ANALYSIS OF JUNE 2, 2016 SUPREME COURT OPINIONS
[Posted June 2, 2016] The Supreme Court of Virginia announces twelve rulings this morning. There are eight published opinions, one published order, and three unpubs.
There are two decisions today in this field. As usual, I’ll start with the shortest one of the day (that’s so I can get commentary posted for you faster): Johnston v. William E. Wood & Associates is just over four pages.
Well-established Virginia law holds that in the absence of a contract of employment, all employees serve at will: they can resign or be fired at any time and for any reason (subject to some exceptions, like a Bowman claim). The party who severs the relationship just has to give reasonable notice to the other party, and it’s done. The question in this appeal is what “reasonable notice” is.
Johnston worked for a real-estate brokerage here in sunny Virginia Beach. One day her boss stopped by her desk and said, “Good morning; you’re fired.” The termination was effective immediately; not two weeks (or apparently even two hours) later. The employee sued, claiming that a termination without any advance notice at all was unreasonable. The learned chancellor refused to bite; he sustained a demurrer.
The justices note that they’ve never addressed this precise issue before, but it turns out not to be hard. The Supreme Court affirms, finding that imposing a time-based requirement – something that the legislature has not deigned to do – “would create a great deal of uncertainty in employment relations.” Suppose an employee gets a red-hot job offer, but she has to leave the next day to accept it. Should the employer be able to make her stay for a waiting period – let’s say two weeks – thereby causing her to lose the opportunity?
Virginia law allows the employee the freedom to pursue that opportunity, so it allows the employer the same flexibility. The justices conclude that the phrase “reasonable notice” means “effective notice that the employment relationship has ended.” Once the other party gets the word, the notice is effective. It can be delayed, of course; there’s nothing wrong with giving two weeks’ notice if you want to. But the law won’t craft such a requirement for employers and employees.
I noted that this is the shortest opinion of the day. I like to think that the concise writing might be attributable to the fact that the author, Justice McCullough, is the only member of the court who earned a living as an appellate lawyer. And we appellate lawyers understand the value of conciseness.
Let’s turn to the public sector, and Andrews v. Richmond RHA. Andrews got fired just as Johnston did in the last case, but she had one advantage over Johnston: because she worked for a public entity, she had a right to a grievance process. Her internal grievances got her nowhere, so she resorted to the Authority’s admin hearing officer.
That step paid off, as the officer ruled in her favor, awarding reinstatement and back pay due to the Authority’s failure to apply properly its internal personnel policy. The officer’s ruling ended with a notice that either party could appeal to the local circuit court. The Authority took that step and secured a reversal; the court ruled that the hearing officer had erroneously interpreted the policies and procedures.
Andrews wasn’t giving up – if she had, we wouldn’t be talking about her today – and at the final step, the justices rule this morning that despite what the hearing officer said, the circuit court didn’t have subject-matter jurisdiction to consider the Authority’s challenge. The court thus reverses the judgment and dismisses the Authority’s appeal.
Where did we go wrong? Well, the Authority’s first mistake – one repeated by the hearing officer and even by Andrews below – was in assuming that its grievance process stemmed from Title 15.2 (Counties, Cities and Towns). In a process like that, a court might very well be empowered to review a hearing officer’s interpretation of internal policies and procedures. But the RRHA’s grievance procedure was instead based on the model in Title 2.2 (Administration of Government, the state’s grievance procedure).
The key to the court’s holding is the comparison between these two paragraphs in Code §2.2-3006:
A.Upon the request of a party to a grievance hearing for an administrative review of the hearing decision, the Director of the Department of Human Resource Management shall determine, within 30 days of the conclusion of any other administrative reviews, whether the hearing decision is consistent with policy.
