ANALYSIS OF FEBRUARY 27, 2009 SUPREME COURT OPINIONS[Posted February 27, 2009] As I sit here today, the sun in shining brightly into my window. It’s unseasonably warm for the middle of winter, as the weather forecast calls for a high of 70 degrees in Virginia Beach today. The daffodils are in bloom, and there’s a pleasant, light breeze. If you listen carefully, you might be able to hear a soft whimpering sound from my car, where my golf clubs are begging to be let out.
But today, the Supreme Court gives me 19 reasons to stay in the office, despite the magnificent weather. The court hands down that many published opinions, and decides three more appeals by order, this morning.
I admit it; I’m a fan of history. Accordingly, I eagerly awaited today’s ruling in State of Maine v. Adams , in which the court decides who gets to keep an original broadside copy of the Declaration of Independence.
Any history fan is going to love any judicial opinion in which the facts section begins, “In July 1776, after the Second Continental Congress approved the Declaration of Independence, . . .” Today’s ruling turns on whether a Virginian really owns the broadside he bought for nearly half a million bucks back in 2002. The State of Maine claimed that the document was a public record, so the Virginian filed a suit to quiet title. Such suits enable a party who claims to own property to conduct only one suit to establish that title, so he doesn’t have to respond to a series of a thousand claims. If anyone else wants to claim title, he has to appear in the case and assert his claim. Maine responded, and the game was on.
The court notes that, interestingly, any party who claims title has the burden of proof in such a suit. That’s different from most litigation, in which one party has the burden to show that he’s entitled to relief, and the other party can do nothing if the first party fails to meet that burden. But the law appends a useful tiebreaker: If one of the suitors is in possession, then he starts out with a presumption in his favor. The old saw that possession is nine points of the law (which was no doubt coined by a guy who had possession) actually has some application in modern jurisprudence.
Adams, the Virginian, had possession, so that made it Maine’s burden to prove that it had the superior title. Today, the Supreme Court agrees with the trial court that Maine didn’t carry that burden. The key ruling in the case is that the document wasn’t a public record, a defined by the laws of both states. If it is, the Maine has a point; you can’t go taking public documents out of government offices. But this document was printed by a private printer, at the direction of the Continental Congress, and was given to first one preacher, then another, for reading to their congregations. The second clergyman then gave it to a town clerk in Massachusetts (the part that later split off to form Maine). That clerk recorded it the old-fashioned way, by hand-copying the words into the town’s record book.
The court holds that the broadside isn’t a public document because it wasn’t created by a public official (remember, the printer was privately employed). The official record was the one the clerk hand-wrote into the town’s book; not the original from which he copied.
Maine forfeits several arguments relating to the statutory law of that state (the trial court had held that Maine’s 1973 statute defining public records did not have retroactive effect), because it didn’t assign error to the trial court’s ruling on that point. That forecloses review of that ruling, and also several others that would have stemmed from it. The court also holds that Maine had not proved that the copy as purloined; all the record indicated was that this copy was found in the home of a daughter of a man who had served as town clerk for over 40 years in the 19th and 20th Centuries. That makes the question of how it got into the daughter’s possession one of speculation. In the end, Adams’s presumption blossoms into a full ten points of the law.
I’ll append here my unashamed envy of Justice Keenan, who got to write the majority opinion, and Fairfax Judge Terry Ney (an outstanding former appellate attorney), who decided the case in the first place.
For purely appellate lawyers, this is a very big day. In four-plus years of publishing commentary on Supreme Court rulings, this is, to my knowledge, the first time I have captioned a section, “Appellate jurisdiction.” The court issues two opinions that deal primarily with its jurisdiction to hear a given appeal. I could classify the two cases according to their primary case areas (taxation and arbitration), but as these decisions say a great deal about a subject that is of critical importance to appellate lawyers across the Commonwealth, I’ll group them together. The first case is, from the standpoint of appellate practice, of enormous importance.
Comcast of Chesterfield v. Chesterfield County is a challenge to the imposition of business personal property taxes. Comcast protested the county’s decision to treat certain electronic property as tangible (and therefore taxable) instead of intangible (which would not be taxed). The county propounded discovery requests to Comcast, asking it to list details about every item of property at issue. Perhaps sensing that this would take a significant expenditure of time and effort to prepare a full response to that request, Comcast replied that it didn’t disagree with the county’s valuation of the property; all it challenged was the determination of its status as taxable.
Evaluating the county’s motion to compel, the trial court decided that the most judicially economical thing to do would be to bifurcate the case, with the first phase being devoted to the question of whether the property was properly classified. After all, if it determined that the property really was intangible, then it wouldn’t be taxable, and the valuation issue would go away.
After a hearing on the first phase of the case, the trial court ruled in favor of the county, finding that the property was, indeed, tangible and therefore taxable. It entered an order to that effect. At that point, the county again pressed its discovery request. Instead of replying, Comcast noted an appeal of the order on the classification ruling.
Appellate geeks (and I use the term lovingly, since I’m one of them) know well that the usual trigger for appellate jurisdiction is a final order. And let’s face it; this isn’t a final order, not by a long shot. Finality is measured by (and this is a very simplified rule of thumb) whether the trial court still has anything left to do. If the only thing the trial court still has to do is make sure the parties obey the order, then the order is final. If the court has to do other things, then it’s not final. At the time the notice of appeal was filed, the trial court was waiting on briefs from the parties before adjudicating the motion to compel; it obviously had lots more to do in the case.
But Comcast’s lawyers scoured the appellate jurisdiction statute and found a gleam of hope. I’ll try to break down the statute in a way that makes easy sense of the issue here.
Generally, the Supreme Court has jurisdiction where there is (1) a judgment in certain enumerated controversies, or (3) “a final judgment in any other civil case.” (You’ll notice that I skipped 2, which isn’t relevant to this discussion.) That’s from the finality statute. The enumerated controversies in part (1) include (f) “The right of . . . a county . . . to levy tolls or taxes,” and (g) “The construction of any statute, ordinance, or county proceeding imposing taxes.”
Comcast accordingly pointed to the absence of the word final from part (1). It’s there in part (3), of course, and this is the most common basis for appellate jurisdiction. But Comcast contended that it didn’t need a final order if it had a controversy in one of the enumerated case areas in part (1).
All this matters a great deal to appellate lawyers, of course. In analyzing this appeal, the Supreme Court starts with the question of whether it has jurisdiction, as it must. The court’s decision on this issue is that the word final might as well be in part (1), too, because in dismissing the appeal, it removes all doubt that it will only hear appeals from final orders, even in the enumerated classes of cases. (Note that my analysis here doesn’t address the separate procedure for certification of interlocutory appeals under Code § 8.01-670.1. Those are still permissible, but they’re awfully hard to get. That section isn’t at issue in this appeal, and I won’t mention it again in this discussion.)
On its face, it looks like Comcast has a point. The General Assembly used the word final in part (3), so its absence from part (1) must mean something. No it doesn’t, the court rules today. Otherwise we’re going to start getting appeals from denials of continuances and orders compelling discovery, just because they happen to arise in a tax case. Trust me; that isn’t going to happen if the Supreme Court has any say in the matter. The appeal is accordingly dismissed as improvidently awarded. That means that Comcast can still appeal at the end of the case – it hasn’t lost – but it’ll probably have to comb through its assets and pony up the information on the property.
The second jurisdiction issue isn’t quite as momentous as Comcast, but it slams the door just as emphatically on a party seeking appellate review. The case is Seguin v. Northrop Grumman , and includes an interesting twist based on the language of a recent Supreme Court opinion.
Seguin worked for Northrop Grumman for some time before the company decided to impose a mandatory arbitration clause on all of its employees. The company sent an e-mail to each employee, advising him or her of the new policy, and saying, in essence, “By showing up for work tomorrow, you’re agreeing to these terms.” Seguin didn’t think much of the idea of a contract of adhesion being forced down her throat like that. She kept coming to work, but she never accepted the terms of the e-mail.
