ANALYSIS OF JUNE 4, 2015 SUPREME COURT OPINIONS
[Posted June 4, 2015] It’s raining here in sunny Virginia Beach. It’s raining so hard that my usual scenic view of the parking lot at Sears across the street is just a gray blur. Since it isn’t exactly picnic weather around here, I might as well stay inside and catch up on my leisure reading – the Supreme Court of Virginia hands down 13 published opinions and two published orders, so I have plenty to keep me right here at the keyboard all day, and probably into tomorrow.
I understand that this morning, before the courthouse doors opened at Ninth and Franklin, a crowd had gathered to attend today’s oral argument in the appeal involving the closing of Sweet Briar College. Having seen immense crowds outside the building – the argument involving the Virginia Episcopal Church a couple of years back comes to mind – I sure hope the weather up in Richmond is better than it is today. Otherwise the courtroom will be full of miserable, wet attendees.
By the way, I’ve heard that the court calendared the Sweet Briar appeal on an expedited basis, so it’s foreseeable to me that the justices may hand down a ruling over the summer, instead of waiting for the next opinion day, which will be in mid-September. I suspect that everyone involved is hoping for a ruling sooner than that.
One last point about the close of this week’s session today: the justices heard only 14 appeals this week, in three days. I’ve warned before that the writ market has crashed, and this session’s brevity is more evidence of that. If the justices were to hear cases at this pace for a full year, we’d get fewer than 90 decisions on the merits. Let me assure you that September’s session will be fuller – it almost always is, since the court has three months of maturing appeals in the meantime. But the days of 250 writs a year are now a distant memory. Like it or not, the court’s merits docket is a small fraction of what it was just a decade ago.
The ruling in Collett v. Cordovana is going to do nothing to help diplomatic relations in certain neighborhoods. The contestants are neighbors who own three lots in a row in West Ocean View in Norfolk. The owner of the center lot filed suit against her two neighbors, complaining that each had artificially raised the level of his lot, so that rainwater drained onto the center lot. The plaintiff claimed that it took hours or sometimes days for the surface water to go away. She alleged claims based on trespass, nuisance, and negligence.
Virginia employs the common-enemy doctrine, which holds that each landowner is free to fend off surface water as best he can. The only limitation is that you can’t do so in a wanton, unnecessary, or careless way. Based on that, the trial court sustained both defendant neighbors’ demurrers and dismissed the case.
The justices today affirm, holding that in light of the common-enemy doctrine, the “outside” neighbors were doing what they were allowed to do. The plaintiff had described their activities – one added gravel to a driveway, and the other piled mulch onto his lot – and had generally asserted that they had done so in an “unreasonable, careless, and reckless” manner. Normally you’d think that would be enough to get you past a demurrer, particularly as to the negligence count. After all, Rule 3:18 says that you can allege negligence generally, without specifying the particulars.
But today’s opinion contains a new requirement for pleading these claims:
[B]ecause this case applies the modified common law rule applicable to surface water, [plaintiff] must allege some negligent action or actions on behalf of [her neighbors]. A simple factual recitation that the [neighbors] did what the common law allows them to do in maintaining their properties and a bare legal conclusion that they did so negligently is insufficient.
So, what’s the plaintiff to do? Simply tolerate the mess of having her yard serve as a BMP for her neighbors? Well, I suppose she could get a truckload of topsoil delivered …
Marble Technologies, Inc. v. Mallon addresses a question that will interest dirt lawyers. Where a grant describes the parameters of an easement, and one of those boundaries is “Along Present Mean High Water,” what happens when rising sea levels swallow the depicted area? Does the easement move inland, along with the mean high water mark, or is it now traversable only by fish?
The court rules today that since the 1936 grant in this case described thepresent mean high water line, the eventual submersion of the dedicated area caused the extinguishment of the easement. In phrasing like this, the easement doesn’t migrate, so by law, it has been extinguished.
I anticipate that this ruling may have increasing importance in view of the prospect of rising sea levels due to global warning – unless that’s all a hoax by that 97% of liberal scientists, of course.
There’s one other important ruling in the case. The easement issue affected plenty of adjacent landowners, and the parties took their time in bringing all the necessary parties into court, necessitating one or more continuances. When the case came for trial, Marble Technologies asked for another continuance, arguing that not all necessary parties were before the court.
The trial court had had enough; it ruled that the trial was going on, despite the absence of necessary parties. How can that be, you ask? If a party is necessary to the adjudication of the case, isn’t the court powerless to proceed without that party?
This illustrates the difference between a necessary party and an indispensable party. Trial courts actually have discretion to proceed without all of the necessary parties, as long as (1) it’s “practically impossible” to join some of them, (2) the court can decide the case without affecting the rights of the missing parties, or (3) the necessary party isn’t indispensable. From the very word, you can probably figure out that where an indispensable party isn’t before the court, proceedings grind to a halt.
The justices find today that the trial court acted within its discretion in going forward with trial, noting that no one had contended that any of the missing parties were indispensable.
Tenancies by the entireties are in for a wild ride in Evans v. Evans, which resolves the question – which dirt lawyers figured had been answered long ago – of whether one spouse can convey his or her ownership interest by a sole act. Here’s the setup:
Mom and Dad bought a home in Tazewell County in 1973. From the street address on a street called Fairway Drive, I like to think it’s adjacent to a golf course. The developer who evidently built the house conveyed it to them as tenants by the entireties.
Three years later, Dad executed a deed that conveyed his ownership interest in the home unto Mom. That deed wasn’t recorded for another three years, until 1979; the record didn’t indicate who recorded it.
Fourteen years later, Mom, evidently sensing her own mortality, set up a trust and conveyed the home into it. She also executed a pour-over will the same day. A year later, she died, still married (and evidently happily) to Dad.
