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VIRGINIA CIVIL PROCEDURE

Supplement Professor Robert C. Wood, III

SPRING 2009

WASHINGTON AND LEE UNIVERSITY SCHOOL OF LAW LEWIS HALL LEXINGTON, VIRGINIA 24450

1 Supplement - Table of Contents

PAGE Introduction B. Courts and Alternatives General District Court Addison v. Salyer ...... 1

Chapter 1: Law and Equity

Introduction

New Rule Three – A New Deal in Virginia The VADA Journal of Civil Litigation, Vol. XVIII, No. 2 ...... 5

A. Claims at Law or in Equity Gasque v. Mooers ...... 12 Advanced Marine Enterprises v. PRC, Inc...... 17 Dairy Queen, Inc. v. Wood ...... 31

B. Boerner v. McCallister ...... 37

C. General District Court Forms and Actions ...... Addendum Unlawful Entry and Detainer §8.01-124, -130 §8.01-114, -121 Attachment §8.01-538, -576 Distress Warrant §55-230, -235 Debtor §8.01-506, -510 Garnishment §8.01-511, -525 of Fieri Facis §8.01-466, -505

D. Plea of Worker's Compensation Whalen v. Dean Steel Erection Co., Inc...... 42

Chapter 2: Parties and Claims

B. of Claims and Parties Generally Old Dominion Iron v. Vepco ...... 46 2 D. Misjoinder – Nonjoinder – Election of Remedies Necessary Parties Mendenhall v. Cooper ...... 53 Wilkins v. Peninsula ...... 57 K. Joint Tortfeasors – Release and Contribution Dickenson v. Tabb ...... 60 Nationwide Mutual Ins. Co. v. Jewel Tea ...... 70 Sullivan v. Robertson Drug Co...... 77 L. Medical Castle v. Lester ...... 81 M. Sovereign Immunity UVA v. Carter ...... 90 O. Suretyship Bd. of Supervisors v. Safeco ...... 92 P. Stockholders, Officers & Directors of Corporations Willard, et al. v. Moneta Building Supply, Inc...... 98 Q. Stockholder Derivative Actions Simmons v. Miller ...... 115 R. Employers and Employees Gina Chin & Associates v. First Union Bank ...... 119 Peace v. Conway ...... 127 S. Anonymous – Section 8.01-15.1 ...... 130 T. County and Local Governing Body Miller v. Highland County ...... 130 U. Declaratory Miller v. Highland County ...... 130

Chapter 3: and Forum Non Conveniens

E. Forum Non Conveniens Virginia Electric Power Company v. Dungee ...... 140

Chapter 4: and Personal

H. Long-Arm Statute International Shoe Co. v. State of Washington ...... 142 Hanson v. Denckla ...... 148 Keeton v. Magazine ...... 160 Shaffer, et al. v. Heitner ...... 167 3 World-Wide Volkswagen Corp. v. Woodson, et al...... 186

Chapter 5: and Motions

M. Emotional Womack v. Eldridge ...... 193 Miller v. Johnson ...... 197 Naccash v. Burger ...... 204 Sea-Land v. O'Neal ...... 212 Russo v. White ...... 219 Almy v. Grisham ...... 223 N. or Sensenbrenner v. Rust, Orling & Neale ...... 231 O. Wrongful Discharge Bowman v. State Bank of Keysville ...... 235 Doss v. JAMCO, Inc...... 240 Mitchem v. Counts ...... 246

Chapter 6: , Cross-claims and Third-Party Practice

A. v. Plaintiff -- Rule 1:4 - Packett v. Herbert ...... 259

Chapter 7: Claim Splitting, Estoppel and Res Judicata Introduction Davis v. Marshall Homes ...... 262 Gary Steel v. Kitchen ...... 282 Graves v. Associated Transport ...... 285

Chapter 8: Limitations of Actions

C. 5. Willard v. Moneta Building Supply, Inc...... 294 6. Eagles Court Condominium v. Heatilator, Inc...... 300 7. Newman v. Walker ...... 303 1

Addison v. Salyer 185 Va. 644, 40 S.E.2d 760 (1946)

Hudgins, J., delivered the opinion of the court. On April 17, 1940, J. O. Salyer filed a petition for an attachment before the justice of Russell county, in which it was alleged that Marjorie D. Addison and Stanley Addison, the principal , were indebted to him in the sum of $300; that they were removing, or about to remove, out of the State with intent to change their domicile; and that they were assigning and disposing of their , or the greater part thereof, with intent to hinder, delay and defraud creditors. Attachments were issued, served upon the defendants and levied on a truck and a stock of merchandise owned by defendants. On April 30, 1940, the trial justice entered a judgment for plaintiff in the sum of $240 and ordered the property seized under the attachment to be sole to satisfy the same. One the same day an appeal was allowed, with Joel Campbell as surety on defendants' appeal bond. On September 3, 1940, the two defendants named in the attachment presented a petition before the circuit court for a writ of prohibition against the trial justice, on the ground that he had no jurisdiction to try the claim asserted against them because it involved title to real estate. No decision was rendered on this petition. On December 10, 1940, a was sworn to try the appeal of the attachment. After plaintiff had introduced a part of his , he moved to declare a mistrial and to transfer the case to the equity side. Over the objection of defendants, this was sustained, one juror was withdrawn, the others were discharged, and the case was ordered to be transferred to the equity side of this court. Pursuant to this order, plaintiff filed a bill in chancery as an amendment to, or substitute for, the petition for the attachment previously filed before the trial justice, in which bill it was alleged (1) that plaintiff had purchased from defendants 16.1 acres of land for the purchase price of $65 per acre; (2) that the description in the deed was not accurate and did not describe the land actually purchased; and (3) that a correct survey of the tract involved showed that it contained only 12.4 acres, a shortage of 3.7 acres, for which plaintiff was entitled to recover the sum of $240.50. The bill recited the institution of the attachment proceedings before the trial justice, the levy of the attachment on defendants' property, the judgment of the trial justice for plaintiff in the attachment proceedings, the appeal from this judgment by defendants, the execution of a forthcoming bond in the sum of $600 with Joel Campbell as surety, the surrender of the attached property to defendants, and the order of the circuit court transferring the case to the equity side. 2 The prayer of the bill was 'that said defendants (including Joel Campbell) may be required to this bill, they now being before said court;' that the deed be reformed and a correct description inserted; and that plaintiff recover of defendants, including Joel Campbell, the sum of $240.50, with the costs of the attachment proceedings. To this bill defendants filed a , challenging its sufficiency on various grounds, and, without waiving their demurrer, filed an answer and cross- bill. The final decree, entered on August 9, 1945, declared that plaintiff in the attachment proceedings was entitled to have his deed reformed in accordance with his prayer. In addition, judgment was entered for him against the defendants, including Joel Campbell, in the sum of $240.50, with interest from the date of the deed and all costs. From this decree this appeal was allowed. Defendants, in their various assignments of error, challenge the jurisdiction of the trial justice to hear and determine the matter in the first instance. The trial justice courts are the successors to the justice of the peace courts which were abolished in 1930. The language of the statutes conferring jurisdiction on the trial justices is substantially the same as the language of the statutes that fixed and determined the jurisdiction of the justices of the peace, except that the maximum amount recoverable in certain classes of actions has been increased. Code, 1942 (Michie), secs. 4987f1, (c) and 6015. This court has held repeatedly that a justice of the peace has limited jurisdiction, and that, since he derives all his jurisdictional authority from the statute, he 'can only exercise such jurisdiction as is expressly conferred upon him.' See Wall v. American Bank, etc., Co., 159 Va. 871, 167 S.E. 425, and cases cited. The statement is equally applicable to a trial justice. Since 1808 this court has consistently held that a justice of the peace has no jurisdiction in cases involving title to real property. See Miller v. Marshall, 1 Va.Cas. (3 Va.) 158; Warwick v. Mayo, 15 Gratt. (56 Va.) 528, 542; Martin v. Richmond, 108 Va. 765, 62 S.E. 800; 31 Am.Jur. 725-6; Anno. 115 A.L.R. 504. The question raised in Richmond v. Sutherland, 114 Va. 688, 77 S.E. 470, was whether or not a police justice of the city of Richmond had jurisdiction to try a person charged with encroachment upon the street in violation of a city ordinance where such person claimed title to the land involved. The trial court followed the decision in Martin v. Richmond, supra, and decided that the police justice had no jurisdiction. On appeal it was held that the 1910 amendment (Acts 1910, p. 424) to section 4106 of the Code of 1887 expressly granted to police justices and justices of the peace authority to try such offenses, but the principle applicable to courts of limited jurisdiction was reiterated; namely, that such courts 'can only exercise such jurisdiction as is expressly conferred.' When it appeared from the evidence before the trial justice that the plaintiff in the attachment based his claim upon the loss of acreage in, and an inaccurate 3 description of, the tract of land described in his deed, it became the duty of the trial justice to dismiss the case from its docket. On appeal the defendants raised the question before and after the jury were sworn. When the want of jurisdiction of the trial justice appeared to the circuit court, it should have sustained the defendants' motion to dismiss, as 'the action of the justice of the peace in issuing the warrant was null and void, and could not confer jurisdiction upon any court to try the case. ' (Italics supplied.) Wall v. American Bank, etc., Co., supra. 'Any act of a tribunal beyond its jurisdiction is null and void, and of no effect , whether without its territorial jurisdiction or beyond its powers.' Western Union Tel. Co. v. Pettyjohn, 88 Va. 296, 298, 13 S.E. 431. An appeal in a civil case from a judgment of a trial justice, as an appeal from a conviction in a criminal case, is tried de novo before the circuit or corporation court. Gravely v. Deeds, post, p. 662,40 S.E.(2d) 175; Copperthite Pie Corp. v. Whitehurst, 157 Va. 480, 162 S.E. 189; Wygal v. Wilder, 117 Va. 896, 86 S.E. 97. The statute (Code, sec. 6038) expressly declares that 'every appeal shall be tried by the court in a summary way, without in writing, or, if the amount in controversy exceeds twenty dollars, by a jury, if either party requires it. All legal evidence produced by either party shall be heard, whether the same was produced or not before the justice from whose decision the appeal is taken, * * *. ' Code, sec. 6038, provides that every appeal 'shall be determined according to the principles of law and equity.' These mandates of the statutes clearly reveal that the provisions of Code, sec. 6084, dealing with the transfer of cases from one side of the court to the other, have no application to cases appealed from the decision of a trial justice. Another assignment of error is based upon the action of the court in refusing to grant a writ of prohibition against the trial justice for the purpose of prohibiting him from taking further steps in the attachment proceedings. This assignment of error is not well taken for the simple reason that there was nothing more the trial justice could do in the case. An appeal, properly perfected, transfers the entire record to the circuit or corporation court for a retrial as though originally brought therein. The judgment of the trial justice is completely annulled by the appeal and is not thereafter effective for any purpose. Mr. Justice Holt, in Gemmell, Inc. v. Svea Fire, etc., Ins. Co., 166 Va. 95, 98-9, 184 S.E. 457, said: 'A court which hears a case de novo, which disregards the judgment of the court below, which hears evidence anew and new evidence, and which makes final disposition of the case, acts not as a court of appeals but as one exercising original jurisdiction. * * * ''When an appeal is taken by either party, its effect is not only to suspend but to destroy the effect of a judgment of a justice. It makes it as though no judgment had been rendered. The cause is considered as 4 still pending, no regard is had to the judgment of the justice, and the rights of the parties are the same as they would be in any other suit pending in the courts of record.' Turner v. Northcut, 9 Mo. 251.” The next question raised is whether a plaintiff, while his case is pending in the circuit court on appeal from a decision of the trial justice, may amend his pleadings to present a case which, as clearly shown on the face of the pleadings, the trial justice has no jurisdiction to determine. This is an open question in Virginia. In Copperthite Pie Corp. v. Whitehurst, supra, it was held that a civil justice had jurisdiction to hear and determine defendant's right of set-off and that, even if set-off was not pleaded before the civil justice, on appeal it could be pleaded before the circuit or corporation court. The discussion in the case was based on the assumption that the amount of the set-off claimed did not exceed the original jurisdiction of the civil justice. The general rule is that jurisdiction of the circuit or corporation courts to try cases appealed from a decision of a trial justice is derivative and if the trial justice had no jurisdiction to issue the warrant, the acquired no jurisdiction by an appeal -- that is, the jurisdiction of the appellate court in such matters is the same as that of the court in which the action was originally instituted. * The limitation of power in the trial justice court adheres to the case throughout. 'The jurisdiction of an appellate court on an appeal from a justice of the peace is entirely derivative, and if the justice had no jurisdiction in an action as it was before him the appellant court acquires no jurisdiction by an appeal, and can derive none by amendment.' 31 Am.Jur. 768. Stacey Cheese Co. v. Pipkin, 155 N.C. 394, 71 S.E. 442, 37 L.R.A. (N.S.) 606 and note; Davis v. Hagan (Tex. Civ. App.), 255 S.W. 484; , etc., Ry. Co. v. Hughes, 44 Tex.Civ.App. 436, 98 S.W. 415; Bankers' Mortgage Co. v. Rogers (Tex. Civ. App.), 61 S.W.(2d) 593; Brandon v. Progress Distilling Co., 167 Ala. 365, 52 So. 640; Tracy v. Sumida, 31 Cal.App. 716, 161 P. 503; O'Mara v. Mancourt, 92 Ind.App. 426, 174 N.E. 297; Short v. Morrison, 149 Mo.App. 372, 130 S.W. 78; Bickett v. Garner, 21 St. 659; Albinola v. Horning, 39 Idaho 515, 227 P. 1054; Rose v. Christinet, 77 Ark. 582, 92 S.W. 866; Saunders v. Scott, 132 Mo.App. 209, 111 S.W. 874. In Hamilton v. Canfield, 70 W.Va. 629, 74 S.E. 878, the West Virginia court held that, on an appeal from the judgment of the justice, the jurisdiction of the appellate court is not broader than that of the justice as regards the subject matter of the action. For a more detailed discussion of this question, see Stacy v. Mullins, post, p. 837, 40 S.E.2d 265. There is one exception to this rule, expressly stated in Code, section 5449, which provides that, on appeal from a decision of the trial justice in actions of forceful entry or unlawful detainer, the trial justice may require the defendant 'to give security also for all rent which has accrued upon said premises and which may accrue thereon, but for not more than one year's rent in all, * * *.' A similar 5 West Virginia statute was construed in State v. Black, 91 W.Va. 251, 112 S.E. 497. It was held that a plaintiff was entitled to sustained between the time of the institution of the action of unlawful detainer in the justice's court and the rendition of the final judgment thereon by the circuit court on appeal, although the amount was in excess of the justice's jurisdiction. The decree is reversed and all proceedings are dismissed. Reversed and dismissed. New Rule Three – A New Deal in Virginia In 1932, President Roosevelt presented to the American people a “new deal” that eventually led our country out of a depression and established new opportunities for all American citizens. Our Virginia has likewise given the citizens of our Commonwealth a “new deal” that will provide a more efficient and effective civil justice system. Effective January 1, 2006, our Court adopted a new Rule Three (and abrogated Rule 2 - equity procedure) that allows both legal and equitable remedies to be sought in a single action. After two centuries of rigid adherence to English that made a marked distinction between law and equity practice, a litigant no longer must choose between filing an action at law where the court did not have the power to grant equitable relief, and filing a bill in equity where the litigant had to forego a right to a jury trial. See, e.g., Advanced Marine Enterprises v. PRC, Inc., 256 Va. 106, 501 S.E.2d 148 (1998). A litigant who seeks both money damages and an equitable remedy, such as an , specific performance, or rescission, may now join in a single action all claims that arise out of the same transaction or occurrence. Virginia has joined the overwhelming majority of her sister states, and the federal courts, that for many decades have allowed joinder of claims for legal and equitable relief in a single . However, this reform of our civil procedure does not alter the principals or elements of legal or equitable claims in Virginia, and in no way denies, or enlarges, a party’s right to a jury trial. Instead, it allows all parties’ claims and prayers for relief in a complaint, , cross-claim, or third party complaint to be heard in one proceeding. It allows depositions and other to be done once, and it facilitates resolutions of all claims between the litigants arising out of the same transaction or occurrence in a single case. When pled properly, our new system will avoid the potential pitfall under our former system of a plea of res judicata where a second action at law was filed after the chancellor had granted equitable relief to the plaintiff in an earlier action. See, e.g., Wright v. Castles, 232 Va. 218, 349 S.E.2d 125 (1986); Worrie v. Boze, 198 Va. 533, 95 S.E.2d 192 (1956). Virginia’s new deal serves the public interest by allowing all claims of any nature to be joined, thereby expediting the resolution of litigants’ claims in a simpler, more efficient system, and thereby eliminating unnecessary delays, costs, and expenses in the administration of the civil justice system. I. What the New System Does 6 New Rule Three provides for one form of action in Virginia courts called a civil action. A civil action is now commenced by filing a complaint. There are no more motions for judgment or bills of complaint. This simplification of procedure accomplishes one fundamental goal: it avoids the mistakes and burdens that occurred when parties had to select one side of the court on which to bring a claim, defense, counterclaim or cross-claim. The New Rule eliminates the for Virginia Code Section 8.01-270 that allowed a plaintiff who brought the action on the wrong side of the court to have the action transferred to the proper side of the court and to thereafter amend the pleadings so as to obviate the objection that the action was not brought on the right side of the court. The paradigm example of the problems and pitfalls for attorneys and trial judges under the old system was the case of Standardsville Volunteer Fire Department v. Berry, 229, Va. 587, 331 S.E. 2d, 466 (1985). In an action for , the plaintiff filed its claim on the law side of the court seeking only money damages. The defendant, who happened to be a circuit court judge, filed a counterclaim to establish an equitable easement over the land of the plaintiff and moved the trial court to transfer the entire case from law to equity. Over the objection of the plaintiff, the trial court made the transfer, and thereafter, hearing the case ore tenus, ruled that the defendant had established an equitable easement over the plaintiff’s property. On appeal the Virginia Supreme Court reversed and held that it was reversible error, not harmless error, for the trial court to have made the transfer from law to equity since it denied the plaintiff its constitutional right to a jury trial. Sadly, the parties had extended time, energy and financial resources futilely for over five years after the dispute had arisen. The parties and their counsel had to regroup and start all over again. This result will never happen again in Virginia. New Rule Three eliminates such an obvious waste of time, money, and judicial resources. A single form of civil action permits a trial judge to follow equitable doctrines for claims at law for money damages and for claims where the parties seek only equitable relief. See Va. Code § 8.01-422. The New Rule does not restrict a party’s right to a jury trial and monetary relief for claims at law for money damages. The litigant no longer will be required to file multiple suits or seek transfer of an action from one side of the court to the other where there are concurrent claims for money damages and an equitable remedy. For example, in Worrie v Boze, supra, the plaintiffs brought a second action at law claiming compensatory and punitive damages, alleging a by the defendants to breach an employment contract between the parties. The defendants filed a plea of res judicata arguing that a prior equity suit brought by the plaintiffs for an injunction barred the law action. The equity suit involved the same employment contract between the parties that contained a covenant prohibiting the defendants from competing with the plaintiffs within a certain area for a stated period of time. When the defendants opened a competing business in this restricted area, the plaintiffs had filed a bill of complaint in which they sought only an injunction to restrain the defendants from operating the competing business. The chancellor 7 granted the injunction, but awarded no monetary relief since there was no prayer for assessment of damages. The Supreme Court upheld the trial court’s rejection of the defendants’ plea of res judicata. The issues in the equity suit were whether the contract was valid and enforceable, and if so whether it should be enforced. On the other hand, the second action at law for money damages was based upon an alleged tort, i.e., conspiracy to induce breach of contract. While the causes of action in the two suits were closely related, our Court held that they were not identical. Now any practitioner who is faced with competing claims for equitable and legal relief, as experienced by the attorneys in Worrie v. Boze, Wright v. Castles, and Standardsville v. Berry, no longer has to choose one side of the court over the other side, a choice where potentially draconian consequences lurked for a mistaken choice of a forum. Under new Rule Three, the plaintiffs’ claims for both equitable and legal relief can be joined in a single action. II. What the New System Will Not Do While law and equity procedures are merged, the new system creates only a single procedural system for civil cases and preserves in all respects the distinctions between legal and equitable remedies. For instance, claims for purely equitable relief such as injunctions, specific performance, reformation, and rescission, or for the partition of property do not affect in any way the established equitable principles upon which these remedies are premised; and in such claims there is no constitutional right to a jury trial. The principles underlying a right of action, defensive pleading, including , a plea of the , joinder of parties, and limitations on a court’s exercise of jurisdiction and/or subject matter jurisdiction have not been affected in any manner. The historic rules providing for the right to a jury trial are not altered in any way. New Rule 3:25 contains a new “jury demand procedure,” but the right to demand a jury trial in an action at law in which a jury is available is preserved. Actions sounding in equity will be heard without a jury. However, Virginia’s established practice allowing for a jury trial on a special plea in equity or for an advisory jury on a purely equitable claim is preserved. See § 8.01-336(D) and (E). As discussed later, it is contemplated that claims triable to a jury will be heard before the trial court makes any determination on an equitable claim where the claims arise out of the same transaction or occurrence. Virginia still adheres to the concept of notice pleading. Rule 1:4(k) tells attorneys that “brevity is enjoyed as the outstanding characteristics of good pleading.” The only exceptions to this rule are claims of or conspiracy which require the plaintiff to plead with particularity. See, e.g., Tuscarora v. B.V.A. Credit Corp., 218 Va. 849, 241 S.E.2d 778 (1978). Remember, however, that there can be no recovery unless the theory upon which the party prevails has 8 been pled. See, e.g., Ted Lansing Supply v. Royal Aluminum, 221 Va. 1139, 277 S.E.2d 228 (1981). The rules governing joinder of claims are not altered in any way. The single form of action system does not alter the rules permitting joinder of claims or defenses and pleading alternative facts or legal theories that arise out of the same transaction or occurrence. See Rule 1:4(k) and Code §§ 8.01-272 and 8.01-281. The rules providing for counterclaims, cross-claims and third party have not been altered or abridged in any manner. The defendant may, but is not required to, plead as a counterclaim any that the defendant may have against the plaintiff, whether or not it grows out any transaction set forth in the complaint. The New Rule has not been changed to require a defendant to file a “compulsory counterclaim.” However, the practitioner needs to remember that while there is no compulsory counterclaim, the rules of collateral estoppel may have a profound affect in a second action brought by either of the parties after a final judgment in the first suit on issues common to both claims. See e.g., Carter v. Hinkle, 189 Va. 1, 52 S.E.2d 135 (1949). See Rule 3:9. There is no charge with regard to cross-claim (a claim by one defendant against another defendant). Any cross-claim by one defendant against another defendant must grow out of any matter pled at the complaint. A cross-claim that does not arise out of the matter pled in the complaint is subject to a demurrer. Rule 3:10. Third party practice remains essentially the same. Rule 3:13. The defendant as a third-party plaintiff may file and serve a third-party complaint upon a person, not a party to the action, who is or may be liable to the third-part plaintiff, for all or part of the plaintiff’s claim against the third-party plaintiff. This procedure is generally used in personal injury actions where the plaintiff has decided to name only one defendant where there may be two or more joint tortfeasors. The named defendant may file a third-party complaint against a second (or third or fourth tortfeasor) for contribution or indemnification. The defendant may file this complaint even though there has been no determination of any liability of the defendant (or third-party plaintiff) to the plaintiff. Va. Code § 8.01-249(5). Remember that the plaintiff has the right in a personal injury or property damage action arising out of a motor vehicle accident to have the third party complaint severed and have a separate trial on the original complaint. Va. Code § 8.01-281(B). The joinder of parties has not changed. New Rule Three neither expands nor existing provisions for joinder of parties, plaintiff or defendant, under the code or case law. For example, in Fox v Deese, 234, Va. 412, 362 S.E. 2d 699 (1997), the plaintiff filed an eight count action joining contract and tort claims against the City of Richmond and joined as defendants, the City Manager, and three other City employees. The Supreme Court reversed the trial court that had sustained a demurrer for misjoinder of parties and causes of action. The 9 Supreme Court held that the plaintiff could join these defendants in the same action, even though these defendants were not jointly and separately liable on all claims in the motion for judgment since all claims arose out of the same transaction or occurrence. See § 8.01-272 and § 8.01-281. There is no change regarding the applicable statute of limitations to legal claims or the concept of laches to any equitable claim. Periods of limitations continue to apply to legal claims, and laches will still apply for equitable claims. Any overlap will be handled as it has historically has been dealt. See, e.g., Belcher .v Kirwood, 238 Va. 430, 383 S.E. 2d, 729 (1989). The basic legal principles for default and the entry of a are not materially altered. Rule 3:19. However, the New Rule adds a new provision that allows a court, prior to entry of a default judgment for good cause shown, to allow the filing of a late responsive pleading. Rule 3:19(b). It also adds a subparagraph (d) that provides during the twenty-one day period after a default judgment, the trial court may, by written order, relieve a defendant of a default judgment after consideration of the extent and cause of the defendant’s delay in tendering a responsive pleading. The trial court can consider whether service of process and actual notice of the claim were timely provided to the defendant, and the effect of the delay upon the plaintiff. New Rule Three is not designed to alter the doctrines of res judicata and collateral estoppel, or the requirement of mutuality of estoppel articulated in Virginia cases. See e.g. Norfolk & Western Railroad v. Bailey, 221 Va. 638, 272 S.E. 2d, 217 (1980). However, there is a caveat of which to be aware. While the New Rule does not specifically alter the doctrines of res judicata and collateral estoppel, it certainly eliminates one of the foundations for a plea of res judicata. In Wright v. Castles, supra, the plaintiff filed two successive actions, both of which arose out of the same occurrence, the first on the equity side of the court in which a final decree was entered, and the second on the law side. Rejecting the defendant’s plea of res judicata, our Court held that for the purposes of res judicata, four elements must concur: 1) identity of the remedy sought; 2) identity of the causes of action; 3) identity of the parties; and 4) identity of the quality the persons for or against whom the claim is brought. Wright v. Castles, 213 Va. at 222, 349 S.E.2d at 128. Now that a plaintiff may seek both legal and equitable relief in a single action, the ground that there must be an “identity of remedy sought” is no longer an issue since legal and equitable relief can be claimed in the complaint. Thus, it could be argued that a plaintiff, who previously filed a complaint seeking only an equitable remedy, would later be barred on a plea of res judicata when in a second complaint the plaintiff sought money damage if the two actions arise out of the same transaction or occurrence. The case of Davis v. Marshall Homes, Inc., 265 Va. 159, 576 S.E. 2d, 504 (2003), concerned a plea of res judicata filed by a defendant in a second action for default on a note after the defendant had prevailed in an earlier action for 10 fraud. Both of the actions arose out of the same transaction. Our Court held that the test to “determine whether claims are part of a single cause of action is whether the same evidence is necessary to prove each claim.” Since the “same evidence” was not required in both cases, the Court overruled the plea of res judicata. The strict application of this test would seem to allow a plaintiff to file an action seeking solely equitable relief, and a second action seeking legal relief since “the same evidence would not be necessary to prove each claim.” In Marshall, there was strong dissent. There is currently proposed a new rule winding its way through the rulemaking process that would overrule “the same evidence test” enunciated in the Marshall case.1 Under this proposed rule, a party who makes a claim for relief, legal or equitable, from an identified transaction or occurrence upon which there is a final, unappealable judgment is barred from filing, or making, a subsequent claim, against the same opposing party that arises from the same transaction or occurrence. The plea of res judicata must be sustained by the trial court even though a party argues a new legal theory or right of recovery, and regardless of the legal elements or the evidence upon which any claim in the prior proceeding depended. There are two exceptions in this new rule. Its provisions do not bar a party, or a party’s insurer, from prosecuting separate personal injury and property damage claims arising out of the same conduct, and it does not bar a party who

