ANALYSIS OF JUNE 8, 2007 SUPREME COURT OPINIONS
[Posted June 8, 2007 ] The Supreme Court hands down 26 published opinions today, in a very wide variety of case areas. (Most sessions, we see opinions in seven or eight case areas; perhaps as many as ten. Today, I count fifteen.) There are also five cases decided by order, some of those unpublished. I am certain that I won’t be able to post commentary and analysis of that many cases today, so I’ll post as I progress through the day, and will finish this process over the weekend.While the attention of the mainstram media will no doubt focus on the capital murder opinion in Gray v. Commonwealth and the statute of limitations decision in the Catholic Diocese of Richmond case, lawyers will find the Haugen v. DSS case absolutely compelling reading.
Civil procedure
As I type this, I am only about halfway through reading the 26 published opinions handed down by the court today. Despite that, I am ready to state that Haugen v. Shenandoah Valley DSS is the Case of the Day, and is an early frontrunner for the Case of the Year.
This case is about continuances, so it will have at least some application for a great many trial lawyers. (It also implicates imperfect factual records, so it holds equal value for appellate practitioners.) The majority opinion, authored by the chief justice, announces a definitive rule for appellate review of trial courts’ decisions on continuance motions. I’ll state that rule here, for those who are merely skimming this essay for meaty content: Continuance rulings are within the trial court’s discretion, “and must be considered in view of the circumstances unique to each case.” Appellate courts will overturn such rulings “only upon a showing of abuse of discretion and resulting prejudice to the movant.” [Emphasis original] The court also notes that where rejection of a continuance request seriously impairs the just determination of a case, that ruling will be reversed.
If you’re only interested in getting the substantive rulings of today’s opinions, and have no interest in the real newsworthiness of this case, you’re welcome to scroll down to the section below on real property. For the rest of you, read on.
Those of us who read appellate opinions for a living know that there is a language of appellate discourse. Like the language of diplomacy, it is usually (though not always) understated, as the authors are mindful of the context in which they write. Today’s justices are the successors of men like George Wythe, St. George Tucker, and a host of other Virginia legal luminaries whose portraits hang solemnly in and outside the main courtroom. The language of these opinions over the centuries has ranged from terse to flowery; from earnest to subdued. Above all it is respectful of opposing views, even while insisting that those views are mistaken. Reading a majority and a dissenting opinion in a case is often like watching a waltz, in which the participants treat a subject, and the opposing view, with grace and deference, though they disagree on the outcome. On occasion, as in some of the debates between Judges Humphreys and Kelsey on the Court of Appeals (about which I’ve written recently), it’s a beautifully choreographed fencing match, with thrusts and ripostes.
Today’s opinions are a bit different. Not in any lack of professionalism; that quality is clearly present in both opinions. The difference is that there is no pretense of subdued disagreement here. The court drops a bomb in this case, and this one is thermonuclear.
When you read the majority opinion, you’ll immediately start making judgment calls about how this case was handled below. Haugen is a federal inmate who is the mother of a child; this petition was filed by the DSS to terminate her parental rights. Haugen sought leave to attend the hearing in person, but the court ruled that she could only participate by telephone. One issue in the case is Haugen’s contention that she was denied Due Process by this ruling, but the Supreme Court rules (unanimously, at least on this point) that she failed to produce a transcript or written statement to enable the appellate court to rule intelligently on this issue.
After the hearing had been going on for seven hours, Haugen hung up the phone. Today’s opinions contain differing explanations for that; the majority finds that she was required by federal prison officials to hang up, while the dissent notes that the record only shows that she hung up. Her lawyer then made a motion for a mistrial due to Haugen’s unavailability. The trial court denied this motion, and the hearing continued for another 90 minutes until it concluded. The judge eventually granted the petition, and terminated Haugen’s parental rights.
The majority today rules that the mistrial motion was in effect a motion for a continuance, and finds that the trial court abused its discretion, using the standard announced above, in denying it. The case is remanded for a new hearing.
I have to admit that upon reaching this point in the opinion, my rooting interests were firmly with Haugen. I tend to agree that refusing a continuance under these circumstances deprived Haugen of the vital opportunity to participate in a very important hearing; under these facts, I thought it only appropriate that she should win a new trial. And then I read the dissent, which turned my initial view on its ear with the launch of the first warhead.
Justice Agee, writing on behalf of Justices Lacy and Kinser, publishes a blistering dissent that strips the majority’s reasoning bare and leaves it exposed to a harsh, glaring light. Behold, Exhibits 1 through 5:
1. There was no error in denying a motion for continuance, he points out, because no such motion was ever made. There is a fundamental difference between a continuance and a mistrial (this is undeniably true), and the very imperfect record (which plays an important role in most of today’s rulings in this case) gives no hint of a request to continue the hearing.
2. The record contains nothing to show that Haugen’s departure was due to the actions of prison authorities. In fact, the record says nothing about the event except a notation that reads, “Ms. Haugen hangs up the phone.” The majority bases its conclusion upon a perceived admission by the DSS’s lawyer in oral argument at the Supreme Court, ostensibly conceding that prison officials ordered the inmate off the phone. Justice Agee first gives a conclusive string citation to show that statements of counsel are not substitutes for evidence in the record. He then points out that even if one accepts such a substitution, the actual colloquy in the Supreme Court does not show that any such concession was made by counsel. He quotes counsel’s statement from oral argument to prove his point.
3. Haugen never presented an issue about a continuance request in the lower courts. (This appeal was first presented to the Court of Appeals, as it affects “The control or disposition of a child.” Code §17.1-405(3)(e).) The majority finds that the question presented in the CAV “is sufficiently broad to encompass the issue” of failure to grant a continuance. The dissent responds by setting forth that question presented, almost verbatim. Here; you can decide for yourself: “Whether the [trial] court erred by failing to require the presence of the parents for the hearing on termination of their parental rights.” Justice Agee points out that the presence of the parents (the father of the child was also a party below) is a far different issue from a continuance of the hearing. He concludes that the issue of a denied continuance “never appeared in this case until raised sua sponte in the majority opinion.”
4. Rules 5:17 and 5:25 bar this appeal because “[n]either the circuit court, the Court of Appeals nor this Court ever heard an abuse of discretion argument. Haugen made no assignment of error asserting an abuse of discretion.” He observes that Haugen never asked the court to invoke the ends of justice rule (appellate practitioners should take this as a reminder that you must request application of that rule; the court won’t apply it without such a request) to enable her to raise it anyway.
5. Finally, the dissent points out that the majority has failed to abide by the very standard it hands down today. In order to warrant reversal, there must be an abuse of discretion accompanied by prejudice. So where, Justice Agee asks, is the proof of prejudice in the record? Neither opinion refers to any presumption of prejudice from a party’s absence from such a hearing, so I don’t perceive that that’s the basis for the majority’s finding. And no evidence was offered in the record to show exactly how Haugen was prejudiced. As noted above, I was rooting for Haugen based on my assumption that she was prejudiced. But there’s nothing in the record to establish that necessary fact.
The dissent concludes that Virginia is now alone in the nation in holding that in termination cases, “the failure by a court to grant a continuance (even when not requested) where the subject parent does not participate in some part of the hearing is prejudice per se and an abuse of discretion as a matter of law.”
So where are we now? Unquestionably, we have a newly enunciated standard for the evaluation of continuance requests. Trial lawyers should have a copy of this case in their trial notebooks, so if a continuance issue comes up at trial, they can cite chapter and verse to the trial judge. Appellate lawyers will want to keep this case’s appellate lessons in mind as they craft assignments and questions, and as they try to deal with defective trial records. (If there is one inflexible lesson from this case, it is this one: Always file a transcript.)
I am more concerned by the potential damage this case may do to the principles of appellate advocacy, if Justice Agee’s concerns about the record are well founded – and they appear to be so. Appellate lawyers follow certain well-defined rules, particularly as they relate to defining issues and amassing a record of the proceedings below. We also expect to have the opportunity to address a potentially dispositive issue, not to have the court insert one sua sponte (where the opposite party hasn’t raised it) after briefing and oral argument have concluded. While I can’t say that I’m truly disappointed that Haugen gets a new hearing, it took a mighty effort to get to that point. After reading all this, I’m convinced that the case should have been affirmed or dismissed (probably the latter) on procedural grounds. The ruling today permits something akin to shortcuts that I don’t like to see the court sanction.
Sexually violent predators
[Special note: If you’re thinking of skipping this section because you don’t handle SVPA cases, please read this anyway; there is an important civil procedure ruling here.]
Last year, the court decided Miles v. Commonwealth, 272 Va. 302, a case in which an inmate’s initial screening test for treatment under the Act was incorrect. In order to proceed with civil commitment proceedings under the Act, the Commonwealth must first administer a test called RRASOR, and the inmate must score at least four on that test. Miles’s test was incorrectly scored as four; he should have received a three. Based on that, the court last year unanimously held that a correctly computed score of four or more was a condition precedent to further proceedings under the Act.