I’m going to stop right here and say that this presents an interesting philosophical issue. Parties are always free to contract among themselves to things that aren’t provided by law. The question of whether one party to an existing relationship can impose terms upon the other by mandate like this, saying, “Take it or walk,” has probably been litigated elsewhere. In an at-will employment state like Virginia, the discussion might well be academic; I suspect an employer could walk desk to desk, directing employees to sign or else clean out their desks. But this approach seems a bit different.
When Seguin sued Northrop Grumman for defamation, the company moved the court to compel arbitration – just like it says in the company policy. Seguin responded that she had never agreed to throw away her right to trial by jury in favor of an arbitrator (especially since the arbitrator would likely be selected by the company). The first order of business for the trial court, accordingly, was to decide whether the dispute had to be arbitrated.
After a hearing, the court ruled in favor of the employer; it ordered the case to be arbitrated. Seguin sought to appeal that ruling. Here’s where there’s an anomaly between caselaw and statute.
The employer relied on the Uniform Arbitration Act, which Virginia adopted in 1986. One provision in that act allows appeals from orders refusing a request to compel arbitration, and from orders staying arbitration, but not from orders compelling arbitration. That’s right; it’s a one-way street. The party who wants to arbitrate can seek review if he loses, but the party seeking to avoid arbitration can’t appeal if she loses.
But Seguin found hope in the language of a recent Supreme Court decision. In Amchem Products v. Asbestos Cases Plaintiffs, 264 Va. 89 (2002), the court ruled that a provision in the Arbitration Act “confers upon this Court jurisdiction to review a circuit court’s order that denies or compels arbitration.”
“Or compels”? Now we’re getting somewhere, Seguin figured. Citing this case, she urged the Supreme Court to consider the case and reverse the trial judge’s decision that would force her into the clutches of an arbitrator.
In evaluating these competing arguments, the court today notes that the lower court’s order in Amchem was to refuse to compel arbitration. It then tacitly acknowledges that its use of the phrase or compel in 2002 might have been ill-advised, particularly in view of the statute. It accordingly decides that that language was dictum, and not binding on the court.
Seguin also argues that the order compelling arbitration is final and therefore independently appealable, but the court is having none of that. As you can imagine from the discussion of Comcast, this one simply isn’t final. The trial court still has the ability to vacate, modify, or correct an arbitral award. So it’s off to the arbitrator for the parties.
My sense is that this case will be of enormous importance to attorneys who handle disputes involving matters where arbitration is fairly commonplace, such as employment law or disputes with credit card companies. (Do you ever read the notices you get from your credit card company, written in tiny 4-point type? Probably not. Well, trust me; you have agreed to arbitrate any disputes with your card issuer.) And with the growth of arbitration agreements into other areas, pushed by businesses that perceive that arbitration offers a low-cost alternative to litigation (or, arbitration opponents will contend, businesses that perceive that any arbitral award will be far lower than a jury verdict), this case will only grow in importance over time.
Does anyone out there still think, despite my preachings here, that the Supreme Court doesn’t pay attention to small claims? Haven’t I shown you that the court will grant a wit in any case, regardless of size, if it thinks that there may be reversible error? Perhaps the recent case of Delta Star v. Michael’s Carpet World, 276 Va. 524 (2008), involving just $2,500, didn’t convince you?
Okay; here’s Exhibit 2: Helton v. Phillip A. Glick Plumbing involves a claim of just under $1,700. If we get any lower than this, we’ll start bumping up against the court’s statutory jurisdiction limit of $500.
This case actually addresses a practice that may be widespread, and is thus a great lesson in negotiable instruments. Lest you be scared off by the invocation of such profane language from the UCC, rest assured; this negotiable instrument is a plain old check. Glick Plumbing did some work for Helton, but Helton wasn’t satisfied with some of what he saw. After some initial fussing over the work and the payment, Helton sent Glick a check for $1,300, which was $1,686.51 less than what the bill was for. He wrote a cover letter, saying that the payment was reduced because of the perceived deficiencies, and that this was all the plumbing company was getting out of him. The check contained the following ominous memo: “Paid in Full.”
The company got the check and the letter, but it wasn’t about to settle for anything less than 100¢ on the dollar. It crossed out the words Paid in Full, substituted “Balance Due $1,686.51” in its place, and blithely cashed the check.
Virginia law is settled in at least one respect: If the company had cashed the check without altering the “Paid in Full” language, then it would be out of luck. Cashing a check that’s marked like that amounts to acceptance of the finality language, and an accord and satisfaction of the debt. The question to be decided today is whether you can escape that dead end by crossing out the language on the check.
Well, no; you can’t. So the court rules today in reversing the judgment of the trial court. Today’s opinion notes that there has been a division of authority on this point, and that Virginia joins the majority of courts in holding that one cannot unilaterally defeat this finality language by what I’ll call the Sharpie Strategy. Basically, there are three elements of this accord and satisfaction defense. (1) The obligor tenders the check in good faith as full satisfaction of the underlying debt; (2) the amount of the debt was “unliquidated or subject to a bona fide dispute”; and (3) the payee cashed it. You’ll note that there’s no subpart to item #3 about erasing the finality language. Since all three of these conditions apply, there has been an accord and satisfaction, and the homeowner gets to keep his $1,700.
Last year the Court of Appeals affirmed a burglary conviction despite the fact that the owner of the purported dwelling house lived in another city, and no one had slept in it for several days. Today, the Supreme Court affirms that ruing, albeit on other reasoning. The case is Giles v. Commonwealth.
The house belonged to a man who inherited it from his mother. He came back to the old homestead on occasion, including one weekend about ten days before Giles got there and broke in.
You’ll notice that I didn’t say “allegedly broke in.” That’s because the gendarmes got the right guy; at least his “participation in the break in is not in dispute,” today’s ruling assures us. The question is whether an empty building like this is a dwelling house. (Statutory burglary, by the terms of the statute, necessarily involves dwelling houses.) Giles argued that since no one was around, and since any occupation of the property was sporadic at best, it was improper to consider this as a dwelling house.
The Court of Appeals affirmed on the grounds that the occupation of the house was frequent enough to justify a conclusion that it was indeed a dwelling house. It was available for “immediate and rapid habitation,” and the owner had an intention to return there from time to time.
The Supreme Court gets to the same destination today, but it uses a different AAA Triptik to get there. The court eschews any analysis of what it calls a “temporal aspect of the habitation,” and focuses instead on what the building is normally used for. In this case, the building was used to house humans, and that, the court finds, was its character. It doesn’t matter how often people actually occupy it or sleep there. The court concludes, with language that will probably find its way into all future jury instructions in burglary cases, that “a dwelling house is a house that one uses for habitation, as opposed to another purpose.”
This house exhibited all of the qualities one would normally associate with habitation. Witness the beds, the fully-stocked kitchen; the working plumbing and electrical facilities; even the toilet bowl cleaner. Accordingly, Giles broke into a dwelling house, so he’s a burglar now, and gets to spend 76 months in another kind of dwelling house, this one lovingly maintained by the Board of Corrections.
Before I leave this topic, I’ll mention that the Supreme Court applied a time-tested rule to decide this case on a ground that is different from the one applied by the Court of Appeals. That’s the “right for the wrong reason” rule, which provides that an appellate court can affirm a judgment on a different ground than the one utilized by the lower court. In my view, it is entirely appropriate for the court to do so, here and in other cases. Here, it makes sense for a dwelling house to be gauged not by how often it’s used but by the purpose for which it’s used. And in general, it’s judicially economical for the courts to affirm for any reason that’s apparent in the record.
But lest my appellee readers get complacent, I’ll tell you that things don’t always work that way. Sometimes, the court has a nasty surprise for appellees as it rules that the appellee must assign error to a lower court’s failure to rule in its favor on an alternate ground, or else that argument is waived. This waiver rule is the evil twin of the right for the wrong reason rule, and can have a case-dispositive effect. (For a recent example, see last October’s decision in Virginia Baptist Homes v. Botetourt County, 276 Va. 656 (2008), in which the court found an otherwise meritorious alternative ground to have been defaulted by the appellee county, since the trial court hadn’t felt it necessary to reach all of the issues before entering judgment in favor of the county.) This “right for the wrong reason” doctrine therefore is not a safe haven on which you can rely, because there’s no way to know which of these two rules the court will use in any given event.