1 The Proposed New Rule 1:6 provides: (a) Definition of Cause of Action. A party whose claim for relief arising from identified conduct, a transaction, or an occurrence, is decided on the merits by a final judgment, shall be forever barred from prosecuting any second or subsequent civil action against the same opposing party or parties on any claim or cause of action that arises from that same conduct, transaction or occurrence, whether or not the legal theory or rights asserted in the second or subsequent action were raised in the prior , and regardless of the legal elements or the evidence upon which any claims in the prior proceeding depended, or the particular remedies sought. A claim for relief pursuant to this rule includes those set forth in a complaint, counterclaim, cross-claim or third party pleading; (b) Effective Date. This rule shall apply to all Virginia judgments entered in civil actions commenced after July 1, 2006. (c) Exceptions. The provisions of this Rule shall not bar a party or a party’s insurer from prosecuting separate personal injury and property damage suits arising out of the same conduct, transaction or occurrence, and shall not bar a party who has pursued mechanic’s lien remedies pursuant to Virginia Code § 43-1 et seq. from prosecuting a subsequent claim against the same or different defendants for relief not recovered in the prior mechanic’s lien proceedings, to the extent heretofore permitted by law. (d) Privity. The law of privity as heretofore articulated in case law in the Commonwealth of Virginia is unaffected by this Rule and remains intact. For purposes of this Rule, party or parties shall include all named parties and those in privity. 11 has pursued mechanic’s lien remedies pursuant to Code § 43.1, et seq. from prosecuting a subsequent claim against the same or different defendants for relief not recovered in the prior mechanic’s lien proceeding, to the extent now permitted by law. Finally, the new rule articulated does not affect the existing laws of privity. Party or parties includes all named parties and those in privity. See e.g., Nero v. Ferris, 222 Va. 807, 284 S.E.2d 828 (1981). When the proposed new rule is adopted by the Supreme Court, the doctrine of res judicata will be altered to a significant extent, and existing case law would have little, or no, precedential value. However, under the exception in the proposed new rule, the law as pronounced in Carter v. Hinkle, supra, will not be altered in any manner. The proposed new rule would require a party to join all claims for relief, both legal and equitable, that arise from an identifiable transaction or occurrence. Failure to do so would forever bar a subsequent action arising out of the same transaction or occurrence. Under the new rule, the defendants’ pleas of res judicata in the cases of Davis v. Marshall Homes, supra, Wright v. Carter, supra, and Worrie v. Boze, supra, would be sustained. The wise practitioner should join all claims that arise from a identified transaction or occurrence, even if the new proposed rule is not adopted by a court. III. Jury Trial Rights in Multi-Claim Actions When parties, whether plaintiff or defendant, present both legal and equitable claims in a single action, the trial court must determine whether or not to present common questions of fact first to a jury before determining whether any party is entitled to equitable relief. This issue was presented to the trial court in Standardsville v. Berry, supra. In reversing the trial court for depriving the plaintiff of its constitutional right to a jury trial, the Supreme Court provided a road map how the case should proceed on remand. If the defendant wished to test his right to an equitable easement over the plaintiff’s land before undergoing a jury trial in the trespass case, the defendant was entitled to bring a chancery suit seeking an equitable easement and have the chancery court enjoin the plaintiff’s action at law for trespass until the chancery court had made its ruling on the defendant’s claim. If the defendant was successful in equity, the plaintiff would be permanently enjoined from interfering with the defendant’s easement, and the plaintiff obviously would not be entitled to any damages in the action at law. If the defendant did not prevail in equity, the plaintiff’s right to proceed in the action at law would be unimpaired, and the issue of damages would be submitted to a jury. Under New Rule Three, it is anticipated our Court’s proffered road map in Standardsville would be reversed 180 degrees. It is reasonable to expect that the Virginia Supreme Court would follow the guidelines set forth in the Supreme Court decisions of Beacon Theater, Inc. v. Westover, 359, U.S. 500 (1959) and Dairy Queen, Inc. vs. Wood, 369, U.S. 469 (1962). In Beacon 12 Theater, the Supreme Court established the proper federal practice when legal and equitable claims are raised in a single action. It held that the Seventh Amendment Right to a jury trial on legal claims must be preserved by trying the legal claims first, or at least simultaneously with equitable claims, and the jury’s finding on any common question of fact must be applied when the court decided the equitable claims. In Dairy Queen, the Supreme Court stated “as long as any legal cause is involved, the jury rights it creates control.” Daily Queen, 369, U.S. at 473. If our Court, when presented with a case similar in nature to Standardsville v. Berry, supra, follows Beacon Theater and Dairy Queen, common questions of fact must first be tried to a jury since the jury trial right should not be impaired through the prior determination of equitable claims. The jury would determine, upon proper instructions, whether the defendant had trespassed over the plaintiff’s land. If so, the plaintiff is entitled to recover money damages, and of course, the defendant would not obtain any equitable relief. Conversely, if the plaintiff did not prove that the defendant had trespassed over its land, then that finding by the jury would be applied by the court in fashioning the equitable remedy requested by the defendant, an equitable easement over the plaintiff’s land. IV. Conclusion The New Rule Three affords attorneys, judges and the public a simplified procedural system that fosters the administration of justice in a timely, efficient, and less expensive manner. We are indebted to our Supreme Court for its insight in moving our civil justice system beyond 200 years of Virginia’s slavish adherence to the “marked distinction” between law and equity procedures. Citizens of our Commonwealth now have a civil justice system that is vastly simplified and improved and can resolve citizens complaints and disputes without the hassle of whether the parties are on the “right side of the court.”

Gasque v. Mooers 227 Va. 154, 313 S.E.2d 384

Russell, J. delivered Opinion in this case. This case requires consideration of the rights of a buyer of a defective automobile who seeks the remedy of revocation of acceptance against the seller and the manufacturer under the Uniform Commercial Code (Va. Code § 8.2-608). On January 8, 1980, Patricia E. Gasque and Earl L. Gasque (buyers) filed a suit in equity against Mooers Motor Car Co., Inc. (Mooers) and Fiat Motors of North America, Inc. (Fiat). They alleged that they had purchased a new 1979 Fiat station wagon, manufactured by Fiat, from Mooers on February 21, 1979; that after delivery they discovered numerous defects in the car; that Mooers had made at least five attempts to correct the defects, without success; that on September 19, 1979, the buyers had demanded rescission of the sale and return of the 13 purchase price or replacement of the car; and that the demand had been refused. The bill of complaint sought only cancellation of the sale and return of the purchase price or, alternatively, replacement of the car with a new one of similar model. There was no claim for compensatory damages, although there was a claim for punitive damages and "loan interest, legal interest, costs of this litigation, and an award of attorney's fees," as well as "other and further relief." The court heard evidence ore tenus and, in a written opinion, held that the evidence did not show a substantial impairment of value of the car by reason of the defects and that the buyers had failed to revoke their acceptance within a reasonable time. At trial, the court sustained Fiat's motion to strike the evidence as to it, on the grounds that the remedy of rescission, or revocation of acceptance, was not available against a party who had no contract with the buyer. A decree was entered in favor of both defendants, from which the buyers appeal. We agree with the trial court's rulings. In accordance with established standards of appellate review, we must view the evidence in the light most favorable to the parties prevailing below. The buyers took delivery of a new Fiat from Mooers on February 21, 1979. At various subsequent times, they reported to Mooers that they had experienced a water leak, a loose gearshift lever, difficulty shifting into second and third gear, heater malfunction, an inoperative clock and interior light, a loose wire under the dash, blown fuses, a piece missing from a front door, automatic choke problems, difficulty starting, fast idling, difficulty closing the rear door on the driver's side, difficulty opening the rear door on the passenger's side, excessive oil consumption, loud vibrations, and various other noises and rattles. In addition, they claimed that the reclining front seat broke, and that they experienced repeated difficulty with the foot-long plastic extension to the gearshift lever, which pulled loose. The buyers returned the car to Mooers on March 13, March 23, an unspecified date in May, June 21, June 27, July 20, and August 6, 1979, for service. On each occasion, Mooers repaired the items complained of, without charge, although Mooers could find no evidence of some of the problems described by the buyers. Mooers conceded that the car experienced a recurring problem with the gearshift extension and testified that this defect affected three out of seventy cars of this model which it had recently sold. Mooers' service manager testified that the gearshift extension would come off only if used improperly by pulling it upward and that the car was still operable without the extension. The car was in fact driven for thousands of miles while subject to this defect. Although Mooers thought a permanent repair of this problem could be accomplished, the difficulty continued up to the time of trial. The buyers consulted counsel, who, on September 19, 1979, wrote to Mooers and to Fiat demanding "a full refund including interests and expenses for the times that the vehicle was in the shop or, in the alternative, the replacement of said automobile." The buyers continued to drive the Fiat, except when it was left with Mooers for service. When the car was last in Mooers' shop for repairs on August 6, it had 4,543 14 miles on the odometer. When buyers' counsel wrote to Mooers on September 19, he stated that the car had been driven 5,400 miles. At the time of the trial on May 21, 1980, the car had been driven over 8,000 miles. The buyers testified that they purchased a used Volkswagen in November 1979, and permanently parked the Fiat, which by then had been driven 8,000 miles, in their driveway. Code § 8.2-608 provides: Revocation of acceptance in whole or in part. 1. The buyer may revoke his acceptance of a lot or commercial unit whose nonconformity substantially impairs its value to him if he has accepted it a. on the reasonable assumption that its nonconformity would be cured and it has not been seasonably cured; or b. without discovery of such nonconformity if his acceptance was reasonably induced either by the difficulty of discovery before acceptance or by the seller's assurances. 2. Revocation of acceptance must occur within a reasonable time after the buyer discovers or should have discovered the ground for it and before any substantial change in condition of the goods which is not caused by their own defects. It is not effective until the buyer notifies the seller of it. 3. A buyer who so revokes has the same rights and duties with regard to the goods involved as if he had rejected them. Although the U.C.C. "Official Comment" appended to this section makes clear that the buyer is no longer required to elect between rescission and damages for breach, the buyers in this case did so by their pleading. The prayer of the bill is purely for a restoration of the parties to the status quo ante, including such incidental damages as would accomplish that purpose. The prayer for punitive damages is extraneous and ineffectual. The suit is, as it must be to accomplish its purpose, founded upon the contract between Mooers and the buyers. Punitive damages are unavailable independent, willful tort is alleged and proved. Kamlar Corp. v. Haley, 224 Va. 699, 299 S.E.2d 514 (1983). Even if the buyers' bill alleged a tort, which it fails to do, an award of compensatory damages, which are not claimed here, is an indispensable predicate for an award of punitive damages, except in actions for libel and slander. Newspaper Publishing Corp. v. Burke, 216 Va. 800, 805, 224 S.E.2d 132, 136 (1976). Thus, the trial court properly confined its consideration to the question whether the evidence supported the prerequisites for revocation of acceptance under Code § 8.2-608: (1) substantial impairment of value to the buyer, and (2) action within a reasonable time and before any substantial change in condition of the goods which is not caused by their own defects.2

2 Buyers contend that the condition of the car was in breach of implied warranties. Mooers contends that such warranties were expressly excluded by the language of the parties' contract. 15 A buyer's right to revoke acceptance does not arise from every breach of warranty, notwithstanding the availability of damages for the breach; it arises only where the value of the goods to the buyer is substantially impaired. Tiger Motor Co. v. McMurtry, 284 Ala. 283, 224 So.2d 638 (1969). The test of such impairment is not, however, a diminution in value of the goods on the open market, or to the average buyer, but rather a substantial impairment of value to the particular buyer involved. See Champion Ford Sales, Inc. v. Levine, 49 Md. App. 547, 433 A.2d 1218 (1981). Whether substantial impairment of value to the particular buyer exists is an issue to be determined by the trier of fact. See Asciolla v. Manter Oldsmobile- Pontiac, Inc., 117 N.H. 85, 370 A.2d 270 (1977). The buyer must carry the on this issue by a preponderance of the evidence. The authorities disagree as to the standard of proof which should apply. The buyers urge us to adopt a subjective test, under which the buyers need only persuade the fact-finder that their "faith has been shaken" in the product. See, e.g., Stamm v. Wilder Travel Trailers, 44 Ill. App.3d 530, 358 N.E.2d 382 (1976), and Zabriskie Chevrolet, Inc. v. Smith, 99 N.J. Super. 441, 240 A.2d 195 (1968). We decline this invitation and hold that the buyer must offer objective evidence showing: (1) that the goods fail to conform to the terms of the contract of sale, and (2) that the nonconformity substantially impairs the value of the goods to the buyer. See Asciolla v. Manter, supra; GNP Commodities, Inc. v. Walsh Heffernan Co., 95 Ill. App.3d 966, 420 N.E.2d 659 (1981). How may this be shown? Undoubtedly, there may be a purchaser of an automobile who wants if for an unusual and special purpose, such as display in a collection of antique vehicles. But the burden would be on the buyer to show such a special need. In the absence of such a showing, the fact-finder is entitled to infer that the goods are needed by the buyer for their customary and ordinary purpose -- simple transportation in the case of an automobile. In the instant case, there was persuasive evidence that the Fiat in question substantially fulfilled that purpose. It had been driven 5,400 miles by the time the buyers sought to revoke acceptance and an additional 2,600 miles thereafter. The trial court applied a standard of "drivability" as the test of whether the car's value to the buyers was substantially impaired. While such a standard would not be of universal application, we cannot say that it was erroneous where the buyers failed to prove any need for the car beyond ordinary transportation. Accordingly, the trial court's finding in this respect was supported by evidence and will not be disturbed on appeal. In deciding whether the remedy of revocation of acceptance is applicable, the fact-finder must resolve additional issues: whether the buyer unreasonably delayed giving notice of revocation, whether the condition of the goods had substantially changed, and whether the buyer had made unjustified use of the goods after giving notice of revocation. As to all these issues, the buyer has the burden of proving by a

Because of the view we take of the case, it is unnecessary to decide this question, and we will assume, without deciding, that the warranties were effective. 16 preponderance of the evidence that his conduct was reasonable. The Uniform Commercial Code has substituted a standard of commercial reasonableness for the stricter standards which formerly prevailed, but the guiding principles are clear. Revocation or acceptance must be made promptly, or within a reasonable time after acceptance, and the buyer may not use the goods to a material degree and then attempt to revoke. Reece v. Yeager Ford Sales, Inc., 155 W. Va. 453, 184 S.E.2d 722 (1971). What constitutes a reasonable time depends upon the facts and circumstances of each case. The time for revocation will ordinarily extend beyond the time for giving notice of breach. Lanners v. Whitney, 247 Or. 223, 428 P.2d 398 (1967); Pedrini v. Mid-City Trailer Depot, Inc., 1 Wash. App. 56, 459 P.2d 76 (1969). Where the delay in notification of revocation is brought about because the buyer gave the seller repeated opportunities to correct the defects and the seller procrastinated in accomplishing repairs, the delay is not unreasonable. Seekings v. Jimmy GMC of Tucson, Inc., 130 Ariz. 596, 638 P.2d 210 (1981). But after giving notice of revocation, the buyer holds the goods as bailee for the seller. The buyer cannot continue to use them as his own and still have the benefit of rescission; his continued use becomes wrongful against the seller, unless induced by the seller's instructions or promises. Stephens Industries, Inc. v. American Express Co., 471 S.W.2d 501 (Mo. Ct. App. 1971); Sellman Auto, Inc. v. McCowan, 89 Nev. 353, 513 P.2d 1228 (1973). Exceptions have been made to the rule in mobile home cases, where departure from the home before resolving the litigation would cause undue hardship to the buyer and where the buyer's continued occupancy might be the best means of safeguarding the property for a seller who refuses to take it back. Minsel v. El Rancho Mobile Home Center, Inc., 32 Mich. App. 10, 188 N.W.2d 9 (1971). Cf. Twin Lakes Mfg. Co. v. Coffee, 222 Va. 467, 281 S.E.2d 864 (1981). But this reasoning has no application to the continuing use of an automobile, which ordinarily depreciates in value with every mile it is driven. Applying these principles to the case at bar, the buyers' delay, at least until after August 6, was reasonable in light of the seller's continuing efforts to effect repairs, which were only partially successful. But it is equally clear that the buyer's continued use of the car after giving notice of revocation of acceptance on September 19, during which time they drove it 2,600 miles, was entirely inconsistent, with their positions as a bailee, maintaining custody only to safeguard the car for the seller. Such personal use of what they contended to be the seller's property does not meet the standard of commercial reasonableness, and the trial court correctly so held. The trial court correctly struck the evidence against Fiat. The remedy of revocation of acceptance was the sole relief available to the buyers under their bill of complaint, as noted above. This remedy lies only against a seller of goods, not against a remote manufacturer. This is so because the remedy, where successful, cancels a contract of sale, restores both title to and possession of the goods to the seller, restores the purchase price to the buyer, and as fairly as possible, returns the contracting parties to the status quo ante. The remote manufacturer, having no part in the sale transaction, has no role to play in such a restoration of former positions. 17 Seekings v. Jimmy GMC of Tucson, Inc., supra, 130 Ariz. at 600, 638 P.2d at 214; Reece v. Yeager Ford Sales, Inc., 155 W. Va. 461, 184 S.E.2d 727, 731 (1971). The buyers argue that this limitation on revocation revivifies the "archaic doctrine of privity." We disagree. A remote manufacturer is liable to a buyer for damages arising from or from breach of warranty, and the defense of lack of privity has been abolished as to such cases, Code § 8.2-318. But the remedy of revocation of acceptance under Code § 8.2-608 is conceptually inapplicable to any persons other than the parties to the contract of sale sought to be rescinded. For these reasons, the decree will be Affirmed.

Advanced Marine Enterprises, Inc., v. PRC 256 Va. 106; 501 S.E.2d 148 (1998)

Keenan, J., delivered the opinion of the Court. In this appeal, we consider issues in a chancery proceeding involving both equitable and legal claims arising from an alleged business conspiracy and breach of an employment agreement. PRC Inc. (PRC) is a corporation that, among other things, provided marine engineering services under contract to the . Included in those services was "shipbuilding support" that PRC rendered to the Naval Sea Systems Command (NAVSEA). Advanced Marine Enterprises, Inc. (AME), a Virginia corporation engaged in the business of marine engineering, also provided services under contracts with the Navy, including NAVSEA. PRC requires every new employee to sign a uniform Employment Agreement as a condition of employment. The Employment Agreement obligates PRC employees to protect PRC's proprietary information and to refrain from disclosing such information to individuals outside the company. The Employment Agreement also contains a non-competition provision, which provides in relevant part: Employee agrees not to compete with PRC for a period of eight months following termination of employee's employment, by rendering competing services to or, with respect to such services, solicit any customer of PRC for whom Employee performed services while employed by PRC, within 50 miles of a PRC office. At various times during 1995, due to the loss of certain marine engineering contracts, PRC informed some of its marine engineering employees that they 18 should look for other employment. On December 13, 1995, PRC announced that the company would be sold to Litton Industries, Inc. (Litton).3 In November 1995, prior to the announcement of the sale, C. Michael Pirrera, a senior manager in PRC's marine engineering department, contacted AME and inquired whether AME would be interested in employing all seven managers from PRC's marine engineering department (PRC Managers). When AME expressed interest in hiring the PRC Managers, AME and the PRC Managers, led by Pirrera, formed a plan (the Plan) under which AME would attempt to hire every employee in the PRC marine engineering department. Under the Plan, AME agreed to make secret job offers to all employees in PRC's marine engineering department. These employees would be required to resign on the same day, December 29, 1995, without notice to PRC, despite PRC's requirement that employees provide two weeks notice of their intent to leave PRC's employ. The Plan's objective was to transfer PRC's entire marine engineering department to AME, including the PRC Managers, the other employees, all customer relationships, and all existing contracts. As one PRC Manager stated, the idea was "to put together an entity that the [PRC] customer can't live without." AME knew about the terms of PRC's Employment Agreement before implementing the Plan. AME was aware that it faced a potential lawsuit by PRC to enforce the Employment Agreement, and that PRC could assert other causes of action against AME, such as with contract. After projecting the nature and amount of damages that might result from a lawsuit by PRC, AME decided that the benefits of the Plan outweighed the potential consequences of a lawsuit. To implement the Plan, some of the PRC Managers developed a "matrix" describing how the PRC Managers would obtain the business of PRC's marine engineering department. This "matrix" included detailed confidential and proprietary information about PRC's workload, the value of certain work, and the amount of government funding available for each job in PRC's marine engineering department. The "matrix" also evaluated each of PRC's jobs regarding the ease with which the job could be "pulled" from PRC or "diverted" to AME. Based on employee information supplied by the PRC Managers, AME prepared "offer" letters to each of the PRC Managers and other marine

3 Due to a conflict of interest caused by the sale to Litton, PRC was later required to sell one of its primary marine engineering contracts, the 400D contract, to a buyer other than Litton. In April 1996, PRC entered into a contract with Tracor, Inc., the parent company of Vitro Corporation (Vitro), for the sale of the "400D unit," which covered the 400D contract and approximately 80 PRC employees.