After that opinion was handed down, the court took the relatively rare step of granting a rehearing. (Rehearings are granted in roughly 5% of all such petitions.) Today, by published order, the court reaffirms its previous holding on the rationale of the original opinion, and reverses the judgment below. There is a concurring opinion, however, written by Justice Kinser (joined by Justice Lemons), arguing that the majority’s result is correct but its reasoning is too expansive. (The difference may well be one of only historical interest with regard to this statute, as it has been amended effective July 1, 2007 .)
With that doctrine settled, the court takes up the new case of Shelton v. Commonwealth, which has remarkably similar facts. Shelton was determined by the trial court to be a sexually violent predator, based in part on an original score on the RRASOR that was reported as a five. That score was later determined to be erroneous; the corrected score was either two or three (obviously, the difference doesn’t matter).
Ordinarily, that would end the inquiry, as a result of the Miles doctrine. But there’s an important holding here on preservation of issues, and that should interest every civil and criminal litigant. The Commonwealth contended that Shelton had failed to adequately preserve his objection to the erroneous score while he was in the trial court. Before addressing the merits of the claim, the Supreme Court accordingly has to deal with whether it can consider the issue at all.
Shelton didn’t object to the score of five during the initial probable cause hearing. He did later file a pretrial motion to dismiss on this very issue; the trial court denied that. The objection didn’t come up again until Shelton ’s lawyer noted his objection to the final judgment order, to which endorsement he added the following: “The trial court erred in denying [the] motion to dismiss for reasons stated in the motion to dismiss.” Shelton specifically raised this issue on appeal.
The Commonwealth responded that Shelton didn’t raise the issue again at the conclusion of the government’s case or at the conclusion of all the evidence. That, the Commonwealth contends, constitutes a waiver.
This issue is one of the appellate system’s recurrent goblins; the contemporary objection rule in Rule 5:25 routinely slaughters more appeals than all other rules combined. Accordingly, Shelton had to win this point, or his otherwise meritorious appeal would go down in flames.
Here’s the spoiler: He does win the appeal. Now that I’ve ruined the surprise, let’s get to the court’s analysis of the waiver argument.
I could write a long essay on preservation of issue for appeal. In fact, I have; it’s in the Spring 2005 issue of the VTLA Journal. In that article, I noted that the General Assembly passed an amendment to Code §8.01-384 in 1992, and that amendment eliminated the perceived need to repeat objections over and over again in order to preserve them. Basically, if you let the judge know what you object to, and what ruling you’d like for her to make, and the reasons why your suggested ruling is correct, that’s enough to preserve the objection unless you affirmatively waive the argument later.
Here, Shelton clearly informed the trial court that he wanted the case dismissed because of the error in the RRASOR score. He explained why the ruling he sought was appropriate. Under the provisions of the statute, he didn’t have to keep raising that argument from the dead at several stages of the proceedings. All that’s necessary is for a litigant to give the trial court “an opportunity to rule intelligently upon the issues presented, thereby avoiding unnecessary appeals and reversals.”
The Supreme Court finds that Shelton did what was required of him. His motion to dismiss clearly informed the court of what action he wanted it to take, and why; his specific objection in the final judgment order meant that he didn’t waive that issue. (Under the statute, one must affirmatively waive an argument, such as by specifically abandoning it in an endorsement of an order. As you can imagine, that practically never happens.) The court observes that the merits of this motion remained unchanged throughout the trial, as no one contradicted the Commonwealth’s own expert who testified that the original score had been miscalculated. (The unstated but clear inference here is that if that had become a factual dispute at trial, then renewal of the argument would have been necessary.)
One final distinction here, although it doesn’t appear in today’s opinion. This doctrine does not, in my view, affect the need of a defendant (in either a civil or a criminal case) to renew a denied motion to strike at the conclusion of all the evidence, where the issue is the sufficiency of the plaintiff’s or prosecution’s evidence. That’s because a motion made after all the evidence is in is different from a similar motion that’s made after the initial party has rested. (For one thing, there’s more evidence to consider at the later point, since the defendant has by then presented its case in chief.)
Real property
Billboards are, well, . . . boarda non grata in the City of Virginia Beach , and have been so ever since 1988, when the City Council passed an ordinance banning them. The ordinance permitted the continuation of then-existing billboards, so long as they were not “structurally altered, enlarged, moved or replaced” for any reason. Basically, if you own a billboard in that fair city, you’re stuck with what you’ve got, and where you’ve got it.
Adams Outdoor Advertising owns a billboard there and decided to bring it into the modern electronic era by installing a “large, black, electronic message board” on it. If you have ever seen the newer billboards elsewhere, you have to admit that they’re eye-catching. And since Adams is in the eye-catching business, they figured that would be a good idea.
The trouble was, how to evade the city’s ban on “structural alterations”? Adams settled on a plan that would place all of the changes behind the billboard’s advertising face. That way, the size of the board wouldn’t change (and it was thus not “enlarged”), with only a de minimus (and largely invisible) change to the entire structure. Adams got an electrical permit for the new display, and went ahead with the changes.
That worked just fine until the zoning administrator got wind of the new design. She told Adams that the changes violated the ordinance. What’s more, she told it that since the board had been structurally altered and enlarged, the whole board now had to come down.
Outdoor advertising in areas of significant population, like Virginia Beach , is a major money maker, so you can imagine how quickly Adams sped to the Board of Zoning Appeals to seek reversal of the administrator’s ruling. The BZA agreed with the administrator, so Adams appealed to the circuit court, pursuant to statutory authority for certiorari review. That court affirmed, so Adams was left with just one more step. The Supreme Court granted a writ.
Adams assigned two errors to the trial court’s decision. It first argued that the court erred by concluding that the board was structurally altered or enlarged. The Supreme Court rules today, in Adams Outdoor Advertising v. BZA, that it can dispose of this issue by considering only one of these alternatives; it finds that the new arrangement was, indeed, an enlargement of the billboard. The reason is that “enlarged” in the ordinance isn’t limited to the face of the board. True, the height and width of the board were the same after the improvement as they were before construction started. But the new electronic gizmo added both depth (behind the billboard’s face) and weight – 3,500 pounds’ worth. The court applies a deferential standard to the administrator’s determination on this issue.
Adams also sought reversal of the order that the entire billboard come down. Here, it makes a tactical mistake on appeal that costs it merits review. The trial court had found that the violation of “structural alteration” can’t be cured by subsequently restoring the board to its pre-construction appearance. It also made the same ruling about enlargement. Adams only appealed the first ruling; not the second. Here, the court applies the rule that where two independent rulings form the basis for a trial court’s decision, and the appellant only challenges one of them, the decision will be affirmed on the rationale of the unappealed ruling.
The court also decides a case that will have application in a wide variety of cases, involving cotenancy of land. The decision is Daly v. Shepherd, and involves a townhome owned by two women as tenants in common. The townhome was originally intended to be a home for both women, but Daly decided not to move in. Shepherd lived there with her son, but never excluded Day from possession.
Eventually, Shepherd decided that she wanted to own the entire unit. She did what any cotenant has the right to do, and filed a partition suit. Daly claimed that she was entitled to one-half the reasonable rental value of the unit for the time in which Shepherd has sole possession. The court referred the matter to a commissioner in chancery, who recommended a denial of Daly’s claim. The trial court agreed; Daly got a writ.
In a very short (5 ½ pages) opinion, the Supreme Court affirms today, holding that where property can be co-occupied, a cotenant who has not been expelled or excluded cannot demand a share of the rental value from the occupying cotenant. In essence, nothing stopped Daly from moving into the unit, but she chose to live elsewhere. Assuming there was a reasonable rental value of the townhome, Daly chose to walk away from it.
Daly does get one benefit, in a ruling that evidently was not appealed. The trial court awarded her half of the unspecified rent that Shepherd’s son had paid. But it seems clear that Daly did not regard that as a major victory.
There are enough cases involving cotenancies, including divorce cases, that this opinion is well worth study. For many years, lawyers have wrestled with questions like whether a spouse who voluntarily moves out of the marital home is entitled to a credit for the fair rental value while the other spouse occupies it alone. I am not a domestic relations lawyer, but those practitioners should take a look at this case to see if it helps in their analyses of the “value” of occupying the marital home.
How would you define the use of land “for residential purposes”? Does it include any place where people live? Or is it only a place where the owner lives? That’s part of the analysis in Scott v. Walker, involving a covenant restricting land to residential purposes.
The facts are easy. The Scotts own a house at Smith Mountain Lake , in Bedford County , and the Walkers are their neighbors. Restrictions in place, and recorded in the land records, provide that “No lot shall be used except for residential purposes.” The Scotts started renting out their vacation home on a nightly and weekly basis. The Walkers didn’t like that, and filed suit seeking to enjoin the rentals. The circuit court agreed and issued the injunction.
The issue in the case is whether renting property out is a business use, or a residential use. If the Scotts are, indeed, engaging in a business use, then they’re in violation of the restrictions.