Mom’s will left some money to a couple of grandkids, gave Dad a life estate in the home, and then left everything else – including the remainder interest in the home – to one of the couple’s three sons. The other two offspring of the marriage, a pair of brothers, got cut out of the will/trust arrangement.
The brothers then headed off to court in 1995 to determine the validity of the 1976 deed. They squarely presented the court with the question whether one spouse can, by unilateral act, destroy a tenancy by the entireties. The trial court decided that the matter wasn’t ripe for a DJ action – apparently because Dad was still alive – so it dismissed without prejudice.
Everyone, including Dad, subsequently entered into a settlement agreement that allowed Dad to stay in the home for life; it also gave him about $80,000 “in full satisfaction of his claims against” Mom’s estate. In exchange, he waived any right he had in the property except for the life estate.
This arrangement lasted peacefully as long as Dad did, but upon his death in 2012, the parties headed back to court to figure out the legal effect of that 1976 deed. The trial court found that it was ineffective to sever the tenancy, so it was of no effect. The court also rejected arguments of estoppel by deed and that the 1995 settlement agreement was binding on the estate. That meant that the tenancy by the entireties survived all the way to Mom’s death, at which point Dad owned it; since his three sons were his heirs at law, they were to share the home as part of Dad’s estate.
Today a divided Supreme Court untangles all this legal mess. Senior Justice Koontz writes the majority opinion, in which the court finds that the 1976 deed really was effective after all. The court finds, in a matter of first impression, that severance of the tenancy requires mutual consent of the spouses. Dad’s intent is found in the express language of the deed, while Mom’s consent might be inferred from the recordation of the deed. But her estate plan, in which she regarded the property as hers alone, seals the question: she accepted the benefit of the deed, so she’s found to have consented to the transfer.
So, what about all that prior caselaw that says that the spouses have to act together as grantors in order to sever the tenancy? Those cases all dealt with conveyances to third parties; not between the spouses. In the eyes of the majority, that’s what makes this case different.
This analysis doesn’t satisfy three of the justices. Justice Powell, writing for the chief justice and Justice Mims, files a concurring opinion in which she finds that even between spouses, a jointly executed deed is required. Since the two spouses together – and not separately – held title to the home, it took a deed executed by both spouses, as grantors, to destroy the tenancy. Other than that, only death or divorce can end it.
The concurrence raises an important problem with the majority’s analysis. Pointing out that the spouses’ “mutual consent” had been found to occur over 16 years apart – Dad’s in late 1976 and Mom’s in early 1993 – the question arises: what was the status of the title in the intervening 16 years? And how would any creditors know about that?
The concurrence concludes that Virginia, one of 20 states to retain tenancies by the entireties, should continue to require that both spouses convey title out, even if it’s back to one of the spouses. This is a concurrence and not a dissent because Justice Powell would find that Dad’s execution of the settlement agreement in 1995 was sufficient to divest him of an interest beyond the life estate; at that point, Mom’s will would take over.
I prefer the concurrence’s view of the validity of the 1976 deed. I believe the fact that the conveyance is to one spouse shouldn’t overcome the need for both spouses to sign the deed as grantors; that’s always been one of the hallmarks of a tenancy by the entireties. But I have a nagging suspicion that the concurring justices’ solution might be problematic, too.
My suspicion arises by virtue of the Statute of Conveyances, Code §55-2: “No estate of inheritance or freehold … in lands shall be conveyed unless by deed or will …” Today’s opinion doesn’t say that when Dad went along with the settlement agreement in 1995, he followed it up by executing a deed or making specific provision in his will. If the only document that purported to abandon his interest in the home was the settlement agreement, I don’t think that works to alienate his title. It might work an estoppel – an issue that none of the justices decide today – but failing that, I don’t think you can just craft a settlement document and thereby convey land. Of course, it’s possible that a statutorily compliant document exists; it simply isn’t mentioned in today’s opinion.
Was that enough to satisfy your thirst for convoluted fact patterns? No? Then let’s turn to Deutsche Bank National Trust Company v. Arrington. This one’s a bloody mess of facts; I’ll do my best to present the situation accurately.
Husband and Wife buy some property on a street called Waters Edge. I therefore assume it’s waterfront and correspondingly valuable. Today’s opinion sets out that they took title as “tenants with the right of survivorship.”
I think there’s something missing in the slip opinion; it was probably either our old pal the tenancy by the entireties, or else a joint tenancy. Either of those bears a right of survivorship. In the end, it doesn’t matter, because the marriage dissolved. By law, when that happens, a tenancy by the entireties ends anyway.
The split spouses executed a separation agreement that called for Husband to get the property and for him to pay Wife $11,000 a year for ten years. In order to carry that out, Wife executed a deed of gift of her half interest in the property, unto Husband. The deed was recorded two weeks later, and under today’s holding in Evans, that was effective to convey title, even though the circuit court hadn’t entered a final divorce decree yet.
Now for the bizarre developments. A year after that deed of gift and eight months after the parties divorced, Husband conveyed the property to Mr. Purchaser by general-warranty deed. That, too, was promptly recorded. Thirteen months later, Husband took out a $675,000 mortgage on the property that he no longer owned.
A long time ago, in a galaxy far, far away, lived a young, newly minted lawyer named Steve who spent hours in record rooms in Tidewater, searching titles in anticipation of sales or mortgages of real property. That young lawyer would have been mortified by Husband’s brash decision to record a deed of trust on property he had already sold.
But he would have been even more startled that a bank would give Husband a deep six-figure loan on a phantom title; it would appear that some poor title examiner simply missed the deed into Mr. Purchaser. At this point, I’m expecting a title insurance claim by the bank to recover its loss, since I doubt Husband is going to pay the loan back.