19 engineering employees and authorized Pirrera to negotiate salaries with each employee. The "offer" letters included a provision in which AME agreed to indemnify and hold harmless each PRC employee against any claim, demand, damage, or injury asserted by PRC in connection with the employee's employment by AME. The PRC Managers devised a schedule for distributing the "offer" letters to the PRC employees based on the PRC Managers' concern that some employees might "blab" to PRC after receiving their AME "offer" letter. Under this schedule, the PRC Managers planned to give job offers to those PRC employees who might "blab" only after offers were given to the employees who were unlikely to "blab." The PRC Managers distributed the "offer" letters in mid-December 1995. The PRC Managers delivered each letter personally, encouraged each employee to accept AME's offer, and emphasized the need to keep PRC from gaining knowledge of the Plan prior to December 29, 1995, the date of the scheduled mass resignation. On December 20, 1995, Pirrera learned that rumors of the Plan might "leak out" to PRC. In response, Pirrera sent an "e-mail" message to the other PRC Managers on December 21, 1995, which stated: Subject: Execute Gentlemen: Based on yesterday's events we need to do the following: With the exception of the highest risk team members (i.e., people we are absolutely sure will blab), talk to the rest of the team today. Determine task backlogs immediately. Back up computer files immediately. Transfer files to client sites immediately. Remember gentlemen, we got to this point as a team and we will see this through as a team. Let's roll! Mike On December 29, 1995, the whole group of 26 managers and employees from PRC's marine engineering department submitted letters resigning their employment with PRC, effective immediately. Before leaving PRC and without PRC's knowledge or , many of the PRC Managers and other PRC employees copied their client files and sent the files to client sites so that the files would be available once the employees began working at AME. Many of the PRC Managers and employees also made "back up" copies of PRC computer documents and files, which they removed from PRC without PRC's knowledge. Some PRC Managers and employees also removed, without PRC's consent, various documents pertaining to ongoing projects and work in progress at PRC. In 20 many cases, there were no similar documents left at PRC. All of the above- described information constituted confidential and proprietary information of PRC. In January 1996, PRC filed a bill of complaint against AME, two AME executives, the former PRC Managers, and the other former PRC marine engineering employees.4 Among other things, the bill of complaint contained a request for a temporary restraining order to prevent the defendants from using or disseminating PRC's confidential and proprietary information and from soliciting or performing services for their former PRC customers. The chancellor entered the temporary restraining order on January 2, 1996, but later modified its terms to exclude AME's business with governmental entities. As amended, the bill of complaint also asserted both legal and equitable claims for relief. The five Counts relevant to this appeal are: 1) breach of fiduciary duty (Count I); 2) intentional interference with contractual relations (Count II); 3) intentional interference with prospective business and contractual relations (Count III); 4) specific performance and breach of the Employment Agreement (Count IV); and 5) violation of Code § 18.2-499 (Count VII). The matter was tried before a chancellor, who heard testimony from two expert witnesses and 41 other witnesses. PRC presented the testimony of Mark Bleiweis, a certified public accountant, who is an expert in the area of damage calculation in contract disputes. Bleiweis estimated that, of the several types of economic damage suffered by PRC in the loss of its marine engineering unit to AME, the largest amount of damages resulted from lost goodwill. Bleiweis defined goodwill as the excess of the sales price of a business over the fair market value of the business' identifiable assets. To estimate the lost goodwill associated with the departure of the PRC Managers and employees, Bleiweis examined two sales of comparable businesses, PRC's sale of its 400D unit to Vitro and the sale of AME to Nichols. Bleiweis subtracted the value of each "comparable company's" assets from its sales price to determine the goodwill associated with each comparable sale. With respect to the Vitro sale, he then adjusted this figure to reflect the value to Vitro associated with the funded 400D contract. To account for the larger number of employees involved in both comparable sales, Bleiweis apportioned the estimated goodwill figure for each of the two comparable businesses among the total number of employees involved in each transaction. This calculation yielded a ratio or percentage that Bleiweis applied to calculate the goodwill lost by AME's acquisition of the 26 PRC employees. Using the Vitro sale, Bleiweis estimated that PRC sustained $ 925,123 in goodwill damages from the loss of its marine engineering unit to AME. Using the sale of

4 In April 1996, AME signed a letter of intent with Nichols Research Corporation (Nichols) to sell AME to Nichols. 21 AME to Nichols, Bleiweis estimated that PRC's lost goodwill damages were $ 841,965. Bleiweis also testified that PRC will suffer a loss of profits as a result of the departure of the PRC Managers and employees. Bleiweis estimated that the present value of the expected lost profits was $ 265,655, based on the revenues that the former employees' labor would have generated for PRC. However, he testified that these damages were included in his estimate of lost goodwill. AME, the AME executives, and the PRC Managers and employees (collectively, "AME") offered the testimony of Edward H. Ripper, a certified public accountant, as an expert in government contract accounting claims and valuation. Ripper testified that Bleiweis' conclusions were "substantially overstated," "highly speculative," and contained many "calculation[] errors." Ripper provided several adjustments to Bleiweis' figures and concluded that PRC suffered zero damages from lost goodwill when Bleiweis' method was properly applied to the Vitro sale figures. Ripper also testified that the Vitro and Nichols sales were not true "comparable" sales. On June 19, 1996, the chancellor found in favor of PRC on all counts at issue in this appeal, stating, "I think the method by which the [PRC Managers] elected to do this was covert, surreptitious, violated civil duties, [and] was absolutely wrong." During post-trial hearings, the chancellor stated that "the total impact of this thing was outrageous. This was a group wrong, and they were intending to disadvantage their employer while sitting there silent setting up their own employer for the benefit of themselves and the benefit of AME." Ruling from the bench, the chancellor awarded $ 1,245,062 in compensatory damages on each of Counts I, II, III, and VII. Although this amount was awarded on each of these four Counts, the chancellor did not aggregate these amounts but entered a single compensatory damage award of $ 1,245,062. Under Code § 18.2- 500, the chancellor then trebled the $ 1,245,062 compensatory damage award entered on Count VII. Thus, the total amount of non-punitive damages awarded was $ 3,735,186. The chancellor awarded punitive damages in the amount of $ 1,000,000 against AME, noting that he might be required to reduce that amount to $ 350,000 under Code § 8.01-38.1. He also awarded varying amounts of punitive damages against certain PRC Managers and employees. The chancellor took under advisement AME's argument that the award of treble damages under Code § 18.2-500 was subject to the punitive damages ceiling fixed by Code § 8.01-38.1. He also awarded PRC attorney's fees and costs, but deferred computation of those amounts to a later hearing. On Count IV, based on breach of the non-competition clause of the Employment Agreement, the chancellor enjoined certain PRC Managers and employees for seven and one-half months from performing services for and soliciting work from those NAVSEA jobs for which each manager or employee 22 provided services while employed by PRC. The chancellor stayed the injunction pending resolution of this appeal, and ruled that if the damages he awarded are approved on appeal, the injunction will be dissolved.5 After a hearing on several post-trial motions, the chancellor entered the final decree on June 18, 1997, about one year after the trial. He essentially incorporated the terms of his bench ruling, but reduced the punitive damage award against AME to $ 350,000 to comply with the terms of Code § 8.01-38.1. He awarded PRC $ 475,000 in attorney's fees under Count VII (Code §§ 18.2-499 and -500). He also awarded PRC $ 113,365.56 in costs under Count VII. The costs awarded included $ 47,922.73 for PRC's expert witness fees, $ 27,826.31 for transcripts, and expenses for other costs such as meals, legal research, parking, cab fare, law clerk "temporaries," overnight delivery services, messenger services, telephone calls, and photocopying charges. The chancellor also ruled that PRC was entitled to receive prejudgment interest on the entire award from June 19, 1996, the date of his bench ruling. On appeal, AME argues that the chancellor erred in (1) ruling that AME violated Code § 18.2-499, (2) enforcing the non-competition covenant of the Employment Agreement, (3) his calculation of PRC's lost goodwill and profits and his determination that PRC met its burden of proving damages, (4) awarding punitive and treble damages, (5) awarding PRC costs, and (6) awarding PRC prejudgment interest. I. Violation of Code § 18.2-499 AME asserts that the chancellor erred in finding AME conspired to injure PRC in its business in violation of Code § 18.2-499. AME contends that to establish a violation of the statute, PRC was required to prove that AME acted with the purpose of injuring PRC. AME argues that since the chancellor failed to apply this evidentiary standard, his finding that AME violated the statute constitutes reversible error. AME also asserts that there was no evidence AME acted with the purpose of injuring PRC. We disagree with AME's arguments. In Commercial Business Systems, Inc. v. BellSouth Services, Inc., 249 Va. 39, 453 S.E.2d 261 (1995), we addressed the question whether a violation of Code § 18.2-499 requires proof of actual malice. There, the plaintiff alleged that the defendant's employee, in violation of Code § 18.2-499, conspired to destroy the plaintiff's reasonable business expectancy for a contract renewal with the defendant corporation by awarding a contract to the plaintiff's competitor in exchange for commercial bribes. The trial court granted the defendant's motion for on the ground that the plaintiff failed to prove actual malice, which required the plaintiff to establish that the conspirator's primary and overriding purpose was to injure the plaintiff's trade or business. 249 Va. at 46- 47, 453 S.E.2d at 266-67.

5 AME does not assign error to the conditional nature of the chancellor's injunction. 23 We reversed the trial court, holding that the plaintiff was not required to prove actual malice. We stated that Code §§ 18.2-499 and -500 do not require a plaintiff to prove that a conspirator's primary and overriding purpose is to injure another in his trade or business. Id. at 47, 453 S.E.2d at 267. Rather, we explained that these statutes merely require proof of legal malice, that is, proof that the defendant acted intentionally, purposefully, and without lawful justification. Id. PRC's evidence was plainly sufficient to meet this standard of proof. The individuals in the business conspiracy participated in a scheme to take the entire marine engineering department from PRC and relocate the department at AME. As stated above, AME and the PRC Managers and employees planned and implemented this scheme in secrecy while the PRC Managers and employees were still employed by PRC. The PRC Managers and employees planned and executed a mass resignation without notice to PRC. They took from PRC original client documents and copies of documents containing confidential and proprietary information without PRC's permission or knowledge. Thus, we conclude that the evidence supports the chancellor's finding that AME conspired to injure PRC in its business in violation of Code §§ 18.2-499 and -500. II. Non-Competition Clause of Employment Agreement AME asserts that the non-competition clause in the Employment Agreement was unenforceable because it was unreasonably broad, unduly harsh, and oppressive. We disagree. To determine whether a non-competition agreement may be enforced, a chancellor must consider the following criteria: Is the restraint, from the standpoint of the employer, reasonable in the sense that it is no greater than necessary to protect the employer in some legitimate business interest? From the standpoint of the employee, is the restraint reasonable in the sense that it is not unduly harsh and oppressive in curtailing his legitimate efforts to earn a livelihood? Is the restraint reasonable from the standpoint of a sound public policy? New River Media Group, Inc. v. Knighton, 245 Va. 367, 369, 429 S.E.2d 25, 26 (1993)(quoting Roanoke Eng. Sales v. Rosenbaum, 223 Va. 548, 552, 290 S.E.2d 882, 884 (1982)); accord Blue Ridge Anesthesia & Critical Care, Inc. v. Gidick, 239 Va. 369, 371-72, 389 S.E.2d 467, 468-69 (1990). In New River Media, we enforced a non-competition agreement in which a radio disc jockey contracted not to engage in a competing business within 60 air miles of his employer's radio station for 12 months after leaving his employment. 245 Va. at 369-70, 429 S.E.2d at 26-27. In Roanoke Engineering Sales, we enforced an agreement that prohibited a corporate officer from competing with his employer for three years in any similar business located in Virginia or North 24 Carolina that covered the same sales territory served by the employer. 223 Va. at 553, 290 S.E.2d at 885. When compared with these agreements, the non-competition provision before us is not unduly harsh and oppressive in curtailing the legitimate efforts of former PRC employees to earn a livelihood. The restraints imposed also are reasonable from the standpoint of a sound public policy. The non-competition provision does not contain a blanket prohibition against working for a competitor. Instead, the covenant merely prohibits an employee for eight months from "rendering competing services to or, with respect to such services, soliciting any customer of PRC for whom Employee performed services while employed by PRC, within 50 miles of a PRC office." The agreement's geographic limitation is not rendered too burdensome because PRC has approximately 300 offices worldwide. In the context of the brief time period involved and the narrow definition of prohibited services, the geographic restriction does not pose an unreasonable restraint on departing employees. Likewise, the restriction on solicitation of PRC customers is reasonable because the restriction is limited to the same eight-month period and was interpreted by the chancellor as applying only to certain specialized engineering areas of NAVSEA and individuals serviced by each employee while employed by PRC. Thus, the record supports the chancellor's conclusion that the non-competition provision is valid and enforceable. We also find no merit in AME's contention that the eight-month period provided in the non-competition clause has expired and may not be enforced. On January 2, 1996, the chancellor entered a temporary injunction enforcing the terms of the non-competition clause. For "public policy" reasons relating to nature of the work and the governmental status of actual and potential "customers," the chancellor lifted the injunction two weeks later with regard to AME's business with governmental entities. Thus, since the portion of the injunction involving governmental entities was in effect only for two weeks, the chancellor did not err in ruling that seven and one-half months out of the eight-month prohibition on competition still may be enforced with respect to such governmental entities. See Blue Ridge Anesthesia, 239 Va. at 374, 389 S.E.2d at 470; Paramount Termite Control Co. v. Rector, 238 Va. 171, 176-77, 380 S.E.2d 922, 926 (1989); Roanoke Eng. Sales, 223 Va. at 556, 290 S.E.2d at 886. III. "Goodwill" Damages And Sufficiency Of Evidence Of Damages AME contends that the chancellor erred in accepting PRC's evidence of damages, including its evidence of lost goodwill and profits. AME argues that PRC's evidence was based on flawed methodology and speculative calculations. Specifically, AME asserts that the chancellor failed to consider that PRC's marine engineering department made a profit of only $ 45,108 in 1995, and that the price for the sale of PRC to Litton did not change after the departure of the PRC Managers and employees. We disagree with AME's arguments. 25 As trier of fact, the chancellor evaluated the testimony and the credibility of the witnesses. See RF&P Corp. v. Little, 247 Va. 309, 321, 440 S.E.2d 908, 916 (1994); Richardson v. Richardson, 242 Va. 242, 246, 409 S.E.2d 148, 151 (1991). We will not set aside his findings on appeal unless they are plainly wrong or without evidentiary support. Willis v. Magette, 254 Va. 198, 201, 491 S.E.2d 735, 736 (1997); RF&P Corp., 247 Va. at 321, 440 S.E.2d at 916. After hearing detailed testimony from Bleiweis, PRC's expert, and Ripper, AME's expert, the chancellor accepted Bleiweis' methodology and evidence of damages. We cannot say, as a matter of law, that the chancellor's determination was plainly wrong. In determining PRC's damages for lost goodwill, the chancellor accepted Bleiweis' variation of the market value approach, a frequently-used method for computing goodwill damages that is based on the difference between the price a business would sell for and the value of its non-goodwill assets. See Russell v. Russell, 11 Va. App. 411, 416, 399 S.E.2d 166, 169 (1990). Because there was no sale associated with the transfer of the PRC Managers and employees to AME, Bleiweis utilized a variation of this approach by determining the value of goodwill associated with comparable sales and adjusting this figure to approximate PRC's lost goodwill caused by the departure of the PRC Managers and employees. Ripper never criticized Bleiweis' use of the market value approach, but only stated that Bleiweis made certain errors in applying this method. The chancellor found that the closest comparable sale for purposes of measuring lost goodwill was PRC's sale of the 400D unit to Vitro. The evidence showed that the purchase agreement between Vitro and PRC identified the goodwill associated with that sale by providing that Vitro would pay PRC $ 4,424,091 more than the value of the tangible assets involved. Using Bleiweis' methodology, the chancellor decreased this amount to reflect the value that Vitro would receive from the funded 400D contract and then adjusted the resulting figure to reflect the smaller number of employees involved in the departure of the PRC Managers and employees. The chancellor concluded that the comparable sale of AME to Nichols corroborated Bleiweis' damage estimate for lost goodwill based on the Vitro comparable sale. Since there was no actual sale by PRC to AME, the chancellor rejected Ripper's opinion that the "best" transaction for measuring PRC's lost goodwill was the actual transfer of the PRC Managers and employees to AME. Although Bleiweis estimated the amount of profit PRC lost by the departure of its marine engineering unit to AME, he stated that these damages were included in his calculation of lost goodwill. Thus, in determining PRC's total damages, Bleiweis concluded that a separate damage figure for lost profits should not be added to the damage amount for lost goodwill. The chancellor agreed with Bleiweis on this issue and declined to award additional damages for lost profits, 26 finding that lost profits damages were "subsumed" within the court's goodwill calculation. The chancellor's conclusions reflected his acceptance of Bleiweis' methodology as the most appropriate and accurate measure of lost goodwill and profits. Thus, AME's complaint essentially is reduced to the fact that the chancellor accepted the testimony of PRC's expert witness, rather than the testimony offered by AME's expert. Since the chancellor's findings regarding PRC's lost profits and damages for lost goodwill are supported by credible evidence, we will not disturb those findings on appeal. See City of Manassas v. Board of Supervisors, 250 Va. 126, 137, 458 S.E.2d 568, 574 (1995); Jamerson v. Womack, 244 Va. 506, 510, 423 S.E.2d 180, 182 (1992); Russell, 11 Va. App. at 417, 399 S.E.2d at 169. For the same reasons, we find no merit in AME's contention that the damage award was excessive as a matter of law. Although the record shows that the price for the sale of PRC to Litton did not change after the departure of the PRC Managers and employees, Bleiweis emphasized that the departing group had goodwill value for purposes of maintaining the customer relationships necessary for contract retention. As stated above, the chancellor based the award of damages on his acceptance of Bleiweis' testimony, which constituted credible evidence in support of that award. IV. Punitive And Treble Damages AME argues that a chancellor in equity may not award punitive damages because any award of damages in equity is limited to compensating an injured party to make it "whole." AME contends that punitive damages are in the nature of a penalty and extend beyond mere compensation. AME also asserts that treble damages are punitive in nature and, thus, are likewise unavailable in a court of equity. We disagree with AME's arguments. When a court of equity acquires jurisdiction of a cause for any purpose, the court may retain the entire cause to accomplish complete justice between the parties. Thus, the chancellor may hear legal claims and enforce legal rights by applying remedies available only at law. Waskey v. Lewis, 224 Va. 206, 213, 294 S.E.2d 879, 882 (1982). This rule applies "even to the extent of establishing legal rights and granting legal remedies which would otherwise be beyond the scope of [the chancellor's] authority." Erlich v. Hendrick Constr. Co., Inc., 217 Va. 108, 115, 225 S.E.2d 665, 670 (1976) (citing Johnston v. Bunn, 108 Va. 490, 493, 62 S.E. 341, 342 (1908)); see Iron City Sav. Bank v. Isaacsen, 158 Va. 609, 625, 164 S.E. 520, 525 (1932). The rule is based on the principle that once a court of equity obtains jurisdiction in a case, the court has discretion to transfer the parties to a court of law for adjudication of their law claims or to conclude the litigation by giving complete relief in the chancery cause. Iron City, 158 Va. at 625, 164 S.E. at 525. The purpose of this rule is to prevent a "circuity of action and expense." See 27 Smith v. Smith, 92 Va. 696, 698, 24 S.E. 280, 280 (1896). If a chancellor decides to retain jurisdiction over legal claims, the chancellor acts "as a substitute for the court of law." Id.; Iron City, 158 Va. at 637, 164 S.E. at 529. PRC's bill of complaint sought both equitable and legal remedies. AME could have moved to transfer its legal claims to the law side of the court under Code § 8.01-270, where it would have been entitled to a jury trial, but chose not to proceed in this manner. Thus, AME cannot now complain that the chancellor improperly awarded legal relief to PRC. See Brown v. May, 202 Va. 300, 309-10, 117 S.E.2d 101, 108 (1960). We also observe that the chancellor awarded compensatory, punitive, and treble damages under the various legal claims, not under any equitable claims. Therefore, we conclude that the chancellor acted within his discretion in awarding legal relief on the law claims before him. We disagree with AME that our decision in Colonna Dry Dock Co. v. Colonna, 108 Va. 230, 61 S.E. 770 (1908), requires a different conclusion. There, in an appeal from a decree denying specific performance of a contract, we addressed the issue whether the chancellor properly ruled that the forfeiture of a deposit would constitute a penalty and, therefore, could not be enforced in equity. Id. at 240, 61 S.E. at 774. Thus, unlike the present case, Colonna did not involve legal claims, but only a request for equitable relief. Since the chancellor here restricted his award of damages that are available solely at law to the law claims before him, Colonna is inapposite. We also disagree with AME's contention that the chancellor erred in awarding treble damages. Code § 18.2-500(a) provides in relevant part: Any person who shall be injured in his reputation, trade, business or profession by reason of a violation of § 18.2-499, may sue therefor and recover three-fold the damages by him sustained, and the costs of suit, including a reasonable fee to plaintiff's counsel; and without limiting the generality of the term, "damages" shall include loss of profits. This subsection explicitly allows an award of treble damages on proof of the cause of action provided under Code § 18.2-499. Nevertheless, AME asserts that treble damages may not be awarded in equity because Code § 18.2-500(b), which sets forth the equitable relief available for business conspiracy claims brought under the statute, does not specifically state that treble damages may be awarded in a chancery case. Code § 18.2-500(b) provides in relevant part: Whenever a person shall duly file a bill in chancery in the circuit court of any county or city against any person alleging violations of the provisions of §18.2-499 and praying that such party defendant be restrained and enjoined from continuing the acts complained of, such court shall have jurisdiction to hear and determine the issues involved, to issue injunctions pendente lite and permanent injunctions and to decree damages and costs of suit, including reasonable counsel fees to complainants' and defendants' counsel. 28 We conclude that this provision does not preclude an award of treble damages in a law claim heard in chancery. Instead of limiting the relief available in chancery, this subsection grants a complainant the additional right to seek and obtain injunctive relief, as well as "damages and costs of suit." The term "damages" in subsection (b) refers to the "three-fold" recovery of damages described in subsection (a). Notably, much of the language from subsection (a) is not repeated in subsection (b). For example, subsection (b) does not expressly refer to a "person who shall be injured in his reputation, trade, business or profession by reason of a violation of § 18.2-499," yet this requirement is clearly a predicate for recovery under the statute in equity, as well as in law. Lost profits also are not mentioned in subsection (b), but this subsection necessarily contemplates the right to seek recovery of lost profits in equity as compensatory damages. Thus, on consideration of the language of the entire statute, we conclude that a chancery court is permitted to award treble damages on a law claim under the provisions of Code § 18.2-500. We also find no merit in AME's contention that our decision in Porter v. Wilson, 244 Va. 366, 421 S.E.2d 440 (1992), dictates a different result. Porter involved a trespass action in which a plaintiff contended, among other things, that the trial court erred in refusing to award him treble damages under Code § 55-334 for the unauthorized removal of timber from his property. Id. at 367, 421 S.E.2d at 441. Observing that treble damages are in the nature of a penalty and are not favored, we held that since the timber was removed by one acting under a bona fide claim of right, the trial court did not abuse its discretion in refusing to award treble damages. Porter, 244 Va. at 371-72, 421 S.E.2d at 443. Thus, contrary to AME's assertion, Porter did not involve the issue whether treble damages may be awarded in a chancery case. AME next contends that the chancellor's award of both punitive and treble damages was duplicative. Although AME concedes that the chancellor awarded punitive and treble damages under separate counts of the bill of complaint, AME argues that the conduct underlying the claims is the same and, therefore, that the chancellor erred in awarding both types of damages. We disagree with AME's argument. The awards of punitive and treble damages were based on separate claims involving different legal duties and injuries. The chancellor awarded punitive damages under Counts I, II, and III, for breach of fiduciary duty, intentional interference with contractual relations, and intentional interference with prospective business and contractual relations. The award of treble damages was limited to the business conspiracy claim of Count VII. To prevail in its business conspiracy claim, PRC was required to prove that the defendants combined, associated, agreed, or acted in concert together for the purpose of willfully and maliciously injuring PRC in its business "by any means whatever." Code § 18.2-499. In contrast, the claims asserted in Counts I through 29 III do not require such proof and relate solely to the employment relationship between PRC and the PRC Managers and employees. Thus, the chancellor did not err in awarding PRC both punitive and treble damages. We also find no merit in AME's contention that an award of treble damages is subject to the ceiling on punitive damages set forth in Code § 8.01-38.1. When the words of a statute are unambiguous, we accord the statutory language its plain meaning. Haislip v. Southern Heritage Ins. Co., 254 Va. 265, 268, 492 S.E.2d 135, 137 (1997); Archambault v. Roller, 254 Va. 210, 213, 491 S.E.2d 729, 731 (1997). Under the plain language of Code § 8.01-38.1, the limitation of $ 350,000 applies only to an award of "punitive" damages. If the General Assembly had intended for an award of treble damages to be subject to this limitation, it would have included an express reference to such damages in the statutory language. See Jones v. Jones, 249 Va. 565, 570, 457 S.E.2d 365, 368 (1995); Allstate Ins. Co. v. Eaton, 248 Va. 426, 430, 448 S.E.2d 652, 655 (1994). In the absence of such a reference, we will not construe the plain statutory language in a manner that amounts to holding that the legislature meant other than what it actually stated. See Davis v. Tazewell Place Assocs., 254 Va. 257, 260-61, 492 S.E.2d 162, 164 (1997); Haislip, 254 Va. at 268, 492 S.E.2d at 137; Jones, 249 Va. at 570, 457 S.E.2d at 368. V. Costs AME challenges the chancellor's award of several items of "costs." AME asserts that in the absence of an explicit statutory provision, expert witness fees cannot be shifted to the losing party. AME also contends that the chancellor abused his discretion in including numerous charges, such as fees for legal research and temporary employees, as costs in this case. In response, PRC contends that under the provisions of Code § 18.2-500, PRC was entitled to all reasonable litigation expenses as the prevailing party at trial. We disagree with PRC. The taxing of costs in litigation was unknown at common law and is purely a creature of statute. Ryan v. Davis, 201 Va. 79, 85, 109 S.E.2d 409, 414 (1959). Code § 18.2-500 provides that "costs of suit, including a reasonable fee to plaintiff's counsel" may be recovered on proof of a violation of Code § 18.2-499. Thus, with the exception of reasonable attorney's fees, Code § 18.2-500 makes no provision for an award of costs other than those ordinarily awarded under the general statutes of Title 14.1 of the Code addressing the taxing of costs. See Code §§ 14.1-177 through -201. Since trial courts are vested with discretion under the relevant provisions of Title 14.1 to determine what costs should be taxed against a losing party, we examine the costs challenged by AME to determine whether the chancellor abused his discretion. AME takes exception to the chancellor's award of expert witness fees, and expenses for express mail service, messengers, meals, law clerk 30 "temporaries," computer-based legal research, "library research," photocopies, parking, taxicabs, telephone calls, and transcripts. We conclude that the chancellor abused his discretion in awarding PRC recovery for the above- challenged expenses. Generally, unless otherwise specified by statute, a trial court's discretion to award costs under Code § 18.2-500, or under the relevant provisions of Code §§ 14.1-177 through -201, is limited only to those costs essential for prosecution of the suit, such as filing fees or charges for service of process. Finally, we disagree with PRC's assertion that, in Ryan v. Davis, we "did not question" the trial court's award of costs for expert witness fees in a condemnation case. Since the State Highway Commissioner did not assign cross- error to the award of such "costs," the issue was not before us in that case.