I’ll cut right to the chase here: The Supreme Court finds the language to be ambiguous in several key respects, including the questions I posed at the beginning of this case analysis. If you focus on the purpose to which the occupant is putting the property, then it’s obviously residential; the renters are residing there while on vacation. If you focus on the use the owners are putting it to, then it’s arguably a business.
In resolving this issue, the court turns to one of its time-honored maxims in construing contracts: “. . . substantial doubt or ambiguity is to be resolved in favor of the free use of property and against restrictions.” The court notes that if the covenants had wanted to prevent short-term rentals, they could have said so.
There’s also the conclusion of the trial court that the word residential has a time component; there’s a difference between “residing” in a given place and merely staying there for a night or two. In response, here’s a zinger that ends the inquiry – the court notes that even the Scotts used the home only for vacations. Accordingly, if there really is a time component, then the Scotts’ use of the home would violate the restrictions; essentially, the whole subdivision would be open only to full-time residents. The court accordingly reverses and enters final judgment in favor of the homeowners.
As with most cases of interpretation of contractual language, there is only one “best lesson” out of this case: While you’re drafting restrictions, make sure you’re specific. Ambiguities will work against you.
Torts
The General Assembly has twice attempted to strip defendants of a statute of limitations defense in cases of child sexual abuse, discovered later in life. The first time, in 1991, it did so by statutory change. It took the Supreme Court just one crack at that statute (Starnes v. Cayouette, 244 Va. 202) to declare it unconstitutional as an ex post facto law. So, what do you do if you’re a legislator and the courts find your work unconstitutional? Why, you amend the constitution, of course. The legislature and the people of Virginia did just that, amending the constitution effective in 1995. The amendment enables the General Assembly to “define the accrual date for a civil action based on an intentional tort committed by a natural person” against a minor.
At that point, the General Assembly speedily reenacted the original statute, in pretty much its original form; after a few minor adjustments, it reached its present language in 1998. The law now provides that a cause of action resulting from sexual abuse against a minor will accrue in the same way as ordinary torts (normally, when the minor reaches adulthood), or when the victim first learns from a counselor that the conduct occurred. (As you can imagine, many children block out the memories of horrible events like this.)
When he was 50 years old in 2002, Stephen Kopalchik’s counselor drew out of him the facts of sexual abuse that had occurred long ago, back in the 1960’s. The perpetrators, he determined, were two Catholic priests. He filed suit against five humans, plus the diocese where the priests were employed. The trial court determined that the new legislation didn’t apply to the diocese, because it isn’t a natural person, and it dismissed the suit. The Supreme Court took the case to consider Kopalchik’s argument that the statute did, in fact, give him a right to file this claim. Today’s decision is Kopalchik v. Catholic Diocese of Richmond.
The rub here is that the statute doesn’t mention anything about a tort committed by a “natural person,” so on its face the diocese’s argument seems implausible. But the Supreme Court finds – as indeed it had to, in my view – that the statute must be read in the context of the constitutional amendment that enabled it to be passed. That amendment limited its application to torts committed by “natural persons,” and no matter how you argue it, the diocese isn’t a natural person. (The opinion notes that the claims against the other defendants were not in issue in this appeal. That may or may not be a function of the fact that the human tortfeasors have taken a vow of poverty.)
The court thus affirms, noting that in the absence of the constitutional amendment, the diocese is protected by the Starnes doctrine. In that event, Kopalchik’s right to sue the diocese – but not the priests – ended on his 20th birthday.
Torloni v. Commonwealth involves complicated interplay between two statutes. One is the joint tortfeasor statute (Code §8.01-35.1) and the other is the ceiling on recovery in the Virginia Tort Claims Act (§8.01-195.3).
Torloni was injured while a passenger in a car that ran off a Fairfax County road. Because the shoulder dropped off abruptly, the car flipped over, and she quite evidently sustained significant injuries. She settled with the driver of the car for $100,000 (which most likely represents his policy limits) and then sued the Commonwealth, alleging a defect in the roadway.
The Commonwealth demurred to the suit, pointing out that (1) Torloni had already received $100,000 from the driver, and (2) the cap on recovery under the VTCA is $100,000. (That cap has been in place, and the amount unchanged, since 1993. In 1993 dollars, that’s worth less than $70,000.) Since the amount recovered from the Commonwealth must be reduced by the amount received form the driver, the Commonwealth reasoned that its maximum exposure was (I’ve done the math for you here) zero.
The trial court found that to be compelling logic; it sustained the demurrer and dismissed the case. The Supreme Court awarded Torloni an appeal and began to untangle this ball of statutory yarn.
There is a very important procedural point here, before we get to the heart of the ruling. In the trial court, Torloni filed a brief in opposition to the Commonwealth’s demurrer, but somehow did not address this decisive computational issue. There was a hearing, but no transcript of it was filed, so the Supreme Court has no way of knowing whether she ever raised her current arguments before the trial court. She placed only blanket objection language on the order sustaining the demurrer. This is potentially a fatal problem; the court enforces its contemporaneous objection rule (Rule 5:25 ) ruthlessly, like most other appellate courts.
But salvation arrives, in the form of a motion for rehearing. In that motion, Torloni makes the arguments she later advanced in the Supreme Court. Although he trial court denied the motion, from that point on, her arguments were in the record and therefore preserved for appeal. The key here – and this is vital if you’re trying to protect a record for appeal – is that the order granting the demurrer was not a final order.
This issue is the second cousin of the finality doctrine set forth in Code §8.01-670. While a final judgment becomes really, truly, sincerely final after 21 days (Rule 1:1), interim rulings are always subject to modification as long as the case is still pending. The sustaining of the original demurrer didn’t end this case, so Torloni could still make her record while the case had life.
On the merits, the court goes through a complicated analysis that I won’t replicate here, because I love you, my faithful readers; trust me, you don’t want to go through what’s necessary for that. The result of the case is that Torloni gets to pursue the Commonwealth for another $100,000. The court rules that the proper means to handle this situation is for the VTCA cap to be applied last, so that it truly limits the amount “recovered” from the Commonwealth to that ceiling.
A defamation claim produces a spirited debate among the justices in Jackson v. Hartig . Jackson is a former Virginia Beach School Board member who took office in 1994 only to find the school division in a deficit situation. If you’re a school board member, that’s a very big problem; a state statute classifies deficit spending by a school board as “malfeasance in office,” which is a crime.
This problem culminated in the convening of a special grand jury, to determine whether to indict the board members. The grand jury recommended that the members should resign or face indictment. Most resigned; Jackson and one other member stayed on and fought the subsequent criminal prosecutions. They reasoned that the deficit was produced by a budget that was passed before they were elected, so they couldn’t be criminally responsible for the acts of their predecessors. A jury acquitted both in 1996, and Jackson finished out his term.
In 1998, Jackson sought election to the City Council. At that point, the local newspaper, The Virginian-Pilot, seemed to love him; the paper ran an editorial that praised him for his integrity, and for refusing to cave in to the demands of the prosecutor. The paper endorsed him for a seat on the council, but he didn’t win.
Five years later, Jackson hit the campaign trail again, this time seeking election to the House of Delegates. Three days before that election, the Pilot ran an editorial that will make you scratch your head. It reported “deep misgivings about Jackson ’s qualifications,” and for support, pointed to the fact that he had been indicted and tried on the budget issue. The editorial, written by editor Dennis Hartig, incorrectly reported that Jackson had resigned after the trial, and contended that it had taken years to overcome the budgetary “disaster” that it now clearly attributed to Jackson .
The paper eventually (on Election Day) ran a correction of its misstatement about Jackson ’s having resigned. Jackson lost this election, too. Stung by what he felt was defamatory criticism, he headed for court.
This is really a case about summary judgment, which the trial court entered in Hartig’s favor. The Supreme Court analyzes decades of US Supreme Court libel law, and today concludes that no rational factfinder could rule in Jackson ’s favor. The summary judgment is therefore affirmed. But not, as noted above, without controversy.
This is one of the several decisions handed down today in which a dissenting opinion is filed. Justice Kinser writes for the majority, and notes that the one demonstrably false statement (reporting Jackson ’s putative resignation) does not impugn him, but merely reports a neutral historical fact incorrectly. The remaining assertions in the record do not establish either Hartig’s knowledge of falsity, or reckless disregard of falsity (such as by purposefully avoiding the truth), as required under NY Times v. Sullivan, 376 US 254 (1964) and its many progeny. Clearly, the fact that this was an expression of editorial opinion in a political campaign weighed heavily in the balance.
But Senior Justice Russell’s dissent makes a compelling case for reversal. He acknowledges the fine job the majority does in spelling out the law of defamation, but notes that the ultimate conclusion of whether Hartig wrote the essay with actual malice should be one for the factfinder – for a jury, not for the trial court in a pretrial motion for summary judgment. He cites clear SCV caselaw holding that whether malice exists is a jury question. He also cites a Fourth Circuit case, familiar to federal practitioners, that notes that “summary judgment is seldom appropriate in cases wherein particular states of mind are decisive as elements of a claim or defense.”