But no; that’s not what happened. You see, on the day when Husband mortgaged the property, Mr. Purchaser handed Husband a quitclaim deed giving Husband the property back. Husband for some reason never recorded that deed, and it’s never shown up anywhere.
There’s more. The bank that loaned Husband all that money on property he didn’t own – at least not of record – held off recording its deed of trust for almost two years.
If that’s convoluted, please know that we’re just getting warmed up. Shortly after the bank finally recorded its deed of trust, Wife took Husband to court, claiming an arrearage in that annual payment. In order to purge himself of contempt, Husband executed another deed of trust, this one in favor of Wife, to secure the divorce obligation.
A few months after that, the unthinkable happens: Mr. Purchaser shows up again, and delivers unto Husband a general-warranty deed, reconveying the property back to Husband. This deed and Husband’s deed of trust in favor of wife were recorded on the same day, probably back-to-back, so Wife’s deed of trust is in the chain of title.
But the bank’s isn’t; it was delivered and recorded at a time when Husband, the mortgagor, wasn’t the record owner of the property. When all of this exploded, the bank turned to a statute – Code §55-52, the after-acquired title statute – that provides that when an owner doesn’t possess title when he delivers a deed, but later acquires that title, then his conveyance is valid. The bank pointed to that and told a trial judge that its deed of trust was therefore legitimized, and predated the one recorded by Wife.
The trial court was havin’ none o’ that; it ruled that Wife’s deed of trust held a valid first-lien position. Today, the justices agree after analyzing the statute. They hold that wife, in order to have priority of right over the bank, has to be either a purchaser for value without notice of defenses, or a lien creditor. The court finds that she’s plainly a lien creditor, since Husband owed her a debt and she got a lien to secure its repayment. And the bank’s lien wasn’t “duly admitted to record” because it was outside the chain of title.
After reading and analyzing this case, I find myself dizzy with wonder that all these things could actually have happened. I’m fond of quoting Tom Clancy’s observation that “Truth really is stranger than fiction, because fiction has to make sense.” This case is a fine illustration of the late author’s wisdom in that regard.
There’s a simple question that drives Ballagh v. Fauber Enterprises, Inc.: in a claim under the Virginia Consumer Protection Act, does a plaintiff bear the burden to prove her claims by a bare preponderance, or by clear and convincing evidence?
This case arises out of claims that a seller concealed water damage in the sale of a home. After the evidence was all in, the parties disagreed on the jury instruction that set out the plaintiff’s burden. The trial court agreed with the defendant that it was clear and convincing; the jury thereupon retuned a defense verdict.
The justices agreed to take the case, since there’s no caselaw that sets out this burden. It notes that there’s a general presumption that when the legislature creates a right and doesn’t specify the burden of proof, that burden is a preponderance. The court also notes that the Act is remedial in nature, so that militates in favor of a lower burden.
The seller has some interesting responses to this. It first argues that the Act provides relief for a species of fraud, and fraud requires clear and convincing proof. But the justices ruled as recently as this year that the Act covers far more than just fraud.
The seller then notes that the legislature specified an affirmative defense to these claims, and spelled out a preponderance standard for that defense. It argues that this provision would be redundant if the plaintiff’s burden were also preponderance. The justices today call this “a plausible argument,” but ultimately reject it because it doesn’t constitute an express statement by the General Assembly of what the plaintiff’s burden is.
The seller isn’t done yet; it contends that the Act provides extraordinary relief in the form of treble damages. Surely a stiffer burden must apply where the law multiplies damages, right? Wrong. The court cites several other instances, such as the bad-check law, where statutes provide trebling without affecting the burden.
The seller has one last card to play. It argues that “applying the preponderance standard for VCPA violations would make common law fraud obsolete because plaintiffs would allege VCPA violations instead to benefit from the lower standard of proof.” This is a really nice try, but the justices point out that proof of fraud can often result in far more than treble damages, in the form of punitive damages. A plaintiff can pursue both kinds of claims but can only recover for one; she can elect her remedy after the jury sorts things out for her.
Finally, the court cites appellate decisions from 11 other states, all of which apply the preponderance standard to their consumer-protection statutes. Henceforth, a plaintiff who brings a VCPA claim has to meet a preponderance standard in order to prevail at trial.
The court delivers a mixed result to the parties in Cain v. Lee, and appeal of a judgment involving an intoxicated driver who injured three members of a family in another car. When Lee rear-ended the family’s car, an investigating officer suspected DUI. Lee failed a field sobriety test and blew a .24 on the preliminary-breath-test machine. That gave him the right to remain silent.
Lee refused the full breath test that a magistrate offered him so he was charged with DUI and refusal. He later entered a guilty plea to DUI, and the prosecution nolle prosequied the refusal charge.
Three family members sued Lee. At a combined trial, they called Lee as an adverse witness, at which point this happened:
Lee was asked if he was intoxicated at the time the collision occurred, to which he responded, “I wouldn’t say intoxicated. I had been drinking.” When he was asked again if he was drunk at the time of the collision, Lee stated “[t]hat’s what my paperwork says, .08 to – yes.”
The family sought to introduce the PBT result, in an understandable effort to impeach Lee’s testimony that he wasn’t intoxicated. The trial judge refused to allow that. The court also refused to permit the family to adduce evidence that Lee had been arrested for yet another DUI 2 ½ years after this collision, and had been kicked out of the VASAP regimen for noncompliance.
The final dispute that arrives in Richmond for decision today is a jury instruction that the family opposed, but the court gave: “Punitive damages are generally not favored and should be awarded only in cases involving egregious conduct.”
With liability basically admitted, the only thing for the jury to decide was damages. The family’s injuries had been mercifully slight, so the jury awarded them a total of $12K in compensatory damages and $500 each in punitive damages.
