THE DEMURRER TRAP[Posted November 19, 2012] I post a lot of essays for the benefit of appellate lawyers. A bit less often, I post something for the benefit of trial lawyers, usually geared toward preservation of issues for appeal. This essay is for both sets, but principally for the latter group. It addresses a problem that’s invisible, even when you stare at the statute that’s supposed to prevent it. I’ve mentioned this problem briefly in a few case analyses, but when I dug deeper for the story behind it, I was surprised at what I found; this emphatically calls for a detailed discussion, and a bit of caution on your end.
If you ask a trial lawyer about appellate courts, you’re likely to get a scowl and a complaint that the entire appellate rulebook is a series of traps. The perception permeates the trial bar that every step in the appellate process could be the last, due to a fear that something unknown, or even unknowable, can jump up at any time to bite even the most diligent of lawyers, to send the appeal into oblivion and the lawyer in search of his malpractice carrier’s phone number.
It isn’t that dire. The rules in appellate courts are different from those in trial courts, of course; but in truth, there are fewer rules that we appellate lawyers have to master. Trial lawyers have to be intimately familiar with the rules relating to civil procedure, the rules of evidence (newly codified!), the rules of discovery, and more. But if your practice is in the Supreme Court of Virginia, you start with Rule 5:1 and end with 5:41. Okay, you need at least a passing familiarity with a few of the rules in Part 1; but that’s about the end of it. Appellate practice, as it relates to procedure, really is simpler.
But I’ll be candid: there are traps. The trial lawyers’ fears are not entirely unfounded; it’s quite possible to stare directly at an appellate provision and not see the danger. Here’s one:
B. 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.
Code §8.01-273. This is the demurrer statute, and in plain English, it provides that when a plaintiff amends in response to a sustained demurrer, she can later insist on appeal that her initial pleading was sufficient, and ask the Supreme Court to allow her to go back and litigate that pleading. The fact that she amended won’t be held against her. The court’s rules carry out this preservation of the original pleading; Rule 5:32(a) states that the appendix must contain “the initial pleading (as finally amended), unless other versions are necessary to consider the assignments of error.”
So, did you see the appellate trap? No? Well, join the club; without extrinsic information, you can stare at that statute all day and never recognize that the protection that it affords is almost useless.
Despite the plain language of this statute, the Supreme Court has consistently ruled that when a party files an amended pleading, the justices will consider on appeal only the amended pleading, not the original one. Even though the statute clearly provides that “the demurree may insist upon his original pleading,” the court has always ignored that original pleading unless the amended pleading incorporates or refers to it:
The plaintiffs contend that the circuit court erred by sustaining the demurrer to the complaint and the amended complaint. We will not consider the plaintiffs’ contentions that relate to the circuit court’s judgment sustaining the demurrer to the plaintiffs’ original complaint. The plaintiffs failed to incorporate or refer to their initial complaint in the amended complaint and because we have held that “when a circuit court sustains a demurrer to an amended motion for judgment which does not incorporate or refer to any of the allegations that were set forth in a prior motion for judgment, we will consider only the allegations contained in the amended pleading to which the demurrer was sustained.” Hubbard v. Dresser, Inc., 271 Va. 117, 119-20, 624 S.E.2d 1, 2 (2006) (quoting Yuzefovsky v. St. John’s Wood Apartments, 261 Va. 97, 102, 540 S.E.2d 134, 136 (2001)); see also Doe v. Zwelling, 270 Va. 594, 596, 620 S.E.2d 750, 751 (2005).
Dodge v. Randolph-Macon Woman’s College, 276 Va. 10, 14 (2008).
According to this line of rulings, there’s an invisible requirement in the demurrer statute – in order to trigger the protections of subsection B, the plaintiff must go a step further and refer to or incorporate her earlier pleading when she amends. If she fails to do so, then she will indeed have been “prejudiced by having made the amendment.”
How did this anomalous situation arise? Did the justices recently decide to nullify the protection that was created by the General Assembly in subsection B?
There’s nothing new about it. This problem is the result of the continuation of old caselaw dealing with amended pleadings. Tracing the line of citations back through St. John’s Wood, the earliest of the three cases cited in Dodge, you get a cite to Bell Atlantic-Virginia v. Arlington County, 254 Va. 60, 63 n.2 (1997). That footnote 2 cites a much earlier case – Norfolk & W. R. Co. v. Sutherland, 105 Va. 545, 549-50 (1906) – for this waiver proposition.
And now we have the culprit. Here’s the language of that 1906 decision:
The demurrers to the original and first amended declarations were sustained. The second amended declaration does not refer to those declarations, and they are not made a part of it, but it is complete in itself; and, upon the demurrer, its sufficiency must be determined by its own averments. See Roderick v. Railroad Co., 7 W. Va. 54.
You see? The problem originated in West Virginia. The rascals . . .
Actually, this waiver doctrine reflects common law (including equity practice) going back to the Nineteenth Century. The earliest Virginia expression of this premise that I’ve found is in Hopkins, Brother & Co. v. Richardson, 9 Gratt. (50 Va.) 485, 487 (1852). There, the judges (that’s what they were called back then) of the Supreme Court of Appeals of Virginia told the plaintiff that if he had wanted to insist on his original pleading, he shouldn’t have amended; he had to allow the trial court to enter final judgment on the demurrer, and then take his chances on appeal. Another early case, Darracott v. C&O R. Co., 8 Hans. (83 Va.) 288, 289-90 (1887), harks back to an 1844 decision from New York for this same principle.