As I understand it, the 2009 legislative session ends today, so it’ll be too late for anyone to put together corrective legislation for Greene v. Commonwealth. But as the fans of the Brooklyn Dodgers used to say, “Just wait’ll next year!”
Greene got a subpoena to show up in the offices of the Department of Charitable Gaming to answer questions (and produce documents) relating to an athletic league on the Peninsula. She didn’t show. But instead of issuing a rule to show cause, instead of even finding her in contempt, the Department decided to make an example of her. (So I extrapolate from the opinion today; this is not the wording of the Department.) It got her indicted for a Class 1 misdemeanor for disregarding the subpoena.
You see, the gaming laws empower the Department to issue subpoenas, and they also make it a misdemeanor to violate the provisions of those laws. Greene got a subpoena, and she disobeyed it; what’s the big deal here? The trial court found none, and convicted her. It then went on to sentence her to six months in jail (all of which was Charitably suspended) and fined her $500. The Court of Appeals affirmed without a published opinion. But the Supreme Court granted a writ, and today it reverses and dismisses the indictment.
In case you’re wondering what could possibly have gone wrong here, it’s a simple omission. As stated above, the gaming laws authorize the issuance of subpoenas, and they make it a crime to violate the gaming laws. But somehow, nowhere do they make it a crime to disobey a subpoena. That provision, which does appear in other areas of the law (the opinion lists examples, including blowing off an ABC Board subpoena, which is specifically made a crime), doesn’t appear in the gaming law article of the Code, so Greene didn’t commit a crime. She may be in contempt, the opinion notes, but she isn’t a crook.
I bet someone in the Attorney General’s Office is already working on the draft of legislation that will be pre-filed for the 2010 session . . .
When is an order not an order? We get one answer today in Mwangi v. Commonwealth, a prosecution for third-offense DUI. Once upon a time, I prosecuted those charges, and I recall well the obligation the prosecution has to produce sufficient evidence of the prior convictions. One of Mwangi’s priors was from an Alexandria GDC proceeding. The summons in that case showed that Mwangi showed up in court with a lawyer, pleaded guilty, and was found guilty and sentenced. There was only one thing missing: A judge’s signature.
And that, the Supreme Court rules today, is enough to invalidate the whole thing. In courts not of record, the fact of conviction is proved by the judge’s signature. No signature, no conviction. The Commonwealth argued that the DMV transcript, which showed the Alexandria conviction quite plainly, should be enough to establish the prior. This argument backfires when the court rules that the defective GDC copy actually rebuts the transcript. The court holds that the Commonwealth hasn’t proved this element of its case beyond a reasonable doubt, so the case is sent back to circuit court for a new trial, if the Commonwealth still wants to pursue it, on the lesser charge of DUI-2nd.
Practitioners should note here that if there is a faulty copy of the summons or other official record of a conviction, the prosecution can’t cure that by reference to the DMV transcript. That’s because the DMV bases its records (including your driver’s transcript) on court documents. So if the court document doesn’t establish the prior, the DMV transcript won’t be of any use to correct that.
There are several goodies in Murphy v. Commonwealth, which relates to the scope of immunity granted by a statute that authorizes the Commonwealth to force witnesses to testify. Unfortunately for Murphy, none of those goodies are for him; his conviction is affirmed.
While I dearly love the mountains, I do feel an occasional pang of sorrow for our western Virginia denizens who have never seen the engineering marvel that is the Chesapeake Bay Bridge-Tunnel. It connects Tidewater with Virginia’s Eastern Shore, and aside from being a technical wonder, it’s an extraordinarily beautiful drive, with the Atlantic Ocean to the east and the Chesapeake Bay to the west. I earnestly recommend a trip around sunrise or sunset, which provides incredibly breathtaking scenery.
Murphy may not have noticed any of that scenery as he approached the bridge-tunnel from the north; he may have been too concerned about the 15 or so pounds of marijuana he and a pal had in the car. A state trooper at the toll plaza on the Eastern Shore side noticed the smell of marijuana and directed Murphy to pull over, after which a search of the car proved fruitful from a law enforcement perspective.
I can’t resist a slight digression here. As my loyal readers know well, I dearly love stupid-criminal stories. I’d like to think that somewhere, someone is compiling a book along the lines of The Darwin Awards (which involves only fatalities; not ordinary crooks) in which we get to see the dumb things crooks do in order to get caught. If such a book really is in the works, I offer this case, along with the following memo to crooks: When transporting leafy vegetative controlled substances through a known law enforcement check point (there are usually troopers at the toll plaza), don’t sample the merchandise!!
Back to our regular programming. Police charged both Murphy and his pal with possession with intent to distribute and with transporting more than five pounds of the stuff. Murphy, being an honorable man, decided not to fight the prosecution; he decided to own up to his crime, so he agreed to plead guilty to possession with intent. Of course, he simultaneously agreed to ratfink out on his pal, and testify against him. Murphy signed a plea deal that provided that upon his testimony, he’d plead to possession, and the transportation charge would be dismissed.
Except that deal wasn’t quite good enough for Murphy. After he testified in the preliminary hearing, he filed a motion to dismiss both charges against him. He relied on the statute that empowers the Commonwealth to compel testimony in criminal cases, even over the invocation of Fifth Amendment rights, by giving those witnesses use and transactional immunity. The statute applies to testimony that is “called for by the trial judge or court trying the case, or by the attorney for the Commonwealth.” All those conditions applied to him, Murphy insisted, so he was allowed by state statute to walk.
The trial judge over on the Eastern Shore was unimpressed; he held Murphy to his written agreement and sentenced him for the possession charge. (Theoretically, I suppose, he could have found the deal to be rescinded by Murphy, and thereby convict him of both charges. But I know this judge; he’s a kind man and no doubt sent Murphy off to jail with a fatherly word, adding a knowing smile only when Murphy was out of range.)
The Court of Appeals gave Murphy a small victory, holding that the language of the statute does not require that the testimony be compelled in order to trigger the immunity. So far, things are looking good. But the Court tooketh away that small victory when it ruled that his statutory immunity was implicitly waived when he took the stand.
Murphy appealed, but so did the Commonwealth; that ruling about non-compelled testimony could be real trouble down the line. Today, the Supreme Court reverses that “internal” holding, and thereby affirms the judgment. It finds that the immunity statute doesn’t apply to testimony that is given freely; it only kicks in once the prosecutor forces the witness to testify, usually by sending him an involuntary invitation to court. Accordingly, since Murphy’s testimony was the product of his “exercise of choice or free will,” he gets no free pass.
This isn’t the only instance in which Virginia law tends to punish those who act voluntarily. For example, in the field of civil procedure, a defendant can make a special appearance to challenge process, or the service thereof. If he makes a general appearance, he waives any objection relating to process. A statute provides that a party who wants to make such a special appearance can do that at the same time he files a substantive objection, without waiving his special-appearance objection. But the Supreme Court has held that this statute doesn’t apply to defendants who voluntarily make an appearance, without ever having been served. Gilpin v. Joyce, 257 Va. 579 (1999).
There are a couple of interesting side notes here. The court refers to the US Supreme Court case that required a grant of immunity in order to overcome a Fifth Amendment claim – Kastigar v. US, 406 US 441 (1972). In that case, the high court required that the witness be granted use immunity (preventing the government from using the witness’s testimony to prosecute him) in order to compel his testimony. That isn’t as strong as the other kind of immunity – transactional immunity, which assures a witness that he can never be prosecuted for the particular crime about which he testifies. Despite the holding in Kastigar that use immunity is all that’s required, the court notes today that the Virginia statute grants both types of immunity to a compelled witness.
Today’s opinion doesn’t state whether Murphy got a subpoena to appear in court, or whether he just walked into the courthouse in Eastville. I suppose he might have made an argument that the issuance of a subpoena to even a willing witness constitutes compelled testimony, but the opinion doesn’t discuss this. In light of today’s holding, I doubt such an argument would be productive in future cases.
In the end, Murphy got exactly what he bargained for, which I suppose can only be so bad. Alas, he probably never got that scenic view of the ocean and the bay, as the trooper unquestionably loaded him into his police car at the toll plaza, then headed north, off to the Eastville jail.