VI. Prejudgment Interest AME asserts that the chancellor erred in awarding interest from June 19, 1996, the date of the bench ruling, because some of the damages still were unliquidated. PRC responds that the chancellor did not err in awarding interest from that date, because the chancellor did not reduce the original amount of the award, with the exception of his reduction of the $ 1,000,000 punitive damage award to comply with Code § 8.01-38.1. Generally, prejudgment interest is not allowed on unliquidated damages in dispute between the parties. Skretvedt v. Kouri, 248 Va. 26, 36, 445 S.E.2d 481, 487 (1994); Beale v. King, 204 Va. 443, 447, 132 S.E.2d 476, 479 (1963). However, the issue whether interest should be awarded, and from what date any interest should run, is a matter submitted to the sound discretion of the trial court. Code § 8.01-382; Skretvedt, 248 Va. at 36, 445 S.E.2d at 487-88; Marks v. Sanzo, 231 Va. 350, 356, 345 S.E.2d 263, 267 (1986). When the chancellor ruled on June 19, 1996, that PRC was entitled to $ 1,245,062 in compensatory damages, several matters remained to be resolved. First, the chancellor ruled that the parties would argue at a later date the issue whether treble damages awarded under Code § 18.2-500 were subject to the statutory "cap" of Code § 8.01-38.1. Second, although the chancellor awarded $ 1,000,000 in punitive damages against AME, he announced that he would determine at a later date whether this amount should be reduced under the provisions of Code § 8.01-38.1. Third, in his bench ruling, the chancellor did not determine the amount of attorney's fees or costs to be awarded PRC. Thus, as of the date of the bench ruling, the amount of AME's liability remained unliquidated as to all amounts except the original compensatory damage award of $ 1,245,062. The chancellor did not resolve these outstanding issues affecting the amount of AME's liability until June 18, 1997, the date of entry of the final decree. AME did not cause the delay in the chancellor's entry of the decree. Rather, the chancellor candidly acknowledged that he was the cause of the one-year delay. 31 Thus, we conclude that the chancellor abused his discretion in awarding prejudgment interest on all amounts in excess of $ 1,245,062. For these reasons, we will affirm the chancellor's decree, with the exception of the portion of costs and prejudgment interest specified in this opinion, and will remand the case for entry of a decree regarding costs and interest that is consistent with the principles set forth herein.6 Affirmed in part, reversed in part, and remanded.

Dairy Queen v. Wood 369 U.S. 469, 82 S. Ct. 894 (1962)

Black, J., delivered the opinion of the Court.

The United States District Court for the Eastern District of Pennsylvania granted a motion to strike petitioner's demand for a trial by jury in an action now pending before it on the alternative grounds that either the action was "purely equitable" or, if not purely equitable, whatever legal issues that were raised were "incidental" to equitable issues, and, in either case, no right to trial by jury existed.7 The petitioner then sought in the Court of Appeals for the Third Circuit to compel the district judge to vacate this order. When that court denied this request without opinion, we granted because the action of the Court of Appeals seemed inconsistent with protections already clearly recognized for the important constitutional right to trial by jury in our previous decisions.8 At the outset, we may dispose of one of the grounds upon which the trial court acted in striking the demand for trial by jury -- that based upon the view that the right to trial by jury may be lost as to legal issues where those issues are characterized as "incidental" to equitable issues -- for our previous decisions make it plain that no such rule may be applied in the federal courts. In Scott v. Neely, decided in 1891, this Court held that a court of equity could not even take jurisdiction of a suit "in which a claim properly cognizable only at law is united in the same pleadings with a claim for equitable relief."9 That holding, which was

6 Although AME argues that the chancellor erred in adopting the findings of fact as drafted by PRC, AME does not suggest that this constitutes ground for reversal of this appeal. Thus, we do not address this argument on appeal. 7 McCullough v. Dairy Queen, Inc., 194 F.Supp. 686. 8 368 U.S. 874. 9 140 U.S. 106, 117. See also Cates v. Allen, 149 U.S. 451, in which the principles expressed and applied in Scott v. Neely were explicitly reaffirmed. 32 based upon both the historical separation between law and equity and the duty of the Court to insure "that the right to a trial by a jury in the legal action may be preserved intact,"10 created considerable inconvenience in that it necessitated two separate in the same case whenever that case contained both legal and equitable claims. Consequently, when the procedure in the federal courts was modernized by the adoption of the Federal Rules of Civil Procedure in 1938, it was deemed advisable to abandon that part of the holding of Scott v. Neely which rested upon the separation of law and equity and to permit the joinder of legal and equitable claims in a single action. Thus Rule 18 (a) provides that a plaintiff "may join either as independent or as alternate claims as many claims either legal or equitable or both as he may have against an opposing party." And Rule 18 (b) provides: "Whenever a claim is one heretofore cognizable only after another claim has been prosecuted to a conclusion, the two claims may be joined in a single action; but the court shall grant relief in that action only in accordance with the relative substantive rights of the parties. In particular, a plaintiff may state a claim for money and a claim to have set aside a conveyance fraudulent as to him, without first having obtained a judgment establishing the claim for money." The Federal Rules did not, however, purport to change the basic holding of Scott v. Neely that the right to trial by jury of legal claims must be preserved.11 Quite the contrary, Rule 38 (a) expressly reaffirms that constitutional principle, declaring: "The right of trial by jury as declared by the Seventh Amendment to the Constitution or as given by a statute of the United States shall be preserved to the parties inviolate. " Nonetheless, after the adoption of the Federal Rules, attempts were made indirectly to undercut that right by having federal courts in which cases involving both legal and equitable claims were filed decide the equitable claim first. The result of this procedure in those cases in which it was followed was that any issue common to both the legal and equitable claims was finally determined by the court and the party seeking trial by jury on the legal claim was deprived of that right as to these common issues. This procedure finally came before us in Beacon Theatres, Inc., v. Westover,12 a case which, like this one, arose from the denial of a petition for mandamus to compel a district judge to vacate his order striking a demand for trial by jury. Our decision reversing that case not only emphasizes the responsibility of the Federal Courts of Appeals to grant mandamus where necessary to protect the constitutional right to trial by jury but also limits the issues open for determination here by defining the protection to which that right is entitled in

10 Id., at 110. 11 "Subdivision (b) [of Rule 18] does not disturb the doctrine of those cases [Scott v. Neely and Cates v. Allen] but is expressly bottomed upon their principles. This is true because the Federal Rules abolish the distinction between law and equity, permit the joinder of legal and equitable claims, and safeguard the right to jury trial of legal issues." 3 Moore, Federal Practice, 1831-1832. 12 359 U.S. 500. 33 cases involving both legal and equitable claims. The holding in Beacon Theatres was that where both legal and equitable issues are presented in a single case, "only under the most imperative circumstances, circumstances which in view of the flexible procedures of the Federal Rules we cannot now anticipate, can the right to a jury trial of legal issues be lost through prior determination of equitable claims."13 That holding, of course, applies whether the trial judge chooses to characterize the legal issues presented as "incidental" to equitable issues or not.14 Consequently, in a case such as this where there cannot even be a contention of such "imperative circumstances," Beacon Theatres requires that any legal issues for which a trial by jury is timely and properly demanded be submitted to a jury. There being no question of the timeliness or correctness of the demand involved here, the sole question which we must decide is whether the action now pending before the District Court contains legal issues. The District Court proceeding arises out of a controversy between petitioner and the respondent owners of the trademark "DAIRY QUEEN" with regard to a written licensing contract made by them in December 1949, under which petitioner agreed to pay some $ 150,000 for the exclusive right to use that trademark in certain portions of Pennsylvania.15 The terms of the contract provided for a small initial payment with the remaining payments to be made at the rate of 50% of all amounts received by petitioner on sales and franchises to deal with the trademark and, in order to make certain that the $ 150,000 payment would be completed within a specified period of time, further provided for minimum annual payments regardless of petitioner's receipts. In August 1960, the respondents wrote petitioner a letter in which they claimed that petitioner had committed "a material breach of that contract" by defaulting on the contract's payment provisions and notified petitioner of the termination of the contract and

13 Id., at 510-511. 14 "It is therefore immaterial that the case at bar contains a stronger basis for equitable relief than was present in Beacon Theatres. It would make no difference if the equitable cause clearly outweighed the legal cause so that the basic issue of the case taken as a whole is equitable. As long as any legal cause is involved the jury rights it creates control. This is the teaching of Beacon Theatres, as we construe it." Thermo-Stitch, Inc., v. Chemi-Cord Processing Corp., 294 F.2d 486, 491. 15 There are two groups of respondents in this case in addition to the district judge who is formally a respondent by reason of the procedural posture of the case. H. A. McCullough and H. F. McCullough, a partnership doing business as McCullough's Dairy Queen, are the owners of the trademark and are entitled under the contract to payment for its use. B. F. Myers, R. J. Rydeen, M. E. Montgomery, and H. S. Dale are the original licensees under the contract through whom petitioner obtained its rights by assignment. This latter group of respondents joined in the action against petitioner on the grounds (1) that they would be responsible to the trademark owners if petitioner defaulted on its obligations under the contract, and (2) that they are themselves entitled to certain royalties under the assignment arrangement. Since the portion of the complaint involving this latter group raises no issues relevant to the question to be determined here which differ from those raised in that part of the complaint involving the trademark owners, the discussion can be restricted to the issues raised by the trademark owners and "respondents" as used in this opinion will refer only to that group. 34 the cancellation of petitioner's right to use the trademark unless this claimed default was remedied immediately.16 When petitioner continued to deal with the trademark despite the notice of termination, the respondents brought an action based upon their view that a material breach of contract had occurred. The complaint filed in the District Court alleged, among other things, that petitioner had "ceased paying . . . as required in the contract;" that the default "under the said contract . . . [was] in excess of $ 60,000.00;" that this default constituted a "material breach" of that contract; that petitioner had been notified by letter that its failure to pay as alleged made it guilty of a material breach of contract which if not "cured" would result in an immediate cancellation of the contract; that the breach had not been cured but that petitioner was contesting the cancellation and continuing to conduct business as an authorized dealer; that to continue such business after the cancellation of the contract constituted an infringement of the respondents' trademark; that petitioner's financial condition was unstable; and that because of the foregoing allegations, respondents were threatened with irreparable injury for which they had no adequate remedy at law. The complaint then prayed for both temporary and permanent relief, including: (1) temporary and permanent injunctions to restrain petitioner from any future use of or dealing in the franchise and the trademark; (2) an accounting to determine the exact amount of money owing by petitioner and a judgment for that amount; and (3) an injunction pending accounting to prevent petitioner from collecting any money from "Dairy Queen" stores in the territory. In its answer to this complaint, petitioner raised a number of defenses, including: (1) a denial that there had been any breach of contract, apparently based chiefly upon its allegation that in January 1955 the parties had entered into an oral agreement modifying the original written contract by removing the provision requiring minimum annual payments regardless of petitioner's receipts thus leaving petitioner's only obligation that of turning over 50% of all its receipts; (2) laches and estoppel arising from respondents' failure to assert their claim promptly, thus permitting petitioner to expend large amounts of money in the development of its right to use the trademark; and (3) alleged violations of the antitrust laws by respondents in connection with their dealings with the

16 The full text of the letter sent to petitioner is as follows: "This letter is to advise you that your failure to pay the amounts required in your contract with McCullough's Dairy Queen for the 'Dairy Queen' franchise for the State of Pennsylvania, as called for in your contract with your assignors, constitutes in our opinion a material breach of that contract. "This will advise you that unless this material breach is completely satisfied for the amount due and owing, your franchise for 'Dairy Queen' in Pennsylvania is hereby cancelled. "Copies of this letter are being sent to your assignors." 35 trademark. Petitioner indorsed upon this answer a demand for trial by jury in accordance with Rule 38 (b) of the Federal Rules of Civil Procedure.17 Petitioner's contention, as set forth in its petition for mandamus to the Court of Appeals and reiterated in its briefs before this Court, is that insofar as the complaint requests a money judgment it presents a claim which is unquestionably legal. We agree with that contention. The most natural construction of the respondents' claim for a money judgment would seem to be that it is a claim that they are entitled to recover whatever was owed them under the contract as of the date of its purported termination plus damages for infringement of their trademark since that date. Alternatively, the complaint could be construed to set forth a full claim based upon both of these theories -- that is, a claim that the respondents were entitled to recover both the debt due under the contract and damages for trademark infringement for the entire period of the alleged breach including that before the termination of the contract.18 Or it might possibly be construed to set forth a claim for recovery based completely on either one of these two theories -- that is, a claim based solely upon the contract for the entire period both before and after the attempted termination on the theory that the termination, having been ignored, was of no consequence, or a claim based solely upon the charge of infringement on the theory that the contract, having been breached, could not be used as a defense to an infringement action even for the period prior to its termination.19 We find it unnecessary to resolve this ambiguity in the respondents' complaint because we think it plain that their claim for a money judgment is a claim wholly legal in its nature however the complaint is construed. As an action on a debt allegedly due under a contract, it would be difficult to conceive of an action of a more traditionally legal character.20 And as an action

17 "Any party may demand a trial by jury of any issue triable of right by a jury by serving upon the other parties a demand therefor in writing at any time after the commencement of the action and not later than 10 days after the service of the last pleading directed to such issue. Such demand may be indorsed upon a pleading of the party." 18 This seems to be the construction given the complaint by the district judge in passing on the motion to strike petitioner's jury demand. See 194 F.Supp., at 687-688. 19 This last possible construction of the complaint, though accepted as the correct one in the concurring opinion, actually seems the least likely of all. For it seems plain that irrespective of whatever else the complaint sought, it did seek a judgment for the some $ 60,000 allegedly owing under the contract. Certainly, the district judge had no doubt that this was the case: "Incidental to this relief, the complaint also demands the $ 60,000 now allegedly due and owing plaintiffs under the aforesaid contract." 194 F.Supp., at 687. 20 "In the case before us the debt due the complainants was in no respect different from any other debt upon contract; it was the subject of a legal action only, in which the defendants were entitled to a jury trial in the Federal courts." Scott v. Neely, 140 U.S. 106, 110. See also Thompson v. Railroad Companies, 6 Wall. 134. 36 for damages based upon a charge of trademark infringement, it would be no less subject to cognizance by a court of law.21 The respondents' contention that this money claim is "purely equitable" is based primarily upon the fact that their complaint is cast in terms of an "accounting," rather than in terms of an action for "debt" or "damages." But the constitutional right to trial by jury cannot be made to depend upon the choice of words used in the pleadings. The necessary prerequisite to the right to maintain a suit for an equitable accounting, like all other equitable remedies, is, as we pointed out in Beacon Theatres, the absence of an adequate remedy at law.22 Consequently, in order to maintain such a suit on a cause of action cognizable at law, as this one is, the plaintiff must be able to show that the "accounts between the parties" are of such a "complicated nature" that only a court of equity can satisfactorily unravel them.23 In view of the powers given to District Courts by Federal Rule of Civil Procedure 53 (b) to appoint masters to assist the jury in those exceptional cases where the legal issues are too complicated for the jury adequately to handle alone,24 the burden of such a showing is considerably increased and it will indeed be a rare case in which it can be met.25 But be that as it may, this is certainly not such a case. A jury, under proper instructions from the court, could readily determine the recovery, if any, to be had here, whether the theory finally settled upon is that of breach of contract, that of trademark infringement, or any combination of the two. The cannot be characterized as inadequate merely because the measure of damages may necessitate a look into petitioner's business records. Nor is the legal claim here rendered "purely equitable" by the nature of the defenses interposed by petitioner. Petitioner's primary defense to the charge of breach of contract -- that is, that the contract was modified by a subsequent oral

21 Cf., e. g., Arnstein v. Porter, 154 F.2d 464; Bruckman v. Hollzer, 152 F.2d 730. 22 359 U.S., at 506-510. See also Thompson v. Railroad Companies, 6 Wall. 134, 137; Scott v. Neely, 140 U.S. 106, 110. 23 Kirby v. Lake Shore & Michigan Southern R. Co., 120 U.S. 130, 134. 24 Even this limited inroad upon the right to trial by jury "'should seldom be made, and if at all only when unusual circumstances exist.'" La Buy v. Howes Leather Co., 352 U.S. 249, 258. See also In re Watkins, 271 F.2d 771. 25 It was settled in Beacon Theatres that procedural changes which remove the inadequacy of a remedy at law may sharply diminish the scope of traditional equitable remedies by making them unnecessary in many cases. "Thus, the justification for equity's deciding legal issues once it obtains jurisdiction, and refusing to dismiss a case, merely because subsequently a legal remedy becomes available, must be re- evaluated in the light of the liberal joinder provisions of the Federal Rules which allow legal and equitable causes to be brought and resolved in one civil action. Similarly the need for, and therefore, the availability of such equitable remedies as Bills of Peace, Quia Timet and Injunction must be reconsidered in view of the existence of the Act as well as the liberal joinder provision of the Rules." 359 U.S., at 509. 37 agreement -- presents a purely legal question having nothing whatever to do either with novation, as the district judge suggested, or reformation, as suggested by the respondents here. Such a defense goes to the question of just what, under the law, the contract between the respondents and petitioner is and, in an action to collect a debt for breach of a contract between these parties, petitioner has a right to have the jury determine not only whether the contract has been breached and the extent of the damages if any but also just what the contract is. We conclude therefore that the district judge erred in refusing to grant petitioner's demand for a trial by jury on the factual issues related to the question of whether there has been a breach of contract. Since these issues are common with those upon which respondents' claim to equitable relief is based, the legal claims involved in the action must be determined prior to any final court determination of respondents' equitable claims.26 The Court of Appeals should have corrected the error of the district judge by granting the petition for mandamus. The judgment is therefore reversed and the cause remanded for further proceedings consistent with this opinion. Reversed and remanded.

Boerner v. Mccallister 197 Va. 169, 89 S.E.2d 23 (1955) Whittle, J., delivered the opinion of the court. McCallister filed a bill in chancery against Boerner seeking to enjoin and restrain him from trespassing on and over his land, and to enjoin him from fishing in that portion of the Jackson River which passes through his property. The bill alleged that the tract of land owned by McCallister had been conveyed to Richard Morris by William Jackson in 1772 and lay on both sides of the river, it being one of the tracts granted under authority of the Crown of England, and included not only the lands bordering on the river, but "the rivers, waters and watercourses therein contained, together with the privilege of hunting, hawking, fishing, fowling", etc.; that the said land had been conveyed by divers mesne conveyances to one C. H. Andrews who had conveyed it to McCallister. The bill further alleged that on numerous occasions Boerner had come upon the lands of McCallister without his consent and against his will, for the purpose of fishing in the waters of the river as it flows through and across his lands, in violation of § 29-165, Code of Virginia, 1950; that McCallister had repeatedly requested and advised Boerner to stay off the lands and not to trespass thereon or to fish in the waters of Jackson River flowing through his lands; that Boerner had