The family got a writ. Of these three juicy issues, the justices only decide two. The court predictably rules that the punitive-damage instruction was improper. It was crafted from the language of a 2005 Supreme Court opinion, and the court today reminds litigants and trial judges that simply culling judicial language and crafting an instruction out of it isn’t always a good idea. There’s no requirement in the law that a defendant’s conduct has to be “egregious” in order to justify punitives; and anyway, the legislature has expressly provided for those damages in instances of drunk driving. Since the legislature has approved them, the courts aren’t free to say that they’re “discouraged.”
This ruling results in a reversal. But sensing that the issue of the subsequent DUI would pop up again in a retrial, the justices go ahead and rule that the trial judge got this ruling right. The only circumstances that are relevant to the jury’s decision here are the defendant’s acts at and around the time of this incident, not two years later.
The justices choose to leave the intriguing issue of the PBT on the table, figuring that Lee’s answer the first time was so quirky, it isn’t likely to occur again on retrial – when his lawyers are sure to prepare him not to say anything so foolish again. Personally, I believe that if the justices had reached this issue, it would have been reversed. A misstatement like that just cries out for impeachment, and I believe the family should have been allowed to adduce the result of that test for that purpose. But I can’t disagree with the conclusion that this one isn’t as likely to arise again as the subsequent DUI.
I did find one “dog that did not bark in the night” in this short opinion. The justices reverse and remand “for further proceedings not inconsistent with this opinion.” So what’s the retrial going to cover? The assignment of error only dealt with the punitive-damage claim; does that mean that the second trial can’t touch the (unappealed) compensatory-damage awards? The language in the opinion’s conclusion doesn’t spell that out, but my best guess is that the retrial will only be on the issue of punitive damages.
The court hands down a published order in another case involving a rear-ender – Cosby v. Clem. The parties in this case had three trials, and were still fussing with each other.
This was a “thin-skulled plaintiff” case. The plaintiff had received a spinal-cord-stimulator implant ten years before the collision, and it had given her problems for years. She testified that the collision caused it to stop working, necessitating a course of medical care that included surgery to replace a pulse generator and a cable in the unit. That treatment cost about $180,000.
At the first trial, the jury awarded the plaintiff $9,000. That isn’t a typo; it’s nine thousand dollars. The judge granted the plaintiff’s motion for additur of the actual amount of the medicals, but the defendant elected a new trial instead. This one didn’t go well for the plaintiff, either; the second jury gave her only $1,700, representing her ER bill on the date of the collision. The judge ordered additur again. There was an eventual third trial in which the judge granted partial summary judgment for $177K in medicals; the jury added $6,000 to that for pain and suffering.
The first thing this tells me is that the plaintiff must have made a terrible witness. She suffers a debilitating, painful injury, gets three cracks at trial, and the most a jury gives her for her trouble is nine thousand bucks? But I’m speculating now; I should stick with analysis.
The issue on appeal is whether the trial judge should have granted additur, or simply entered judgment on the $9K verdict. Today the justices rule that the verdict was consistent with the evidence. The plaintiff’s doctor testified about his treatment of and surgery on the plaintiff; but he took her word for it when she said the collision cause the device to malfunction. The jury was entitled to disregard her testimony and award her nothing for her medicals, since it could have determined that those didn’t arise from the crash. The justices accordingly reverse and enter final judgment for the $9,000 verdict.
There are several important rulings in Egan v. Butler, a single opinion that resolves parallel appeals by two judgment debtors. This is a claim of malicious prosecution and defamation by a diesel mechanic against his former employer and a supervisory employee of that company.
Butler, the employee, worked for the company for a good, solid three months before the supervisor, Egan, fired him. Today’s opinion only hints at the ensuing fracas; it’s possible that the employee shoved the supervisor and the supervisor responded by stabbing the employee. In any event, the supervisor swore out an assault warrant against the employee, but that charge died in a dismissal order a few months later.
With the charge dismissed, the employee sued the supervisor and the company for compensatory and punitive damages. During the trial, the defendants sought to adduce evidence of the employee’s work history and of the quality of his work, but the trial court refused that. A jury returned a verdict for the employee, awarding both compensatory and punitive damages.
On appeal, the justices first take up the issue of the exclusion of evidence about the employee’s past. The court rules that the trial court should have admitted the evidence, since it was probative of the employee’s calculus of future income loss. The plaintiff’s evidence on this point was fairly rudimentary: He testified that he obtained replacement employment that paid $6,000 per year, and then multiplied that times the number of years he planned to work before retiring.
The justices find that evidence about the employee’s work history and the quality of his work is highly probative of the issues raised in a future-income-loss claim. The discussion of this point includes an important holding: the longer the duration of a future claim, the more specific and certain the evidence must be. Note that no employee is required to prove the exact amount of his damages; he just has to adduce enough evidence to enable the factfinder to make a reasonable estimate. But if you want twenty-some years of future income in a damage award, you have to do more to advance the ball.
The judgment is accordingly reversed for a new trial on compensatory damages. But the court also reverses the punitive damage award against the company, since it finds the evidence insufficient to pin the supervisor’s actions on the company.
Tort lawyers will immediately recognize the importance of this ruling. Just identifying a person as a supervisor within a company isn’t enough to establish that his liability for punitive damages runs to the company as well. It’s different with compensatories, of course, where the doctrine of respondeat superior generally makes the employer liable. But Virginia law draws a distinction when it comes to punitives.
The court also notes that the employee never even pleaded the other way to tag a principal for punitive damages – authorization or ratification. Accordingly, the punitive-damage award is vacated and dismissed.
Today’s opinion has a coda of sorts, in which the court spells out what happens on remand. There’s a painful footnote on page 19 of the slip opinion, where we find that the appellants also assigned error to the compensatory award, complaining that the employee’s evidence was too speculative. If this claim were meritorious, it would probably result in final judgment for the defendants.
