most favorable to the plaintiff. This posture resulted in an uphill battle for the appellee/defendant, and ultimately contributed significantly to today’s reversal.
The final tort case decided today is Jordan v. Kollman (consolidated with a reciprocal appeal, styled Jordan v. Kollman; the Court issues only one opinion for the two cases). This is a defamation suit brought by a City Council candidate against a citizen who had opposed the candidate’s election efforts. The citizen ran in a local newspaper two advertisements that were critical of the candidate’s voting record during a previous term on Council. The candidate won reelection, but filed a defamation action against the citizen.
In the trial court, a jury returned a verdict in favor of the councilmember for $75,000 in compensatory damages and $125,000 in punitive damages. Thereafter, the court ordered remittitur to $15,000 and $35,000, respectively. Both sides appealed.
Today, the Supreme Court reverses the judgment and enters final judgment in favor of the citizen. Holding to the requirement of actual malice enunciated by the US Supreme Court in NY Times v. Sullivan, the Court finds that the citizen had a rational basis in fact to believe that his comments in the advertisements were true. Brushing aside several other assignments of error on both sides, the Court finds today that the citizen’s statements represent “an honest conviction grounded in good faith,” and enters final judgment in his favor.
The Court decides today one case in which it felt the need to tone down the extra-judicial rhetoric, Davenport v. Little-Bowser. The case presents a united question involved in three distinct petitions for otherwise routine issuances of birth certificates to adoptive parents.
Ordinarily, when a Virginia-born child is adopted, the adoptive parents may request and obtain a new birth certificate, showing the names of the adoptive parents thereon. This document can be useful to obtain prompt medical treatment (a problem evidently faced by one of these sets of adoptive parents), for travel purposes (children are not normally required to carry a passport when crossing international boundaries, as long as they are accompanied by the parents shown on their birth certificate), and for other uses.
The wrinkle here is that all three sets of adoptive parents were same-sex spouses, with marriages celebrated in other jurisdictions (New York and the District of Columbia). When the Commonwealth’s Registrar, Little-Bowser, was confronted with these petitions, she refused to issue the new certificates, believing that to do so would legitimize same-sex marriages in violation of the public policy of the Commonwealth. These mandamus suits followed; the trial court entered summary judgment in favor of the Registrar.
Today, the Supreme Court reverses, holding that Virginia law does not specify that the parents shown on a birth certificate must be of opposite genders. The Court finds it unnecessary to address two challenges based on federal constitutional grounds (Equal Protection and Full Faith and Credit), as it finds that the law of the Commonwealth requires the issuance without regard to the sex of the parents. In doing so, the Court takes time to specify what it believes “this case is not about.” Despite considerable attention to ancillary issues in the trial court and before the Supreme Court (the opinion understandably, and understatedly, leaves out the considerable media attention the case has attracted), the majority rules that the case “is not about homosexual marriage, nor is it about ‘same-sex’ relationships, nor is it about adoption policy in Virginia.” The sole issue the Court addresses today is Virginia law for issuing birth certificates.
The case contains an interesting analysis of a relatively arcane principle relied upon by the Registrar, the rule of practical construction. That rule provides that when an agency or official is charged by law with administering a statute (or, in the case of a locality, an ordinance), the courts afford great deference to that agency’s or official’s interpretation of the provision thus enforced. The Registrar argued that she interpreted the birth certificate statute to require opposite-sex parents on such certificates. The Court certainly does not abandon this rule, but holds it inapplicable where the “official” interpretation would “change the plain meaning of the statute.” Additionally, “[o]nly when the statute is obscure or its meaning doubtful will courts defer to an administrative interpretation.”
In two cases decided today, the Court addresses the issue of attorney’s fee provisions in contract cases. The first, Safrin v. Travaini Pumps USA, is based on a confessed judgment note. When Safrin defaulted on such a note, one of the named attorneys in fact appeared in the Clerk’s Office and confessed judgment on his behalf. The judgment, using a pre-printed form, provided for the payment of a principal sum due, plus the “cost of this proceeding (including . . . attorney’s fees . . .)” The form did not specify the amount of the attorney’s fees thus confessed.
Several months later, Travaini Pumps moved the trial court to reopen the case to liquidate the attorney’s fee award. Over Safrin’s objection, the court granted this motion and thereafter awarded some $7,500 in fees. The Supreme Court awarded Safrin an appeal, and today reverses the award, based on Rule 1:1. Holding that a confessed judgment is subject to the same set of rules that govern all other judgments, the Court today finds that the trial court lost jurisdiction 21 days after the entry of the confessed judgment. The attorney’s fee award is thus vacated.
There are at least two ways for creditors to deal with this problem. First, the note should contain a provision of a sum certain (or a percentage certain) as attorney’s fees; under Virginia law, such a provision is presumptively reasonable, and the burden to show that it is unreasonable is on the party resisting it. Second, the creditor may petition the court to determine the amount of the fees within 21 days after entry of the confessed judgment.