26 This does not, of course, interfere with the District Court's power to grant temporary relief pending a final adjudication on the merits. Such temporary relief has already been granted in this case (see McCullough v. Dairy Queen, Inc., 290 F.2d 871) and is no part of the issues before this Court. 38 stated to McCallister "in no uncertain terms that your complainant could not stop the defendant, and that he intended to continue to fish in said stream where it flows through the complainant's lands." The bill further alleged that the fishing on the property constituted a trespass damaging McCallister's right to privacy and ownership, interfering with his right to fish unmolested in his own stream, and impaired his use and enjoyment of his said lands and waters; that "the repetition with which the defendant has committed such trespassing and his avowed intention to continue so to do, not being adequately compensable in damages, creates such a condition that your complainant has no plain, adequate and complete remedy at law, and so he must resort to a court of equity for injunctive relief to inhibit, restrain and enjoin the said defendant from trespassing upon his lands and waters, against the will and without the consent or permission of your complainant; and openly and hostilely defying and insulting your complainant so as to tend to cause violence and breach of the peace"; hence the prayer for injunctive relief. Boerner filed a demurrer to the bill in which he asserted that the bill showed on its face that McCallister was seeking to deny defendant and the public the right to fish in a river belonging to the Commonwealth of Virginia; that the suit was one to try title to land and was improperly brought in equity; that McCallister had prosecuted Boerner criminally and equity will not enforce a penal statute; that McCallister had alleged no irreparable injury; that there was an adequate remedy at law, and that the court should take judicial notice that the Jackson River is floatable for logs and was used commercially for that purpose and therefore the public can fish therein. The court, overruling the demurrer, held that the suit was not one to try title to land; that the bill appeared to be "a pure bill for an injunction to prevent a trespass"; that the complainant does not have an adequate remedy at law; that judgment at law would not protect complainant's alleged rights; that the purpose of the bill was to avoid a multiplicity of law actions and that as Boerner had no personal claim in the river as it passed through the lands of McCallister he could not complain that McCallister is seeking to enjoin his trespass rather than to embarrass him [Boerner] with numerous actions at law or even criminal prosecutions. In the court's written opinion overruling the demurrer it is stated: "He [Boerner] complains, however, that he should not be required, at great expense, to defend this proceeding. In the oral argument it was brought to his attention that he does not have to defend this suit at any expense, if he would agree with the complainant not to trespass again over the lands or fish in the river where it passes through the lands of the complainant. This he is not willing to do." The court further held that the navigability of Jackson River was a factual question. We are of the opinion that the allegations in the bill stated a cause for injunctive relief and therefore the demurrer was properly overruled. 39 As a general rule, where an injury committed by one against another is being constantly repeated, so that complainant's remedy at law requires the bringing of successive actions, the legal remedy is inadequate and the trespass will be prevented in equity by an injunction, the prevention of a multiplicity of actions at law being one of the special grounds of equity jurisdiction. 43 C.J.S., Injunctions, § 24(a), p. 449. This is so, even though each individual act of trespass is in itself trivial, or the damage is trifling, nominal or insubstantial, and despite the fact that no single trespass causes irreparable injury. The injury is deemed irreparable and the owner protected in the enjoyment of his property whether such be sentimental or pecuniary. 43 C.J.S., Injunctions, § 64(a), pp. 526, 527. See also Long's Baggage Transfer Co. v. Burford, 144 Va. 339, 132 S.E. 355; Mears v. Colonial Beach, 166 Va. 278, 184 S.E. 175. The order overruling the demurrer required Boerner to answer the bill and further provided that the case be heard ore tenus. The answer to the bill denied generally the allegations thereof, and specifically denied that the referred to in the bill included anything other than land, asserting that it did not include any water rights or "beds or bottoms of streams". The answer admitted that Boerner had fished in the waters of Jackson River "which belongs to the Commonwealth of Virginia". It denied, however, that he had fished in the river "at a point plaintiff owned land on both sides thereof". It asserted that "even if complainant's title covers land on both sides of Jackson River where defendant was fishing, and even if his title was derived from a colonial grant which gave the original patentee title to the bed of the river * * * said river has been used commercially for small boats, bateaus, or canoes, by a small steamboat, and for the commercial floating of logs, and is therefore navigable in fact, within the meaning of the decisions of the courts of the Commonwealth of Virginia, and is held by the owner subject to the public right to use same and fish therein, pursuant to which right defendant was fishing in said river; and that the Jackson River, its waters and its bottom is a highway for the people of the Commonwealth of Virginia and a public river, and defendant had a right to fish therein, * * *." The bill and answer formed the issues to be determined. The court, after hearing evidence ore tenus, entered the decree appealed from which stated in part: "* * * (The) court doth find as a fact from the evidence that the Jackson River, above the City of Covington and at Natural Well, where the same flows through the lands of the complainant, is a non- navigable stream and consequently private, the bed of which is vested in the complainant, and is not public or vested in the public. The court doth accordingly adjudge, order and decree that the defendant, Frank R. Boerner be, and he is hereby permanently restrained and enjoined from coming upon the lands and waters of the complainant for the purpose of fishing, hunting, or any other 40 purpose, without the prior written consent and permission of the complainant." To the entry of this decree Boerner filed assignments of error, the first of which, charging that the court erred in overruling the defendant's demurrer to the bill, has heretofore been treated. The next assignment charges "that the court erred in granting an injunction enjoining appellant from fishing on appellee's lands, appellant having denied and traversed appellee's allegation that he was on the appellee's lands, and appellee having failed to introduce evidence showing that appellant was on appellee's lands." There is no merit in this assignment. In addition to other evidence, Boerner admitted in his testimony: "I have been in the river through his [McCallister's] property, which he claims he owns. I have fished it many times and about two years ago when we were arrested Mr. McCallister and I did have words." It was evident that Boerner defiantly intended to continue to fish in the waters of the river claimed by McCallister, contending that McCallister had no right to prohibit him from so doing. The next assignment of error challenges McCallister's ownership of the bed of the stream, contending that the title thereto is in the Commonwealth. The evidence discloses that McCallister owns the land on both sides of the river at the point in question, his title going back to a colonial grant recorded in Virginia State Library, Archives Division, Land Office, in Book of No. 29, which patent was recorded between 1749 and 1751, at page 148. The grant to William Jackson is in the name of George II, King of Great Britain, etc., through William Gooch, Esquire, Lieutenant Governor and Commander in Chief of the Colony and Dominion of Virginia. It is signed by Thomas Lee. It is disclosed by the grant that the grantee acquired title to "all the woods, underwoods, swamps, marshes, low grounds, meadows, feedings and his due share of all veins, mines and quarries, as well discovered as not discovered within the bounds aforesaid, and being part of the said quantity of the said 270 acres of land and the rivers, waters and water courses therein contained, together with the privilege of hunting, hawking, fishing, fowling and all other profits, commodities and hereditaments whatsoever, to the same or any part thereof belonging or in any wise appertaining." At the time of the grant (between 1749 and 1751) there was no law preventing the conveyance of "the rivers, waters and water courses therein contained", therefore the grantee took title under the grant in this case to that part of Jackson River within the grant. The common law of England continues in force in this jurisdiction except as altered by the General Assembly. § 1-10, Code of Virginia, 1950. It has not been changed by statute so as to affect the ownership of the beds of streams granted prior to 1780 where the land lies in the eastern or tidewater section, or granted prior to 1802 where the land lies in the western part 41 of the State, the situs of the present proceeding. 20 M.J., Waters and Watercourses, § 11, p. 35; Gaston v. Mace, 33 W.Va. 14, 10 S.E. 60, 25 Am.St.Rep. 848, 5 L.R.A. 392. The statutes of 1780 and 1802 made grants by the "Land Office" subsequent to their passage void as to beds of streams, but they specifically exempted grants made by the "former government" prior to their passage. Hence the title to the bed of the river lying within the boundary of the McCallister property belongs to him as it was undeniably embraced within the grant above referred to. The bed of non-navigable streams and the waters are owned by the riparian owners. Hampton v. Watson, 119 Va. 95, 89 S.E. 81, L.R.A. 1916 F. 189; Jennings v. Marston, 121 Va. 79, 92 S.E. 821, 7 A.L.R. 855. Boerner next contends that even though the Jackson River at this point is properly embraced within the grant, it being a floatable or navigable stream, should be held to be the property of the Commonwealth which would give the public the right to fish therein. In view of our conclusion as later expressed, that Boerner has not proved the river navigable, it is not necessary to decide this question; yet there is persuasive authority to the effect that even though a stream may be floatable, and in some instances navigable, the public interest therein is limited to the right of navigation; the only restraint placed upon the owner being that he cannot obstruct or impede the public right. James River and Kanawha Power Co. v. Old Dominion Iron and Steel Corp., 138 Va. 461, 469, 122 S.E. 344; Miller v. Commonwealth, 159 Va. 924, 166 S.E. 557; Mass. v. New York, 271 U.S. 65, 70 L.Ed. 838, 46 S.Ct. 357; 56 Am. Jur., Waters, § 470, p. 884. We agree with the chancellor that the question of whether or not the river at the point in controversy is a floatable or navigable stream was a factual one to be determined upon the evidence presented. The test is whether the stream is used or is susceptible of being used in its natural and ordinary condition "as a highway for commerce on which trade and travel are or may be conducted in the customary modes of trade and travel on water". 20 M.J., Waters and Watercourses, § 21, p. 59; Ewell v. Lambert, 177 Va. 222, 13 S.E.2d 333; United States v. Appalachian Elec. Power Co. (Va.), 23 F.Supp. 83, reversed on another point in 311 U.S. 377, 61 S.Ct. 291, 85 L.Ed. 243. The decree deciding the issue states: "* * * (The) court doth find as a fact from the evidence that the Jackson River, above the City of Covington at Natural Well, where the same flows through the lands of the complainant [McCallister], is a non-navigable stream and consequently private, the bed of which is vested in the complainant, and is not public * * *." That there was substantial evidence upon which to base this conclusion cannot be successfully controverted. Boerner asserted that the river was navigable and the burden rested upon him to establish this fact. Burner v. Nutter, 77 W.Va. 256, 87 S.E. 359; Rhodes v. Otis, 33 Ala. 578, 73 Am.Dec. 439; Case v. Woolley, 6 Dana 17, 32 Am.Dec. 54. He attempted to carry the burden by showing that between 1901 and 1907 several efforts were made to float logs down 42 the Jackson River "during floodtime" to a mill located at Dry Run, now within the corporate limits of the City of Covington. This method of transportation evidently proved unsatisfactory as no such further attempts have been made. A great preponderance of the evidence establishes the fact that the stream at the point in question is neither floatable nor navigable. The ruling of the chancellor on an issue where conflicting evidence is heard ore tenus is entitled to special respect. "A decree in a chancery suit, where conflicting evidence is heard in open court, has the weight of a jury's verdict, or the weight of a common law judgment in a case heard by the court without the of a jury. The case comes to the appellate court with all the conflicts in the evidence resolved in favor of the prevailing party." Evans v. Slone, 196 Va. 231, 239, 83 S.E.(2d) 385, 390; 1 M.J., Appeal and Error, §§ 277, 278, pp. 707, et seq. For the reasons stated the decree is affirmed.

Whalen v. Dean Steel Erection Co., Inc. 229 Va. 164, 327 S.E.2d 102 (1985) Russell, J., delivered the opinion of the court. This appeal turns upon the question whether a general contractor's employee may bring a tort action against a subcontractor for personal injuries caused by the subcontractor's negligence on the job. The subcontractor contends that such an action is barred by the Worker's Compensation Act. The facts are undisputed. The Kroger Company desired to erect a grocery store building in Charlottesville. Kroger engaged Pinkerton and Laws Company as general contractor for the work. Pinkerton and Laws subcontracted the structural steel work to Dean Steel Erection Company, Inc., by a subcontract which provided that Dean Steel was to do "a complete job of steel erection" for the building. Edward T. Whalen was a carpentry foreman employed by Pinkerton and Laws, the general contractor. On April 25, 1980, the date of his injury, he was working at the construction site, engaged in fabricating wooden forms into which concrete would be poured. His crew was responsible for installing reinforcing steel and pouring concrete into the forms when completed. Whalen's crew also set "anchor bolts" in the concrete, to which vertical steel columns would later be attached. On the date of the accident, Whalen's carpentry crew, Dean Steel's crew, and the crew of a masonry subcontractor were working simultaneously inside the structure. The masonry walls were partially completed. Dean Steel's crew had erected some of the vertical columns and had placed on top of them fifteen of the nineteen horizontal steel girders which were ultimately to span the top of the structure from wall to wall. Dean Steel had stored the remaining four girders, which were about fifty feet long and five feet deep, inside the building. They rested on wooden supports which had been placed on the ground by Dean Steel's crew. 43 Whalen was seriously injured when one of these girders "fell over," striking both his legs. Whalen applied for and received benefits under the Worker Compensation coverage carried by his employer, Pinkerton and Laws. While receiving disability benefits, he brought this action against Dean Steel, contending that its negligence was the of his injuries. Dean Steel filed a special plea, asserting that Whalen's sole remedy was under the Workers' Compensation Act. After hearing evidence, the court sustained the plea, finding that Dean Steel was "participating in the trade, business or occupation" of Pinkerton and Laws at the time of the injury, and that this action was therefore barred by the Workers' Compensation Act. On appeal, Whalen contends that the employee of a general contractor is not barred from suit against a subcontractor for the latter's negligence on the job, and that a construction of the Workers' Compensation Act that would so bar him is unconstitutional. We have considered the underlying question in many cases. The test to be applied was most recently set forth in Stewart v. Bass Constr. Co., 223 Va. 363, 288 S.E.2d 489 (1982). Code Sec. 65.1-40 states that the rights and remedies granted under the Workmen's Compensation Act "shall exclude all other rights and remedies" of an employee to recover for an injury received during the course of his employment. Code Sec. 65.1-41 provides, however, that an employee can maintain an action at law against the person causing his injury, provided such person is an "other party." Our task is to determine whether Bass was an "other party." The test to be applied in the present case was first stated in Feitig v. Chalkley, 185 Va. 96, 38 S.E.2d 73 (1946). There we said that in order to maintain a common law action the defendant had to be a stranger to the trade, occupation, or business in which the plaintiff was involved. This test has been restated and applied numerous times. See, e.g., Stout v. Onorati, 221 Va. 143, 267 S.E.2d 154 (1980); Bosher v. Jamerson, 207 Va. 539, 151 S.E.2d 375 (1966); Rea, Administratrix v. Ford, 198 Va. 712, 96 S.E.2d 92 (1957); Sykes v. Stone & Webster Eng. Corp., 186 Va. 116, 41 S.E.2d 469 (1947). Its application depends upon the facts and circumstances of the particular case. Bassett Furniture v. McReynolds, 216 Va. 897, 902, 224 S.E.2d 323, 326 (1976). Id. at 365, 288 S.E.2d at 490. Rea, Administratrix v. Ford, cited in Stewart, is factually similar to the present case. An employee of a general contractor engaged in the construction of a school building was killed by a falling steel truss which was being hoisted by a subcontractor's employee. The subcontractor was engaged for the purpose of providing the necessary crane and crew to lift the steel trusses into place. We affirmed the trial court's judgment striking the evidence of the decedent's personal representative in a common-law action against the subcontractor, on the ground that such an action was barred by the Workmen's Compensation Act. The result followed 44 from the fact that the subcontractor was no stranger to the employment and the work. We said: In the present case Ford, [the subcontractor], was no stranger to the business of Daniel, the principal contractor. On the contrary, in furnishing the equipment and crew for the purpose of erecting the steel structure Ford was a subcontractor engaged in an essential part of the work which the principal contractor had to do. Thus he was not an "other party" within the meaning of Code, Sec. 65-38 [now Code Sec. 65.1-41]. Like the principal contractor, Ford was under the canopy of the Workmen's Compensation Act and not subject to an action at law for damages for injury to or death of Rea who was engaged in the same work. 198 Va. at 717, 96 S.E.2d at 96. The "stranger to the work" test, applied to varying facts, necessarily produces varying results. Thus, in Hipp v. Sadler Materials Corp., 211 Va. 710, 180 S.E.2d 501 (1971), and in Burroughs v. Walmont, 210 Va. 98, 168 S.E.2d 107 (1969), subcontractors were found to be outside the canopy of Worker's Compensation, and therefore subject to suit, because their duties consisted simply of delivering materials to a construction site, without participation in the construction work. But where a subcontractor had mixed duties, some involving mere deliveries of materials and others directly involved in the construction work, we held that he was within the canopy of Worker's Compensation, and not subject to an action for negligence at the hands of an employee of the general contractor. In Bosher v. Jamerson, 207 Va. 539, 151 S.E.2d 375 (1966), an employee of a general contractor engaged in the construction of an industrial building was injured when struck by a truck operated by the employee of a subcontractor engaged in hauling sand to the construction site. Although the plaintiff had recovered Worker's Compensation benefits from his employer, the general contractor, he sued the subcontractor for negligence. The trial court overruled the subcontractor's plea in bar, and the plaintiff recovered a judgment. We reversed and entered final judgment for the subcontractor because his duties included not only hauling sand to the construction site and dumping it there, but also spreading it inside the foundation area to establish a sand base six inches deep. The latter activity, we held, was "part of the trade, business or occupation" of the general contractor. The subcontractor was, therefore, no stranger to the general contractor's work and not an "other party" within the meaning of Code Sec. 65-38 (now Code Sec. 65.1-41). As a consequence, the plaintiff's remedy was limited to Worker's Compensation. Id. at 542-43, 151 S.E.2d at 377-78. It is clear from a comparison of these precedents that the rule of Feitig v. Chalkley, 185 Va. 96, 38 S.E.2d 73 (1946), has become firmly fixed in Virginia. It requires that the facts of each case be analyzed to determine whether the defendant in a common-law action was, at the time of the plaintiff's injury, a stranger to the work in which the plaintiff was engaged. If the defendant was "no stranger," then he was not an "other party" within Code Sec. 65.1-41, and the common-law action against him is barred by Code Sec. 65.1-40. There is no clearer illustration of this principle 45 than the case of a subcontractor who has undertaken to perform a fraction of the construction work for which a general contractor has overall responsibility. Here, as in Rea, the defendant was a subcontractor engaged in an essential part of the work which the general contractor had to do. Dean Steel was no stranger to the work in which Whalen's employer was engaged, but was, on the contrary, performing an essential part of it. Dean Steel was, therefore, under the canopy of the Worker's Compensation Act when Whalen was injured, and the trial court correctly ruled that this action was barred. Whalen, however, conceding that the "stranger to the work" test pervades our previous holdings, contends that a competing and better-reasoned test is found in Southeastern Tidewater Auth. v. Coley, 221 Va. 859, 275 S.E.2d 589 (1981), based upon Shell Oil Co. v. Leftwich, 212 Va. 715, 187 S.E.2d 162 (1972), and Bassett Furniture v. McReynolds, 216 Va. 897, 224 S.E.2d 323 (1976). This test, the argument continues, depends not on whether the subcontractor is a stranger to the work, but rather upon whether the subcontractor's activity is one normally carried out by the owner or general contractor through employees, instead of one customarily entrusted to a subcontractor. Whalen misapplies these authorities. Southeastern, Shell Oil, and Bassett stand in a line of cases beginning with Sykes v. Stone & Webster Eng. Corp., 186 Va. 116, 41 S.E.2d 469 (1947), which consider whether a subcontractor's employee, injured by a general contractor's (or owner's) negligence on the job, may sue such general contractor or owner at common law or whether such general contractor or owner has become the statutory employer of the plaintiff under Code Secs. 65.1-29, 65.1-30, or 65.1-31, or their predecessors. These statutory employer cases present a question which is the obverse of the one presented here, and their rule is inapplicable where a general contractor's employee seeks to sue a subcontractor. Professor Arthur Larson, quoted in Shell Oil, makes the distinction clear: "The test (except in cases where the work is obviously a subcontracted fraction of a main contract ) is whether this indispensable activity is, in that business, normally carried on through employees rather than independent contractors." Shell Oil, 212 Va. at 722, 187 S.E.2d at 167 (quoting 1C A. Larson, The Law of Workmen's Compensation Sec. 49.12 at 9-53 (1982)) (emphasis added). Whalen tacitly admits that this case is controlled by Rea, Administratrix v. Ford, if that authority is followed, but argues that the holding in that case was faulty on constitutional grounds, and that any construction of the Workers' Compensation Act which deprives him of the right to sue a subcontractor denies him due process, equal protection of the laws, and the right of trial by jury. We do not agree. In adopting the Compensation Act, the legislature provided for the payment of statutory compensation to workers for injuries arising out of and in the course of the employment. The claimant is relieved of the necessity of proving negligence and proximate cause. He is also relieved of any need to resist such affirmative defenses as and assumption of the risk. In exchange, the law relieves the employer of exposure to actions at law from employees sustaining such injuries. Many cases, weighing this quid pro quo, have held it to be a fair exchange, beneficial to employer, employee and society at large, and in itself sufficient to satisfy 46 constitutional requirements. See, e.g., New York Central R.R. Co. v. White, 243 U.S. 188, 37 S.Ct. 247, 61 L.Ed. 667 (1917); Northern P. Ry. v. Meese, 239 U.S. 614, 36 S.Ct. 223, 60 L.Ed. 467 (1916); Bergen v. Fourth Skyline Corporation, 501 F.2d 1174 (4th Cir. 1974); Haynes v. James H. Carr, Inc., 427 F.2d 700 (4th Cir.) cert. denied, 400 U.S. 942 (1970). See also Fauver v. Bell, 192 Va. 518, 65 S.E.2d 575 (1951); Humphrees v. Boxley Bros. Co., 146 Va. 91, 135 S.E. 890 (1926). Whalen contends that this case differs from the statutory employer cases in that Dean Steel had no obligation to pay him workers' compensation benefits because it was neither his employer nor his statutory employer, and that Dean Steel should not, therefore, be entitled to the constitutionally-sanctioned quid pro quo of immunity from suit. We do not agree. The quid pro quo which protects the Compensation Act from constitutional attack is of larger dimensions. It is a societal exchange, benefiting all employers and all employees who stand together under the canopy of the Compensation Act. Its effect is to guarantee compensation to all injured workers under the canopy and to bar common-law suit against all employers also thereunder. As long as the injured worker has recourse to compensation from his own employer, or a statutory employer, he has the benefit of the quid pro quo upon which the compensation scheme is based, and it is immaterial whether he would have been entitled to claim compensation from other employers who are also under the canopy of the Act. Accordingly, we conclude that the result reached by the trial court did not infringe Whalen's constitutional rights. The judgment appealed from will be Affirmed.

Old Dominion Iron v. Vepco 215 Va. 658, 212 S.E.2d 715 (1975) Poff, J., delivered the opinion of the court. The fundamental question before us is whether Old Dominion Iron & Steel Corporation (Old Dominion) stated a cause of action in its motion for judgment against Virginia Electric and Power Company (Vepco) and City of Richmond, Virginia (the City). We will proceed to the consideration of the fundamental issue on the record as originally transmitted. Confining ourselves to that record, we will not notice arguments of the parties based upon facts not stated expressly or by necessary implication. We look to the motion for judgment for facts and reasonable inferences of facts, for they are taken as confessed when well pleaded. Chippenham Manor v. Dervishian, 214 Va. 448, 201 S.E.2d 794 (1974); Ames v. American Nat. Bank, 163 Va. 1, 176 S.E. 204 (1934). By deed dated January 29, 1926, Old Dominion's corporate grandfather conveyed to Old Dominion's corporate father 12 acres of land on Belle Isle, an island in the James River in Richmond. By the same deed, the grantor conveyed to Vepco 47 all of its right, title, and interest in the steel highway bridge connecting the island with the north bank of the river. However, the deed provided that Old Dominion and its successors in title could use the bridge in connection with its manufacturing operation conducted on the 12-acre tract, and that Old Dominion and Vepco and their respective successors in title "shall jointly . . . maintain the same and shall contribute equally . . . towards the cost of maintenance upkeep repair and replacement of said bridge and towards the and discharge of any claims or actions at law, for damage or personal injury to property or persons growing out of the use, maintenance upkeep and repair of said bridge." Vepco and Old Dominion, the two grantees in the deed, executed a separate agreement of even date and later recorded both documents on the same date. The agreement acknowledged as binding the provisions of the deed quoted above. On May 13, 1933, Old Dominion and Vepco entered into another agreement under which Vepco released Old Dominion from its liability respecting the bridge and assumed sole responsibility for the maintenance, repair, and replacement thereof so long as no other adequate roadway connection with the north shore of the river was available. The 1926 agreement, as amended in 1933, was made for Old Dominion's use, enjoyment, and benefit. By order entered in condemnation proceedings on September 12, 1968, the trial court vested title in the City to a portion of the 12-acre tract, but, with the City's consent, Old Dominion continued to occupy the condemned land, conduct its business on the 12-acre tract, and use the bridge in connection with its business operation. About January 15, 1970, the remaining portion of the 12-acre tract, previously acquired by the City, was leased by the City to Old Dominion, and Old Dominion continued to occupy and use the entire tract. Under an agreement dated March 27, 1972, Vepco agreed to sell and the City agreed to buy certain Vepco holdings on Belle Isle, including the steel bridge. The agreement further provided that Vepco would continue to maintain the bridge as long as Old Dominion continued to occupy the 12-acre tract, with the understanding that the City would consummate acquisition and occupancy of that property as soon as possible. This agreement was in confirmation of Vepco's duties with respect to the bridge and was made for Old Dominion's use, enjoyment, and benefit. On June 23, 1972, the bridge was destroyed by the flood waters of tropical storm "Agnes" and has not been replaced. Having recited these allegations of fact in its motion for judgment, Old Dominion alleged that "[as] a result of the failure of either Vepco or the City to properly maintain, keep up and repair the bridge by reason of which failure the bridge was destroyed as aforesaid and as a result of the failure of either Vepco or the City to replace the bridge, all in violation of the duties and obligations of Vepco and the City pursuant to agreements made as aforesaid for Plaintiff's use, enjoyment and 48 benefit, Plaintiff has sustained and will continue to sustain" certain specifically enumerated damages, including the costs of providing alternate methods of access and transportation to and from its plant. Old Dominion argues that it has alleged in three capacities to sue for damages for breach of the covenant to maintain and replace the bridge, viz., in its capacity as lessee of a portion of the land benefited by the covenants in the deed, in its capacity as condemnee and permissive occupant of another portion of that land, and in its capacity as original promisee in the contract arising from the 1926 agreement, as amended in 1933. Old Dominion argues further that, in its capacity as third party beneficiary of the March 27, 1972, contract between Vepco and the City, it has standing to sue for damages for breach of the contract commitment to maintain the bridge. Finally, Old Dominion contends that, with respect to its standing in each of these capacities, it has alleged a breach of obligation and causally related damages and, thus, has properly pleaded a cause of action against Vepco and the City. I. Old Dominion As Lessee The deed contained two covenants, one covenant granting Old Dominion the right to use the bridge (a use in the nature of and easement) and the other covenant requiring Old Dominion and Vepco to maintain and replace the bridge. The parties do not disagree that these covenants run with the land. The bridge is the burdened estate. The 12-acre tract is the benefited estate. Old Dominion alleged that it leased a parcel of land from the City about January 15, 1970. Reading the motion for judgment as a whole, it appears that this parcel was a portion of the 12-acre tract benefited by the covenants. The terms and tenure of the leasehold are not reflected in the record before us, and we cannot consider the argument advanced by Vepco and the City that Old Dominion's leasehold interest "was not sufficiently substantial" to give it standing to sue for damages flowing from a breach of the covenants. Nor do we mean to imply that we would accept the argument if the record reflected the terms and tenure of the leasehold. We consider only whether a leasehold interest acquired from an original covenantee or its successor in title is sufficient to give a lessee standing to enforce the covenants.27 Vepco argues that, under the express language of the covenants, only "successors in title", i.e., subsequent owners of fee simple title, have such standing. Such an argument overlooks the distinction the law makes between the burden of a covenant running with the land and the benefit of such a covenant.