The Supreme Court adhered faithfully to this view into the early Twentieth Century, when it decided Davis v. Marshall, 114 Va. 193 (1912), sending yet another appellant’s argument to an ignoble death. Evidently that decision, though it was merely the latest in an unbroken chain, stepped on the wrong toes, because a legislator soon introduced a bill that created the predecessor to §8.01-273(B), effectively overruling the waiver doctrine. The General Assembly passed that legislation in the 1914 session. 1914 Acts of Assembly, ch. 281, codified as Code of Virginia (Pollard 1904) §6116.
But even though the legislature took this action to relieve plaintiffs of the prejudicial effect of amending, the Supreme Court continued to insist that it would only evaluate the most recent amended pleading, not an earlier draft; post-1914 caselaw reflects a disdain for the legislative override of this common-law doctrine. Back in the days when Prohibition afflicted the nation and Babe Ruth terrorized American League pitchers, the Supreme Court took up an appeal involving this conflict between old caselaw and new statute. In Winston v. Winston, 144 Va. 848 (1926), the court noted the waiver-by-amendment doctrine, and contrasted the protection afforded by §6116. The court ruled that §6116 didn’t apply, because the plaintiff didn’t object to the sustaining of the demurrer. 144 Va. at 860.
Well, if that’s the only thing you need to do in order to cloak yourself in the statute’s protection, it should be easy; you just object, as most unsuccessful plaintiffs do when a demurrer is sustained, and Winston no longer applies. But even though subsequent plaintiffs have no doubt objected to such demurrer rulings, the Supreme Court has always clung to the waiver rule. (The court has also refused to apply the statute, based on harmless-error analysis, where the plaintiff was eventually allowed to prove his whole case, including those allegations set out in the original struck pleading. W.S. Forbes & Co. v. Southern Cotton Oil Co., 130 Va. 245, 249 (1921). That one’s quite understandable.) Subsequent decisions, up to and including Dodge in 2008, have continued the appellate court’s practice of evaluating only the latest version of a pleading, not the prior ones, no matter what the statute says, and despite the Rule 5:32 provision.
So what’s a plaintiff to do? Subsection B was designed to eliminate the need to risk an immediate appeal of the grant of a demurrer, and to allow the case to go forward. Obviously, one way that modern plaintiffs can avoid this invisible trap is to forgo the protection of the statute, and take the risky approach suggested back in 1852 in Hopkins, Brother & Co.: you decline an amendment in favor of an immediate appeal. If that doesn’t strike you as a good option (and it shouldn’t), you can always do what the language of St. John’s Wood and the other cases provides: simply incorporate or refer to your original allegations when you amend.
And yet even this approach has risk. Trial lawyers understandably may be hesitant to restate allegations that the trial judge has already struck, especially when his honor’s demurrer ruling was delivered with a peal of angry thunder from the bench. A defendant foreseeably may move for sanctions against a plaintiff who realleges the very contentions that the trial judge has already found wanting, and a testy trial judge may even grant those sanctions. True, the plaintiff can always explain that she’s merely doing what the Supreme Court says must be done in order to preserve the issue, and hand up a copy of Dodge or one of the other cases as proof.
But even that precaution may not be enough. In the recent case of Northern Virginia Real Estate v. Martins, 283 Va. 86 (2012), the justices affirmed the imposition of the attention-getting sum of $272,000 in sanctions against the plaintiffs and their counsel. Any fair reading of Martins will lead to the conclusion that the plaintiffs and their counsel richly deserved to be sanctioned for turning a molehill of a contract dispute into a seven-figure mountain of litigation. But the opinion contains this observation in the court’s recitation of the reasons why sanctions were appropriate:
[T]he plaintiffs’ complaint, amended complaint, and second amended complaint . . . included three counts of defamation . . . . Inexplicably, the second amended complaint included these defamation counts after the trial court: (1) sustained the Gavins’ demurrer to these counts in the original complaint and allowed the plaintiffs to amend their complaint; and (2) sustained the Gavins’ demurrer and plea of absolute privilege in relation to these defamation counts with prejudice, and allowed the plaintiffs to again amend their amended complaint.
283 Va. at 112. The adverb inexplicably in this passage indicates that the justices wondered why on Earth the plaintiffs would have re-pleaded counts that had been dismissed with prejudice. The answer that this essay plainly suggests is, “Because of the invisible demurrer trap.” The court has here approved a sanction that is based, at least in small part, upon a course of pleading that the justices have repeatedly held is essential for appellate review.
So now what’s a plaintiff to do? How do you respond to the friendly but deadly suggestion from the bench, “I’ll sustain the demurrer, but I’ll be happy to give you leave to amend if you want that”? Until Martins, the best answer was that you should go ahead and amend, reallege the struck counts (a simple incorporation reference would also be sufficient), and thereafter have the guts to stand up to judicial anger from the trial judge. Unfortunately, the Supreme Court has now ruled that this type of careful pleading can get you and your client sanctioned (jointly and severally!), so that’s no longer a safe option. This presents plaintiffs the unpleasant dilemma of choosing between risking sanctions and abandoning a potentially winning appellate argument.
Appellate practice isn’t supposed to be like that. This state of affairs, whereby the statute says one thing but actual practice is fatally different, adds fuel to the trial lawyers’ complaints that the appellate system is a booby-trapped landscape. Theoretically, the legislature could amend the demurrer statute yet again, to emphasize that it meant what it said back in the Wilson Administration. But the best solution is also the simplest: the Supreme Court should interpret the demurrer statute the way it’s written, without imposing an invisible (and risky) requirement of reallegation. There’s nothing wrong with a harmless-error limitation, such as the one the court employed in 1921 in W.S. Forbes; but beyond that, the court should give the statute the effect that the legislature clearly intended, nearly a century ago.