Last year the Court of Appeals affirmed a criminal conviction in Thompson v. Commonwealth, involving the question of whether something called a butterfly knife was a “weapon of like kind” to a dirk, dagger, or Bowie knife. Thompson is a convicted felon who was carrying such a knife when a police officer frisked him in the course of a Terry stop. Today, the Supreme Court reverses, holding that while this knife is indeed a weapon, it is not “of like kind” to the aforementioned types of blades. You can compare this description of a butterfly knife with those types, and come to the same conclusion as did the justices today. (A dirk, by the way, is described in the opinion as a short sword.)
In all, today’s tally of published opinions reads: 19 decisions; 0 dissents. You have to reach into the one published order to find any disagreement among the justices. But when you do that, you find quite a tussle in Rudolph v. Commonwealth, which involves a suppression motion in a marijuana case.
This one occurred in January 2006 right here in Virginia Beach, probably about a mile and a half as the crow flies from where I’m sitting right now, typing up this analysis. The Cypress Point Plaza Shopping Center had experienced a number of break-ins and robberies, and a police officer on patrol spotted a car parked behind a gas station at the center. It was 8 pm – hardly the middle of the night, but in January it was definitely dark. The car wasn’t burning headlights. While there was a nearby side door to the gas station’s convenience store, in the officer’s experience that door was seldom used by customers, especially when the front parking lot was empty, as was the case on this evening.
The officer decided to check on the car. He drove near and saw that it was parked across the marked lines for parking – perpendicular to the way cars would normally be parked in those spaces. He also saw two men in the car. The order then describes what the officer saw:
“In the few seconds he observed the parked vehicle from about a car length and a half away from Rudolph’s vehicle, [Officer] Latchman saw Rudolph moving around in the vehicle and saw Rudolph’s head ‘[go] down a couple of times and back up.’ Latchman testified that Rudolph appeared to be looking or reaching for something inside the vehicle. Latchman decided to drive his marked police vehicle around the gas station to ‘make sure everything was fine.’ In doing so, he did not observe anything unusual. While Latchman was circling around the gas station, Rudolph began to drive away.”
The officer decided to find out what was up. He stopped the car, found Rudolph to be the driver, and found marijuana in the footwell in front of the driver’s seat.
As I read through this recitation just now, I sorted through the several factors listed, mentally ticking them off as I went along. Car parked near a side door – nothing inherently suspicious about that. Parked across painted lines – maybe boorish, especially if there had been heavy demand for parking spaces, but not criminal. Offense occurred at 8 pm at night – naaah; if it were 2:30 am, I might be a bit more suspicious, but this isn’t exactly the wee hours. History of crimes in the shopping center – c’mon; if that’s articulable suspicion, then everyone who comes to shop there can be detained. Driver apparently looking around in the car for something – he might very well be lost, and looking around for a street map, or a cell phone to call for directions. (Better to do that while parked than while tooling down the highway at night. I give the driver extra credit points for that.) Leaves when he sees the officer – you’re allowed to do that, aren’t you?
I accordingly had a series of non-factors, so I wasn’t surprised to see that the majority today reverses the conviction, holding that the facts observed by the officer weren’t sufficient to justify a Terry stop. The court remands to permit Rudolph to decide whether to withdraw his conditional guilty plea. (Trust me on this: He will.)
I then noted that the dissent was authored by Justice Lemons (joined by Justice Kinser and Senior Justice Carrico). I accordingly sat back with pleasant anticipation to see what could be the matter with the majority’s eminently sensible conclusion. (It was eminently sensible in large part because I was reaching the same conclusion along with them, of course.) Justice Lemons is a very persuasive writer, and I always try to read these things with an open mind . . .
Well, I won’t say that he blew my mind, but his argument emphatically woke me up. He cites US Supreme Court caselaw that observes what a drastic remedy the exclusionary rule is; the high court just this year reemphasized that the application of that rule “has always been our last resort, not our first impulse,” in addressing challenged evidence. He then posits that the rule is best suited to situations in which police action is “pernicious” or arbitrary, not those in which an officer acted plausibly in ambiguous circumstances. Terry’s requirement of a reasonable suspicion is not as daunting as the probable cause required for an arrest, he notes.
The dissent then recites the several arguably suspicious circumstances I had more or less summarily dismissed in my stroll through the majority opinion. Having already considered these factors, I was ready to chalk this dissent up to a simple dispute over degrees of suspicion. And then I saw the quote from US v. Arvizu, 534 US 266, 274-75 (2002):
“Terry, however, precludes this sort of divide-and-conquer analysis. The officer in Terry observed the petitioner and his companions repeatedly walk back and forth, look into a store window, and confer with one another. Although each of the series of acts was ‘perhaps innocent in itself,’ we held that, taken together, they ‘warranted further investigation.’ 392 U.S. at 22. See also Sokolow [, 409 U.S.] at 9 (holding that factors which by themselves were ‘quite consistent with innocent travel’ collectively amounted to reasonable suspicion).”
(“Divide-and-conquer”? Isn’t that exactly what I had been doing while pondering these non-suspicious factors?)
Hmmm. Doesn’t this pretty much cover Rudolph’s situation? The facts aren’t enough to arrest him, to be sure. But under this fairly permissive standard, shouldn’t a police officer be permitted to at least ask a brief question? After reading the dissent (and re-reading the majority; I always strive to be fair-minded), I think the answer is yes.
Justice Lemons concludes by noting a subtle variation in the language of Terry stop caselaw, which originally permitted a stop where an officer could reasonably believe that “criminal activity may be afoot.” The subtle shift is reflected in a tendency of courts, including the SCV and the Big Supremes, to mix in the phrase, “criminal activity is afoot.” All that Terry required was this suspicion of possible criminal activity, given the minimally intrusive nature of a Terry stop.
Will this case get further review? It’s emphatically foreseeable that the Attorney General may get out his map of I-95 and look north. At that point, another very persuasive writer, Virginia Solicitor General Steve McCullough, may get an opportunity to convince at least five Robes that this stop was proper.
To its great credit, the court acknowledges in the course of Cooper v. Commonwealth that its previous holdings on the subject of the alibi defense have not been a model of clarity. At various times, the court has ruled on virtually indistinguishable fact patterns that an instruction on alibi either was wholly inappropriate or was absolutely required. There’s a model jury instruction that nobly attempts to reconcile all these divergent holdings, but prosecutors and defense counsel alike probably felt little confidence in the state of the law on this point.
Today, the court crafts a definitive statement of the requirements for alibi instructions. In doing so, it holds first that alibi (which literally means “elsewhere” in Latin) is, after all, a defense to a criminal charge. Previous opinions had stated that it was not truly a defense, but “a mere fact shown in rebuttal of the State’s evidence.” No more. Next, the court backs off from a prior holding that an alibi instruction should not be given where the other instructions adequately cover things like presumption of innocence and reasonable doubt. It observes that the defendant is required by subparagraph (c)(2) of Rule 3A:11 to advise the prosecution of his intent to prove alibi. That requirement “place[s] alibi on a different footing from other evidence in the case,” making a separate instruction appropriate.
But the court goes even further than that in reversing Cooper’s conviction. Today the court crafts an inflexible rule that if there is evidence in the case “that the accused was elsewhere than at the scene of the crime at the exact time or for the entire period during which it was or could have been committed,” then the defendant is entitled to an alibi instruction. End of discussion; no judicial discretion allowed.
Based on my conversations with them, I believe that trial judges like solid, no-exceptions rules like this. It makes their job easier, and helps them to avoid seeing the three words they dread most: “Reversed and remanded.” (No judge wants to try a case twice. If it were up to trial judges, the word remanded would be seared right out of the American lexicon and banished to one of the inner circles of perdition.)