27 In Jones v. Richmond, 88 Va. 231, 13 S.E. 414 (1891), and Meagher v. Appalachian Power Co., 195 Va. 138, 77 S.E.2d 461 (1953), cited by Vepco, the party seeking to enforce the covenant had no proprietary interest in the benefited estate. Those cases are inapposite here, since Old Dominion has alleged a leasehold interest.

49 That distinction and the rules attendant upon it are stated in Restatement of Property § 547 at 3266-69 (1944): "§ 547. Privity between Beneficiary and Successor.

"The benefit of a promise respecting the use of land of the beneficiary of the promise can run with the land only to one who succeeds to some interest of the beneficiary in the land respecting the use of which the promise was made. "Comment: a. Rationale. . . . The running of the benefit, like the running of the burden, was once based upon a concept of identification of the successor with his predecessor. This concept required for its application that the successor succeed to the estate held by the original promisee. But other concepts have joined to modify the historical concept as applied to the running of benefits. The succession to benefits is never as objectionable, at least from the point of view of the successor, as the succession to burdens. It is not unnatural that greater liberality has been displayed with respect to the former kind of succession than the latter. The result has been so to modify the concept of identification with respect to the running of the benefit of a promise respecting the use of land as to require only that an interest of the predecessor pass to the successor. . . . c. Succession to interest. The concept of identification, upon which the running of both the burden and the benefit of promises respecting the use of land is based, presupposes a succession to an interest in the land with which the promises run. Historically, such a succession meant a succession to the interest of the predecessor in that land. This historical rule is still applicable in the case of the running of the burden (see 535). It is no longer true with respect to the running of the benefit. The benefit will run with any part of the interest of the beneficiary of the promise if the part succeeded to is of such a character that performance of the promise will be of benefit to the owner of it. "Illustration: 1. A and B are the owners of neighboring lands. A has a dwelling house located on his land. B covenants with A and his assigns that he, B, will not use his land as the site of a manufacturing establishment. A leases his house to C for ten years. B begins to operate a glue factory upon his land. C is sufficiently the successor to the benefit of the promise to enable him to sue upon it." [Emphasis in text supplied]. The rule is further explicated in 2 American Law of Property § 9.20(392) (1952): 50 ". . . But in the case of the benefit as distinguished from the burden, the courts permit the life tenant or lessee of the covenantee to enforce the benefit. In these cases the courts proceed on the theory that the benefit of a covenant is primarily attached to the possession of the covenantee's estate, and that when he has transferred this possession by creating a lesser possessory estate, the benefit should be treated as temporarily passing with the possessory interest to the life tenant or lessee."

To accept Vepco's argument, we must assume that the original parties to the covenants intended that the benefit run only to the covenantee and its "successors in title." Except for the use of that phrase, we find nothing in the record bearing upon the parties' intent which would justify such an assumption. Rather, we find much that supports the construction that the parties intended that the benefit should descend to an owner of a lesser possessory interest in accordance with the established rules governing covenants running with the land. When the covenant was first attached to the 12-acre tract, the covenantor and covenantee knew that the bridge was the only vehicular access to the island from the shore. While the benefit of the covenant, as an attachment to the land, had some value, its only real value was in its attachment to the use of the land. If we are to make any assumption as to what the original parties intended, we must assume that they intended the benefit of the covenants to run to those they could reasonably anticipate would necessarily be the users of the bridge, viz., the original covenantee, its successors in fee simple title, and the possessors of a lesser proprietary interest lawfully acquired from the original covenantee or one of its successors in title. As lessee of the City, Old Dominion possessed such an interest; necessarily, the lease agreement must have contemplated use of the demised premises as part of Old Dominion's manufacturing operation and use of the bridge in connection therewith. Under the facts before us, we do not construe the phrase "successors in title" as a limitation on the class of the covenantee's successors entitled to enforce the covenant, but as an indication of the parties' intent that the covenants run with the land. We hold that Old Dominion, as lessee of a portion of the benefited estate,28 had standing to sue for damages resulting from a breach of the covenant to maintain and replace the bridge and properly pleaded a cause of action against the legal owner of the burdened estate. During the time the alleged damages were sustained the legal owner was Vepco. As vendee in the March 27, 1972, contract, the City was equitable owner. Unlike an owner of a lesser proprietary interest in the benefited estate who inherits the benefit of the covenant, an owner of a lesser proprietary interest in the burdened estate does not inherit the burden. In order for the successor

28 A covenant is not destroyed by division of the benefited estate, and its benefit runs to an assignee of a parcel of the benefited estate, provided the enjoyment of the benefit does not place an additional charge upon the burdened estate. Restatement of Property, supra at @ 551 (3276-77). See also Linkenhoker v. Graybill, 80 Va. 835 (1885) (applying the same rule with respect to easements). 51 to the covenantor to be liable upon the burden of the covenant, he must succeed to the estate of the covenantor.29 2 American Law of Property, supra at § 9.15 (384); Restatement of Property, supra at 535 (3210-11). Since City, as the equitable owner, had neither legal title to nor the right to occupy the burdened estate, 8A G. Thompson, Real Property, § 4449 (285-86) (1963), it had not succeeded to the estate of its predecessor, Vepco. Accordingly, we hold that Old Dominion, in its capacity as lessee, has failed to state a cause of action against the City.30 II. Old Dominion as Condemnee and Permissive Occupant Old Dominion alleged that, at the time its damages were sustained, it was a permissive occupant of the condemned parcel of the benefited estate. On appeal, it argues that, as condemnee, it had a potential reversionary interest sufficient to give it standing to sue for damages resulting from a breach of the covenant to maintain and replace the bridge. But Old Dominion made no allegation in its motion for judgment that the condemnation proceeding was still pending and that it owned such an interest at the time its damages were sustained. While we cannot look to the enlarged record, we take judicial notice of our opinion in Richmond v. Old Dominion Iron and Steel Corporation, 212 Va. 611, 186 S.E.2d 30 (1972). There, we held, inter alia, that the City had proved the necessity of the taking of the parcel of land involved here. Upon the entry of our order in that case, any potential reversionary interest owned by Old Dominion was extinguished. Our order was entered January 17, 1972. The bridge was destroyed June 23, 1972. We hold that Old Dominion failed to allege standing as a condemnee to enforce the covenant, that it had no such standing in fact, and that as condemnee and permissive occupant, it failed to state a cause of action against Vepco and the City. III. Old Dominion as Original Promisee of a Contract Old Dominion says that, apart from its standing as lessee to enforce the covenants in the deed, it has standing as original promisee in the separate contract arising from the 1926 and 1933 agreements to sue for damages for breach of the promise Vepco made in that contract. Vepco argues that the promise to maintain and replace the bridge raises a duty the benefit of which attaches to ownership of the benefited property; that the breach

29 The covenant to maintain and replace the bridge is an affirmative covenant. We do not decide what rule would apply to a negative covenant running with the land. 30 There is respectable authority for the rule urged by Vepco that when the benefited estate and the burdened estate become merged in the same owner, a covenant running with the land is extinguished. See, e.g., 21 C.J.S., Covenants § 78(936) (1940). But there was no such merger here. While the City owned fee simple title to the benefited estate in its entirety, the City as we have said, owned only an equitable title to the burdened estate. 52 of that duty "injures a party by damaging his property interest"; and that "any cause of action arises from this property interest." Vepco concludes that Old Dominion had no "substantial estate in the benefited property" and therefore "does not have such a property interest on which to sue and recover damages." Vepco's contractual liability, as distinguished from its liability on the covenants, is founded upon privity of contract with Old Dominion and does not depend upon Old Dominion's ownership of a substantial interest in the benefited estate.31 The nature and extent of Vepco's contractual liability turns upon the intention of the parties, as evidenced by the two contract documents and the circumstances surrounding their execution. The facts alleged in the motion for judgment do not manifest an intent that Vepco's liability terminate when Old Dominion ceased to own a "substantial estate" in the benefited property. The contractual commitment to maintain and replace, like the covenants, was attached to the use of the benefited property (See Part I, supra). This circumstance supports the conclusion that the parties intended Vepco's contractual obligations to continue as long as Old Dominion had the right to use the bridge in connection with its manufacturing operation on the island. Old Dominion alleged that it had such a right, that Vepco breached the promise to maintain and replace the bridge, and that it was damaged by the breach. As promisee of the 1926 and 1933 agreements, Old Dominion stated a cause ex contractu against Vepco. Since Old Dominion did not allege that the City was privy to the contract, it failed to state such a cause against the City. IV. Old Dominion as Third-Party Beneficiary Old Dominion alleged that the March 27, 1972, contract under which Vepco agreed to sell the bridge to the City provided "that Vepco would continue to maintain the bridge so long as Plaintiff's occupancy of property on Belle Isle continued, with the understanding that the City would as soon as possible consummate acquisition and occupancy of the said property" and that this provision "was made for Plaintiff's use, enjoyment and benefit." This allegation was fully sufficient to give Old Dominion standing under Code § 55-22 (Repl. Vol. 1974) to sue for damages for breach of the commitment to

31 ". . . [A] . . . covenant [running with the land] creates two different bases of liability in the covenantor. Firstly, he is in privity of contract with the covenantee, and this relationship creates in the covenantor a contract duty which is unassignable. Secondly, he is in privity of estate with the covenantee, and this relationship is the basis upon which the courts treat a contractual burden as attaching to the covenantor's land and running to a subsequent assignee. Thus, when the covenantor assigns his entire estate in the land, he ceases to be liable as to the future upon this contractual burden because he is no longer in privity of estate with the covenantee; but his liability upon the nonassignable contract duty under privity of contract remains in him." 2 American Law of Property, supra at § 9.18 (388).

53 maintain the bridge. See Kempsville Utilities v. Wills, 213 Va. 679, 194 S.E.2d 740 (1973). Old Dominion alleged that the commitment was made by Vepco. The commitment was part of the consideration for the City's promise to buy the bridge. Old Dominion's rights under that commitment are co-extensive with those of the City. We hold that Old Dominion, as third-party beneficiary under the contract, properly stated a cause of action against Vepco; it stated none against the City. Vepco argues that Old Dominion alleged only a commitment to maintain the bridge and that such a commitment does not include a duty to replace the bridge. Ordinarily, a duty to replace is not to be inferred from a naked promise to "maintain". Absent factors denoting a broader obligation, such a promise imports only an undertaking to conserve the status quo, i.e., to make such repairs as become necessary to sustain normal operability. But this is not an ordinary case, and we must determine whether the record before us indicates that the parties intended the commitment to "maintain" to include the duty to replace. The use of the word "maintain" is only one of the facts alleged and, standing alone, that fact does not resolve the question. Old Dominion further alleged that Vepco's commitment "was in confirmation of the duties and obligations" Vepco had undertaken in 1926. It is not likely that Vepco would have volunteered any commitment for Old Dominion's benefit had it not felt that it owed Old Dominion some continuing duty with respect to the bridge. The only duty it could have had in mind was its earlier commitment to maintain and replace. Of course, upon a trial on the merits, the burden of proving intent will rest upon Old Dominion. On this appeal, however, we are not concerned with proof of the facts alleged but with the sufficiency of the allegations. We hold that the trial court was correct in sustaining the City's demurrer but erred in granting Vepco's motion for summary judgment. The judgment is affirmed in part and reversed in part, the motion for judgment as to Vepco is reinstated on the docket, and the case is remanded for further proceedings not inconsistent with this opinion.

Mendenhall v. Cooper 239 Va. 71, 387 S.E.2d 468 (1990) Stephenson, J., delivered the opinion of the court. Code § 43-17 provides that "[n]o suit to enforce [a mechanic's lien] . . . shall be brought after six months from the time when the memorandum of lien was recorded." In this case, the lienors brought suits to enforce liens against their debtor within the six-month limitations period. Approximately six months after bringing the suits, however, the lienors, with leave of court, filed amended bills of complaint, adding new defendants. The new defendants claimed that the suits against them were time-barred, but the trial court disagreed and decreed enforcement of the 54 mechanic's liens. The new defendants appeal, contending that the trial court erred in overruling their statute of limitations defense.32 The facts are undisputed. Colonial Beach Development Company (the Developer) acquired certain real property in the Town of Colonial Beach as a site for a condominium project. On November 13, 1983, the Developer recorded a deed of trust on the property that secured a promissory note payable to First American Savings and Loan Association (First American) in the principal sum of $1,650,000. The trustee named in the deed of trust was First American Service Corporation (the Trustee). Thereafter, the Developer proceeded to construct the condominium project. On November 13, 1984, the Developer recorded the condominium declaration. In 1984, the Developer contracted with Douglas L. Cooper, Inc. (Cooper), and Northbowl, Inc. (Northbowl) for labor and materials that were furnished to the project. The Developer sold and conveyed two condominium units in Phase I of the project. Unit No. 6 was conveyed to Ellen P. Becker, by deed dated November 1, 1984, and recorded November 13, 1984. Unit No. 4 was conveyed to Windsor H. and Leslie L. Mendenhall, by deed dated December 14, 1984, and recorded December 19, 1984. At the same time, the Mendenhalls recorded a purchase money deed of trust to the Trustee on Unit 4, securing a promissory note also payable to First American. On January 31, 1985, Cooper recorded a memorandum of mechanic's lien. Northbowl recorded its memorandum of mechanic's lien on February 8, 1985. In their respective memoranda, Cooper and Northbowl named the following parties as owners: the Developer; Becker, as owner of Unit 6, Phase I; and the Mendenhalls, as owners of Unit 4, Phase I. Cooper and Northbowl gave notice of their lien claims to the owners named in their memoranda and to the Trustee. On May 16, 1985, the Developer filed for bankruptcy. On July 31, 1985, within six months after Cooper and Northbowl recorded their memoranda, Cooper and Northbowl filed bills of complaint only against the Developer to enforce their mechanic's liens. The Developer did not respond to the suits. Because the Developer defaulted under the deed of trust that secured First American, the Trustee was directed to conduct a foreclosure sale of the condominium property, except for Units 4 and 6 in Phase I. The sale was conducted on August 9, 1985, and First American purchased the property. First American subsequently assigned its interest in the property to The St. Johns Development Corporation (St. Johns). Consequently, by deed recorded November 27, 1985, the Trustee conveyed the property to St. Johns, subject to all mechanic's liens. On January 8, 1986, the trial court entered orders permitting Cooper and Northbowl to file amended bills of complaint that would add new parties

32 The lienors' suits were consolidated at trial and on appeal. 55

defendant.33 On January 22, 1986, Cooper and Northbowl filed amended bills of complaint that added, as defendants, the Mendenhalls, Becker, the Trustee, and First American (collectively, the new defendants).34 As previously stated, the trial court overruled the new defendants' plea of the statute of limitations and decreed enforcement of the mechanic's liens. Our analysis begins with a determination whether the new defendants are necessary parties to the suit to enforce, or are merely proper parties. Failure to include proper parties is not a ground for dismissing the suit. A court is empowered to adjudicate a cause in the absence of proper parties. Bonsal v. Camp, 111 Va. 595, 597, 69 S.E. 978, 978-79 (1911). Thus, the sustaining of a proper party's statute of limitations plea does not mandate a dismissal of the suit. A different rule applies, however, with respect to necessary parties. A court is powerless to proceed with a suit unless all necessary parties are properly before the court. We have said that [a necessary party's] interests in the subject matter of the suit, and in the relief sought, are so bound up with that of the other parties, that their legal presence as parties to the proceeding is an absolute necessity, without which the court cannot proceed. In such cases the court refuses to entertain the suit, when these parties cannot be subjected to its jurisdiction. Bonsal, 111 Va. at 597-98, 69 S.E. at 979 (quoting Barney v. Baltimore City, 73 U.S. (6 Wall.) 280, 284 (1867)). Accord, Walt Robbins, Inc. v. Damon Corporation, 232 Va. 43, 348 S.E.2d 223 (1986); Buchanan Co. v. Smith, 115 Va. 704, 80 S.E. 794 (1914); Sweeney v. Foster, 112 Va. 499, 71 S.E. 548 (1911). See also Kennedy Coal v. Buck'n Coal, 140 Va. 37, 124 S.E. 482 (1924). It follows, therefore, that a suit, time-barred as to any necessary party, must be dismissed because such necessary party is not subject to the court's jurisdiction. Consequently, we must determine whether the new defendants in the present case are necessary parties. We define "necessary parties" broadly: Where an individual is in the actual enjoyment of the subject matter, or has an interest in it, either in possession or expectancy, which is likely either to be defeated or diminished by the plaintiff's claim, in such case he has an immediate interest in resisting the demand, and all persons who have such immediate interests are necessary parties to the suit.

33 The orders were endorsed only by counsel for Cooper and Northbowl. Nothing in the record suggests that the added parties knew about the orders until they were served with copies of the amended bills. 34 The new defendants are the appellants herein. St. Johns was added as a party defendant also and is an appellant herein. However, because St. Johns acquired its interest in the subject matter after July 31, 1985, we express no opinion whether it was a necessary party. 56 Raney v. Four Thirty Seven Land Co., 233 Va. 513, 519-20, 357 S.E.2d 733, 736 (1987) (quoting Gaddess v. Norris, 102 Va. 625, 630, 46 S.E. 905, 907 (1904)) (citation omitted). Moreover, we have held that both the trustee and the named beneficiary of an antecedent deed of trust are necessary parties in a suit to enforce a mechanic's lien. Walt Robbins, Inc., 232 Va. at 47-48, 348 S.E.2d at 227. See also Code § 55-66.1. In the present case, Becker and the Mendenhalls are owners of condominium units subjected to the mechanic's liens. They were so designated, and their properties described, in the memoranda of liens and in the amended bills to enforce. The Trustee and First American are the trustee and beneficiary, respectively, under the antecedent deed of trust. Thus, the new defendants were necessary parties in the suits to enforce because they each had an interest in the subject matter which likely could be defeated or diminished by Cooper's and Northbowl's claims. Although the new defendants were not made parties to the enforcement suit until more than a year after the memoranda of liens were filed, Cooper and Northbowl claim that the amended bills relate back to the commencement of the suits brought against the Developer. Cooper and Northbowl contend, therefore, that the filing of the original bills stopped the running of the statute of limitations as to the new defendants. In the context of Code § 43-17, however, we have held that, when an amendment introduces a new claim or makes new demands, the statute continues to run until the time of the amendment. Neff v. Garrard, 216 Va. 496, 498, 219 S.E.2d 878, 879-80 (1975). See also Comm. Mech., Inc. v. Stand. Fed., 222 Va. 330, 331, 281 S.E.2d 811, 811 (1981). Furthermore, it is well-established that when "a new party is brought into a suit by an amended pleading, the suit must be deemed to have been commenced as to him at the time that he was so brought in." Webb v. United States Fidelity, etc. Co., 165 Va. 388, 393, 182 S.E. 557, 559 (1935). Accord Dorr's Adm'r v. Rohr and als., 82 Va. 359, 365-66 (1886). Cooper's and Northbowl's original bills sought to enforce their mechanic's liens only against the Developer's property. By their amended bills, however, Cooper and Northbowl sought to enforce their liens against properties owned by Becker and by the Mendenhalls, in addition to the Developer's property. Furthermore, the amended bills, unlike the original bills, presented questions concerning the priority of the lien created by the antecedent deed of trust. The amended bills, therefore, not only added new defendants but also presented new and different claims. Therefore, the enforcement suits against the new defendants are deemed to have been commenced at the time of the amendments. Consequently, we hold that the enforcement suits were not brought against the new, necessary defendants within the time required by Code § 43-17.35

35 The decision we reach is dispositive of the case. Therefore, we do not address the assignment of cross-error. 57 Accordingly, the trial court's judgment will be reversed, the mechanic's lien enforcement suits will be dismissed, and final judgment will be entered here for the appellants. Reversed and final judgment.

Wilkins v. Peninsula Motor Cars, Inc. 266 Va. 558, 587 S.E.2d 581 Lemons, D., delivered the opinion of the court. In his suit against Peninsula Motor Cars, Inc. ("Peninsula"), a jury awarded Gerald G. Wilkins ("Wilkins") enhanced damages of $12,000, a sum conceded by Peninsula to represent the trebling of $4,000 in actual damages under the Virginia Consumer Protection Act, Code §§ 59.1-196 to -207 ("VCPA"). By agreement of the parties, the issue of attorney's fees and costs pursuant to Code § 59.1-204(B) was reserved for determination by the trial court and was later fixed at $34,183. Also, in his claim for common law fraud, the jury awarded Wilkins $1,862.86 in actual damages and $100,000 in punitive damages. In this appeal, we consider whether the trial court erred in requiring Wilkins to elect between his remedies. I. Facts and Proceedings Below On March 30, 1999, Gerald Wilkins purchased a 1998 BMW 540I from Peninsula. An employee of Peninsula represented to Wilkins that the car was new despite the fact that the car's odometer had recorded 972 miles. In fact, the car had been previously titled and was considered a used car. Wilkins discovered Peninsula's misrepresentations when he received the title to the car in the mail. Wilkins brought an action against Peninsula for fraud, violation of the VCPA, and violation of the federal Odometer Act. After the close of evidence, the trial court struck the Odometer Act claim. After the jury returned the verdict and in response to a motion by Peninsula, the trial court required Wilkins to elect between the two verdicts. The trial court explained that Wilkins had "advanced two alternative theories of recovery based on a single transaction or occurrence" and ruled that allowing Wilkins to receive both verdicts would permit a double recovery for his loss. Wilkins conceded that receiving both $100,000 punitive damages for the fraud claim and the additional $8,000 above actual damages for his claim under the VCPA would constitute a double recovery. He also conceded that receiving both $1,862.86 under the fraud claim and $4,000 of the $12,000 enhanced damages under the VCPA claim would constitute double recovery of actual damages. However, Wilkins maintained that no election between the two verdicts should be required and that he should receive $4,000 in compensatory damages, $100,000 in punitive damages, and the attorney's fees associated with his VCPA claim. The trial court held that by "awarding damages under the VCPA and the plaintiff's fraud cause of action, the jury essentially compensated the plaintiff and punished the defendant twice." Wilkins appeals the adverse 58 judgment of the trial court requiring his election between verdicts based upon separate causes of action. II. Analysis The issue before us involves a question of law. We review de novo the trial court's determination that Wilkins was required to elect between his verdicts. Eure v. Norfolk Shipbldg. & Drydock Corp., 263 Va. 624, 631, 561 S.E.2d 663, 667 (2002). The genus of election of remedies has many species. This case is not about claims that are irreconcilable, such as a claim for rescission of the contract accompanied by a claim for specific performance. Nor does this issue involve questions of election between remedies at law or in equity. The only election of remedies issue presented in this case is whether the bar against double recovery justifies the trial court's requirement that Wilkins elect between verdicts. We had previously stated that the trial court must assure that a verdict, while fully and fairly compensating a plaintiff for loss, does not include duplicative damages. Tazewell Oil Co. v. United Virginia Bank, 243 Va. 94, 113, 413 S.E.2d 611, 621- 22 (1992). While the precise circumstances presented by this case have not been addressed in Virginia, the principles resolving the matter are not unfamiliar. In determining whether multiple damage awards constitute impermissible double recovery, the trial court must consider the nature of the claims involved, the duties imposed and the injury sustained. Advanced Marine Enterprises v. PRC Inc., 256 Va. 106, 124, 501 S.E.2d 148, 159 (1998). In Advanced Marine, the trial court had entered judgment of treble damages on a claim pursuant to Code § 18.2-499 and -500 for conspiracy to injure plaintiff in its reputation, trade, business or profession. Additionally, the trial court had entered judgment for punitive damages on three separate counts involving "breach of fiduciary duty, intentional interference with contractual relations, and intentional interference with prospective business and contractual relations." Id. Concluding on appeal that the awards were not duplicative, we stated: The awards of punitive and treble damages were based on separate claims involving different duties and injuries.... To prevail in its business conspiracy claim, PRC was required to prove that the defendants combined, associated, agreed, or acted in concert together for the purpose of willfully and maliciously injuring PRC in its business "by any means whatever." Code § 18.2-499. In contrast the [other claims] do not require such proof and relate solely to the employment relationship between PRC and the PRC Managers and employees. Thus, the chancellor did not err in awarding PRC both punitive and treble damages. Id. at 124-25, 501 S.E.2d at 159. However, when the claims, duties, and injuries are the same, duplicative recovery is barred. In Moore v. Virginia Int'l Terminals, 254 Va. 46, 49, 486 59 S.E.2d 528, 529 (1997), we affirmed the right of an injured worker to seek compensation under either or both the federal Longshore Act and the state workers' compensation statutes, but "[t]he claimant, however, is entitled to only a single recovery for his injuries." Unlike the circumstances presented in Advanced Marine, the causes of action brought by Wilkins have the potential for duplication of damages. However, Wilkins concedes that he is only entitled to one award of compensatory damages, one award of exemplary damages, and one award of attorney's fees. He does not seek a judgment for the actual damages awarded in the VCPA claim in addition to the actual damages awarded in the fraud claim. He maintains that the trebled portion of the verdict under the VCPA is in the nature of exemplary or punitive damages and does not seek recovery of that portion of the award in addition to the punitive damage award.36 Wilkins argues that judgment should be entered in his favor for $4,000 actual damages (from the VCPA claim), $100,000 punitive damages (from the fraud claim), and $34,183 in attorney's fees and costs (ancillary to the VCPA claim). Acknowledging that the trial court was required to assure that there was not duplicative recovery, he argues that the trial court erred in requiring him to elect between his verdicts based upon the different causes of action. We agree with Wilkins. This case does not present irreconcilable causes of action which would require Wilkins to elect between them. Rather, this case involves causes of action with different elements of proof and potentially duplicative damage awards. In these circumstances, Wilkins is entitled to full and fair compensation but not duplicative compensation. The trial court erred in requiring Wilkins to choose between causes of action, when all that was required was supervision of the damage awards to avoid double recovery. Additionally, Peninsula argues that an award of attorney's fees and costs under the VCPA is duplicative of punitive damages. The plain language of the statute defeats this argument. Code § 59.1-204(B) clearly states, "Notwithstanding any other provision of law to the contrary, in addition to any damages awarded, such person also may be awarded reasonable attorney's fees and court costs." Peninsula suggests that such language was intended to apply only to damages awarded under the VCPA and does not apply to circumstances where damages are awarded for an independent cause of action. First, damages were awarded under the VCPA in this case. Second, if the General Assembly had intended such a restrictive view of a remedial statute, such an effect could have been evinced by plain language. See, e.g., City of Richmond v. Richmond Metro. Auth., 210 Va. 645, 648, 172 S.E.2d 831, 833 (1970); Greenberg v.