But we’ll never know. The footnote states that the appellants failed to brief this issue adequately, so consistent with the court’s prior practice, it considers the issues waived. That means the employee gets another crack at proving damages on retrial.
In the context of large commercial-realty management litigation, I would think that $38,000 is relatively small potatoes. But that’s the amount in issue in Spectra-4, LLP v. Uniwest Commercial Realty. Someone, at least, figured it was an amount worth appealing.
Our tale starts in 1995, when a management company called Jefferson/LBG signed contracts with the owners of two commercial buildings up in the State of Northern Virginia. The buildings were owned by separate LLPs, and the management company signed one agreement with each. That arrangement worked for two or three years, until the management company went out of business. Immediately thereafter, a new management company with a similar name – Jefferson Commercial Real Estate Services, took over. It wasn’t affiliated with the earlier company, but it assumed its duties. The new company didn’t sign contracts with either building’s owner.
That one only lasted a year or so. Then Uniwest arrived; it gobbled up the second management company’s assets in a purchase and started managing the buildings. Again, there was no new agreement.
That arrangement actually worked for about 12 years, but by 2012, the owners decided to go in a different direction. They notified Uniwest that they were terminating the management agreements. Uniwest resisted, saying that the management agreements – that would be the management agreements that Uniwest never signed; hint, hint – didn’t permit an early termination.
That brought lawyers in on both sides. After a period of wrangling, the parties agreed that Uniwest would be out in October 2012. Before it left, it scooped about $36,000 out of the owners’ accounts for “early termination fees” and another $1,700 for photocopying. Those withdrawals formed the basis of the ensuing lawsuit.
The circuit court agreed with Uniwest that, although the management company hadn’t signed an agreement with the buildings’ owners, an implied-in-fact contract existed that mirrored the old Jefferson/LBG deals. Since those agreements did provide for early-termination fees, the trial court ruled that Uniwest’s withdrawals were proper.
The Supreme Court reverses today. It agrees that there’s an implied-in-fact contract, but it disagrees that such contract imported the earlier agreement wholesale. The court finds that only those terms that formed the parties’ course of dealing were implied; not the whole earlier deal. Since there was no corporate history of early termination – and really, how could there be one? – the implied-in-fact contract didn’t authorize the termination fees or the copying costs. The case is remanded for the circuit court to enter appropriate judgments for the owners.
This case is particularly useful for the court’s explanation of the difference between contracts that are implied in fact and those implied in law. It also helps to explain just which terms the courts will actually imply.
For the second time this year, the justices decide a legal malpractice appeal. Today’s version is Desetti v. Chester, an appeal from an Augusta County judgment.
During an incident at her home, Desetti smacked a cop. Actually, I infer that it was more significant than just boxing the gendarme’s ears; she was charged with felony assault and battery of a police officer, in addition to obstruction of justice, so there was probably an egregious component to the event.
Desetti hired Chester to represent her. The prosecution offered him a plea agreement – misdemeanor assault, with no sentencing recommendation – but according to the complaint in this legal-mal action, he never conveyed that offer to his client. Instead, he used a phrase that, in my opinion, ought to be a Class 5 felony for lawyers to utter to their clients: “You’ve got a slam-dunk case.” He urged her to go to trial.
In my experience, when someone describes a potential appeal to me as “a slam-dunk,” I immediately become four times as wary as before. But I digress.
The complaint also alleges that the lawyer made two other mistakes. He didn’t instruct his client that a conviction of a felony carried a mandatory six-month active jail sentence; and he didn’t discuss with her the idea of offering a lesser-included-offense instruction that would have enabled the jury to convict her of only a misdemeanor.
You’ve already figured out that this doesn’t end well for our protagonist. The jury convicted Desetti of the felony, and after an unsuccessful appeal, she was off to the pokey for six months. A month into that sentence, she filed a habeas petition that alleged ineffective assistance.
Surprise! The habeas judge agreed with her and tossed the felony conviction, finding the lawyer’s representation to be “constitutionally deficient.” When the prosecutor elected to retry her, she took the misdemeanor deal. The court sentenced her to ten days in jail, all suspended.
Now it’s time for this legal-malpractice claim. But the lawyer demurred, claiming that his erstwhile client hadn’t satisfactorily pleaded that her damages proximately sprung from his representation of her. Specifically,she wasn’t innocent. This factor distinguishes this appeal from the recent decision in Shevlin Smith v. McLaughlin, where the client was exonerated on retrial. The trial court sustained the demurrer and dismissed the suit, without granting leave to amend.
The client got a writ, but today she gets no help from the justices. The Supreme Court affirms, noting that a client who sues for legal malpractice in a criminal case has a higher pleading standard than one in a civil-based claim. The reason for this is simple: the courts don’t want someone committing a crime and then profiting from it by filing a malpractice suit.
Here’s the ultimate takeaway from this opinion. A plaintiff in Desetti’s position “must plead facts establishing … that the damages to be recovered were proximately caused by the attorney’s negligence but were not proximately caused by the legal malpractice plaintiff’s own criminal actions.” Against this backdrop, the court unravels the complaint and finds it wanting. For example, Desetti never asserts that she would have been sentenced to a lighter term than six months if she had agreed to an early misdemeanor plea. The fact that she actually received a suspended ten-day sentence after she had wrongly served six months doesn’t lead inexorably to the conclusion that she would have received that sentence on a plea in the first place. After all, the maximum penalty for a misdemeanor assault is 12 months plus a $2,500 fine, and the original plea offer didn’t contain a sentencing recommendation.
Limitations of actions
The court addresses the rare circumstance of equitable tolling of the statute of limitations in a published order released today. The case is Birchwood-Manassas Associates, LLC v. Birchwood at Oak Knoll Farm, LLC.