B. Within 30 days of a final decision, [either] party may appeal on the grounds that the determination is contradictory to law by filing a notice of appeal with the clerk of the circuit court in the jurisdiction in which the grievance arose. . . . Within 30 days of receipt of the grievance record, the court, sitting without a jury, shall hear the appeal on the record. The court may affirm the decision or may reverse or modify the decision. . . .
I’ve bolded the critical words above. This statute sets out that decisions on the application of departmental policy stay in-house – no resort to court is permissible. Only if there’s an allegation that the decision is contrary to law may you go to a judge.
The Authority’s appeal to the circuit court claimed only that the hearing officer had improperly interpreted, applied, and even rewritten departmental policy. There’s a difference between law (statutes and caselaw are the obvious sources) and policy (established by an executive to govern internal processes). Respecting this difference means the court have to stay out of administrative determinations involving only disputes about policy.
I’ll add a couple of quick points here. First, Andrews never asserted in the circuit court that that court didn’t have jurisdiction; she went along with the whole process. But subject-matter jurisdiction cannot be waived, so despite her failure to object below, Rule 5:25 was defanged here; the justices took up the jurisdictional issue in the first instance.
Second, Andrews originally filed her appeal in the Court of Appeals – presumably under that court’s admin-law jurisdiction. But the CAV determined that the case belonged upstairs, so it transferred the record to the Supreme Court.
I’m not sure why the case didn’t fit in the Court of Appeals, but I don’t need to take the time to sort it out. Practitioners should know that there’s a saving statute, providing that if you make a mistake and file your appeal in the wrong court, you are not really-most-sincerely dead; it’s simply transferred to the right appellate court. If you get shipped from the CAV (where you have an appeal of right) to the SCV (where you have to seek a writ), the justices will give you leave to convert your brief of appellant into a petition for appeal.
There are a lot of fatal appellate landmines in the Virginia system, and some of them are, unfortunately, largely invisible. This isn’t one of them; there’s no real penalty for guessing incorrectly which appellate court gets your appeal.
SCOTUS has told us in no uncertain terms that criminal defendant cannot be required to stand trial while dressed in identifiable prison clothing. Today, in Wilkins v. Commonwealth, the Supreme Court takes up whether the appellant was indeed in such identifiable clothing, and resolves the first-impression issue of who has the burden of proof on that point.
This opinion is as much about the adequacy of an appellate record as it is about criminal procedure. In the chief justice’s opinion, he repeatedly refers to something before noting that it doesn’t appear in the record. Wilkins showed up for trial dressed this way, based on his lawyer’s representation in the record:
He’s wearing Portsmouth City Jail clothes. They are kind of like a green, sort of scrub outfit. He is wearing black sneakers that I think they have the inmates wear. He’s got a visible bracelet on his left arm.
The trial judge granted a short recess to allow Wilkins’s lawyer to get him some civilian clothes, but that was unavailing. The court felt that Wilkins was gaming the system – he had sought the previous day a fourth continuance of the trial date – and the judge noted for the record that he wasn’t confident that the jury would even recognize the outfit as coming from a jail.
The jury got ‘im, of course, and the Court of Appeals affirmed, ruling in part that the record “fails to establish that the appellant’s clothing at trial actually was clearly identifiable as jail clothing.” It’s this last holding that furnishes the basis for the justices’ ruling today.
Here’s how the chief justice frames the decisive issue:
This case presents a very narrow question for resolution: whether Wilkins’s attire was “readily identifiable” as jail-issued clothing. To answer that question, we first must determine which party has the burden of proof. In other words, does Wilkins have to prove that the clothing he wore at trial was readily identifiable as jail attire? Or, does the Commonwealth have to prove that it was not?
Relying on caselaw from elsewhere, the court rules that the burden is on the defendant, when he asserts that he’s about to be tried in prison clothes, to show that the clothing was “readily identifiable to the jury as jail attire.” And that brings us back to the problem of the inadequate record. The justices have only that sparse description from the defense lawyer. They hold that that isn’t enough to establish a constitutional violation.