The other attorney’s fee case also ends unhappily for the attorney; in Lee v. Mulford, the court rejects a plaintiff’s effort to have the court determine the amount of attorney’s fees after a jury verdict in his favor.
Lee sued Mulford to collect a note for $130,000; pursuant to the terms of the note, he also requested an award of attorney’s fees. At trial, Lee adduced no evidence relating to attorney’s fees before the jury; he evidently planned to make a motion to the trial court to fix the fee award in the event he received a verdict on the underlying debt. The jury gave Lee a verdict for roughly $40,000, but no doubt to Lee’s surprise, it went on to split court costs 50-50, and specify that each party should bear its own attorney’s fee. The instructions to the jury told it to consider the contract as a whole, and to give effect to every part of it, but did not specifically mention legal fees.
To Lee’s great dismay, the trial court denied his request to fix fees notwithstanding the verdict. He argued that “it is customary to argue the issue of fees post-trial.” Noting that Lee does not identify the source of such a custom (and did not provide any evidence in support of his contention), the Court today finds that such a custom, even if it exists, cannot supersede the contract rights of the parties. In earlier reported cases where the trial court had fixed legal fees after a general jury verdict, the Court notes that there was always an advance agreement among counsel to so bifurcate the proceedings. Unfortunately for Lee, there was no such agreement here. And when he “sought attorney’s fees as part of his claim for damages and a jury was empanelled to decide the case,” that was the end of his claim for fees.
The lesson here is simple: Where the plaintiff claims attorney’s fees as a part of his contract recovery, he should either get a stipulation (on the record) to sever that issue and take it up post-verdict, or adduce to the jury evidence of the amount of fees.
While Asplundh Tree Expert Co. v. Pacific Employers Insurance Co. is an insurance case, the real issue therein is one of equity jurisdiction. This complicated case arises out of an automobile collision involving a work crew employed by Asplundh. One of the employees filed a suit against the driver (a coworker) and Asplundh; the employer filed a plea asserting the Workers’ Compensation bar. Asplundh’s liability insurer, Pacific Employers, filed a declaratory judgment proceeding, seeking a ruling that it was not liable for the injuries, since (it contended) the policy excluded coverage for injuries covered by Workers’ Comp.
While the declaratory judgment cause was pending, the first court denied Asplundh’s summary judgment motion, holding that the Workers’ Comp bar did not apply. After this ruling, Asplundh and the employee negotiated a settlement of the case, which was funded by Pacific Employers. In doing so, the carrier reserved its rights to continue to pursue the declaratory judgment cause.
After a four-day trial and equipped with 18 depositions totaling 2,500 pages, the trial court ruled in favor of the insurer, and required Asplundh to reimburse its carrier for the amount of the PI settlement. Asplundh got a writ to review that ruling. Today, the Supreme Court affirms, holding that the carrier had sufficiently protected its right to continue the declaratory proceeding. In reaching this ruling, the Court reaffirms that a court of equity does not lose jurisdiction of a cause once it acquires it; Asplundh had contended, at trial and on appeal, that once the underlying PI case was settled, there was no longer an active controversy to support a declaratory proceeding.
Today’s decisions include one corporate dispute, Stockbridge v. Gemini Air Cargo, Inc., in which Delaware law governs the principal issues. Stockbridge was terminated as an officer of the company, and exercised a right set forth in his employment agreement to force a sale of his corporate stock (with a value of $5 million) upon the company. He gave a timely notice of the exercise of this right; the company dragged its feet in reply. After several months’ delay, it eventually agreed to “work with” the employer’s attorney in agreeing on a buyout price.
When the company delayed even further, Stockbridge sued for breach of the buyout provisions. Only at this point did the company assert that it was excused from performing its obligations under the agreement, due to the company’s financial position. Delaware law prohibits the enforcement of such buyout provisions where the company’s capital is “impaired” (here, where there is not enough net shareholders’ equity to pay it outright).
The case is interesting for two procedural aspects. First, the Court rules today that issues relating to the company’s financial position and its alleged bad faith (it paid a similar buyout to another employee at the very time Stockbridge had exercised his option) are jury issues, and reverses the trial court’s summary judgment in favor of the company. Second, and of great interest to those advising companies required to respond to similar notices, the Court emphatically criticizes the company’s nonresponsiveness to the initial call – so much so that the Court holds that the company has waived its principal contractual defense by failing to raise it timely. It thus appears that Stockbridge will have far more ammunition when the case returns to the trial court.
In perhaps the smallest case of the day (financially speaking), the Court reverses an award of $5,000 in punitive damages against a corporation that owns buried fiber optic cable used for telecommunications. In Xspedius Mgt. Co. v. Stephan, Xspedius bought out the assets of a bankrupt company, comprising miles and miles of buried cable. Unknown to Xspedius, one of the cables had been mis-laid by the predecessor, and encroached on the Stephans’ property. When the company discovered the technical trespass, it contacted the Stephans and began to negotiate a price for the right of way.