As you might guess from the names, these are affiliated entities. Birchwood-Manassas was created to own, develop, and sell real estate; Oak Knoll and another LLC were also organized to develop property. The entities had common managing members, two men named Horowitz and Haims. From time to time, funds swept back and forth between the entities. While that might excite your suspicions about intermingling of funds, the transfers were at least facially legitimate, and showed plainly on the companies’ books.
But eventually, things soured and a non-managing member of Birchwood-Manassas sued to wind up the affairs of the company, citing “an irreconcilable conflict” between the managers of businesses that were in a debtor/creditor relation to one another.
A trial court granted the relief and appointed a liquidating trustee. That trustee demanded repayment of all loans due unto Birchwood-Manassas. Oak Knoll and its sister entity, Birchwood at Wading River, asserted the statute of limitations on the claims.
The parties agreed that a three-year period applied to the debts, and that more than three years had expired since the claims accrued. But the trustee asserted that the limitations period should be tolled because of the “irrevocable conflict of interest of its managers, and their breaches of fiduciary duties to Birchwood-Manassas.”
This, then, is a case about when equitable tolling applies. Normally, statutes of limitations are strictly construed, and they won’t be tolled unless there’s a statutory tolling provision. None of the provisions in the relevant statutes applies. That left the trustee to turn to equity. The Supreme Court has approved equitable tolling in what it has described as two “extraordinary circumstances.” Those are (1) where fraud prevents a plaintiff from suing, or (2) where the defendant affirmatively prevents the plaintiff from suing.
But neither of those exact situations apply here, either. Today, the justices rule that they won’t extend equitable tolling to cover situations involving claimed conflicts of interest or breached of fiduciary duties. The court notes that loans between affiliated business entities are quite common. And any disgruntled members could have brought suit within the limitations period; no one stopped the fellow who stepped forward and started all this litigation.
Although this is just a published order, this is an important decision in that it illustrates the justices’ great reluctance to venture beyond statutory tolling.
Today is something of a red-letter day in the field of libel and slander; the court hands down two significant decisions in this field. We’ll start with Pendleton v. Newsome.
This appeal arises from a tragedy, the death of a seven-year-old girl who suffered a fatal allergic reaction after ingesting a peanut at school. Local news media jumped on the story, producing interviews with the mother and with school officials. The mother asserted that she had fully alerted the school’s nursing staff about her child’s allergy, even handing over an Epi-Pen that could be used in an emergency; she related that the staffer with whom she spoke assured her that the school was well-supplied, simultaneously handing back the Epi-Pen.
When it was the school officials’ turn to be interviewed, they had to be very circumspect; privacy laws prevented them from identifying the child by name or from commenting on the circumstances of this child’s death. But the school’s carefully crafted statements contained a clear message: We rely on parents to equip us with information necessary to handle situations like this. If parents don’t do that, we can’t carry out doctors’ orders.
The mother felt that this was a suggestion that she had dropped the ball, and was responsible for her own daughter’s death. She sued several school officials, each of whom had given a version of the scripted statement to the media. She claimed that the officials’ statements could only be read as addressing her, even though she wasn’t mentioned by name; and that the statements carried the innuendo that the mother had brought on the death.
A trial court initially overruled the officials’ demurrers, but in light of the justices’ recent ruling in Webb v. Virginian-Pilot Media from last year, the judge changed his mind and sustained them, dismissing the case. Today, the justices reverse and send the case back for trial.
Today’s opinion is a helpful review of the elements of a defamation claim. A plaintiff has to show how the statements are actionable; that part’s called the inducement. Next, she has to establish how it refers to her (assuming she isn’t expressly named); this is the colloquium. Finally, she has to establish the meaning of the words, “if it is not apparent on its face.” This is called the innuendo.
Senior Justice Russell writes for a unanimous court. He quickly concludes that the allegation that a mother is responsible for her child’s death “would be defamatory.” He next notes that while none of the statements refer to the mother by name, in context it’s quite clear that the school officials were referring to her and to no one else. Finally, he points out that “evidence is admissible to show the circumstances surrounding the making and publication of the statement which would reasonably cause the statement to convey a defamatory meaning to its recipients.” The court thus reverses to allow the mother to develop her case for trial.
The second defamation opinion today is a whopper: Schaecher v. Bouffault arose from, of all things, a special-use-permit application for a kennel.
No, really; it did. The plaintiff is the owner of two companies, one of which was to buy some Clarke County land, and the other of which was to operate a kennel there to provide “rehabilitation services to displaced companion canines.” Given my fondness for a certain canine back at home, The Big Woof, I like this idea.
But not everyone liked it. A neighboring property owner happened to be on the County Planning Commission. She was smart enough to know local land-use laws, and found several faults with the application. According to the complaint – and we have to accept these assertions as true, since the case died in the trial court on demurrer – the Commission member sent several defamatory e-mails and made statements to a local newspaper, all with the intention of killing the project. The suit — brought by the owner and by one of the companies — alleged that she succeeded in doing so; it contained a copy of the fully executed contract, and alleged that it had failed to close. It sought damages for defamation and for tortious interference with contract.
Much of today’s analysis is a fairly straightforward explanation of the justices’ agreement with the circuit court on some of the more benign e-mails. Those asserted, for instance, that the planned kennel would be contrary to an existing easement on the land that prohibited that kind of use. The plaintiff had asserted that this was a thinly disguised assertion that she was a lawbreaker; but the Supreme Court, quite correctly in my view, rules that there’s no defamatory “sting” to them, so they aren’t actionable.
Okay, but how about this statement: “I firmly believe that [the plaintiff] is lying and manipulating facts.” You have to admit that there’s nothing at all benign about this one, and the justices quickly conclude that this is at least potentially defamatory.