If you’re a prosecutor, or perhaps a judge on the Court of Appeals, you might be tempted to roll your eyes at this opinion and muse, “There they go again, changing the law as they go.” But on two levels, I heartily approve of this ruling. First and foremost, it makes sense to require this instruction, which tells jurors that if the alibi evidence shakes their confidence in the defendant’s guilt, then he’s entitled to an acquittal. (The court rejects any suggestion that the defendant has to prove alibi by any particular degree of proof, such as a preponderance.) I believe that this should have been the rule all along. And second, I’ll always applaud any decision that formally settles an unsettled area of the law, where the court has sent mixed signals in the past. That promotes predictability and cuts down on the need for new trials, both of which are good things. And I’m not even a trial judge . . .
Thus ends what has to be regarded as a lost day for the Attorney General; out of seven criminal rulings today, the prosecutors lost five, and even one of the affirmances was tempered somewhat (Giles was affirmed, albeit on different reasoning).
Four years ago, the Supreme Court decided Nerri v. Adu-Gyamfi, 270 Va. 28 (2005), in which it held that a suit that is signed by a lawyer not in good standing is a legal nullity, and could not be nonsuited. Two years later, the court handed down Harmon v. Sadjadi, 273 Va. 184 (2007), holding that a wrongful death suit filed by a person who qualified as a personal representative in West Virginia, but not in Virginia, was also a nullity and could not be nonsuited. From these two cases, today’s ruling in Johnston Memorial Hospital v. Bazemore inexorably springs.
Bazemore’s husband died in March 2005 while he was a patient at Johnston Memorial. She filed a wrongful death suit one week short of two years later, but she had never formally qualified as his personal representative during the intervening time. The hospital noticed the defect and moved to abate the action, since wrongful death suits must be brought in the name of the personal rep. When word of this problem reached her attorney, Bazemore qualified as administratrix of her husband’s estate in August 2007, six months after suit was filed. The attorney then promptly moved for a nonsuit, figuring that he could refile now that his client had qualified.
The hospital opposed the nonsuit motion, but the trial court, heeding the admonition that a plaintiff has an absolute statutory right to one nonsuit, granted it. The hospital appealed.
First question: Can you appeal the grant of a nonsuit? Ordinarily, no; a nonsuit order isn’t a final order, and doesn’t terminate the litigation by adjudicating the claims presented. All it does is withdraw the pending suit. But if there is an assertion that a nonsuit has been granted without authority, the Supreme Court will entertain an appeal – McManama v. Plunk, 250 Va. 27 (1995) – and that’s what happens here.
Citing Nerri and Harmon, the court first rules that the suit by Bazemore was, indeed, a nullity, since the named plaintiff, “Wanda Bazemore, Administratrix of the Estate of David Gray Bazemore, Deceased,” was not a legal entity. It then reaffirms the holding of the two earlier cases that a legal nullity cannot be nonsuited. The court thus reverses the judgment and dismisses the action. As a practical effect, this ends any hope that Bazemore may have had of recovering against the hospital, since the statute of limitations expired shortly after she filed the fatally defective action.
Sexually violent predators
The relatively recent Sexually Violent Predators Act has produced a spate of appellate decisions involving the initial determination of whether to confine an inmate; now we’re starting to see appeals involving the required annual status reviews. The Supreme Court gave us our first such decision by an unpublished order earlier this month, in Smith v. Commonwealth. Today the court adds another, this one published – Lotz v. Commonwealth.
There are two issues in today’s ruling, but in my view one of those is fairly ordinary; the other one provides the reason why this one was published. At the review hearing, both sides evidently agreed that Lotz still needed treatment. The Commonwealth presented an expert who opined that Lotz wasn’t well-suited to conditional release (for outpatient treatment of his condition). Lotz countered with an expert of his own, who stated that this conditional release would be perfectly appropriate. The trial court evaluated the two experts’ testimony and found the Commonwealth’s expert to be more persuasive. The court today affirms that ruling on well-established principles of appellate deference to trial courts’ credibility decisions.
The precedent-setting ruling relates to the reports of Lotz’s medical evaluations. When the trial court initially received the records, they were sealed by court order. But during the trial, they were admitted into evidence, for obvious reasons; they were generated in the first place with the intention that the judge would read them. Lotz asked the judge to re-seal them at the conclusion of the case, citing the Virginia statute relating to privacy of medical records (which, as I understand it, roughly parallels the federal HIPAA statute). The judge refused to do that.
Today, the Supreme Court affirms. It notes that the privacy statute begins with a caveat: “except when permitted or required by this section or by other provisions of state law . . .” It then finds that an “other provision” of state law requires that the reports be given to the court. That’s a required disclosure, so the prefatory exemption in the privacy statute means that privacy isn’t mandated.
Next the court turns to last year’s decision in Perreault v. The Free-Lance Star, 276 Va. 375 (2008), in which it held that open-government laws require that court records be open to the public, absent compelling reasons for sealing them. In Perreault, the court noted that an abstract risk to one’s reputation isn’t enough to overcome this strong presumption. And neither does Lotz here; the court rules that he has not provided a satisfactory reason for re-sealing the records, now that they’re in evidence.
This ruling can have a material long-term effect. Lotz is just 23 years old, and it’s foreseeable that he could be rehabilitated by the Commonwealth’s treatment efforts (though judging from the factual description in today’s opinion, he still has a ways to go). If these records are open to public inspection, then the probability of his returning to any sort of normalcy later in life, even after a successful course of treatment, look dim. Of course, the fact that material parts of his history are now recited in a published Supreme Court opinion probably makes any concern about the trial court’s records superfluous.
Limited liability companies
Back in the medieval era, when I was in law school, mulitparty business organizations were either corporations or partnerships. In 1991, the General Assembly authorized a new type of entity – the limited liability company – that offered the protection of a corporation without all the formal paperwork hassles. Since then, a great many companies have been organized as these “corporation lite” entities. Today the Supreme Court gives us two opinions relating to that corporate structure.
The first of these is Remora Investments v. Orr. In the spirit of simplicity that engendered LLC’s, here are the “facts lite”:
A northern Virginia LLC realized $1.4 million in proceeds from the sale of a real parcel in 2003. The manager plunked the funds into an investment account, but did not distribute them to the members (including himself, since he owned a small piece of the corporate pie).
The majority owner of the LLC was yet another LLC (for simplicity’s sake, I’ll call this new entity the parent, and the first LLC the subsidiary). The parent complained that the manager hadn’t dealt out the money, but was just sitting on it. Three months after the closing, with the proceeds still sitting in an account, the parent filed suit against the manager; the suit (after a couple of amendments) sought dissolution of the subsidiary, an accounting, and damages for breach of fiduciary duties.
A commissioner in chancery recommended that the parent’s relief be granted, including the damages. But the trial court was of another mind; it ruled that the parent couldn’t file this suit in its own name, but was required to file a derivative action in the name of the subsidiary. In effect, it ruled that the only party with standing to sue the manager of an LLC for breach of fiduciary duty, is the LLC, since that’s the entity to which he owes the duty.
The parent appealed from this disappointing result, but it finds no succor in Richmond. The Supreme Court affirms, finding that, indeed, only the LLC has standing to file such a suit. The court notes that under general corporation law, a director owes his duties to the entity, and the same is true of a manager of an LLC. In contrast, the partnership statutes provide that partners owe duties to the partnership and to the other partners. In this appeal, the parent was asking to be treated as a partnership instead of as a company.
Before closing, the court notes that it would be possible for the LLC to provide for direct actions by members against the manager; all they have to do is build that provision into the operating agreement. But that hadn’t happened here, so the parent goes away more or les empty-handed. (I added the “more or less” part because the opinion states that the manager distributed proceeds roughly two years after the initial sale, so the parent doesn’t exactly come away penniless.)
There’s a closely related legal question in the other LLC case decided today, Luria v. Westbriar Condo Unit Owners Association. There, the issue is whether the manager of an LLC owes a fiduciary duty to third-party creditors. After seeing the result in Remora Investments, you’d think that the answer would be no. Eventually, the answer may be no, but the court doesn’t specifically decide this question today.
Luria is a real estate developer who had big dreams. He envisioned a large condominium complex up in Fairfax, with four magnificent buildings and over 200 units in all. Using a series of three entities, two of which were LLC’s, he started construction in 1996.