What would be enough? Well, if the words COUNTY JAIL or SHAWSHANK PRISON appear on the uniform, we can all agree that that would suffice. You’d get the same result with an orange jumpsuit, or stripes, or a prominent serial number. But there’s nothing about a set of green scrubs, black sneakers, and a bracelet that screams, “Inmate comin’!”
If you have a problem like this in the future, my advice is to make whatever record you can, since the absence of a satisfactory record sank this appeal. At a minimum, take a photograph and ask that it be placed in the record of the case, so appellate jurists don’t have to guess.
There’s a double rarity in Commonwealth v. Bass. The first is that the Court of Appeals applied the ends-of-justice exception to the contemporaneous-objection rule, on its way to reversing a conviction. The second is that the justices reverse that ruling and reinstate the original judgment.
Police arrested Bass on warrants charging him with robbing Victim A and attempting to rob Victim B. (If you want a helpful mnemonic, think of the robberies as Actual and Botched.) The Commonwealth took the case to a grand jury, which inadvertently got the victims backwards. The indictment accordingly charged him with actually robbing Victim B and attempting to rob A.
Nobody noticed this defect at trial. As the evidence came in, it showed only an attempted robbery of Victim B, since he had no money to give up, while Victim A lost $85 in cash. The court instructed the jury consistent with the evidence and with the warrants, but inconsistent with the indictments.
The jury then hung as to Victim B, but it found Bass guilty of robbing Victim A – you know, the guy who had actually been robbed. After a sentencing phase, the jury sentenced Bass to ten years in prison for robbing Victim A.
In criminal-law parlance, this is a “fatal variance” between the indictment and the evidence. It means what you think it means: the defendant is entitled to a reversal when he’s convicted of a crime of which he wasn’t indicted. But Bass never raised this issue in the trial court.
The Court of Appeals took the rare step of applying the ends-of-justice exception and remanding the case for a new trial on the attempted-robbery charge. Today, the justices, in an even rarer move, reverse that decision and reinstate the conviction. They hold that while Bass was convicted of a crime for which he wasn’t indicted, there was no grave injustice here – that’s a requirement for this exception – since, under prior caselaw, “no grave injustice occurs merely because a variance exists between an indictment and the evidence offered at trial.”
Bass was made aware in the warrants that he was charged with actually robbing Victim A. All of the evidence pointed to that actual robbery, and that’s the basis on which everyone understood that the case was proceeding. In sum, the process wasn’t even remotely unfair, so Bass doesn’t get the benefit of the exception. Since he didn’t raise the objection in time for the trial court to remedy it, the Supreme Court holds that this issue is waived.
The court goes on, in what I saw as almost an anticlimax, to address a second issue, one that the CAV felt it didn’t need to reach: the sufficiency of the evidence. It finds that this issue, too, was improperly preserved at trial, since Bass never asserted the grounds for it in his limited motion to strike the Commonwealth’s evidence. He did move to strike – good for his lawyer, who apparently is a reader of this website – but the grounds asserted didn’t match up with the one he pressed on appeal.
There’s a distinctly Richmond-and-Tidewater theme in today’s cases. All seven published opinions arose in The Holy City or down here in the southeast corner of the state. Bank of Hampton Roads v. Powell began its life in Chesapeake as a suit for breach of contract and for specific performance.
Thirteen years ago, Powell owned some land in what we call the Greater Great Bridge section of Chesapeake. A developer coveted the land to assemble into a subdivision it wanted to develop, and offered to buy it from her. The parties agreed on a purchase price of $265K plus one lot in the new subdivision. They later executed an addendum, giving Powell the right to Lot 1.
Powell started to get suspicious when, as the subdivision sprung up over the next few years, the developer hadn’t given her her lot yet. In 2012, the developer sold Lot 1 to a builder instead of to Powell. Powell didn’t get mad; she got a lawyer.