36 Consequently, we are not presented with the issue whether the enhanced damages under the statutory conspiracy claim are duplicative of the punitive damages in the fraud claim. See United Laboratories, Inc. v. Kuykendall, 335 N.C. 183, 437 S.E.2d 374 (1993). 60 Commonwealth, 255 Va. 594, 600, 499 S.E.2d 266, 270 (1998); Barr v. Town & Country Props., Inc., 240 Va. 292, 295, 396 S.E.2d 672, 674 (1990). Additionally, the purpose of the attorney's fees and costs provision is different from the purpose of punitive damages. Punitive damages are designed to punish offensive or unlawful conduct and deter it in the future. Flippo v. CSC Assocs., 262 Va. 48, 58, 547 S.E.2d 216, 222 (2001). The fee shifting provisions of the VCPA are designed to encourage private enforcement of the provisions of the statute. Accordingly, we will reverse the judgment of the trial court and remand with directions to enter judgment for Wilkins in the amount of $138,183 plus an award of reasonable attorney's fees and costs for successfully prosecuting this appeal. Reversed and remanded. Dickenson v. Tabb 208 Va. 184, 156 S.E.2d 795 (1967)

Spratley, J., delivered the opinion of the court. On December 15, 1962, Darryl Edward Dickenson and his young bride of two months drove from their home in Annandale, Virginia, to Kern Motor Company in Winchester, Virginia, to find out when they could expect the delivery of a new car purchased through John Prosser Tabb, IV, salesman for the motor company. After a short conference at the office of the motor company, Tabb left, purchased a "fifth" of whiskey, and returned. The motor company closed for business between 6:15 and 6:30 p.m. At that time, approximately seven or eight ounces of the whiskey had been consumed by the Dickensons and Tabb. It is not disclosed how much of the liquor had been consumed by any one of them. After the motor company closed, William Harrington Smith, Jr., its sales manager, invited the Dickensons and Tabb to his apartment for a drink. Tabb and Dickenson each had two highballs at Smith's apartment between 6:30 and 8:40 p.m. The witnesses said that Dickenson's conduct and behavior at Smith's apartment were normal, and there was nothing about his appearance or conduct to suggest that his drinking had impaired his ability to drive a motor car. Arrangements were made for Smith and his wife, Dickenson and his wife, Tabb and a friend, Beverly Rice, to go to Lone Oaks Restaurant in Waterloo, Virginia, for dinner. At the restaurant, the group of six were served a steak dinner. Dickenson had two bottles of beer and Tabb one during a period of about one hour and forty-five minutes. At the restaurant, nothing out of the ordinary was noticed about Dickenson's appearance or actions. He was not loud or boisterous. He appeared to have control of his muscular movements and there was nothing wrong with his speech. Tabb telephoned his wife from the restaurant that he was bringing some guests, the Dickensons, to his home to spend the night. Mrs. Tabb testified he said nothing 61 about the ability or inability of Dickenson to drive. The group left the restaurant about 10:45 p.m. in two cars to drive to Tabb's home in Middleway, West Virginia. Dickenson was the driver of the first car, a Tempest, with his wife in the front seat and Tabb in the rear seat. Smith drove the other car, a Studebaker, which was occupied by Mrs. Smith and Beverly Rice. Traveling from Waterloo through Middleway, the parties proceeded in an easterly direction on U.S. Route 340 towards Charles Town, West Virginia. They drove through Berryville, Virginia, thence across the West Virginia line to about one mile west of Charles Town, where the accident hereinafter related occurred. After the two cars passed through Berryville, Smith and his wife, who were driving behind Dickenson, observed Dickenson driving at times in the middle of the highway. His automobile drifted to the right of the hard surface, and on to the hard shoulder a couple of times between Berryville and Gaylord, a distance of four and one-half miles. Smith, who was driving approximately 50 to 55 miles per hour, said that Dickenson suddenly drove ahead at a rate of speed in excess of 65 miles per hour. Smith tried briefly to keep up with the Dickenson car; but slowed down when Mrs. Smith protested. He lost sight of the Dickenson car until Rippon was passed. Between Rippon and the scene of the accident, a distance of 5 miles, the Dickenson car appeared to maintain a constant speed of 50 to 55 miles per hour. At about 11:00 p.m., Mr. and Mrs. Ripley Franklin Dellinger left Charles Town, traveling in a westerly direction on Route 340 in a Buick automobile, Dellinger driving and his wife on the front seat. They traveled about a mile and a half, when Dickenson, traveling easterly, drove his car across the center line of the highway into the westbound traffic lane of Dellinger and crashed "broadside" into Dellinger's Buick. Route 340, at the scene of the accident, is a two-lane highway, 21 feet in width, running generally in an east-west direction. The two lanes are divided by lines in the center, one broken to permit eastbound passing, and one solid to prohibit westbound passing. East of the point of the accident, the highway is straight and practically level for a considerable distance. Immediately to the west it runs downhill and into a rather sharp curve towards the north. As a result of the collision, the Dickenson car, the Tempest, stopped approximately in the middle of the roadway in a crosswise position, facing north and occupying both lanes. The Dellinger Buick came to rest at an angle across the center of the highway, with its left front driven into the right-hand door of the Tempest. The right door of the Tempest was caved in; but its left side did not appear to be damaged very much. Smith came upon the scene of the accident from the west almost immediately after its occurrence, while the smoke and dust from the collision were still in the air. He stopped his Studebaker on the southern shoulder of the road beside a portion of the wreckage. He and his wife observed that the Tempest blocked both traffic lanes, 62 and that the Buick was at an angle across the center line. Debris was scattered throughout Dellinger's lane; but there was none in Dickenson's lane. Mr. and Mrs. Smith realizing that there had been a "very serious accident," and fearing the result of injuries to the occupants of the wrecked automobiles, sought to give and to obtain help. Smith sent Rice to Charles Town to notify the police and to secure ambulances; directed his wife to help the injured; ran about 60 feet in an easterly direction towards Charles Town; and stationed himself in the center of the highway to warn traffic. He was then clad in an unbuttoned tan topcoat with his white shirt exposed. He observed an approaching car, and "waved" his arm to cause it to stop; but it did not slow down nor stop. The observed car turned out to be a car driven by Mrs. Helen P. Tharp. In the meantime, Mrs. Tharp, a nurse at the Charles Town General Hospital, left her work about 11:00 p.m. to go to her home in Berryville. Traveling in an Oldsmobile, she drove in a westerly direction on Route 340, and approached the wreckage of the Tempest and Buick, at a speed of about 40 to 50 miles per hour. She says she did not see Smith standing in the center of the road, waving his arms to warn her. She drove on until she collided with the wrecked Buick. She testified that Route 340, immediately east of the scene of the accident, is "a long, straight stretch with a very, very slight decline." She admitted that nothing blocked her view for a distance of at least 627 feet, or for so much of that distance as came within the range of her headlights, as she approached the scene. She observed the lights of three automobiles, which she thought were driving towards her; their lights "blinded" her and she dimmed her lights. When she arrived at a point about 10 feet from the wrecked Buick, she realized that the cars facing her were not moving; then she swerved to her left into the eastbound lane, in an attempt to avoid the Buick; and, failing in her attempt, struck its right rear fender. She admitted that she did not slow down; did not sound her horn; did not deviate from her path; and did not apply her brakes until the moment she saw the Buick just 10 feet away. The Buick was struck with such force that it was moved a distance of 30 to 35 feet, and came to rest across the westbound traffic lane. In its movement, it struck the Tempest and knocked that care sideways a distance of at least 30 feet to the north berm of the highway. The "swinging" left rear end of the Tempest struck and severely injured Mrs. Smith, who had stepped onto the road, in the eastbound lane, attempting to go to the aid of the injured in the first collision. Mrs. Tharp's car "caromed" off the rear of the Buick, thence to a fence on the south side of the highway, and came to rest in a field. Photographic exhibits of the three cars show that each was badly damaged. Mr. and Mrs. Smith testified that there were no vehicles in the area of the accident, except the Tempest and the Buick, until the arrival of Mrs. Tharp. Smith said he had to leap aside from his position in the middle of the highway to escape being struck by the approaching Tharp car. He further testified that the highway was in good condition, the road dry, the night clear, although there was no moon. There was some light snow on the dirt and gravel shoulder, but none in the roadway. 63 No witnesses saw Tabb between the first and second collisions. No evidence was presented to show what injuries he received in the first collision. After the two collisions, he was found unconscious in Dickenson's car, and he had no memory of either collision. Mrs. Dellinger did not remember what happened after the first collision. Mr. and Mrs. Dickenson died on the night of the accident from the injuries received in the collision, and Dellinger died thirteen days later in a hospital. After both collisions, Tabb was found to have suffered a fracture of the skull, numerous lacerations and contusions of the forehead and face, trimalleolar fracture of the right ankle, damage to the capsular ligament complex, and comminuted fractures of the left arm and right leg. The amount of the damages awarded is not in question in either case. The smashed condition of the wrecked cars and the multiple injuries sustained by Tabb reflect the violence of the two collisions. The trial consumed five days and the evidence is voluminous. There were some contradictions in the evidence; but the jury resolved them in favor of the plaintiffs, Tabb and Mrs. Smith. Consequently, the facts have been summarized and stated in that light. Tabb filed a motion for judgment against the administrator of Dickenson, the administratrix of Dellinger, and Mrs. Tharp, who will be sometimes hereinafter referred to as defendants. Mrs. Barbara A. Smith instituted action against the same defendants. In each case, defendants filed responsive pleadings in which they denied liability and charged each of the plaintiffs with contributory negligence and . The issues were joined, and the cases were, by agreement, consolidated for trial at the same time. At a bench conference following opening statements by counsel for all parties, counsel for Mrs. Dellinger, administratrix, moved the court to enter judgment in her favor, because plaintiffs in their statements did not allege any negligence on the part of her decedent. After a colloquy among the court and counsel, counsel for plaintiffs moved "to dismiss this suit against Dellinger, administratrix of her husband." The court announced that it would grant the motion. The other defendants objected. The court and all parties agreed that no order would be immediately entered; but that the dismissal of Dellinger would be reflected in the final order. While the first witness was on the stand, the court told the jury that plaintiffs had renounced their claims against Dellinger. At the conclusion of the evidence for plaintiffs, and at the conclusion of all the evidence, the court overruled defendants' motions to strike the evidence. After receiving instructions from the court, and hearing argument of counsel, the jury returned a verdict in favor of Tabb against Dickenson's administrator, and Tharp, jointly and severally, for the sum of $20,000; and in the case of Mrs. Smith a verdict in favor of Dickenson, administrator, and against Mrs. Tharp for the sum of $3,000. 64 Motions of the two defendants to set aside the verdicts, and to enter judgment in their favor, notwithstanding the verdicts, were continued to a later date. Subsequently, each defendant filed a plea of release and res judicata on the ground that the dismissal of Dellinger as a defendant released all others jointly liable for the same wrong or injury. It appeared that an order was prepared, and endorsed by plaintiffs, dismissing Dellinger "with prejudice," but it was never entered. Plaintiffs moved to withdraw their endorsement of the order on the ground that their motion was to dismiss Dellinger "without prejudice." The court, in the exercise of its discretion, thereupon entered an order dismissing "without prejudice," the administratrix of Dellinger. The pleas of release and res judicata were denied. The court overruled and denied the motions to set aside the verdicts and entered judgments in accordance therewith. Objections and exceptions were noted by defendants. of error were granted the administrator of Dickenson and Mrs. Tharp in the case of Tabb (Record Nos. 6479, 6480), and Mrs. Tharp in the case of Mrs. Smith (Record No. 6481). On appeal the three writs of error were consolidated and heard together on a single record from the court below. Dickenson's administrator, in his assignments of error, (Record No. 6479) contends: (1) that the evidence was insufficient to justify the jury in finding that any negligence on his part was the proximate cause of the injuries sustained by Tabb; (2) that Tabb was guilty of contributory negligence and assumption of risk as a matter of law; and (3) that the court erred in refusing to sustain his plea of release and res judicata "in allowing plaintiff to withdraw his endorsement of the dismissal order with prejudice;" and (4) that the court erred in giving Instruction No. 4 and in refusing Instruction No. J. At the bar of this Court, he has abandoned his assignments with reference to the two instructions. Mrs. Tharp, in the Tabb case (Record No. 6480) relies on assignments of error similar to those of Dickenson, except as to instructions. She argues that the court erred in granting Instructions Nos. 3, 4 and E, and in refusing to give Nos. BB, CC and CC-1. In the Smith case (Record No. 6481), Mrs. Tharp defends on the grounds that Mrs. Smith was, as a matter of law, guilty of contributory negligence and assumption of risk. She asserts that the court erred in granting Instructions Nos. 3 and E, and in permitting Mrs. Smith to withdraw her endorsement of the order dismissing Dellinger as a Defendant, and denying plea of release and res judicata. As the collisions of the automobiles occurred in West Virginia, we shall consider the evidence in the light of the law of that State, where applicable here. Records Nos. 6479, 6480 Dickenson's administrator, as a corollary to his claim that he was free from negligence causing the injuries to Tabb, argues that those injuries were due to the intervening negligent actions of Mrs. Tharp, which he could not have reasonably foreseen. In addition, he claims that the circumstances of the two collisions did not present a case for the application of the single indivisible injury rule. 65 The uncontradicted evidence clearly shows that Dickenson was guilty of negligence, which was the cause of the first collision. Tabb was riding in the rear seat of Dickenson's car, when the latter drove his automobile from its eastbound lane across the center line of the highway into the westbound lane, and in front of the oncoming Dellinger car. All of the debris from the collision was found in Dellinger's lane of travel. The negligence of Dickenson caused both lanes of traffic to be blocked, and this situation continued to the time of the second collision. The second collision was a naturally foreseeable consequence of the highway being blocked. Dickenson's negligence created that situation and started a chain of events from which further injury could and did occur as a proximate result. Evans v. Farmer, 148 W.Va. 142, 133 S.E.2d 710. Cf. Hartley v. Crede, 140 W.Va. 133, 148, 82 S.E.2d 672, 681. The case of Hartley v. Crede, supra, 140 W.Va., upon which Dickenson's administrator relies, may be distinguished from this case on the facts. One of the specific instances of the difference is that in the Hartley case, one lane of traffic was unobstructed and entirely open to the free flow of traffic. Here, the highway was so blocked that it was reasonable to foresee danger from approaching traffic, and the consequences which ensued. We do not think that the actions of Mrs. Tharp constituted intervening acts which "insulated" the negligence of Dickenson. An insulated intervening cause has been defined in Lester v. Rose, 147 W.Va. 575, 594, 130 S.E.2d 80, 93, quoted with approval in Maroulis v. Elliott, 207 Va. 503, 510, 511, 151 S.E.2d 339, 345, as follows: "An intervening cause in order to relieve a person charged with negligence in connection with an injury must be a negligent act, or omission, which constitutes a new effective cause and operates independently of any other act, making it and it only, the proximate cause of injury." In Evans v. Farmer, supra, 148 W. Va., the West Virginia Court said at page 155, "An intervening cause of an injury is a negligent act or omission which constitutes a new effective cause and which, operating independently of anything else, is the proximate cause of the injury." (133 S.E.2d at page 718). Dickenson's negligence concurred with the negligence of Mrs. Tharp in causing the second collision. Her negligence was not "a new effective cause," which operated "independently" of his negligence. While each collision was, perhaps, sufficiently severe in itself to cause most of the injuries to Tabb, the evidence supports the jury's finding that the negligent acts of each defendant concurred in proximately causing all of the injuries sustained by Tabb. The causation of each special injury, each bruise, each broken bone, or particular damage to Tabb could not be established mathematically. It was impossible to ascertain with certainty which part of his injuries was attributable to the negligence of Dickenson in the first collision, and which was caused by Mrs. 66 Tharp in the second collision. As his injuries were not susceptible of apportionment between the two collisions, the trial court properly told the jury that the injuries sustained by Tabb were indivisible. As we said in Maroulis v. Elliott, supra, 207 Va., at page 511: "* * * (Where) separate and independent acts of negligence of two parties are the direct cause of a single injury to a third person and it is impossible to determine in what proportion each contributed to the injury, either or both are responsible for the whole injury." Richmond Coca-Cola Bottling Works, Inc. v. Andrews, 173 Va. 240, 250, 251, 3 S.E.2d 419; Von Roy v. Whitescarver, 197 Va. 384, 393, 89 S.E.2d 346; Murray v. Smithson, 187 Va. 759, 48 S.E.2d 239; Lester v. Rose, supra, 147 W. Va.; Reilley v. Byard, 146 W.Va. 292, 119 S.E.2d 650; Wilson v. Edwards, 138 W.Va. 613, 77 S.E.2d 164. In Reilley v. Byard, supra, 146 W. Va., at page 299, 119 S.E.2d, at page 654, the Court quoted the following from The Law of Automobiles in Virginia and West Virginia, Volume 1, Section 18, page 53: "Where, although concert is lacking, the separate and independent acts or negligence of several combine to produce directly a single injury, each is responsible for the entire result, even though his act or neglect alone might not have caused it." See Anno: Motor Vehicles -- Damages -- Apportionment, 100 A.L.R.2d, page 50. The court did not err in granting Instruction No. 4, which told the jury that if "negligences of two persons concur in proximately causing a single indivisible injury, then such persons are jointly and severally liable for the entire damage sustained, although there was no common duty, common design, or concert of action, and the jury in case of such finding may not apportion damages as between such persons," and that "In order for the negligence of two parties to concur with each other as a proximate cause it is not necessary that they occur simultaneously, but the question of whether there is such concurring negligence is for the jury to decide." Although the evidence shows that Tabb knew Dickenson had consumed intoxicating beverages, there was nothing to show that Dickenson's drinking had been to an extent likely to affect the manner of his driving. Mr. and Mrs. Smith and Mrs. Charles R. Miller, the owner and operator of Lone Oaks Restaurant, testified that Dickenson's behavior at the Smith apartment and later at the restaurant was normal. He was not loud or boisterous; nothing appeared to be wrong with his speech or with his walk; and there was no indication that he was under the influence of intoxicants. Not until after the group had left the restaurant, and Dickenson had driven past Berryville did Smith and his wife observe that he was driving for a short distance in an improper manner. However, they observed no irregularity in his driving for a distance of about five miles prior to reaching the scene of the accident. Since Mr. and Mrs. Dickenson were killed and Tabb had no recollection of the 67 events on the day of the accident, no evidence was available to explain the driving of Dickenson beyond Berryville and his sudden burst of speed. The fact that a host has been drinking and his guest has knowledge of that fact is not sufficient to establish contributory negligence as a matter of law. The evidence must go beyond this and show that because of his drinking the driver's ability to drive was impaired, and that the guest knew, or, in the exercise of ordinary care, should have known this and yet entered, or continued to voluntarily ride in the car. Whether Tabb knew, or should have known, that drinking had impaired the ability of Dickenson to drive was a question for the jury. Meade, Adm'r v. Meade, Adm'r, 206 Va. 823, 827, 147 S.E.2d 171, 174; Yorke v. Maynard, 173 Va. 183, 188, 3 S.E.2d 366, 369; 8 Am. Jur., 2d, Automobiles, §§ 537, 538, pages 94-96. In Spurlin v. Nardo, 145 W.Va. 408, 114 S.E.2d 913, the West Virginia Court recognized the same distinction between contributory negligence and assumption of risk as that adopted in Virginia. Arrington, Adm'r v. Graham, Adm'r, 203 Va. 310, 124 S.E.2d 199; Hunn v. Windsor Hotel Company, 119 W.Va. 215, 217, 218, 193 S.E. 57, 58; Tiller v. N. & W. Ry. Co., 190 Va. 605, 612, 58 S.E.2d 45, 48. In both states it has been held that: "The essence of contributory negligence is carelessness; of assumption of risk, venturousness. * * * (Assumption) of risk embraces a mental state of willingness, while contributory negligence is a matter of conduct," with knowledge and appreciation of the danger. Arrington, Adm'r v. Graham, Adm'r, supra, 203 Va., at page 314. There is no evidence that Tabb voluntarily exposed himself to any known hazard, with full knowledge and appreciation of its existence. Whether he carelessly placed himself in a dangerous position was a jury question. The trial court did not abuse its discretion in permitting plaintiffs to withdraw their endorsement of the unentered order dismissing Dellinger's administratrix "with prejudice," and then entering on order dismissing her "without prejudice." No reason appears from the transcript of the evidence as to why the dismissal was intended to be "with prejudice." There was no evidence that Dellinger was guilty of any negligence. Plaintiffs' final motion was simply to "dismiss the suit against Dellinger" -- not to dismiss it "with prejudice." Dismissing or releasing a claim against one tort-feasor does not operate as a release of other joint tort-feasors unless there has been a satisfaction. It is the acceptance of satisfaction which operates to extinguish plaintiff's cause of action against other joint tort-feasors. First, etc., Bank v. Bank of Waverly, 170 Va. 496, 503, 197 S.E. 462; Key v. Caldwell, 39 Cal.App.2d 698, 702, 104 P.2d 87, 89. In Shortt v. Hudson Supply, etc., Co., 191 Va. 306, 313, 60 S.E.2d 900, quoting with approval from Cooley on Torts, 4th Ed., Vol. 1, sec. 83, page 263, we said: "* * * (Where) the bar accrues in favor of some of the wrongdoers by reason of what has been received from or done in respect to one or 68 more others, * * * the bar arises not from any particular form that the proceeding assumes, but from the fact that the injured party has actually received satisfaction, or what in law is deemed the equivalent." We find no merit in the objections of Mrs. Tharp to the granting and refusing of certain instructions. Instruction No. 3 merely stated well recognized duties of an operator of an automobile. Instruction No. 4, which we have hereinbefore referred to, sets out the "indivisible injury" rule, and applies it to the facts of this case. Instruction No. E is based on the Code of West Virginia, §1721 (333) (now § 17C-6-1), which read in pertinent part as follows: "(a) No person shall drive a vehicle on a highway at a speed greater than is reasonable and prudent under the conditions and having regard to the actual and potential hazards, then existing. In every event speed shall be so controlled as may be necessary to avoid colliding with any person, vehicle, or other conveyance on or entering the highways in compliance with legal requirements and the duty of all persons to use due care. * * * "(c) The driver of every vehicle shall, consistent with the requirements of subsection (a), drive at an appropriate reduced speed * * * when special hazard exists with respect to pedestrians or other traffic or by reason of weather or highway conditions." Mrs. Tharp testified that she was blinded by the lights of cars headed towards her as she approached the scene of the first collision. Traveling at 45 to 50 miles per hour, she did not remove her foot from the accelerator, nor apply her brakes until she was within 10 feet of the Dellinger vehicle. In Wolfe v. Beatty Motor Express, 143 W.Va. 238, 246, 101 S.E.2d 81, 86, where the facts were similar to those in this case, insofar as they concern Mrs. Tharp, the Court quoted with approval the following statement from Darling v. Browning, 120 W.Va. 666,668, 669, 200 S.E. 737, 738: "It is an accepted mandate of law that, in the exercise of reasonable care, a motorist, temporarily blinded by the lights of an approaching vehicle, must exercise caution commensurate with the situation in order to avoid injury to the person or property of others. * * *." To the same effect see Stamper v. Bannister, infra, 146 W.Va. 100. Instructions BB and CC are in conflict with Instruction No. 4, in that they would impose upon Tabb the burden of proving what specific part of his injuries was caused by the first collision and what part was caused by the second. In that event, Tabb would have been unable to recover from either Dickenson or Mrs. Tharp. 69 Instruction No. CC-1 was given as No. CC-2, with minor changes, which cautioned the jury against inferring negligence of Mrs. Tharp from the fact that the second collision occurred. Record No. 6481. This brings us to a consideration of Mrs. Smith's action against Mrs. Tharp. In view of our determination that the court did not err in the granting and refusing of instructions, nor in dismissing the pleas of release and res judicata, and having reached the conclusion that Mrs. Tharp was guilty of negligence, we need only consider whether Mrs. Smith was guilty of contributory negligence and assumption of risk. Mrs. Smith testified, without contradiction, that just before the second collision, she had alighted from her husband's car, and was standing alone on the south shoulder of the road, facing the wreckage of the first collision; that desiring to go to the aid of the injured in that collision, she made preparations to cross the road; that knowing her husband had gone down the road to her right to warn traffic approaching from the east, she looked to the left, that is towards the west; saw no car approaching in the eastbound lane; then stepped on to the eastbound lane; and before she could cross the road, Mrs. Tharp, approaching in the westbound lane, struck the wrecked Buick, causing it to strike the Tempest and the rear end of the Tempest to strike her. She expressed it in this way: "I remember we hadn't seen any cars at all behind us. Then I thought, well, if a car does come up from that direction, they are going to see this accident, but they are not going to see me standing over here on the side of the road. So I finally got myself all gathered together for what I might see over there, and so I said, well, here I go, and next thing I heard, horrible noise, and I felt myself being hurt." In going to the aid of the injured persons, Mrs. Smith did not voluntarily expose herself to the danger of Mrs. Tharp's negligence. Failing to see any approaching car, she was not indifferent to the hazards of the road. She was not guilty of assumption of risk, and whether she was guilty of contributory negligence, under the circumstances of the case, was correctly left to the jury. In Stamper v. Bannister, 146 W.Va. 100, 104, 118 S.E.2d 313, 316, this is said: "The law in this state is that if the way appears clear to a pedestrian, he may proceed to cross a highway, and whether or not he is guilty of negligence in so doing is generally a question of fact for jury determination." (Citing cases.) In Deputy v. Kimmell, 73 W.Va. 595, 596, 80 S.E. 919, 920, dealing with the reciprocal rights and duties of pedestrians and drivers of automobiles this is said in Point 7 of the syllabus of the Court: "A person lawfully in a public highway may rely upon the exercise of reasonable care by drivers of vehicles to avoid injury. Failure to 70 anticipate omission of such care does not render him negligent. A pedestrian is not bound, as a matter of law, to be continuously looking or listening to ascertain if automobiles or other vehicles are approaching, under penalty that if he fails to do so and is injured his own negligence will defeat recovery of damages sustained." Cf. Ritter v. Hicks, 102 W.Va. 541, 135 S.E. 601. In conclusion, we are of opinion that the evidence was sufficient to justify the jury in finding that Dickenson and Mrs. Tharp were each guilty of negligence, and that their successive negligent acts were, in combination, the direct and proximate cause of Tabb's injuries. We also hold that the evidence was sufficient to justify the jury in finding that Mrs. Smith was neither guilty of contributory negligence, nor of assuming the risk. The judgments complained of are, therefore, affirmed.