So who’s right? In the most elementary sense, Justice Kinser is; she got more votes, and so that’s the law in Virginia . But I have to admit that my sentiment, viewed through the admittedly incomplete lens of reading the opinion instead of the full record, is with the dissent. I recognize the importance of freedom of the press, and the body of caselaw that has grown out of NY Times amply protects the media when they offer opinion on matters of public concern. But where a plaintiff puts a defendant’s state of mind in issue, it’s hard for a jurist to decide what “no reasonable factfinder” could have decided.
If you’ve read my essays on appellate statistics, you know that the odds of an appellant’s getting a writ in a civil case are generally around 20-25%. (Last year it spiked to 31%, but I expect it to return to near the historical norm this year.) Under those circumstances, a lawyer who has obtained a writ can be proud of his accomplishment; he’s beaten 3-to-1 odds. Our next case involves someone who has obtained no fewer than three writs in the past year and a half. The rub is that this person isn’t a lawyer. Nor is he a free man; he’s Oludare Ogunde, an inmate in the Greensville Correctional Center . (For another case involving one of Ogunde’s fellow Greensville inmates, see the “Change of name” section below.) There are probably a number of lawyers who could learn something about appellate procedure from Mr. Ogunde, although he won’t be available for CLE presentations for a few years yet.
Ogunde has a skin condition that is aggravated by shaving. He sought an exemption from the prison’s no-facial-hair policy, but was rejected. He also allegedly did not receive proper treatment for that condition. Knowing his way around the legal system, he filed a complaint against Prison Health Services (a company providing, well, . . . health services at his prison) and several of its medical employees, alleging several claims. Those included gross negligence, intentional infliction of emotional distress, Eighth Amendment claims founded on cruel and unusual punishment, and even a claim of breach of contract.
The trial court found that the defendants were agents of the Department of Corrections, and as such were entitled to sovereign immunity. The court eventually dismissed all of Ogunde’s claims, rejecting his request for leave to amend. That’s when Ogunde worked his appellate magic and got a writ, at which point the Supreme Court found volunteer appellate counsel for him.
Today, in Ogunde v. Prison Health Services, the court reverses (mostly; one ruling is affirmed) and remands for further proceedings. There are several procedural lessons here, and I’ll mention them in this list of some of the court’s rulings:
Sovereign immunity – The court employs its usual formulation of the test to determine whether a given person is an employee (which the defendants had claimed, so they’d get the immunity protection) or an independent contractor (in which case there’s no immunity). Of the four-part test, the most important factor is whether the putative employer exercises control over how the assigned task is accomplished. Here, Prison Health’s contract with DOC did it in: “The Contractor [PHS] shall be responsible for completely supervising and directing the work under this contract and all subcontractors that he may utilize, using his best skill and attention.” Oops. While the court’s analysis of this issue is longer than that, this language produces only one conclusion on the dispositive question.
Breach of contract – Ogunde argued that he was an intended third party beneficiary of the contract between PHS and DOC. The court’s jurisprudence indicates that this status applies whenever the actual parties to a contract “clearly and definitely intended it to confer a benefit upon him.” Here again, the contract betrays Prison Health’s efforts to evade liability: The stated purpose of that contract is to “provide cost effective, quality inmate health care services for up to approximately 6,000 inmates” including those at Greensville. Double oops. Prison Health tried to get out of this one by claiming that since Ogunde isn’t permanently incarcerated there (easy for them to say; let’s see them spend a few years locked up and see how their definition of permanent changes), he’s only an incidental beneficiary. The court swats this one aside with ease. It gives the example of a passenger in a car who is a third party beneficiary of the auto policy taken out by the owner. She’s no longer a passenger after the ambulance crew pries her out of the wreckage, but she is emphatically an intended beneficiary of the policy.
Emotional distress – The court affirms the dismissal of these claims, finding as a matter of law that Ogunde’s allegations of outrageous or intolerable conduct don’t rise to the level required for liability. In this sense, one major lesson is that on demurrer, the court need not take at face value a pleader’s conclusory allegations.
Amendments of pleadings – Once again, you have to hand it to this particular jailhouse lawyer; he got it right, at least as far as pleading procedure is concerned. Confronted with the trial court’s initial ruling against him on immunity, he asked for leave to amend to add the Commonwealth as a party, and even filed a proposed amended pleading under the Tort Claims Act. (Having that pleading in the record is usually essential for appellate review, something many trial lawyers forget.) The Supreme Court affirms the denial of the pleading adding the Commonwealth, since it has already ruled that Prison Health isn’t entitled to that immunity. Ogunde technically loses this skirmish, but he had already won the battle. As for the remaining proposed amendments, the court recites the familiar language from Rule 1:8, that “Leave to amend shall be liberally granted in furtherance of the ends of justice.” The Supreme Court accordingly reverses and permits the requesteed amendments. In my view, a trial court’s ruling that denies a plaintiff even one opportunity to amend is going to receive very strict review in an appellate court.
Having won this battle, Ogunde now gets to go back to the trial court to see if he can win the war. He leaves his volunteer counsel behind, as those were only assigned for the appeal. But if he’s as good an amateur trial lawyer as he is on the appellate stage, I wouldn’t bet against him.
Criminal law
The court decides the capital murder appeal of a confessed murderer in Gray v. Commonwealth, which involves the horrific slaying of a young family of four in Richmond on New Year’s Day 2006. Gray confessed to police, with little prompting, to the murders and the gruesome treatment of his victims. A jury sentenced him to death for the killing of two young girls, aged four and nine years, and to life in prison for three other capital murder counts. Evidently conceding that he was in for at least a life term in prison, Gray appealed only the convictions that resulted in the death penalty; the other convictions are now final.
There is one very significant issue here, and it occupies the largest portion of today’s opinion. Gray argued that the statute making it capital murder to kill a child under 14, but only if the murderer is at least 21, is unconstitutional. The court performs a straightforward rational basis test for the provision, and finds that it passes constitutional muster; the Commonwealth has an interest in protecting its children from murder, and the limitation of the death penalty for “older” defendants has a plausible rationale. Gray pointed out that the minimum age for which a person can be subjected to the death penalty is 21, under Roper v. Simmons, 543 US 551 (2005), and argued that this statute carves 18-20 year olds out for preferential treatment. (Gray was 28 at the time of the crimes.) The court notes that other statutes create limitations based on the ages of the victim and the perpetrator. The clincher, in my view, is the Commonwealth’s argument that a wider disparity between those ages makes a peer relationship less likely, “and thus an increased [likelihood of] predatory relationship.”
There is one noteworthy appellate procedural issue here. Gray assigned error based on claimed passion and prejudice by jurors, and on disproportionality. In his briefs, he did not argue those issues at all. Normally, that precludes appellate consideration of either issue, given the way the court has consistently enforced Rule 5:17. But the court decides these issues anyway – both adversely to Gray – because the language of the assignments “track nearly verbatim” the factors that court is required to consider as part of the mandatory review of all death penalties.
McDonald v. Commonwealth is the most recent progeny of the US Supreme Court’s 2003 ruling in Lawrence v. Texas, 539 US 558. In Lawrence, the Big Supremes held that Texas ’s sodomy statute was unconstitutional as applied to consenting adults (plus a few other limitations, like no prostitution or public acts). Our Supreme Court followed suit two years later, in Martin v. Ziherl, 269 Va. 35 (2005), a civil suit in which the court found that Virginia’s ban on consensual sex between unmarried adults was just as unconstitutional.
Along comes McDonald, a man in his mid-40’s who managed to persuade a 16-year-old and a 17-year-old to engage in consensual sodomy with him. When the local prosecutor found that conduct to be untoward, McDonald whipped out a copy of the Martin opinion and said that sodomy was dead in Virginia . He pointed out that both girls were above the age of consent in Virginia , so the law couldn’t touch him.
The law touched him anyway; he was prosecuted for and convicted of four counts of sodomy and one of contributing to delinquency. A trip to the Court of Appeals proved unavailing, but the writ he got from the Supreme Court looked promising.
Today, the Supreme Court affirms, noting that both Lawrence and Martin specifically excepted sex involving minors from their respective holdings. But what about the age of consent? McDonald had statutes that specifically list ages of consent. Unfortunately for him, the sodomy statute doesn’t have one; there is no listed “age of consent” for sodomy in Virginia (except, by implication from Lawrence, 18, which is the age of majority), as there is for more conventional sexual acts.
This case has one noteworthy procedural issue. McDonald loses the opportunity to mount a facial challenge to the statute, because his objection raised in the trial court never mentioned a facial challenge. A facial challenge to constitutionality is harder to mount than as-applied, but if it works, it’s extraordinarily effective. Here’s a wholly implausible illustration: Envision a statute that provides that males are ineligible to run for public office. We can probably agree that that’s facially unconstitutional. The question is, Can a woman sue to strike down the statute? She can’t mount an as-applied challenge, because the bar of the law doesn’t apply to her. But she could argue that the law is unconstitutional on its face.