Perhaps you seized upon the first four words and concluded that this is just a matter of opinion. You generally can’t be held liable for expressions of opinion – things that cannot be proved true or false. But caselaw establishes that you can’t shield yourself from defamation liability by prefacing a false statement with the words, “In my opinion …” This one looks likely to be actionable.
Except it isn’t. The court conducts a very detailed analysis of the entire e-mail, and notes that the Commission member had prefaced these fiery words with details on how the applicant’s statements were at odds with history. In that context, we get this ruling, which may surprise you:
As [plaintiff] has not pled that the stated facts are themselves false and defamatory, in order for [defendant’s] statements to be defamatory, it would have to be reasonable for [the recipients] to perceive that [defendant] had an implied factual basis for her accusation that [plaintiff] was lying of which they were unaware.
Did you know that? Did you realize that, in pleading a defamation claim arising from a statement that you’re a liar, you have to assert not only that you aren’t a liar, but also that the individual statements the defendant relied upon were themselves lies? As of today, you do indeed have to allege that. In reaching this conclusion, the court today cites three federal circuit-court decisions; this appears to be a first-impression decision in Virginia.
The court also agrees with the dismissal of the tortious-interference claim. I’ll confess that the explanation for this ruling left me unsatisfied; there may be more in the record to support it that I just don’t know.
The court decides this claim on a narrow issue. The sales contract was attached to the pleading as an exhibit, and the plaintiff asserted that because of the defendant’s obstructionism, the contract “became cost prohibitive” and had to be terminated. Here’s what happens next:
Although [the corporate plaintiff] alleges that it was terminated, the last iteration of the contract was signed and indicates that settlement would occur the day after the amended complaint was filed. In short, nothing in the contract indicates that it has been terminated. A court considering a demurrer may ignore a party’s factual allegations contradicted by the terms of authentic, unambiguous documents that properly are part of the pleadings.
The justices affirm the dismissal of this count because the plaintiff attached a “live” version of the contract. The complaint asserted that it had been terminated, but the justices reject this assertion, since they’ve got what looks like a valid contract attached to the pleading.
This is the part that left me unfulfilled from an analytical standpoint. The plaintiff can’t attach a copy of the contract and assert that it has been terminated? Does she have to attach a document that effects the termination? Evidently so; merely alleging that it was terminated isn’t good enough.
I would think that the court would have to accept this unambiguous factual assertion. After all, this isn’t an instance where the contract says X and the pleading says Y. I assume that there’s nothing in the contract that says that it hasn’t been canceled, so the pleading doesn’t really contradict the attachment.
That being said, I’ll just have to get used to disappointment. For your sake, when you‘re pleading a breach of contract, you now have a perplexing requirement. You may need to get a document that formally reflects the contract’s termination. Without it, your unambiguous assertion that it has been terminated isn’t enough to get you to a jury.
I found myself chuckling early in my reading of Alexandria Redevelopment & Housing Authority v. Walker. At the end of the procedural-history section, the opinion quotes the trial judge thus, in commenting on his case-dispositive ruling: “I may be wrong, but I’m sticking with it.” It’s one thing for a trial judge to say that in open court, but when it gets quoted in the appellate opinion, you strongly suspect that his honor’s forecast is about to come true.
The procedural posture of this case is at times baffling. That’s not because of the Supreme Court’s opinion; Justice Kelsey does a very good job of laying out clearly what transpired below. I was baffled because I found myself muttering on occasion, “Now, why on Earth would he [sometimes the litigants and sometimes the trial judge] do that?”
This all started when ARHA fired Walker for excessive absenteeism and tardiness. The Authority had in place an employee-grievance program that, as is customary for such things, contains several steps. The last of these is for the parties to select an arbitrator to decide the matter. This policy contained a selection provision that resembles the process for peremptory challenges in jury trials: you start with an odd number of potential arbitrators, then each side strikes one until you’re left with one name, and he’s your guy.
The Authority sent Walker a list of proposed arbitrators, and reminded her that the parties had 30 days to complete this process. Instead of striking her first goblin from the list, she ignored the problem. At one point, she responded to an e-mail by writing, “I am seeking counsel so I can go to court.” When the Authority’s representative sent a follow-up question, asking if she was abandoning arbitration, she ignored that, too.
Thirty days passed, and despite another reminder before the deadline, Walker still hadn’t answered. The Authority then told her that it considered the arbitration request as withdrawn. The next day, Walker sprung to life, saying that she was indeed “interested in arbitration” but mentioning nothing about her previous silence. In subsequent exchanges, she expressed the sentiment something like, “We shouldn’t be doing this by e-mail,” and “I never got a list of arbitrators.” The Authority responded by saying that it had already closed the file.
Almost a year later, Walker filed suit, claiming that the Authority had unilaterally cut off her arbitration rights. She sought only two forms of relief: money damages and an injunction reinstating her to her old job.
The Authority responded with a motion for summary judgment. I’m not sure if that motion asserted the 30-day limit for filing suit after a determination; she had missed that date by almost 11 months. Even so, the trial court entered what it termed a “Final Order Granting in Part and Denying in Part Motion for Summary Judgment,” calling it a final order in the body of the document. The judge did something that Walker had never asked for – he sent the parties to arbitration. He based this ruling on his perception that what had happened was a “miscommunication between the parties as opposed to a compliance issue.”
The Authority made what is to me the entirely predictable decision to seek appellate review. Shortly before the mandatory, jurisdictional 30-day deadline to file a notice of appeal, it sent such a notice to the trial-court clerk by overnight courier. The courier delivered it on the deadline day – to the deed desk, not the civil division of the clerk’s office. By the time it got into the right hands and was datestamped, it was the 31st day.
