ANALYSIS OF OCTOBER 15, 2020 SUPREME COURT OPINIONS
(Posted October 15, 2020) After three barren Thursdays, we have opinions today from The Robes by the James. The Supreme Court of Virginia issues two published opinions today, plus one unpublished order.
Workers’ Compensation
An employer wins what may be a temporary victory in an injury-by-accident case today. The appeal is Alexandria Public Schools v. Handel. The claimant is a school teacher who was injured when she slipped and fell after stepping in a puddle of water in her classroom.
Her injuries were bad enough to warrant an ambulance ride to a hospital. She eventually filed a comp claim for “injuries to her right ankle, knee, hip, shoulder, neck, and back,” as today’s opinion reports.
Visits with two orthopedists revealed a nerve injury to the shoulder, which is the only injury at issue in today’s opinion. A deputy commissioner concluded that there was a causal connection between the undisputed accident and the shoulder injury, so the teacher got an award of benefits. The full commission and the Court of Appeals agreed.
But the Supreme Court unanimously vacates the award and remands the case today. The Court of Appeals had approved the finding based on the conclusion that
any injury causally connected to the accident—even if not connected to the sudden or mechanical change—is compensable. In other words, a claimant does not need to prove a structural or mechanical change in every part affected by an obvious accident as long as there is at least one sudden or mechanical change and each injury is caused by the accident.
It’s this analysis that leads to today’s remand. The Supreme Court holds that an “any injury suffices” approach is incorrect; the claimant must prove a connection between the accident and the specific injury. It remands to the CAV to address the claim in this light. It’s possible that that court will send it back down, since this calls for a factual determination. At that hearing, the employee may or may not be able to furnish the required proof of a causal connection.
Corporate stock
Today’s opinion in Day v. MCC Acquisition addresses the interplay between a statutory interpleader proceeding and the old equitable doctrines that preceded that statute. At issue are uncertificated shares of stock in Trigon Healthcare, the successor to Blue Cross/Blue Shield.
Before that succession, a company named M.C. Construction owned a membership interest in Blue Cross. When that insurer converted from a mutual company to a stock company in 1997, M.C. Construction owned shares in the new company. From what I can tell from today’s opinion, no one ever issued stock certificates in that new company.
Two years later, a new company, MCC Acquisition, bought all of the assets of M.C. Construction. (Because of the similarity of the company names, I’m going to call this company “the buyer,” to make this analysis easier to read.) The purchase agreement gave the buyer title to all tangible and intangible property of the old company.
As you may recall, Trigon evolved through mergers and acquisitions into Anthem and then to WellPoint. At this point, WellPoint issued stock in itself in the name of M.C. Construction, and since the company was by that point defunct, sent the shares to the Unclaimed Property office within the Virginia Department of the Treasury. The Treasurer sold the stock and plunked the money into the Richmond Circuit Court during an interpleader action.
This led to competing claims to the money. The buyer asserted that it had a right to receive the funds, because it had bought all of M.C. Construction’s assets, including intangible ones like claims to corporate stock. M.C. Construction replied that the buyer’s claim was for breach of contract – the failure to turn over the stock – and the five-year statute of limitations for a contract claim had long expired.
A circuit court judge ruled in favor of the buyer, holding that there was no evidence of any stock certificates in existence before 2008, when the Treasurer got WellPoint shares. What the buyer got was a chose in action, and since this is an interpleader proceeding, the breach-of-contract limitation period didn’t apply.
The Supreme Court agrees today. This is an in rem proceeding, not an in personam contract action. The circuit court’s task was to ascertain who the rightful owner was; not to adjudicate a claim that X owed money to Y. As today’s opinion notes, “no party currently maintains a claim against the other for anything.” The court’s discussion contains a detailed examination of the nature of stock ownership and of in rem actions. Because this isn’t a contract claim, the circuit court correctly declined to apply a breach-of-contract statute of limitations, and correctly awarded the funds to the buyer.