Today, the Supreme Court analyzes McDonald’s arguments at the three levels of courts, and decides that his facial challenge wasn’t properly presented in the trial court. Accordingly, he only has an as-applied challenge. But as the court notes in its opinion, even that missed the real issue in the case: The Lawrence and Martin decision specifically don’t apply to offenses involving minors. The convictions are thus affirmed.
There’s an important ruling today in a criminal plea case, Justus v. Commonwealth. The charges there include breaking and entering, malicious wounding, and destruction of property.
I have to start out by saying that the affairs around the Justus household, way out in Buchanan County , must have been awfully interesting. Harold Justus lived there with his girlfriend, who is named Tina Justus. (Yes, I paused over that one, too. But let’s keep going.) One night his ex-wife, Patricia Ann Justus, entered the home, armed with a hammer, and got into a fracas with her ex and his girlfriend. Both ex-husband and girlfriend filed criminal complaints, and now the former Mrs. Justus has the right to remain silent.
At an early proceeding in the trial court, the defendant’s court-appointed lawyer indicated that she would plead guilty to the charges. The judge engaged the defendant in the usual colloquy, familiar to anyone who’s ever been in a criminal courtroom, to determine whether the guilty plea was freely and voluntarily made. One of those questions is whether the defendant was actually guilty of the offenses charged. She gave the appropriate answers, and entered her plea. The court then heard some evidence from the ex-husband as to what had happened, including the details of a fight that started between his ex and his girlfriend, and proceeded to involve him, too. The judge decided that that was sufficient; he found the defendant guilty and ordered a presentence report.
Okay; right here is where it starts to get really interesting. The prosecutor asked the judge to direct the defendant to have no contact with her ex-husband. The judge responded that he wasn’t planning on having her at liberty anyway; he was already starting to motion to the sheriff to take her into custody pending sentencing. Her lawyer then suggested home monitoring – you know, like Paris Hilton wanted – so the judge asked where she lived. Why, with Mr. Justus, was the reply.
See? I told you it must have been an interesting household. The stunned judge asked if that was really true; he was assured that Mr. Justus’s home was, indeed, her residence. Careful criminal defense lawyers will have noted that at this point, the defendant has been convicted of (and is awaiting sentencing on) breaking and entering into her own home, and damaging it. You have figured out by now that one cannot unlawfully break and enter into one’s own home, but no one mentioned this fact; I certainly do not blame the trial judge for not thinking of this during this remarkable stage of the proceedings.
Right before the sentencing hearing, a new lawyer for the defense showed up, this one retained. He told the judge that the defendant wanted to withdraw her guilty plea and stand trial on the charges. He brought affidavits in support of a motion that said that she was actually quite innocent. He pointed out the problem of the B&E charge, and noted that she was ostensibly convicted of destroying her own property. He also had an affidavit from an alleged eyewitness who said she saw the whole thing, and the ex-husband and his girlfriend had started the fight.
Now where are we? The judge conducted a hearing and decided that it was too late to change the plea; he relied upon caselaw furnished by the prosecutor from habeas corpus cases, involving claims of ineffective assistance of counsel (which is what the defendant claimed she had received from Lawyer #1) on whether to plead guilty. The court relied upon the defendant’s claim at the original proceeding that she was satisfied with the services of her lawyer, and she was ready to plead guilty. The court then sentenced her to 14 years in the pen, with 8 of those suspended. To make matters worse, he revoked her probation for a prior conviction, based on these new convictions, and imposed that incarceration, too.
Justus went first to the Court of Appeals, which affirmed her convictions. That court held that the trial court was entitled to reject the affidavits, based on the defendant’s acknowledgement that she had committed the acts charged. But the Supreme Court decided to take the case to look into the matter further.
In today’s opinion, the court finds all that habeas law to be inapplicable; Justus, unlike those habeas petitioners, had not been finally sentenced at the time she sought to rescind her plea. (In criminal cases, the final judgment is the sentencing order; the fact that the judge had earlier orally pronounced a finding of guilt is not a judgment, and can still be set aside.) The Supreme Court relies upon a previous case involving a request to modify a plea, and notes that such a decision is within the discretion of the court. Ordinarily, that’s bad news for the defense. But the court also points to language from the earlier opinion, saying that trial courts should deny such request just to enable the defendant to enter “a merely dilatory or formal defense.” This request was neither; Lawyer #2 was actually claiming that she was really, truly not guilty. And he had facts, caselaw, and evidence to back up that plausible contention.
The court finds today that plausible is quite enough; “where the ends of justice will be subserved by permitting not guilty to be pleaded,” the trial court should allow the defendant to change her plea. The court also points to language authorizing a change where the defendant pleads guilty “inadvisedly, if any reasonable ground is offered for going to the jury.” I’d say that a charge of breaking into one’s own home is a pretty reasonable ground to resist the charge, and the court so finds today. Justus accordingly gets to go back to the trial court and allow a jury to decide who started the whole thing. She also gets relief from the imposition of the suspended jail time from her earlier conviction, since that was based on a conviction that has now been reversed.
Grandison v. Commonwealth is a cocaine possession case that is really about packaging. Grandison chose to store his drugs (albeit concealed inside his watch pocket) in a folded-up dollar bill. The police officer who pulled him over at a traffic stop knew he was in a high-crime area, so he handcuffed Grandison before he patted him down for weapons. During the pat-down, he felt something hard in Grandison’s pocket. That turned out to be a cigarette lighter, which is, by criminal law standards, perfectly innocuous. But the officer also saw part of a folded dollar bill protruding from the pocket. The officer, who had been trained in drug recognition, recognized the peculiar origami as an “apothecary fold,” which was commonly used on the street to store drugs.
The officer took the bill, unfolded it, and discovered cocaine, at which point this traffic stop became a whole different ballgame. At the ensuing trial, Grandison moved the court to suppress the drugs, since there was nothing suspicious about having a dollar bill in ones pocket. “Maybe so,” reasoned the circuit court, “but not a bill that’s been folded in that way.” On the basis of the officer’s testimony (the officer qualified as an expert witness at trial), the court allowed the evidence in, and found Grandison guilty. The Court of Appeals affirmed last year in a published decision.
Today, a divided Supreme Court reverses. The majority finds that possession of a legitimate object, one with a wholly legal use, does not create a reasonable suspicion of illegality. It cites two relatively recent cases in which it so held – one involved a film canister, which is commonly used to store drug, and the other involved a hand-rolled cigarette. In those two cases, the court had ruled that where there are two uses for an item, one legal and the other illegal, an officer can’t presume the illegal use in furtherance of reasonable suspicion.
There is yet another dissent here by Justice Agee, joined by Justices Kinser and Lemons (careful court-watchers will note that the three least senior justices part ways with their more senior colleagues). The dissent focuses not on the inherent nature of the object, but on the unusual way in which it had been manipulated. Loosely translated, the dissent argues that law-abiding people may well possess dollar bills, but only drug dealers fold them in this peculiar fashion.
One late spring day in June 2004 a lead-footed Demetrius Baldwin zipped through a residential subdivision roughly 25 miles an hour over the speed limit. That attracted the attention of a police officer (contrary to popular belief, sometimes you really can find a cop when you need one), who pulled Baldwin over on nearby State Route 10, in a turn lane. The officer approached the car on foot, stopping at approximately the dividing line between the front and rear driver’s side doors. Baldwin was engaged in a classic 21st century endeavor, talking on a cell phone.
The officer tapped on the driver’s window, at which point Baldwin grabbed the steering wheel, “turned his vehicle towards [the officer], and then proceeded over two lanes of traffic and sped off.” The officer had to jump back in order to avoid having his feet run over. After a seven-mile chase (which must have produced some very interesting radio chatter among law enforcement personnel), Baldwin was apprehended.
If you’re keeping count, you’ve already got speeding. Eluding police – check. That one’s easy. If there were a charge of Felony Being Stupid, they probably have him pegged on that, too. But the Commonwealth indicted him for nothing less than attempted murder, for trying to run down the police officer.
And it worked, too; Baldwin was convicted and sentenced to 15 years in prison, with 11 years suspended. The Court of Appeals affirmed, noting that the evidence showed a clear path straight ahead of Baldwin in the turn lane. If he had merely wanted to escape, that court observed, he could have driven straight ahead and never endangered the officer. The Supreme Court decided to take a look at the case. (By this point, the eluding charge is final; today’s opinion deals only with the attempted murder conviction.)
The key issue in the Supreme Court’s analysis is whether the Commonwealth proved an intent to kill, beyond a reasonable doubt. The court cites an old case that held that while one can be guilty of murder even without an intent to kill (such as by reckless or wanton conduct that results in a death), intent is an essential element of a charge of attempted murder. Thus an intent element must be shown at trial.
In Baldwin v. Commonwealth, the court concludes that the Commonwealth never proved any such thing. Remember, the officer was standing beside Baldwin ’s car. At most, if Baldwin had indeed run over the officer, then the officer would have suffered a foot injury. Aside from Achilles’s fatal injury at the hands of Paris during the siege of Troy , I don’t know of anyone who has died from a foot injury; certainly nothing akin to having one’s foot run over by a car. The evidence in this case is thus distinguishable from other cases in which the court found enough evidence to support a finding of attempt, such as where a driver sought to ram a car behind which an officer stood. The court accordingly reverses the judgment, and dismisses the charge.