Because I’m gentle-natured, I won’t criticize the Authority’s lawyers for filing something that’s mandatory and jurisdictional on the last possible day. I’ve never walked a mile in their shoes. But for you, my loyal readers, I have some heartfelt advice: For God’s sake, don’t do this! A notice is simple and easy; it’s three sentences and takes four minutes to prepare. As soon as you think it’s even slightly likely that you’ll want to appeal, go ahead and file it. You don’t surrender anything by filing the notice on, say, the 24th day.
Before you think this is going to turn into another Landini v. Bil-Jax, please know that the Authority’s lawyers – unlike Landini’s lawyer – found out about the delayed datestamp. They quite properly moved the trial court to direct the clerk to correct the filing date, and after a hearing, the court did just that. Courts have jurisdiction to correct ministerial errors like this, and the justices see nothing wrong with the way the court handled this one. Because of this finding, the Supreme Court begins by denying Walker’s motion to dismiss the appeal.
The court then turns to the merits. It begins with the premise that by statute, when one party blows off a requirement in the grievance process, the other party wins if the error isn’t corrected within five days. Here, Walker waited hopelessly too late to file her suit – almost a year, when she only had 30 days – so the justices find that the trial court should have cut the proceedings off right there. In a footnote, I sense the court’s barely concealed astonishment that the judge would have awarded Walker relief that she didn’t plead, in plain violation of a long line of caselaw. (You can’t get relief you don’t ask for, in trial courts and on appeal.)
In the end, the Supreme Court reverses and enters final judgment in favor of the Authority. Experienced readers of these opinions could see this one coming from a mile off, since almost half of the factual section is a recitation of Walker’s failure to adhere to deadlines or even respond to e-mails. Being diligent won’t always result in a victory, but even when it isn’t a case-dispositive item, it can color the Supreme Court’s view of the evidence and the issues.
When a person makes a will, and after his death no one can find the original, Virginia law applies a presumption that the testator decided to revoke it, presumably by tearing it in half. (Yes, that’s a valid way to revoke a will.) Edmonds v. Edmonds involves a proceeding to establish a photocopy of a missing will for probate purposes.
A man we’ll call Dad was married twice. The first marriage, evidently celebrated early in his life, ended in divorce. The divorce apparently roughly coincided with the birth of Dad’s son; by the time the son grew up, he had no memory of Dad, and had no relationship with him.
Dad married again in 1972, this time to Mom, and they had a daughter. Dad made three wills: one in 1973, one in 1989, and one in 2002. In each will, Dad acknowledged that he had a son, but specifically cut the son out of his will. Each will named Mom as Dad’s primary heir; as the daughter grew up, she was gradually listed as a contingent beneficiary in the 1989 version. The 2002 will created a family trust that carried this arrangement out yet again.
Dad mentioned this specific arrangement on numerous occasions to others, including persons outside the family. But when he died in 2013, no one could find the original will; just a photocopy in a binder that his estate lawyer had given him along with the original document.
Mom filed a suit seeking to have the court accept and probate the photocopy. She named the son and daughter as defendants. The daughter answered, asking that Mom’s request be granted. The son also answered, but he asked the court to apply the presumption and find that Dad died intestate, so he would share in the estate.
At trial, Mom produced numerous witnesses who testified about Dad’s unequivocal statements to them about his estate plans. He mentioned that he had no relations at all with his son and had made no provision in his will for him.
So how does the son even have a prayer here, even with the presumption, in the face of all this testimony? Here’s the answer, contained in an excerpt from a 1983 Supreme Court decision:
This presumption, however, is only prima facie and may be rebutted, but the burden is upon those who seek to establish such an instrument to assign and prove some other cause for its disappearance, by clear and convincing evidence, leading to the conclusion that the will was not revoked.
I’ve italicized the relevant part of the decision. Son argued that while all these folks were able to testify about what Dad had said to them, all of that evidence was beside the point. Mom (and presumably the daughter) had to affirmatively prove the cause of the will’s disappearance, and they never even undertook to do that. No witness testified that the original will was gone because it was purloined by a burglar, or that it was burned to a crisp after being hit by lightning.
The trial judge ruled in favor of Mom and the daughter. (Okay, admit it: you were rooting for them, weren’t you?) On appeal, the justices affirm. Today’s opinion points to other language in the same 1983 opinion in which the court held, for example, that “it was not incumbent upon [the proponent] to prove that the [will] was destroyed or suppressed by any certain person nor specifically what became of said will …” The evidence that Mom adduced was quite sufficient, the court finds, to establish that Dad never changed his mind about how he wanted his property distributed.
Reflection on today’s rulings
Did you notice something missing from today’s batch of decisions? A familiar feature of opinion day, inexplicably absent?
Perhaps you caught what I’m referring to: There are no dissents in any of the 15 rulings I discuss above. Not one. The closest we get is a concurrence in Evans v. Evans over the right way to get to the same result.
I’ve covered every opinion day since January 2005. At least since Justices McClanahan and Powell arrived in 2011, I can’t recall a single opinion day with such unanimity of views from the bench. Once upon a time, dissents in our Supreme Court’s opinions were rare; the court tended to speak with one voice, especially in the last century. More recently, I’ve become accustomed to seeing nearly half of the court’s decisions come with a rebuke from a minority.
The answer to your next question is no; I don’t expect this to last. I suspect we’ll see some fireworks when the court next hands down its decisions in September.
If you were following the Sweet Briar College case that was argued today – or any other case argued this week, for that matter – you can go to this link to listen to the audio recording of the argument. This is the tenth session since the court began making these recordings publicly available. I applauded that decision when it was announced, and I echo that applause now. This is a wonderful dose of judicial openness that serves everyone in the system well.
Finally, if you’ve stuck with me throughout the whole length of today’s essay – almost 10,000 words of analysis – I thank you. I hope the prose sparkled, and I greatly appreciate your continuing support for this site. If you’ve been here since the beginning, this is our 64th opinion day together. I have no plans to stop soon.
Health and happiness to each of you.