The exterior of the buildings was clad in a sort of artificial stucco known by the acronym EIFS –
I’m going to pause here while all of my readers who handle construction claims catch their breath. You see, they all sucked wind as soon as they saw that dreaded acronym, which has caused so much heartache for so many building owners, and has provided ongoing employment for baby lawyers across the southeast. For the rest of you, an External Insulation and Finish System is, if installed perfectly and never damaged, a truly outstanding protection against moisture intrusion. It is impervious to water, and keeps out all of the moisture that might otherwise cause devastating wood rot.
Unfortunately, if it’s installed imperfectly, so that moisture can leak in, it is equally outstanding at keeping that moisture sealed in, where it silently destroys a building’s structure and eventually the owner’s bank account. That’s where the baby lawyers come in, propounding massive discovery requests and sifting through mountain ranges of documents to assemble claims against the manufacturers, distributors, and installers of the product.
In 1999, the project architect sent a letter to Luria, telling him that the EIFS needed some caulking and sealing, to prevent water intrusion. So far, no big deal. He followed that up with another letter the next year; this letter also suggested that Luria hire an engineer to assess the waterproofing qualities of the EIFS on the buildings.
Luria didn’t do those things. Instead, according to today’s opinion, he was too busy transferring money out of the LLC’s and into his own bank accounts. Meanwhile, in 2002, control of the condo association finally transferred from the declarants (Luria’s companies) to the unit owners. (That transfer usually occurs when 75% of the units are sold.) The association hired an engineer to assess the condition of the property as a whole.
At this point, it’s a big deal. The engineer reported to the association that they had significant EIFS problems that could run to $3.7 million. I’ll do the math for you: That’s about $16,000 per unit. A couple of months later, it got worse; the same engineer came back with a supplemental report, specific to the EIFS problem. In that report, he suggested that the EIFS should be removed in its entirety. The opinion doesn’t list a cost for that, but my best guess is that it’s significantly higher than the $3.7 million.
And that leads us to the courthouse. Citing the mandatory two-year warranty, which starts on the date of sale, the association sued Luria and his companies. They raised seven claims, and after a bench trial, the circuit court granted judgment in favor of the association on four of them.
Luria and his companies appealed. From what I’m seeing here, I infer that they lost the war at the petition stage, as the Supreme Court refused the petition for appeal on two counts (statutory warranty and alter ego liability), totaling $5.8 million. But there was still a battle to be fought, as the court agreed to consider whether the association could make out a claim for breach of fiduciary duty and fraudulent conveyance.
The association argued that it became a creditor of the declarants as soon as Luria got the first report in 1999, notifying him of an EIFS problem. (Note that it’s possible to become a creditor in this context even before you get a judgment. That doctrine prevents potential debtors from conveying away all their property as soon as they get sued.) But the Supreme Court disagrees, and reverses the judgment. It points out that the 1999 report, and even its younger cousin delivered the next year, only mentioned the need for some touch-up work. The devastating report only came in 2003, after the association took the reins; it was only after that point that the association could be said to be a “creditor” (even unadjudicated) of the declarant on the warranty claim. Since Luria’s pocket-lining took place, according to the evidence, between 1996 and 2002, he didn’t divert any money at a time when the association was a creditor.
Accordingly, the court doesn’t squarely address the question of whether an LLC’s manager owes a fiduciary duty to a third party. It assumes that he does, without deciding the matter today. The only holding in this regard that’s of precedential value is the court’s finding that “the notice required to create creditor status is actual notice of a specific potential statutory warranty claim.” That ruling will have application beyond the context of LLC’s, in my opinion; it will likely relate to claims that any creditor has squirreled away assets upon learning that someone thinks he owes her money.
It is with some trepidation that I begin this analysis of Smith Mountain Building Supply v. Windstar Properties. That’s because my involvement with mechanic’s lien litigation was long ago and tangential at best. I recognize that this is one of those areas of the law where you either know the subject well, or else you don’t know it. One thing I do recall well, even after all this time, is that the requirements for a valid mechanic’s lien are strictly construed, and the prospective lienor basically has to get it perfect, or else he has no lien.
That, at least, was my memory. But perfection, it turns out, isn’t required, as a statute provides a measure of wiggle room for the claimant whose memorandum contains what the Code calls an inaccuracy. In that event, the lien isn’t invalidated.
Okay, what’s an inaccuracy? The court helpfully adopted the following dictionary definition in this context in 2002: “not accurate” or “containing a mistake or error.” Speaking as a guy who fancies himself a wordsmith, it occurs to me that this definition is awfully open-ended. You can classify just about any defect in a memorandum of mechanic’s lien as “a mistake or error.” But Noah Webster aside, the court doesn’t take such a broad view.
Smith Mountain shipped materials to the job sites for two properties owned by Windstar. The general contractor evidently wasn’t diligent in paying for the materials, so the supplier filed two memoranda claiming liens on the two properties. (So far, the supplier is doing the right thing. If it had filed a single memo covering both properties, that would be invalid as a blanket lien.)
The mechanic’s lien statutes forbid the filing of any claim for materials furnished more than 150 days before the end of the job. If you’re not getting paid as the project moves forward, you have to press the matter, or else risk losing that part of the claim. The supplier’s memoranda included some amounts that went back more than 150 days from the end of the job, so the owner moved for summary judgment in the ensuing lien enforcement suits. The supplier acknowledged that it had made a “mistake or error” in including those amounts in its claims; it asked the court to permit it to adduce evidence to show such a mistake or error, so it could claim the benefit of the curative statute.
The trial court refused that request, and dismissed the suits without a trial. It ruled that the inclusion of stale claims constituted a fatal defect that invalidated the liens. On appeal, the supplier contended that if it could show substantial compliance with the statutes, then its lien should be upheld.
The Supreme Court disagrees, and affirms the judgment in favor of the owner. It reconciles two cases that the supplier had contended were in conflict, and determines that including an excessive amount for the claim is indeed a fatal defect. As for the contention that the inclusion of such sums was a mistake or error, the court distinguishes a previous holding, favorable to the supplier’s position, since the “mistake” in the earlier case was the inclusion of an inappropriate class of claim (one for which no lien could ever attach) instead of a claim for too much money.
As noted above, I am no expert in this field. But on basic statutory interpretation principles, this ruling doesn’t sit well. I cannot envision how fine the scalpel would have to be in order to carve this error away from the general statutory rule that honest mistakes shouldn’t invalidate a lien. I recognize the well-established rule on strict adherence to statutory requirements for claiming a lien, but where the legislature has provided a curative statute (which, by the way, has been around for at least 90 years) to soften the effect of such mistakes, why shouldn’t that be applied? In my view, the supplier made a “mistake or error” in calculating the amount of its claim, and it should be permitted to enforce the corrected amount. While I recognize the difficulty of the court’s task in reconciling the Code’s provisions, I think the better course would have been to hold that the curative statute applies to this kind of error.
[Thank goodness we’re done with all that mechanic’s lien stuff.]
Estate of Parfitt v. Parfitt presents an unpleasant picture of undue influence, self-dealing, and fiduciary infidelity. I have no way of knowing whether the allegations are true or not, of course, but based on the evidence at trial, this is a very troubling set of facts.
Jane Parfitt executed a will, leaving her estate to her children in equal shares. She then received the devastating news of a cancer diagnosis; she succumbed to the disease two years later. In the interim, the family agreed that her son Jeff would leave his job to care for Jane until full-time caregivers could be hired. Everyone agreed that he would receive $500 per month from Jane’s bank account, to make up for his lost income. He was made a co-signer on that account, to help her with bill-paying.
Jeff converted Jane’s financial assets into cash and deposited those into her bank account. He also got a reverse mortgage and a home equity loan, and plunked that into the account, too. In all, he deposited over $338,000.
At this point, according to today’s opinion, Jeff vacuumed out the account, transferring $370,000 unto himself and his wife. When the estate found out that he had basically taken all the money for himself, it sued.
The trial court ruled that the estate had failed to make out a case of undue influence, conversion, or unjust enrichment. It also held that there was insufficient proof that Jeff enjoyed a confidential relationship with his mother before her death. It accordingly dismissed the case.
