State high court overturns Norfolk judge’s ruling

By Michelle Washington, The Virginian-Pilot – April 19, 2008

The state Supreme Court has ruled that Norfolk Circuit Judge Chuck Griffith abused his discretion when he fined a lawyer more than $14,000 after his client filed for bankruptcy on the eve of trial.

Griffith could not be reached Friday to comment.

His decision to fine the attorney in the 2006 case was one of several actions that critics raised against him earlier this year during legislative hearings over whether the judge should retain his seat.

The General Assembly did not consider the case because it was still under review by the Supreme Court, but legislators did not reappoint Griffith to a second term.

Griffith’s sanction against lawyer John J. McNally came in December 2006. McNally was representing painting contractor Simonz Inc. against a damages lawsuit filed by Robert and Ellen Rey.

The night before the scheduled start of a jury trial, McNally’s client filed for bankruptcy. McNally informed the Reys’ lawyers within an hour of the filing, according to the Supreme Court’s ruling.

The next day, the Reys’ lawyer, Daniel Warman, argued that McNally had never intended to try the case and had deliberately delayed the bankruptcy filing to run up the Reys’ legal costs.

Griffith agreed. He told Warman to tally up his costs for preparation in the week before the trial, and then levied that total as a fine against McNally.

In the opinion issued Friday, the Supreme Court ruled that its previous opinions show that circuit court judges do not have inherent authority to award attorney’s fees and costs as a sanction.

Chief Justice Leroy R. Hassell Sr. wrote that nothing in the record supports Griffith’s conclusion that McNally did not intend to try the case.

“We hold that the circuit court abused its discretion by imposing sanctions upon McNally,” Hassell wrote.

In a February letter to legislators to rebut his critics, Griffith wrote that after questioning McNally, he believed the lawyer would have been unprepared to try the case had his client not filed for bankruptcy.

“It is well established that attorneys can be sanctioned for misconduct or other actions that unfairly result in costs to opposing parties,” Griffith wrote.

L. Steven Emmert, who represented McNally, said the court emphasized that there was “nothing sanctionable in filing a bankruptcy petition.”

Warman said he was disappointed in the court’s decision but that the ruling was “not unexpected.” He said the record of the proceedings had not contained much detail on evidence of the delay tactics he alleged against McNally.