The lawyer sued everybody he could think of – the developer, its principals, and the bank that had extended a loan over the property. She sought money damages and the imposition of a constructive trust on Lot 1.
During the course of the litigation, the builder settled with Powell, evidently for $25,000. She then asked the court to affix the constructive trust against another parcel, known as Lot A, which was the only part of the land that the developer still owned. The court held a bench trial and found in Powell’s favor. It imposed that constructive trust, giving Powell an interest in Lot A superior to the bank’s lien. It added that if she did not receive title to Lot A, then she would receive judgment for $110,000 (the price that the builder had paid for Lot 1) against the developer and two of its principals.
The bank alone appealed; the developer and its principals chose to live with the judgment.
The dispositive issue in this appeal is whether a court may impose a constructive trust upon Lot A when the contract was for Lot 1. Primarily citing a 1995 decision, the court rules that unless you can trace your claim directly to specific property, a constructive trust is inappropriate; you’re just a general creditor like anybody else.
Powell had a specific claim to Lot 1. When she settled with the developer, that claim ended. She still had damages, and the court notes today that the judgment against the developer and its principals is still valid; but the bank is off the hook.
One last point: the bank assigned error to the trial court’s refusal to reduce the $110K judgment by the $25K that Powell got from the builder. The court rules that the bank doesn’t have standing to make that claim, because there’s no money judgment against it. Only the judgment debtors would have had that standing, and they didn’t appeal.
We get the court’s newest pronouncement on the always-important topic of sovereign immunity in Pike v. Hagaman, a medical-malpractice action against a nurse at the VCU Medical Center in Richmond. The nurse worked in an intensive care unit, and on this occasion supervised a patient after he had received reconstructive surgery on his palate.
The nature of the patient’s surgery required that postoperatively, his head be kept in a neutral position, and that no pressure be placed on the right side of his face. The patient alleged that the nurse negligently supervised him and allowed his head to roll to the right side for a period of time, essentially destroying the reconstructive work.
The nurse filed a special plea of immunity, and after hearing evidence, the trial court sustained it and dismissed the action. The patient got a writ to review the immunity ruling.
This case is governed by the James v. Jane doctrine first announced in 1980. Claims of immunity by governmental employees – Jane, the appellee in the 1980 case, was a surgeon at the U.Va. Hospital – are evaluated by examining exactly four factors.
Or so I had thought, until I reread a couple of lines in today’s opinion. Here are those lines:
[In James, we] developed a list of four non-exclusive factors to assess whether a plea of sovereign immunity should be sustained. [Non-exclusive?]
[From a footnote] Neither party suggests that we consider any factors beyond the four articulated in James v. Jane. Accordingly, we confine our analysis to these factors. [Citation omitted]
I began to learn immunity law in 1990, when I went to work for a municipal government and started defending City employees who got sued in cases where the City was absolutely immune. I read James v. Jane back then, and for the life of me, I always assumed that the four factors were exclusive. So did everyone else in the municipal-liability field, as far as I could tell.
I just had to satisfy my curiosity, so I interrupted this essay a few minutes ago to pull down 221 Va. – it’s one of those obese, 1,000-page volumes they used to crank out in the late 70s and early 80s – and reread the case. I found no statement in Justice Harrison’s majority opinion setting out whether the list was exclusive or not. As of today, at least, it’s not.
In fairness, I should point out that in an early, and famous, citation to James, the justices gave a broad hint of what I had missed: “Among the factors to be considered are the following …” Messina v. Burden, 228 Va. 301, 313( 1984). But other decisions described the four factors as exclusive; for just one example, Friday-Spivey v. Collier, 268 Va. 384, 391-92 (2004) (“the question whether an individual working for an immune governmental entity … is entitled to the protection of sovereign immunity is answered by applying a four-part test first enunciated in James v. Jane … and reiterated in subsequent cases. The four factors are …”)
You know what that means: from here on, lawyers will be limited in their James v. Jane arguments not by this list, but by their own imaginations.