There is an important procedural point here. Today’s opinion doesn’t say whether the trial court granted a motion to strike at the conclusion of the estate’s case in chief, or whether the that court received and considered all of the evidence from both parties. It simply recites, “After a three-day bench trial, the trial court entered an order . . .” Since today’s opinion begins by reciting that the case was dismissed, I infer that it was handled on a motion to strike instead of on the merits of the case.
That matters a great deal, because it necessarily frames the appellate court’s view of the facts. If the trial court decided the case on all of the evidence, then Jeff would be entitled to a favorable view of the evidence and all reasonable inferences therefrom. But if the trial court granted a motion to strike, then the estate gets that favorable view. Because the opinion doesn’t contain the familiar phrase, “We view the evidence in the light most favorable to X, the prevailing party below,” and because the factual recitation is pretty damning as to Jeff’s actions, I will assume that this case fell on a motion to strike. (I’ll note that it is theoretically possible that the facts were undisputed, and that Jeff sat defiantly by in the trial court. But if that were the case, I seriously doubt it would have taken a three-day bench trial to get to judgment.)
On appeal, the Supreme Court reverses and remands for further proceedings. It rules that the trial court incorrectly concluded that Jeff didn’t occupy a confidential relationship with regard to his mother. It reaches that conclusion by going to the realm of banking law to pluck out this statutory gem:
“Parties to a joint account in a financial institution occupy the relation of principal and agent as to each other, with each standing as a principal in regard to his ownership interest in the joint account and as agent in regard to the ownership interest of the other party.” Code § 6.1-125.15:1.
The last clause of this quote makes Jeff an agent with regard to Jane’s funds in the account. And rest assured, it was all Jane’s; Jeff contributed nothing, aside from liquidating everything that Jane owned. Since he’s her agent, he owes her the usual fiduciary duty flowing from agent to principal.
The legal effect of this ruling is immense: It creates a presumption of undue influence, and shifts the burden from the estate to Jeff, requiring him to rebut that presumption. Now he can no longer sit back with his arms folded (assuming he ever did that); he has to justify these transfers on retrial. And you will imagine that that will prove a bit problematic for him.
The estate also wins another important point, as the Supreme Court reverses a ruling of the trial court based on the Dead Man’s Act. That act requires corroboration of the testimony of one party to a transaction, where the other party is incapable of testifying about it (usually due to death; hence the morbid name). Such corroboration doesn’t have to be complete, but the law imposes a heightened corroboration requirement in cases involving confidential relationships. Since the Supreme Court has found such a relationship here, Jeff will have to have significant backing if he wants to claim, for example, that Jane directed him to give himself the $370,000.
Today’s news isn’t all rosy for the estate. The court rules that it has abandoned its claims of conversion and unjust enrichment, despite having assigned error to the trial court’s rulings. In light of today’s other rulings, this might come as a surprise, but the reason is simple: The estate didn’t argue those issues in its brief. The court has repeatedly held that if you assign error to a ruling, but you don’t then present any argument on those assignments, you have waived the assignments. This doctrine was memorably applied to strike a quarter of DC sniper John Muhammad’s 102 assignments of error in 2005; more recently, in Jay v. Commonwealth, 275 Va. 510 (2008) the court reaffirmed that appellate courts may treat un-briefed issues as waived. Accordingly, on retrial, the estate will have to do without its claim on these two theories.
Did you know that you can get permission to build a pier from public property? Neither did I. But the procedure has been around for a long, long time. The court finally gets around to speaking on a significant aspect of that process today, in Burwell’s Bay Improvement Association v. Scott.
Back during (ugh) Prohibition, when Babe Ruth was terrorizing American League pitchers and Charles Lindbergh gazed at the wide Atlantic and wondered if he could –
Oh, all right; I’ll be more prosaic. Back in 1925, a man named Poole started a bit of trouble, with a capital T, and that rhymes with P, and that stands for –
(Ahem!) I suppose I can be forgiven for this digression by those members of my audience who are familiar with The Music Man. For the rest of you, I’ll play this one straight (more or less) from here on out.
Poole petitioned the Isle of Wight Circuit Court to award him “the privilege of erecting a wharf” that would abut the James River. The foot of the wharf stood on public land. The judge agreed that he could have that privilege on two conditions: He had to pay a fee, and he had to allow the public to use the wharf. Fair enough, Poole replied. He built the wharf. He later added a pier and a recreational building called the Pavilion, which was situated on pilings and extended out over the water. It must have been a beautiful spot.
But nothing is permanent on this earth, and in 2003, Hurricane Isabel dispatched the Pavilion, leaving behind only the forlorn prospect of uncapped pilings, and generations of memories. The current owners plan to rebuild the Pavilion as soon as they can line up the plans and gather financial backing.
In the meantime, that public property is no longer public. The county sold it back in 1960 to Burwell’s Bay. Three years after Isabel, with the Pavilion’s empty pilings still pointing skyward, Burwell’s Bay filed its own application to construct its own pier and its own building, which would be situated between the site of the Pavilion and the River proper. Essentially, Burwell’s Bay fired a shot across the bow of Poole’s successors, threatening to block their (as yet prospective) view.
Those successors filed a declaratory judgment action, seeking a declaration that they had riparian rights as a result of the 1925 court order, and that the construction of Burwell’s Bay’s structure would interfere with those rights. They threw in separate claims of adverse possession and prescription. At trial, the court ruled in favor of the successors on the specific grant of riparian rights, and didn’t reach the alternate claims.
Today, the Supreme Court reverses and remands. It holds that any rights awarded to Poole under the statute were personal to him, and could not be passed along to his heirs and successors in interest. The right (actually a privilege) to build a wharf doesn’t convey any more rights than are necessary to effectuate that purpose, and the owners of the servient parcel still retained all their other rights, specifically including the right to build their own pier.
The court remands the case with a direction to the circuit court to evaluate the merits of the adverse possession and prescription claims, so the successors aren’t whipped yet. In this light, remember my discussion of the waiver doctrine and the right-for-the-wrong-reason rule, in Giles v. Commonwealth up in the criminal section? The court’s approach to this unadjudicated issue is perfectly in line with the issue that was deemed waived in that Botetourt County tax case. But here, unlike the Botetourt tax man, the appellee mercifully gets another chance to prove that it’s entitled to relief.
In addition to history, I also love maps. I am accordingly disappointed that today’s opinion in Kitt v. Crosby doesn’t include any of the maps, plats, and diagrams that must have been introduced into evidence in this ejectment action that was in reality a boundary line dispute.
The property is up in the mountains of Alleghany County, and was originally owned by one Mr. and Mrs. Blizzard. After her husband passed away, Mrs. Blizzard sold off a part of the tract in 1944 to Henry Kitt, the ancestor of today’s appellants. Half a century later, Mrs. Blizzard’s heirs sold the rest of the tract, and that remnant ultimately ended up in Crosby’s hands.
The problem started back in 1944, when the Kitt deed was drafted. Instead of today’s modern surveying methods, which can pinpoint calls and distances with great precision, the drafter of that deed used physical monuments and the boundaries of other parcels to describe what was being conveyed. (If your experience with real property descriptions is limited to The Land of Suburban Rectangles, this one will look like a morass.) Accordingly, the description started with “a point in the intersection of the Old Rich Patch Railroad Bed (railroad now abandoned) with the boundary line of a tract of land owned by the United States Government, . . .” Have you ever tried to trace land boundaries by reference to long-abandoned railroad rights-of-way, according to where, exactly, the government may have owned property back in World War II? That was the task that faced the surveyors who tried to make sense of this deed. The other descriptors, by the way, similarly referred to adjoining landowners instead of giving distances and specific directions.
At trial, a battle of experts ensued, with both sides offering their surveyors’ conclusions and the reasons (often going well outside the land titles to include things like where old fence posts were found in the ground) for those opinions. The trial court gave the case to a jury, which returned a verdict in favor of Crosby. Kitt appealed.
The primary dispute in the boundary aspect of this case is the question of whether the trial court should have submitted the case to the jury. Kitt argued that the court should have applied something called the order of preference rule, and thereby struck Crosby’s evidence. That rule applies where the surveyors can locate the boundaries of adjoining properties. The Supreme Court affirms the trial court on this point, holding that the existence of ambiguities in the original deed made the introduction of parol evidence proper, and thus making the case suitable for resolution by jury trial.