The next case, Robinson v. Commonwealth, involves an unmitigated tragedy that occurred on a road in Spotsylvania County . Robinson is a 30-year veteran of the Marine Corps who stopped for a red light. The road provided two lanes of travel in both directions, but merged into one lane shortly past the intersection where Robinson waited in his SUV. Before the light changed, a red Mustang pulled up to the light in the lane immediately to Robinson’s left. When the light changed, both drivers accelerated forward.
It soon became clear that the driver of the Mustang was going to try to get in front of Robinson’s SUV. Thinking back on his frustration at seeing lots of drivers do that, he decided he “wasn’t backing down.” He kept going forward, matching the Mustang’s speed as they approached the merge point. Importantly, it was the Mustang’s lane that ended; that driver had the duty to yield the right-of-way to Robinson.
Soon it became apparent to Robinson that he had to slow down, or the vehicles would collide. He backed off, having reached 45-50 miles per hour (the speed limit was 40) to allow the Mustang to pass him. He then watched in horror as the car, with plenty of open road in front of it, veered off the road and into a tree. The impact tore the small car in half.
Robinson turned his SUV around, parked in a driveway, and ran over to assist another man, who was already pulling branches off the wreckage. The two men heard undecipherable sounds from the female driver and saw her moving. At that point, a State Trooper arrived and took charge. The trooper allowed another man to leave, and at that point, Robinson left as well.
The next day, sheriff’s deputies visited Robinson at his home. It was then that he learned that the driver of the Mustang had been killed in the collision. Worse, the woman’s four-year-old son, who occupied the back seat of the car, had died as well. The woman’s speedometer showed that she had been travelling 76 miles per hour when she lost control.
Robinson spoke candidly with the deputies; indeed, when you read the opinion, you will learn of his commendable honesty in a horrifying situation, at a time when he probably could have avoided any significant trouble by simply clamming up and demanding a lawyer. Instead, he told the deputies the whole story. That got him charged with reckless driving and felony leaving the scene of an accident. Only the latter charge is at stake in this appeal.
The statutory language plays a vital part in the evaluation of this appeal. It provides that “The driver of a vehicle involved in an accident in which a person is killed” must stop and report to law enforcement. The question here is whether Robinson was “involved in an accident” within the meaning of the statute.
As I have described the facts, you have probably formed a conclusion that Robinson obviously was “involved,” given his description of the events to the deputies. While this wasn’t racing, his driving was a part of the circumstances that led to the two tragic deaths. But that’s not an accurate picture of what constitutes a violation of the statute.
The Supreme Court finds today that, despite a conviction in the trial court and a CAV affirmance, Robinson was not “involved” in this accident. While the Court of Appeals used an expansive dictionary definition of involve to affirm Robinson’s conviction, the justices today hold that expansive dictionary definitions are inconsistent with the requirement that penal statutes be construed narrowly. The court notes that no previous case has defined involved in this context, and the statute itself gives no definition.
Now we have one: For the purposes of this statute, a driver is “involved in an accident” if there is physical contact between the vehicles (that never occurred in this collision), or if the defendant was a proximate cause of the accident. In the trial court, the judge specifically found that Robinson did not proximately cause the wreck. Accordingly, using the newly minted definition, the conviction is reversed and the charge dismissed.
Local governments
If citizens don’t like what their elected officials do, what remedies do they have? Well, the simplest is the old “throw the bums out” approach, exercisable every election cycle. But there is an even more specific mechanism that works on individual legislation, instead of on the legislators: The referendum.
Norfolk ’s city code has a provision for referenda. And when the city took steps in 2005 to rezone some property in Ocean View for redevelopment purposes, several citizens in the area weren’t happy. They went to a prominent local attorney, who told them of their right to seek reversal of four related ordinances that dealt with the situation. Under the ordinance, the citizens gather signatures on a petition and present it to the city council. If the council doesn’t repeal the ordinances within a month, they file the petition and the circuit court can enter an order placing the matter on the ballot at a general election. Pure democracy at work, right?
The citizens prepared and circulated a petition that called for repeal of the four ordinances. The city council wasn’t impressed, essentially daring the petitioners to go to the electorate. They accordingly filed the petition in the Norfolk Circuit Court. Some time later, the trial court granted petitions to intervene filed by the city and the Norfolk Redevelopment and Housing Authority. After a subsequent hearing, a judge designate dismissed the petition, because it called for repeal of more than one ordinance. The city argued, and the court agreed, that it should have been one ordinance per petition.
On appeal, the court decides two legal issues today, in Committee of Petitioners v. City of Norfolk. The first is the citizens’ objection to the intervention motions, on timeliness grounds. The Supreme Court rejects this assignment, citing the trial court’s “reasoned evaluation” of the circumstances. Noting that intervention is within the trial court’s discretion (producing a fairly lenient standard of review), the court notes that the city council could have mooted the matter at any time by rescinding the ordinances. It also notes that nothing in the ordinance requires an earlier intervention.
This language will be very important in the context of other intervention motions, in completely unrelated fields of law. The court isn’t encouraging unwarranted delay, but the language of this opinion (at page 5 of the slip opinion) will help anyone who finds that he needs to intervene in a suit, and it’s already the bottom of the seventh inning.
The second issue goes the other way; the court finds that there is no requirement in the city’s charter for the “one ordinance per petition” requirement imposed by the trial court. The lower court had analogized the petition process to the city’s own requirements for ordinances, which require that each ordinance “shall be confined to one subject.” But there’s nothing to convert that requirement into the realm of referenda, the court notes today. The court also points out that if the circuit court orders the matter placed before the electorate, it can shape the questions separately, even if there’s only one petition. The court, not the citizens and not the city, gets to frame the question to be voted on. Accordingly, the judgment is reversed for further proceedings. It still isn’t a mortal lock that the voters will get the last word on this (other than deciding whether to find themselves a new set of councilmen during the next councilmanic election). The circuit court still has to decide whether the matter should go forward. But the citizens have cleared an important procedural hurdle today.
One final note: The court cites section 35 of the Norfolk Charter, and observes that “a petition does not have to contain the text of the ‘ordinance or ordinances’ sought to be repealed.” Did you catch that “or ordinances” part? While I don’t have the entire charter handy, that at least suggests to me an additional reason to support the court’s ultimate conclusion today. The use of the plural shows that the charter contemplates that a given petition can address more than one ordinance.
Indemnity
In Mark Five Construction v. Castle Contractors, the court addresses the narrow issue of whether a prospective indemnitor under the Workers’ Compensation Act must itself be primarily subject to the Act. Castle is a Maryland company that hired itself as a subcontractor to the general (Mark Five) for a construction project in Virginia . A Castle employee was injured on the job, and got an award of Workers’ Comp benefits from Mark Five, since Castle didn’t have the minimum number of employees to be subject to the Act. Mark Five then sued Castle under the indemnification provisions of the Act (Code §65.2-304), and that’s the dispute that gets finally resolved today. (The employee’s comp benefits are not at stake in this case.)
The Supreme Court rules today that the trial court correctly sustained Castle’s demurrer. In order to be secondarily liable under the indemnity statute, Castle first had to be subject to the Act itself. Otherwise, you’d have the anomalous situation of an employer who doesn’t fit the minimum-employee requirements of the Act, who would nevertheless be required to pay indirectly what he doesn’t have to pay directly. Since the General Assembly decided to exclude certain small employers from the Act, the only way to carry out that intention is to hold that Castle is not liable for indemnity.
Contracts
I have a confession to make: I have been looking forward to finding out how the court rules in Settlement Funding v. Neumann-Lillie, ever since I read the assignments of error a few months ago. This admission will probably brand me as something of a civil procedure geek. If so, I’ll bear the character stain.
This is a case about a choice of law provision in a contract. It also illustrates why certain contracts contain otherwise unfathomable choice-of-law provisions. Lillie got one of life’s little (well, maybe I should say big) boosts back in 1996 when she bought a winning ticket from the Virginia Lottery. Not one of the Mega-Millions tickets worth nine figures, but one called “Money for Life,” with a prize of $1,000 a month for life.
Now, a grand a month isn’t what it used to be; it probably wouldn’t even make the down payment on a Bentley. But it does mean that you’ll never be destitute, assuming you take reasonable care not to overspend. Nevertheless, Lillie, like many other annuity recipients, wanted to convert some of her winnings into ready cash. She arranged with an entity called WebBank to lend her $29,000, with an assignment of the lottery winnings as security. She agreed to repay $500 a month for 178 months, starting in 1999. The loan document provided that it would be governed by the laws of (of all places) Utah .