Back to today’s decision. The justices today affirm the trial court’s ruling that the nurse was entitled to immunity. Using the four factors, a five-member majority – Justice McCullough, writing for the chief justice and Justices McClanahan, Powell, and Kelsey, finds that all four militate in favor of a grant of immunity. The nurse was performing a vital public function in which Virginia had a strong interest – so it says in statutory pronouncement of public policy. The nurse had to use judgment and discretion in performing her job, and the hospital – and hence the government – exercised control and direction over her work.
Justices Mims and Goodwyn dissent. They note that while Virginia obviously wants a sound public-hospital system, the daily care of a single nurse for a single patient is hardly the stuff of grave governmental importance. Their best point is probably this zinger, in which they take a quotation for James v. Jane and replace the word doctor with nurse, with devastating effect:
The only issue we decide here is whether a [nurse], employed by an agency of the Commonwealth of Virginia and practicing in a hospital operated by such an agency, should be immune from an action for his negligence, i.e., for his failure to exercise reasonable care in attending a patient. In Eriksen v. Anderson, 195 Va. 655, 660-61, 79 S.E.2d 597, 600 (1954), we said: “There is no statute which authorizes the officers or agents of the State to commit wrongful acts. On the contrary, they are under the legal obligation and duty to confine their acts to those which they are authorized by law to perform. If they exceed their authority, or violate their duty, they act at their own risk, . . . and the State is not responsible or liable therefor.” . . . A [nurse] who fails to use reasonable care in the treatment of a patient acts at his own risk, and is not entitled to invoke the doctrine of sovereign immunity.
I’ve taken longer than I normally do to analyze Thorsen v. Richmond SPCA, a legal-malpractice case. It’s a 6-1 ruling with a majority opinion by Justice Millette. The majority’s reasoning is complex but understandable, but Justice McClanahan’s dissent stopped me in my tracks, causing me to do something I’ve seldom felt I had time to do before: go back and reread the majority, to see if I’d missed anything.
Here’s the setup: Client goes into Lawyer’s office in 2003 and asks him to write a will for her. She wants to leave everything to her elderly mother (Client is 43; Mother is around 80), and if Mother predeceases Client, then Client wants everything to go to the SPCA. Lawyer draws up the will and Client signs.
Mother dies shortly thereafter. Client, having survived Mother, dies in 2008. Her assets at death include about $70,ooo in personalty and $600,000 in realty. Lawyer contacts SPCA and tells it, “You just inherited a substantial estate.”
The fly in the ointment, the monkey in the wrench (to quote that eminent Twentieth Century philosopher, John McClane) was that in preparing the will, Lawyer made the SPCA the contingent beneficiary of Client’s personal estate only. It omitted the real property, which passed by intestate succession to two of Client’s relatives. The SPCA got $70K instead of the $670K it thought it would receive.
The SPCA then sued Lawyer in Richmond Circuit, claiming legal malpractice and contending that it as an intended third-party beneficiary of Client’s agreement with Lawyer for the preparation of the will. Lawyer filed a demurrer, claiming that SPCA had no standing to sue because of a lack of privity, and a special plea of the statute of limitations, arguing that more than three years had elapsed since his representation had ended.
The trial court overruled the demurrer and the special plea, convened a bench trial, and entered judgment for the SPCA for the $600,000 difference. Lawyer journeyed three blocks south and got a writ.
The primary issue in the appeal – the one that absorbs most of the discussion in the majority opinion, and the lion’s share of the dissent – is privity.
“Virginia has,” the dissent assures us, quoting a 2010 SCV decision, “adopted the strict privity doctrine in legal malpractice cases.” We also learn that the General Assembly has modified by statute this requirement in one class of cases, those involving the creation of irrevocable trusts.
