ANALYSIS OF MARCH 24, 2022 SUPREME COURT OPINIONS
(Posted March 24, 2022) It’s a fine, soft day here in Tidewater – translation: it’s raining – and it’s opinion day at Ninth and Franklin in Richmond. The Supreme Court of Virginia hands down two published rulings this morning, one opinion and one order.
The sadness of an intra-family dispute gives us Kittrell v. Fowler, from Middlesex County. The facts are quite complex, a labyrinth of family trusts and large financial transactions, punctuated by the abrupt suicide of one beneficiary/trustee.
But the ruling is quite simple, so I’ll spare you the intricate details. (If you really want those details, scroll up just a tad; they’re only a mouse click away.) The Supreme Court reaffirms that only the personal representative of an estate can pursue a claim that accrued to the decedent during her lifetime. Beneficiaries to the estate cannot sue in their own names to vindicate rights belonging to the testator or settlor.
There’s one interesting procedural point in today’s published order. This is an interlocutory appeal, and it isn’t the parties’ first trip to the Supreme Court. In 2019, one set of parties sought an interlocutory appeal. Their opponents objected, and under the law that existed at the time, that prevented the appeal. Back then, all parties had to consent to interlocutory review, so either party had veto power. That led the opponents to file a prohibition/mandamus petition in the Supreme Court in early 2020, but that petition died later that year.
Meanwhile, the legislature amended Code §8.01-670.1 to remove the requirement for universal consent. Today’s appellants then moved again for certification, and the circuit court agreed, leading to today’s decision.
I don’t have a rooting interest between the parties to this appeal, but I do appreciate this first (as far as I know) use of the amended certification statute. The General Assembly acted on the recommendation of the Boyd Graves Conference to remove the veto provision. I was a strong backer of that change in the Conference, and I’m glad that it resulted in what I regard as a salutary change in the Code.
The justices address some familiar customers in Sidya v. World Telecom Exchange Communications, LLC. This litigation, involving claims of conspiracy, interference with contract expectancies, and appropriation of trade secrets, has been to the SCV twice before.
World Telecom sued Sidya, the owner of its former vendor company, alleging that he and World Telecom’s then-CEO conspired to undercut World Telecom’s business to benefit a new company that the two men were creating. At a jury trial, the plaintiff adduced plenty of smoking-gun testimony to prove the torts, and the jury responded with a sizable verdict.
The Supreme Court today analyzes the evidence to conclude that the jury had a solid basis to impose liability. It accordingly affirms the principal damage award. In a previous appeal, the justices had directed the circuit court to allocate the unitary verdict against Sidya, one of multiple defendants. After a hearing, the circuit court determined that amount to be $1.3 million and then trebled that to about $4 million. The justices find no fault with these rulings.
The news for Sidya gets a bit better; the Supreme Court reverses a $1.6 million attorney’s fee award allocated to matters before and during trial, finding insufficient evidentiary support. It leaves intact a separate $500,000 fee award for post-trial work, because World Telecom’s lawyers offered far more billing detail on those.
Finally, the justices weigh in on a little-explicated but important statutory provision: judgment interest on a compound damage award. The justices hold that despite the five-year gap between the jury verdict and the judgment appealed here, judgment interest began to run on the date of the verdict. That’s consistent with the court’s ruling in the Upper Occoquan case 14 years ago.
But there’s more: Sidya argued that the interest should only run against the primary $1.3 million award, and not on the trebled damages or the $350,000 punitives award. Here, the justices agree with him in what looks to me to be a ruling of first impression. Henceforth, we know that only the primary compensatory award gets post-judgment interest.
I’ll do the math for you; I was always pretty good at math, though I mostly jettisoned that when I chose a legal career. As of yesterday, World Telecom was hoping to receive (in round numbers) $4 million in trebled compensatory damages, plus $350K in punitives, plus about $2.2 million in attorney’s fees, plus $1.7 million in judgment interest. That’s a bit over $8.2 million. With today’s rulings, that total expectation is down to $5.4 million or so. That’s still lot of money, but Sidya’s appellate lawyer succeeded in carving almost $3 million off his judgment liability – before considering her appellate fees, of course.
Justice Kelsey authors today’s opinion for a unanimous court. This was the last undecided appeal argued in 2021; the lawyers appeared before the court on November 9, and had to wait 19 weeks for today’s ruling. Given the complexity of the case and the legal issues, that delay is hardy unreasonable.