Unless you’re really, really quick at math, you may not have noticed that $500 times 178 months is $89,000, which is a lot of interest for a loan of $29,000. Lillie may not have noticed, or maybe she didn’t care. In any event, her monthly payments went along uneventfully for just over two years, at which point she asked Settlement Funding (to which WebBank had assigned the loan) for a payoff figure. That’ll be $67,023, the company responded. Now it’s time for some real number crunching, which I’ll do for you: Even assuming that Lillie hadn’t paid down the principal balance by a dime in the first two years, that payoff represented an interest rate of 58.3% per year. (If you assume that she was paying down the principal a little bit every month, as with an ordinary mortgage or car loan, then the effective rate is significantly higher.)
At this point, Lillie stopped paying what she regarded as a usurious instrument. Settlement Funding moved to collect. It first sought to enforce Lillie’s assignment (based on a security agreement and a financing statement) of the lottery proceeds. No dice there; under Virginia law, lottery winnings can’t be assigned. So the company then sought a judgment based simply on the note and the contract. You’ll be interested to know that the company’s claim against the unfortunate lottery winner has somehow now reached $253,000, plus interest and legal expenses. Lillie pleaded, among other things, usury, and asked that all interest be voided. At this point, the game is afoot.
In the trial court, Settlement Funding moved to strike the usury defense, because Utah law applies, and (surprise!) Utah doesn’t regulate usury. Now you know why the contract specifies that jurisdiction’s laws to govern any disputes. The dispute at trial was whether Settlement Funding had proved what Utah law was, in order to enable the Virginia court to apply it.
So, how do you prove that a given state’s code doesn’t address a particular topic? You can’t exactly bring a set of the Utah State Code into the judge’s chambers and invite his honor to thumb through it at his leisure. Settlement Funding’s attorney orally represented unto the court the extent of Utah ’s law (saying that it recognized only what the market would bear, with no fixed usury ceiling), and offered to submit a memorandum to establish what Utah law provides. The lawyer did just that, citing a statute that sets forth the market-conditions approach, but evidently doesn’t mention the word usury. The trial judge wasn’t convinced; he ruled that in the absence of sufficient proof of what Utah law was, the court would presume that that state’s law was the same as Virginia’s, which caps interest at 12%. Since this contact was for slightly more than that, the court ruled that all interest was eliminated from the contract and note. It also awarded Lillie damages for the usury violation, so that in the end, Settlement Funding had to pay her, some $47,000 in damages plus $24,000 in attorney’s fees.
The Supreme Court agreed to take the case at Settlement Funding’s request, and today, it reverses, holding that the company offered sufficient proof of what Utah law provides. There is no discussion in the opinion of whether the Utah law offends Virginia ’s public policy, and whether our courts have to afford full faith and credit to Utah law regardless of our public policy. This one is strictly about the level of proof offered at trial, and the court finds that it was enough to get Settlement Funding past Lillie’s claim for damages. The case is remanded for further proceedings, presumably to calculate the amount Lillie owes the company.
This case finally illustrates one of my favorite musings, which I’ll repeat here. The use of a double negative is intentional: “Rich people don’t have no problems; they just have different problems.” Perhaps now we can apply that to modest lottery winners.
Insurance
The court takes up once again the boundaries between the realms of tort and contract in Augusta Mutual Ins. v. Mason, a property insurance case that eventually led to allegations of fraud. The Masons bought a homeowner’s policy from Augusta Mutual in 1998. Six years later, they lost their home in a fire on Christmas Day. Evidently that fire started in their wood-burning fireplace; my inference from the opinion is that the chimney caught fire, possibly from an accumulation of something like creosote, and the fire spread to the rest of the home.
The Masons filed an insurance claim, but Augusta Mutual denied it, asserting that the Masons had falsely certified in writing, when they bought the policy, that their chimney was constructed of bricks and tile. (The unrepentant punster in me cannot help but note that people named Mason are in a dispute over bricks.) The homeowners responded that they had never signed or otherwise made any such certification; Augusta ’s inspection contractor had filled out and signed the certification form. The Masons sued the insurer for, among other things, denying the claim in bad faith.
Augusta Mutual responded to this by bringing a third-party action against the inspector, claiming that he had fraudulently induced the company into issuing a policy that it would never have issued if it had known the true composition of the chimney. The pleading also asserted breach of fiduciary duty. The trial court sustained the inspector’s demurrer and dismissed the third party action. This ruling is the subject of today’s opinion; the Masons’ claim is not adjudicated today.
Today’s opinion centers on the question of whether a fraudulent inducement to enter into a contract results in a contract claim or a tort claim. The court finds that this one is pure contract. Augusta Mutual and the inspector had entered into an agency agreement some years before the fire; the inspector’s duties to Augusta (including the fiduciary duty of loyalty and fidelity) arose solely by virtue of that contract.
This case also serves as a reminder of one key point regarding pleading. The trial court had sustained a demurrer to Augusta Mutual’s original third party complaint, but granted leave to amend. The company did file an amended suit, but did not incorporate by reference the allegations of the original suit. The court rules today, consistent with its previous rulings on this point, that the failure to incorporate or refer to those pleadings means that the appellate court will consider only the amended allegations, not the original ones. At first blush, this seems incongruous in light of the provisions in Code §8.01-273(B). That section provides:
“Wherever a demurrer to any pleading has been sustained, and as a result thereof the demurree has amended his pleading, he shall not be deemed to have waived his right to stand upon his pleading before the amendment, provided the order of the court shows that he objected to the ruling of the court sustaining the demurrer. On any appeal of such a case the demurree may insist upon his original pleading, and if the same be held to be good, he shall not be prejudiced by having made the amendment.”
This is a major-league trap for the unwary trial lawyer. Despite what the statute seems to say, you must do more, in order to preserve your right to “stand upon” your original pleading in the appellate court, than merely object to the order sustaining the demurrer. You have to go one step further, and incorporate the allegations of your first pleading into your amended pleading. If you don’t do that, then the protection in the Code provision will have been wasted.
Change of Name
David Stephens, Jr. is enjoying an extended period of free room and board with the compliments of the Attorney General, in a state prison in Jarratt, Virginia . Those housing arrangements didn’t stop him from filing a statutory petition to change his name to Yâ-sin ibn Dâwũd Stephens, consistent with his Islamic faith. A skeptical trial court looked at the petition, decided that the new name had no “religious meaning or significance contrary to its general and accepted meaning.” The court thus denied the name change.
The Supreme Court then did something that it does rarely, but every so often – it granted Stephens’ pro se petition for appeal. Today, in Stephens v. Commonwealth, the court reverses and remands for further proceedings.
This one is purely statutory; name change petitions are specifically provided for in the Code. Section 8.01-217 requires a two step process when a prisoner’s application is at stake. The trial court must first determine whether “good cause exists” for the application. If so, it accepts the application, and then decides whether the change is sought for a fraudulent purpose, or would infringe upon someone’s rights. If not, the court must grant the petition.
The Supreme Court observes that the exact basis of the trial court’s review of the petition isn’t clear, but it ascertains that the judge must have decided that Stephens didn’t clear the first hurdle, that of showing good cause for initial acceptance of the petition. But the trial judge never came out and said that; nor did he make any factual findings beyond what I have quoted above. With the agreement of the Commonwealth, the court finds that the trial court thus erred. The question in this appeal is what the Supreme Court should do with the case.
The court decides to send it back for evaluation of the second step of the process, which the trial judge evidently never reached. The court today finds that the record does not establish any basis for a finding against Stephens on the good cause question, so that much is settled. The trial court will now consider whether there is a fraudulent purpose, or whether someone else’s rights will be infringed. From this standpoint, it looks as though the petition will eventually be granted. Now, if he had sought to change his name to “Pia Zadora,” to take some advantage of the starlet’s undying celebrity and marketability, then he might have a problem . . .
There is a companion case to Stephens that is decided today by unpublished order; that case is Wells v. Commonwealth, also involving a Greensville prison inmate wanting a new name. The court reverses that judgment, too, on the same rationale as set forth in the Stephens opinion. The Wells order is not available on the court’s web site, but if any of my readers would lie a copy, they can contact me by e-mail.
Consumer law
Daniel and Crystal Couch saw the ad and couldn’t resist; Manassas Chrysler was offering just the vehicle they wanted, a brand-new Town & Country minivan. They tore the ad out of the paper, got in their old heap, and headed off to the dealer to buy that car.
Trouble was, someone had beaten them to the dealer, and had bought that car; the dealer didn’t have another one in stock. He did offer them a similar model, evidently a slightly higher trim line, and with a slightly higher price tag. They thought about it and said yes. The dealer said that their new van wasn’t there right then, but would be brought over from another lot later that day. They left and came back later, when they paid $2,000 down, signed some paperwork, and got to behold their new vehicle for the first time.
And then they saw the splotch.
It was ugly. The gray unfortunately contrasted with the red color of the vehicle. It was about seven or eight inches in diameter, plus a drip mark stretching downward toward the wheel well. When they complained, the friendly salesman told them to bring it back, and the shop would remove the stain. The Couches brought it back; the shop tried ineffectively (over the course of a few weeks) to remove the stain, but it wouldn’t budge. So the paint and body shop employees did the next best thing – they painted over it. They neglected to get the Couches’ consent to do that.