Today a majority of the Supreme Court rules that the common-law third-party-beneficiary doctrine establishes another exception. Turning to numerous cases from other jurisdictions, the court holds that a beneficiary of a testamentary document has standing to sue for legal malpractice the lawyer who wrote the document. The majority notes that if this were not the case, there could be no meaningful recovery for the breach of the attorney’s duty: the Client could recover only nominal damages, since she wasn’t harmed.
This is the ruling that triggers Justice McClanahan’s forceful dissent. She begins by noting that the privity requirement has not been abolished in Virginia – with the exception of the irrevocable-trust statute described above – and it shouldn’t be the role of the courts to carve out exceptions. That, she feels, is the legislature’s prerogative. The Code allows a client to sue his lawyer for malpractice, but doesn’t give that right to anyone else, even third-party beneficiaries.
The dissent notes the policy implications of creating such an exception. Lawyers who have to worry about being sued by nonclients might find their loyalties divided, or diminish the quality of services to a client. Today’s ruling might expose the lawyer to liability to “an unforeseeable and unlimited number of people.” Many lawyers might opt to get out of the estate-planning business entirely.
One key holding today is that the right of action accrues for these third-party beneficiaries when the testator dies. That, Justice McClanahan, can easily be decades after the lawyer drew the will. Thus, attorneys have the potential for liability for astronomical damages (such as with especially wealthy clients), owed to unknowable potential beneficiaries (such as bequests to “my children” by a woman who’s still of child-bearing age), triggered by an event that may occur decades into the future (such as when a client in his 30s wants to make a will).
You know, she’s got a point about that liability? I’m sufficiently terrified; I think I’ll stick with appeals.
The dissent regards this as the recognition of a new cause of action in favor of parties who would have been barred by the strict privity rule in Virginia. Whether you regard it as a new rule or as a logical extension of third-party-beneficiary jurisprudence into another field, this case is a watershed: lawyers can now be sued for malpractice by people other than their clients, so long as the injured party was an intended beneficiary of the lawyer’s services.
We’ll head back to Tidewater for our final case of the day, Saddlebrook Estates Community Association v. City of Suffolk.
Years ago, a lady we’ll call Landowner owned a tract of land in Virginia’s largest city. She got a permit to develop it into homesites, with a substantial area reserved for an equestrian center. She then sold it to a developer, which platted the equestrian center in a specific area.
The developer leased the equestr- – you know, I’m getting tired of typing that long, tricky word – the horse center to an LLC that planned to operate a stable and riding school there. It then developed the rest of the neighborhood.
This case is about real-estate taxes. Specifically, the City taxed the horse center, sending the bill to the LLC’s owner. This matched up well with the lease, which specified that the LLC would pay the taxes on the horse center.
But no one paid the tax bill, so the City initiated the process for a tax sale. By this point, the neighborhood had been fully developed and the developer had conveyed the common areas, including the horse center, to the community association. The association filed suit to get a declaration that it didn’t owe the taxes. It also sought to stop the sale.
At a bench trial, the judge rejected the association’s citation to a statute that ostensibly placed upon the unit owners – not the association – the tax burden for the horse center. The court found that the horse center was a commercial enterprise, because the LLC accepted paid boarding from nonresidents. It thus found that the horse center didn’t meet the statutory definition of “open or common space” that would qualify it for the kind of tax treatment that the association craved. Judgment for the City.
The justices take a dispositively different view. They find it irrelevant that the horse center received outside income, since the statutes don’t list that as a factor. The court relies for this conclusion on a 1985 case involving not horses but golfers – Lake Monticello Owners’ Ass’n v. Ritter.
The court doesn’t come out and find the property to be tax-exempt; instead, the burden is indeed distributed among the property owners – not as a pro rata share of what would be the normal tax bill, but in consideration of the value that the horse center adds, as a neighborhood amenity, to their homes. Even those residents who don’t ride got benefits – walking trails, picnic tables, and just plain-old open space. (Space is one thing that Suffolk has in abundance.)