There’s another ruling that will have application in many other fields beyond real property law. The court discusses the “side switching” doctrine, and it affirms the trial court’s employment of that rule to bar one of Kitt’s expert witnesses. Crosby had originally hired the expert in an earlier iteration of this litigation; that suit was dismissed without prejudice, but Crosby could read the writing on the wall, and he fully expected to get sued by Kitt, as eventually happened. The court finds that the rule applies in the context of this case, and employs its two-part test to bar the witness’s testimony against Crosby. The two parts are (1) whether the first customer reasonably believed that he had a confidential relationship with the expert, and (2) whether he conveyed confidential and privileged information to the expert. Crosby established both of these elements, so the trial court was right to bar the testimony.
There’s one other key point about this analysis: The reasonableness of the belief in the existence of a confidential relationship is gauged from the perspective of the client, not the expert.
The only land use opinion of the day is Hale v. Blacksburg BZA, which addresses the question of whether a developer acquired a vested right to develop a parcel before the Town of Blacksburg amended its zoning ordinance. The developer sought to construct a big-box retail facility – think Wal-Mart, or The Home Depot – after having submitted proffers (voluntary restrictions on its development rights, plus other voluntary concessions not necessitated by the project itself) to secure a rezoning.
This opinion is long. When I say it’s long, I mean it’s long. At just over 42 pages, it’s clearly the “big-box” opinion of the day in more ways than one. (The “background” section of the opinion, containing the facts and the proceedings below, is longer than the full text of the second-longest opinion released today.) I mention this because, as my loyal readers will recall, I aim to keep the reading light and airy here, and that requires brevity. I accordingly will greatly simplify things by giving you just a capsule of the facts, and a summary of the legal rulings. Land-use junkies can click on the hyperlink above to get their fill, with my hearty compliments.
The owners of a tract in Blacksburg wanted to develop it. The sent the town a request to rezone it from low-density residential (those suburban rectangles I mentioned earlier) to permit some commercial and higher-density residential. The plan, as described by Justice Koontz today, looked very impressive; it featured a village concept, with storefront shops at street level and apartments or condos on the second and third floors. It offered tree-lined streets, well-landscaped parking areas, and store facades that varied every sixty feet, instead of being one long homogenous block. This looked like the kind of place that you’d regard as a pleasure to visit, to shop, or even to live.
The town bit; this looked like a winner of a plan. The town accepted the proffers that accompanied the request (which among other things would prohibit eight specific uses that would otherwise be permitted under the new classification), and rezoned the property to permit the development.
Eight months later, the developers filed one of a series of preliminary site plans for the project. This plan contained an abrupt change, in that one section was no longer quite so aesthetically pleasing – a big box had sprouted where part of the village once was. The town pointed this out, but subsequent preliminary plans continued to show the big box, with as much as 176,000 square feet of retail contained within a single structure.
Word of the proposed development got out, and some citizens started squawking. The town council members, always sensitive to the wishes of the electorate, hastily amended the zoning ordinance to require a special use permit for any retail structure larger than 80,000 square feet. Essentially, this would kill the big-box aspect of the development. The developers contended that they had submitted their plans in time, and had acquired (before the date of the amendment to the zoning ordinance) a vested right to build what they wanted to build.
The zoning administrator ruled that the developers had no such right. The developers appealed that decision to the BZA, which ruled, “Yes, they do.” The circuit court affirmed the BZA’s ruling.
Today the Supreme Court reverses, effectively reinstating the zoning administrator’s interpretation. It finds that the rezoning wasn’t a “significant affirmative governmental act allowing development of a specific project.” How can that be, you ask? Didn’t the town rezone this property – unquestionably a significant affirmative governmental act – to allow this specific development?
Well, no; the rezoning didn’t specify a given use to which the land would be put. It would permit various uses, but the only thing “specific” here was the list of eight things the developer couldn’t do. In my mind, the fact that the developer pulled off what the town felt was a bait-and-switch illustrates this principle. A right to build something in the future (as opposed to the ability to continue an actual existing use) is only vested once the government approves a specific use, and that hadn’t happened here.
The developers also contended that, under a separate land use statute, they have a vested right because they were required to dedicate a bike path and pay $25,000 for a nearby intersection, and the need for neither of those was generated by the project. The court similarly rejects this argument. As for the bike path, the court observes that according to the plan, the developer won’t actually dedicate it; it keeps the land, decides where to put the path, and maintains the premises. And the court concludes that the intersection improvements were indeed necessitated by the new development.
Accordingly, if the developers still want to put up a big box, they can do so, as long as they offer sufficient incentive (further proffers, anyone?) to obtain a special use permit.
There’s a noteworthy appellate procedure point that merits special emphasis here. For years, land use appeals were sharply constrained by a statute that gave a presumption of correctness to a BZA’s findings of fact and conclusions of law. That made it awfully hard to get a land use ruling overturned. The General Assembly amended that statute in 2006, so that findings of fact are entitled to the same presumption, but legal conclusions aren’t. Essentially, this put land use appeals on the same footing as other appeals, where, for example, in a breach of contract suit the Supreme Court respects the factual findings after a bench trial, but reviews the legal rulings de novo.
Accordingly, pre-2006 decisions need to be viewed in a slightly different light now. In footnote 10 on page 27 of the slip opinion, the court observes that it is not necessarily bound by its ruling in a 2003 case:
“[E]ven if we were to find that the decision in City of Suffolk [266 Va. 137] was directly applicable to this case, we would nonetheless be required to revisit the issues addressed therein in order to apply a de novo standard to the circuit court’s application of Code § 15.2-2307 as required by Code § 15.2-2314 as amended.”
I’m not certain about this, but it occurs to me that it’s possible that the court considers the rulings in all pre-2006 zoning opinions to be fair grounds for renewed debate now. If that’s the case, then this decision will have enormous implications for the field of land use law. Maybe it’s a “bigger-box” opinion than I originally thought.
FURTHER THOUGHTS ON HALE V. BLACKSBURG BZA[Posted March 9, 2009] I have been musing about one of the Supreme Court’s published opinions released ten days ago, and am prompted to supplement my original essay on the land use decision in Hale v. Blacksburg BZA:
There’s one aspect of this case that’s troubling; it brings to mind the Sherlock Holmes story, “Silver Blaze,” where “The dog did nothing in the night-time.” From a land use law standpoint, a big part of this ruling is completely wrong, but there’s simply no mention of the legal issue; that dog didn’t bark. In my opinion, the missing piece has nothing at all to do with the justices, whose hands were apparently tied by the procedural posture.
When it realized that in approving a rezoning, it had failed to limit the size of the retail structures, the Town hurriedly passed an amendment requiring a special use permit for big-box construction in this zoning classification. The developers argued that their rights were vested before the effective date of the amendment, and that issue is the primary thrust of the court’s opinion. But the developers apparently didn’t challenge the imposition of a SUP process in the first place.
Maybe they should have. Special use permits relate to permitted uses of property; not to the structures on a site. The zoning classification permitted the use of the property for retail purposes, and that’s exactly the purpose the developers had in mind. There is no justification I can see for requiring a special use permit to allow someone to use his property for commercial purposes in an area that’s zoned commercial; such a use is already allowed, and doesn’t need a permit to legitimize it. Theoretically, a local government could have required a SUP for a retail structure in, say, a light industrial area. But the developers’ proposed use of the property fit the zoning classification exactly, so requiring a SUP was the wrong legal approach.
In that sense, the Town’s imposition of an additional hurdle to this development should have been regarded as completely inappropriate. So why didn’t the court rule on this issue? Based on Justice Koontz’s meticulous recitation of the proceedings below, in which he mentions nothing about this issue, I infer that the developers never raised this issue in the trial court. I know that they didn’t assign error to it in the Supreme Court. Accordingly, while it may be tempting in the future to cite this case as authority for the proposition that a local government can require a special use permit for a particular size of a building, I think that would be an incorrect application of this case. The justices take each case as they find it, and this opinion should not be viewed as an endorsement of this land use procedure.