When the Couches saw what had happened, they told the dealer they didn’t want it; they had bought a new van, “not a repainted vehicle.” The dealer declined, since the title had passed. The Couches brought it back, notifying the dealer by letter that they were revoking their acceptance. The dealer stubbornly had it towed back to them. By this point, the odometer showed 1,100 miles.
Litigation ensued, as it must eventually if we lawyers are to remain productive members of society. The Couches fired the first shot, suing to confirm the revocation of acceptance and contending that the dealer had violated the Consumer Protection Act by wreaking a “bait and switch” tactic upon the unfortunate couple. (Turns out they really wanted that first van, after all.) The dealer responded by saying that it had followed standard practices in the industry regarding advertisement of vehicles with limited availability. The dealer cited a Motor Vehicle Board regulation that permitted it to advertise limited availability by using stock numbers in its ads.
At trial, the court refused to permit the dealer to introduce the MVB regulation into evidence. A jury returned a verdict in favor of the Couches on their revocation claim and on their Consumer Protection claim. Since the jury found the VCPA violation to be willful, those damages were trebled according to law. The dealer got out his map of I-95 and headed for Richmond , where the Supreme Court agreed to hear the case. The result is today’s ruling in Manassas Autocars v. Couch.
Today’s decision relates to the interplay of statutes and regulations. Regulations generally have the force of law, so at first blush, it looks like the trial court should have allowed the dealer to introduce this one. But the court notes today one key difference between the enabling statute and the regulation. The statute contains some extra language, providing that a dealer can’t use the stock-number method “unless the advertisement clearly and conspicuously discloses that it relates to only one vehicle.” Since neither the regulation nor the ad contained that extra language, it would have been error for the court to allow the jury to consider it. That’s because a statute always trumps a regulation in the event of conflict.
Incidentally, the dealer lost one opportunity to win this battle. He argued that the regulation should at least have been admitted to prove that the VCPA violation wasn’t willful (so he wouldn’t have to face trebled damages). That sounds like a persuasive argument to me, but the dealer hadn’t made it in the trial court, so it falls victim to the relentless buzzsaw of Rule 5:25. The dealer also loses another argument on a related problem; its assignment of error on the fraud claim in the Supreme Court differed materially from the argument it presented in the trial court and on appeal. It’s essential for an appellate lawyer to ensure that she actually briefs the precise issue to which she assigns error, not its second cousin.
The court next turns to the revocation of acceptance claim. I recall this doctrine when I studied it in law school, back when both the world and the UCC were young. A buyer is entitled to revoke his acceptance of goods sold to him as longs as he does so seasonably. The revocation must be based upon a nonconformity that substantially impairs the value of the product to him, and he must have accepted it on the assumption that the problem would be cured. Here, the Couches met all those requirements, and were thus entitled to revoke their acceptance of the van. The one issue that comes closest to paying off for the dealer is the substantial impairment question. The dealer argued that the vehicle was still driveable, and that’s the purpose for which people buy vehicles. So any paint defect, it argued, couldn’t be a “substantial” impairment. But the court accepts the testimony of the Couches’ expert, who testified that the paint job devalued the vehicle by 20%.
On this last point the court distinguishes its holding in Gasque v. Mooers MotorCar Co., 227 Va. 154 (1984), where the buyer tried to return the vehicle after driving it for 8,000 miles (including more than 4,500 miles after revoking acceptance). The Couches bought this specifically as a new car, not merely as driveable transportation, and their economic expectation from that purchase was thus frustrated.
One last pointer: For those of you who think that a judgment has to be fairly large before the Supreme Court will expend an argument docket slot on it, you should know that the total amount of damages the jury awarded to the Couches (including the trebling of the VCPA claim) was just over $11,000. That amount is probably less than what each side spent on appellate legal fees. The lesson here is that a prospective appellant should not be dissuaded from a meritorious appeal simply because he thinks the court will reject his claim as too small.
Arbitration
Lawyers tend to regard arbitration as either “trial lite,” a means of resolving disputes quickly, inexpensively, and efficiently; or as a tool of Satan to inject irrelevant issues and inadmissible evidence into a dispute-resolution process, thereby leading to a skewed result. Happily, I don’t need to wade into that fray in order to give you the lowdown on BBF, Inc. v. Alstom Power, a short arbitration opinion that arose in a commercial setting.
Alstom Power develops generating plants, evidently big ones. The plants are cooled by condensers; BBF builds those. Accordingly, the parties reached an agreement for BBF to supply the condensers for two power plants that Alstom Power was building. The contract required BBF to pay liquidated damages if the condensers didn’t work properly. These two evidently didn’t work as promised, so Alstom Power filed an arbitration claim, pursuant to the contract between the two companies. The arbitrator awarded Alstom Power $2.7 million.
BBF then moved the appropriate circuit court to set the award aside, contending that it violates Virginia public policy; it alleged that Alstom Power had quietly obtained insurance coverage for the very same loss, through one of its affiliates. The narrow issue in this case is whether a court can set an arbitration award aside for that reason.
The answer, we learn today, is no. Despite Virginia courts’ rigid adherence to public policy considerations, an arbitration agreement is usually a waiver of all court protections; the parties usually can go to court only to implement the arbitrator’s award. There is a statute that governs what limited authority trial courts have over such awards (§8.01-581.010), but violations of public policy aren’t among the laundry list of acceptable reasons for intervention. The Supreme Court accordingly affirms the trial court’s decision to let the award stand.
There is one simple lesson in this case, and it applies to lawyers and nonlawyers alike: If you want to keep your rights to judicial review, and you want to keep the proceedings consistent with the rules of law and of evidence, don’t sign any agreement that contains a binding arbitration clause. Once you do, you have contracted away your right to those types of legal protection.
Powers of attorney
There’s another sharply contested 4-3 decision announced today (but not as hot as Haugen, above), this one in the case of Jones v. Brandt. It involves a man in failing health, named Davis , who executed a power of attorney in favor of his lawyer to manage his financial affairs. Four months after he executed the power, Davis orally instructed the attorney to add a “pay on death” co-owner to a $250,000 certificate of deposit in his name. (The new co-owner was not, as sometimes happens, the attorney in fact, but Davis ’s long-time caretaker during his declining years.) The lawyer did as he was directed the same day, and sent a letter to Davis the next day, confirming that he had carried out Davis ’s wishes.
Eight weeks later, Davis died. His executrix learned about the change and filed a suit seeking the aid and direction of the circuit court with regard to the CD. She showed the court that the power of attorney didn’t actually give the lawyer the authority to change beneficiary designations in CD’s (although it gave him such a power with regard to other financial assets). The court convened a hearing at which the lawyer testified to Davis ’s instructions and his compliance with them. After listening to the evidence, the court ruled that the POD designation was valid.
On appeal, a bare majority of the court affirms this ruling, noting that the trial court was in the best position to judge the credibility of the key witness, the lawyer. (I have known this lawyer for a number of years, and for whatever it’s worth, I concur with the trial court’s assessment; he’s a perfectly ethical member of the bar.) It points to the language in the power that grants expansive authority to the attorney, including a request that the grants be given liberal application in furtherance of the grantor’s wishes and the attorney’s power to act. It also finds that the change of beneficiary is consistent with the grantor’s stated intention (also based on testimony from the lawyer) to “take care of [the POD beneficiary] outside of my will.”
So, we’ve got credible testimony from a reliable witness to establish that the lawyer faithfully carried out the grantor’s wishes. How can one wrench a controversy out of that?
‘Seasy. One goes back to the Victorian era, and one reads Hotchkiss v.Middlecoff, 96 Va. 649 (1899). In that case, the justices’s remote predecessors decided that even expansive language in a power of attorney has to be construed narrowly. When a power of attorney includes language like that, the language is “interpreted as intending to confer only those incidental powers necessary to accomplish objects as to which express authority has been given.” That is, you can construe specific grants of authority broadly, but you can’t use expansive language to create new rights.
The dissent, written by Senior Justice Russell, notes that virtually all of the evidence to support the grant of the power comes from one man – the lawyer who received the instructions (with no other witnesses), sent a confirming letter to the grantor (without producing a copy of the letter in court), and said that the grantor had intended this to “take care of” his caretaker (without any corroboration). The dissent appears unwilling to treat any witness, no matter how honest he may be, with that much deference. The dissent does not call this attorney’s honesty into question, but points out persuasively that this approach invites abuse in other cases with other, less scrupulous, attorneys in fact.
The dissent also observes that the General Assembly passed legislation in 1992 (in response to a case from the Fourth Circuit) that makes specific provision for gifts under powers of attorney. It describes several circumstances under which attorneys in fact can make such gifts, and argues that none of those circumstances apply here. The majority (authored by Justice Koontz) answers that there is no gift in this case; the change of a beneficiary designation remains voidable at the will of the grantor (he could have told the lawyer to revoke it the next week if he’d wanted) since it conveys no present interest.