When the negotiations broke down, the Stephans filed suit for damages, including punitives. They did not ask the court to order that the cable be removed from their property. (Three weeks before trial, their attorney sent a letter demanding the removal of the cable. The company immediately began the engineering work to plan the removal, but this was not completed before trial.) At trial, a jury awarded the Stephans $15,000 in compensatory and $5,000 in punitive damages. The company appealed only the punitive damage award.
Perhaps unsurprisingly, the Court today reverses the award, finding that Xspedius did nothing “in reckless disregard of the Stephans’ property rights.” The Court notes that the company immediately set out to rectify the problem as soon as it learned of its existence; and does not fail to observe that the Stephans sought only money, not removal of the allegedly offending line, in the suit. Punitive damages, the Court reaffirms today, are available only where there is misconduct, actual malice, or a conscious disregard of the rights of others. Finding no such evidence relating to Xspedius, the Court vacates the punitive damage award.
The Court today returns one appeal to the Court of Appeals of Virginia. The appeal in XL Specialty Insurance v. VDOT was originally filed in the Court of Appeals; that court found that the appeal should, in fact, be heard in the Supreme Court, and transferred the case pursuant to Code of Virginia §8.01-677.1. Today, the Supreme Court classifies the underlying proceeding as an “administrative provision for claims resolution” and returns the case to the Court of Appeals.
The issue here is whether VDOT is immune from liability in quasi-contract. XL issued a performance bond on two highway projects. When the contractor defaulted, XL stepped in and completed the projects. When it billed VDOT for finishing the work, the agency claimed that it was immune from such liability because it did not have a direct contractual relationship with XL. Today the Supreme Court holds that XL does not step into the original contractor’s shoes, and is thus not really in privity of contract with the agency. Final adjudication of the claim is thus postponed yet again.
The doctrine of governmental immunity has been unevenly spelled out in the Court’s body of caselaw, considering immunity claims in tort and contractual contexts. This is in no way a criticism of the decisions; it merely recognizes that the Court has had far more opportunities to decide immunity claims in tort cases. As such, the contours of the Commonwealth’s immunity from tort liability are fairly well defined, while immunity from contract liability remains comparatively unspecified. The Commonwealth evidently routinely asserts such immunity in contract claims, and the practitioner who brings a claim against the government must be careful to follow all the procedures for making claims pursuant to the applicable statutes. This opinion provides a useful guide on how to do that, within the context of the Court’s determination that XL’s appeal belongs in the Court of Appeals. The eventual resolution of this case by the Court of Appeals will be well worth watching, as it will probably provide much-needed guidance, even beyond the suretyship context of this case.
In addition to those noted above, the Court today affirms an award of damages for breach of contract in an auction case where the buyer backed out after submitting the high bid; the case is Forbes v. Rapp. The Court does find that certain expert testimony was erroneously admitted, but finds the error to be harmless.
The Court dismisses a complaint of judicial misconduct filed by the Judicial Inquiry and Review Commission against a Circuit Court judge in JIRC v. Peatross. The Commission’s charges arose out of the judge’s handling of three separate criminal proceedings. The charges are dismissed as the Court finds no clear and convincing evidence that the judge’s actions violated the Canons of Judicial Conduct. The opinion constitutes at best a mixed blessing for the judge, as it cites several legal errors he committed, and concludes that “some of his conduct did not exemplify the level of professionalism that judges in this Commonwealth should exhibit.” But as the Court notes, mere legal errors do not warrant censure or removal (if it did, there would be empty benches across the Commonwealth).
The Court also decides two attorney disciplinary appeals. It affirms a thirty-day license suspension in Pilli v. Virginia State Bar, and remands another, Barrett v. Virginia State Bar, for reconsideration after partially vacating the Disciplinary Board’s findings. Pilli arose out of the attorney’s intemperate pleading, in which he accused a judge of, among other things, lying. The attorney acknowledged that the pleading was written in frustration at the way a particular case had been handled. His contentions that the statements were (1) mere opinions, or alternatively (2) made on an objectively reasonable basis, fell on deaf ears before the Disciplinary Board. The Court’s ruling today affirms the Board’s finding that the comments violate the Rules of Professional Conduct.
The other discipline case, Barrett, stems from the attorney’s separation from his wife, who was also his legal secretary (here, as often, a troublesome combination). The wife took the couple’s six children and moved from the marital home in Virginia Beach to Grayson County. The lawyer wrote several e-mails to his estranged wife, urging her to return to him and telling her his view of how a divorce proceeding would be resolved unfavorably to her otherwise. For example, he suggested that the venue of the suit would be in Virginia Beach, and suggested that the divorce court would award custody of the children to him.
The Board found that the notes constituted the giving of advice to a person not represented by an attorney, other than merely the advice to secure counsel. It also relied upon letters sent to the wife’s attorney, threatening to bring disciplinary actions against the latter. While this latter aspect of the communications is found to have violated the Rules, the statements to the wife are held by the Court today not to be an ethical violation. In so finding, the Court notes that the messages are interspersed with the lawyer’s efforts at reconciliation and professions of love for his wife. After dismissing three aspects of the Board’s findings, the Court remands the proceeding for further consideration of an appropriate sanction against the attorney.