Nationwide Mutual Insurance Company v. Jewel Tea Company, Incorporated 202 Va. 527, 118 S.E.2d 646 (1961) Snead, J., delivered the opinion of the court. Ralph D. Hilton and Nationwide Mutual Insurance Company instituted a suit in equity against Jewel Tea Company, Incorporated, to obtain contribution from Jewel as a joint tort-feasor after Nationwide had settled claims for personal injuries and property damage resulting from an automobile collision. Respondent demurred to the bill and also filed a motion to strike and dismiss it. By decree entered January 26, 1960, the demurrer and motion were sustained and the bill was dismissed with leave to amend. In the decree Nationwide's motion to amend the bill by omitting Ralph D. Hilton as a party complainant, but in all other respects to remain the same, was granted, and Jewel's demurrer to the amended bill and motion to strike were sustained and the amended bill was dismissed. Complainant assigned error to the entry of this decree and we granted an appeal. The bill alleged that complainant issued to Ralph D. Hilton a policy of indemnity insurance on his 1953 Chevrolet automobile. On December 17, 1956, the car was being operated by his son, Randolph Hilton, on business of his own and not as agent of his father when the vehicle collided with another owned and operated by Dr. F. F. Buck, in which James C. Lyons was riding, on Route 680 in Wythe county approximately in front of the residence of W. T. Musser. The highway extends in a northerly and southerly direction and just north of the point of collision there is a sharp curve to the west. Randolph was proceeding in the southbound lane and Dr. Buck was proceeding north in the other lane. Musser's home is on the west side of the road. His front yard slopes in a steep bank at the base of which is a rock wall that obstructs the vision of motorists rounding the curve. Just south of the point of the curve Jewel's panel delivery truck, headed 71 north, was parked on the west side of the road in front of the Musser property, partly on the hard surface and partly off of it. As Randolph Hilton approached the curve he veered his vehicle to the left in order to pass the truck. At that moment the car driven by Dr. Buck proceeding in the northbound lane appeared and the two vehicles collided. The bill further alleged that Jewel's driver was negligent in parking or stopping his truck in such a manner as to impede or render dangerous the use of the highway by others; that Randolph Hilton was negligent in operating his vehicle without having it under proper control and without keeping a proper lookout, and that as a result of their concurring negligence Dr. Buck's car was damaged and Lyons received personal injuries. It was also alleged that complainant promptly entered into negotiations with Dr. Buck and Lyons and settled their claims on January 21, 1957, for the total sum of $2,555.74, which it says was reasonable, so as 'to avoid the expense of litigation and in view of the liability of said Jewel Tea Company and the said Randolph Hilton (who was covered for liability insurance under the policy of * * * Ralph D. Hilton under the omnibus coverage clause)'; that complainant unsuccessfully undertook to obtain from respondent contribution of one-half of said payments; that the negligence of respondent was judicially determined in an action brought by Ralph D. Hilton against respondent for damages to his car, wherein he recovered a judgment upon which a writ of error was refused by this court; that complainant is entitled to be subrogated to the right of Ralph D. Hilton to contribution because of the settlements made by it under the policy of indemnity insurance; that it was important that the claims be settled promptly, and that the torts were mere acts of negligence and involved no moral turpitude. The bill prayed that respondent be required to pay to complainant, by way of contribution, $1,277.88, being one-half of the amount of the two claims settled. It is contended by complainant that it made payments to Dr. Buck and Lyons on behalf of Randolph Hilton, an additional assured under his father's policy, and by virtue of such payments it is entitled to contribution from Jewel as joint tort-feasor. Respondent challenges complainant's allegation in the bill that it was entitled to be subrogated to the right of Ralph D. Hilton to contribution because of the settlements made by it on his behalf under the policy. It maintains that Ralph D. Hilton, who was the bailor, had no such right as he was not liable for damages to either Dr. Buck or Lyons. With this we agree. However, complainant also alleged it made the settlements in view of the liability of Jewel and Randolph Hilton, who was covered as an additional assured under the omnibus clause of the policy issued to his father. The latter allegation, together with others in the bill, stated a sufficient case for contribution. No right of contribution among wrongdoers existed at common law. 4 M.J., Contribution, § 22, p. 527, note 10, and cases there cited. That right is now given 72 by § 8-627, Code 1950, and may be enforced when the wrong is a mere act of negligence and involves no moral turpitude. To enforce contribution against a joint tort-feasor a cause of action by the person injured against that wrongdoer must lie. Nationwide insists that because the Buck car was in its proper lane when struck, the concurring negligence of Jewel and Randolph Hilton was the proximate cause of the damage to Dr. Buck's automobile and the personal injury to Lyons and both Dr. Buck and Lyons had causes of action against the joint tort- feasors. Complainant maintains that the interests of Nationwide and Jewel were served by complainant's making prompt and reasonable settlements of the claims and that it is entitled to enforce the right of contribution possessed by Randolph Hilton, its additional assured. Randolph Hilton's right of contribution is dependent upon a determination of the issues of whether the joint negligence of Randolph Hilton and Jewel's agent was the proximate cause of the injuries sustained by Dr. Buck and Lyons, and whether Dr. Buck and Lyons were contributorily negligent. The principle of subrogation has been liberally applied in Virginia. Federal Land Bank v. Joynes, 179 Va. 394, 402, 18 S.E.2d 917. The right to contribution is not a personal right of the tort-feasor but is a chose in action to which an insurer may be subrogated. McKay v. Citizens Rapid Transit Company, 190 Va. 851, 859, 59 S.E.2d 121. The insurance company was indemnitor of its additional assured, Randolph Hilton, and because he was an alleged tort-feasor, it could, upon making settlement of the claims in his behalf, be subrogated to his right of contribution from a joint tort-feasor. A right of action for contribution will lie though no previous judgment determining the issues of negligence and contributory negligence has been obtained. Some require that a judgment be obtained against both tort-feasors and paid by one before he may seek contribution from the other. Annotation 85 A.L.R. 1091; 122 A.L.R. 520; 141 A.L.R. 1207. There is nothing in our statute which requires that the issues of negligence and contributory negligence be adjudicated before an action for contribution may be brought. It is, however, necessary that the injured person have a cause of action against the tort- feasor from whom contribution is sought. If the alleged joint tort-feasor challenges the right to contribution on the grounds that the compromise settlement is unreasonable, excessive, made in bad faith, or that he was not concurrently negligent, or that his negligence was not a proximate cause of the injuries compromised, he may, in the suit for contribution, produce evidence to rebut the allegation and proof of negligence and show that the compromise was unreasonable and excessive, and have the issues adjudicated. Consolidated Coach Corp. v. Burge, 245 Ky. 631, 54 S.W.2d 16, 85 A.L.R. 1086. Respondent is not bound by the compromise settlements since it was not a party to them, nor is it deprived of a trial by jury as to its liability for the damages sustained by Dr. Buck and Lyons. Complainant must establish the negligence of both Randolph Hilton and Jewel as concurring causes of the injuries; Jewel has the right to rebut the evidence tending to show its negligence or that it was a proximate cause of the injuries. The burden is upon Jewel to show that the compromises were not made 73 in good faith or that they were unreasonable and excessive if such is a defense. 13 Am. Jur., Contribution, § 119, p. 98. There is no merit in respondent's contention that Nationwide's claim is barred by the statute of limitations. In its answer it alleges that Lyons' claim for personal injury against either Hilton, Dr. Buck, or Nationwide existed for one year from the date of the accident and is barred now by the statute of limitations. The basic principle of equity is that where two or more persons are subject jointly to liability, it should be borne by them equally. The right to contribution is not based upon express contract or agreement. Code section 8-627 specifically states that contribution may be enforced between wrongdoers when the act of negligence involves no moral turpitude. This is a right that is given by statute and arises when, and only when, one tort-feasor has paid a claim for which they are both liable. The right of action arises upon payment or discharge of the obligation, and it is then that the statute of limitations begins to run. Van Winckel v. Carter, 198 Va. 550, 556, 95 S.E.2d 148; McKay v. Citizens Rapid Transit Co., supra, at pages 857, 858; 13 Am. Jur., Contribution, § 88, p. 77. In McKay v. Citizens Rapid Transit, supra, at pages 858, 859, we said: 'We therefore hold that the statute of limitations did not begin to run until the payment was made by the indemnitors through the transit company to Mrs. Patrick, and that even if the one-year statute could have applied, less than a year had expired before bringing this action. However, we are of opinion that the one-year statute has no application, but that the cause of action in cases of this kind arises out of an implied promise to pay, and therefore the three- year statute of limitations would apply. 18 C.J.S., Contribution, sec. 13-b, p. 22; 13 Am. Jur., Contribution, sec. 84, p. 75; Houston v. Bain, 170 Va. 378, 196 S.E. 657.' Here Nationwide settled the claims of Dr. Buck and Lyons by making payment in compromise on January 21, 1957, and this suit was brought on May 27, 1959, well within the three-year statute of limitations. Respondent contends that complainant should be barred from recovery in its suit for contribution because it is splitting its cause of action and is harassing defendant with a multiplicity of suits. It maintains that there was only one insurance carrier, Nationwide, which carried both liability and property damage on the Hilton car. It admits that Dr. Buck, Lyons and Ralph Hilton each had a right to sue the various defendants in separate actions at law for his respective damages; however, it asserts that once complainant acquired all of these claims arising from one incident or happening, the complainant was bound by the rule against splitting causes of action, and the judgment in the subrogation case of Ralph D. Hilton v. Jewel Tea Company awarding Hilton property damages should be a bar to the present suit by complainant. This overlooks the fact that there arose out of the accident several causes of action which could have been brought 74 by the separate plaintiffs against respondent at different times. There was no requirement that they be brought together or at the same time, and had they been paid by Nationwide at different times, it would still have been entitled to contribution from respondent in each instance upon proof that respondent's agent was a joint tort-feasor in commission of the negligent act causing the various injuries. Respondent attacks the holding in Carter v. Hinkle, 189 Va. 1, 52 S.E.2d 135, in which this court followed the minority rule in allowing a plaintiff to institute separate actions for personal injuries and for property damage arising out of the same tort. It argues that the primary reason for the rule is that different insurance carriers may become subrogated to different elements of the damages, and contends that such a situation does not exist here. For an annotation discussing the majority and minority rules, see 62 A.L.R.2d 997; the Virginia rule is set out on page 1001. In the present case no one plaintiff was suing separately for property and personal injury damages; rather the claim of Dr. Buck was for property damage, that of Lyons for personal injuries, and once paid by complainant, it filed only one suit to enforce contribution of respondent after its compromise settlement with the two claimants. Had complainant settled with Lyons within one year and later settled with Dr. Buck, it could have enforced its rights of contribution a year or more apart and yet been entitled, on proof of concurring negligence, to recover one-half of the amount paid the respective claimants. Rather than harassment by a multiplicity of suits, the joining of the two claims into one suit for contribution reduces the amount of litigation. Respondent argues that when Nationwide brought action in behalf of Ralph Hilton against Jewel and recovered judgment, it should have joined the compromise settlements of Dr. Buck and Lyons and brought only one suit against Jewel for the three claims. This it could not have done for the right of action of Ralph Hilton, to which Nationwide was subrogated, was based not on Jewel's being a joint tort-feasor but was based on its primary negligence. No negligence could be attributed to Ralph Hilton, and it follows that he had no right of contribution. The only right of contribution existing as a result of that action was that of Jewel against Randolph Hilton as a joint tort-feasor, had Jewel so desired to proceed and had it proved Randolph's joint negligence in causing the damage to the Hilton car. The present suit for contribution was separate and distinct. Complainant was subrogated to the right of Randolph Hilton, an additional assured under the policy, and was entitled to seek contribution for damages paid Dr. Buck and Lyons for which Randolph Hilton and Jewel might be jointly liable. The decree appealed from is reversed and the case remanded for a determination of the issues presented. Reversed and remanded.

75 Sullivan v. Robertson Drug 273 Va. 84; 639 S.E.2d 250 (2007)

Keenan, J, delivered the opinion of the court. This case is an appeal of a judgment entered in a contribution action involving joint tortfeasors. We consider whether the circuit court erred in instructing the jury that it could apportion damages based on the jury's assessment of the degree to which a defendant's negligence contributed to the injuries that were the subject of the underlying tort action. We also consider whether the circuit court erred in instructing the jury that it could consider the reasonableness of the settlement reached in the underlying tort action. In 1997, David M. Hopper filed a complaint in the United States District Court for the Western District of Virginia against his physician, William C. Sullivan, D.O., alleging that Dr. Sullivan improperly prescribed excess amounts of Triamcinolone, a corticosteroid. Hopper alleged that his use of those excessive amounts of Triamcinolone caused him to develop severe medical conditions including Cushing's Syndrome37 and osteoporosis. Hopper further alleged that Dr. Sullivan failed to monitor Hopper's use of Triamcinolone, improperly administered an injection of testosterone, and subjected Hopper, a known recovering narcotics abuser, to a "foreseeable dangerous home regime of self- administered drugs." In his complaint, Hopper additionally alleged that Dr. Sullivan had written Hopper prescriptions for Cortisone, Prednisone, and other corticosteroids and medications, and that Dr. Sullivan had "disavowed to other health care providers knowledge" of Hopper's drug regimen. Hopper sought $1 million in compensatory damages and $350,000 in punitive damages from Dr. Sullivan. Hopper and Dr. Sullivan later entered into an agreement settling the federal court action for the amount of $ 735,000. In the agreement, Hopper released all claims he may have had against Dr. Sullivan and against Robertson Drug and its employees. After the settlement, Dr. Sullivan filed the present motion for judgment against Michael S. Robertson, a pharmacist, and Robertson's employer, Robertson Drug Co., Inc. (Robertson Drug), seeking contribution for Dr. Sullivan's payment in settlement of Hopper's claim. In the contribution action, Dr. Sullivan alleged that Robertson, in his individual capacity and as owner of Robertson Drug, negligently "refilled" Hopper's Triamcinolone prescriptions, thereby contributing to Hopper's injuries.

37 Cushing's Syndrome is a condition caused by excessive cortisone in the body. The symptoms may include a rapid increase in fat cells in the face, neck, and trunk, curvature of the back caused by osteoporosis of the spine, hypertension, diabetes, pain in the abdomen and back, and muscular wasting and weakness. Richard Sloane, The Sloane-Dorland Annotated Medical-Legal Dictionary 690 (1987) 76 Dr. Sullivan further alleged that because Hopper could have pursued an action for damages against Robertson and Robertson Drug, Dr. Sullivan was authorized under Code §§ 8.01-34 and - 35.1 to pursue the contribution action. Thus, Dr. Sullivan asserted that Robertson and Robertson Drug were indebted to Dr. Sullivan for "their share of the total settlement paid by Sullivan for their release." In their grounds of defense, Robertson and Robertson Drug denied that they caused any injury to Hopper or were joint tortfeasors with Dr. Sullivan. At trial, the evidence showed that Hopper initially sought medical treatment from Dr. Sullivan for multiple injuries he sustained in an automobile accident. In June 1993, Dr. Sullivan provided Hopper with his first dose of Triamcinolone for "pain management." Hopper reported that his headaches were less severe after the injection. Thereafter, Dr. Sullivan gave Hopper two or three additional Triamcinolone injections between August and September of 1993. Dr. Sullivan also wrote Hopper a prescription for Triamcinolone. Instead of writing "0" as the number of refills permitted, Dr. Sullivan circled "PRN," which allowed Hopper to receive unlimited "refills" for 24 months. According to Dr. Sullivan, he did not intend to allow unlimited "refills" of the drug because its long-term use can cause suppression of the immune system, bone deterioration, diabetes, and weight gain. Dr. Sullivan admitted that he acted negligently in prescribing Triamcinolone to Hopper. From June 1993 through July 1993, based on the prescription written by Dr. Sullivan, Hopper obtained Triamcinolone on five occasions from Westover Pharmacy. After Westover Pharmacy permanently closed its business at the end of July 1993, Hopper obtained "refills" of his prescription at Robertson Drug three times between early August 1993 and the middle of September 1993. Robertson was the pharmacist who provided these last three "refills" and, at that time, he had access to Westover Pharmacy's prescription records. The jury heard conflicting testimony on the issue whether Robertson's conduct constituted a breach of the standard of care applicable to pharmacists. Edgar R. Gonzales, who qualified as an expert in pharmacology, testified that because of the drug's serious long-term effects, Robertson breached the standard of care for pharmacists by supplying the additional Triamcinolone without contacting Dr. Sullivan. In contrast, Timothy W. Lucas, who also qualified as an expert in pharmacology, testified that Robertson did not breach the standard of care for pharmacists by failing to contact Dr. Sullivan before "refilling" Hopper's prescription. The evidence further revealed that in the middle of September 1993, Hopper became ill, was admitted to a hospital for 20 days, and was diagnosed as having Cushing's Syndrome. In 1995, Dr. Eugene J. Barrett began treating Hopper for Cushing's Syndrome, osteoporosis, and several other related problems, including a compression back fracture, a rib fracture, and a risk of spinal collapse. Dr. Barrett attributed these conditions to Hopper's overuse of corticosteroids. 77 Dr. Barrett could not identify any specific condition as being caused solely by a particular steroid prescribed by Dr. Sullivan. However, Dr. Barrett concluded that Hopper's use of Triamcinolone was the dominant, contributing factor in his development of Cushing's Syndrome and osteoporosis, and that each injection of that drug had a cumulative effect. At the close of Dr. Sullivan's evidence, Robertson and Robertson Drug (collectively, Robertson) moved to strike the evidence, arguing that Dr. Sullivan was required to apportion the damages and quantify Robertson's share of the injury because Dr. Sullivan was responsible for a "big measure" of Hopper's injury, while Robertson was only responsible for a "very small area" of damages. Robertson argued that Dr. Sullivan's settlement did not reflect such an apportionment, and further noted that neither Dr. Barrett nor Gonzales was able to apportion the amount of damage attributable to the actions of either Dr. Sullivan or Robertson. The circuit court denied Robertson's motion, stating that the jury should decide what damages, if any, Robertson caused. At the close of all the evidence, Dr. Sullivan argued that he was entitled to judgment as a matter of law on the issue of reasonableness of the settlement, arguing that Robertson had failed to present any evidence to rebut the presumption that the settlement was reasonable. The circuit court denied Dr. Sullivan's request. Over Dr. Sullivan's objections, the circuit court gave the following jury instructions: Instruction A: The Court instructs the jury that where there is damage from several causes, for a portion of which the defendants cannot be held liable, a plaintiff must present evidence that will show within a reasonable degree of certainty the share of the damages for which the defendants are responsible. If the plaintiff fails to do so, then he cannot recover for that item. Instruction O: The Court instructs the jury that on the issue of damages if you find [both Robertson and Robertson's Drug were] negligent, and their negligence was a proximate cause of David Hopper's injuries, which were the basis of his lawsuit and settlement with Dr. Sullivan, then you shall determine how much of the amount of that settlement is related to negligence of [the] Robertson[s] and apportion that amongst all the wrongdoers on a pro-rata basis. Instruction 13: The Court instructs the jury that there is a presumption that the $735,000.00 settlement made by Dr. Sullivan is reasonable, that the defendants are not bound by the compromise settlement since they 78 were not a party to the settlement, and that the burden of proof is upon the defendants to prove that compromise settlement was unreasonable and excessive. The jury returned a verdict in favor of Dr. Sullivan, awarding him damages in the amount of $73,500. Dr. Sullivan made a motion to set aside the verdict, arguing that because the jury decided that Dr. Sullivan and Robertson were joint tortfeasors, Robertson was required to pay half the $735,000 settlement. The circuit court denied the motion and entered final judgment in accordance with the jury verdict. Dr. Sullivan appeals. Dr. Sullivan argues that the circuit court erred in giving Jury Instructions A and O, which permitted the jury to apportion the amount of damages based on the jury's assessment of Robertson's degree of negligence in causing Hopper's injury. Dr. Sullivan maintains that Hopper's injuries were not susceptible to apportionment because the evidence showed that his injuries were indivisible. Thus, Dr. Sullivan contends that Robertson was a joint tortfeasor who was equally liable for half the damages caused by his concurrent negligence and that the circuit court should have instructed the jury that if it returned a verdict in Dr. Sullivan's favor, the jury must award him $367,500. In response, Robertson argues that Jury Instructions A and O were correct based on the evidence presented. Robertson asserts that the evidence showed that Hopper suffered multiple divisible injuries, some of which were caused solely by Dr. Sullivan. Robertson contends that, therefore, the jury was properly instructed that Dr. Sullivan could recover only for injuries proximately caused by the concurrent negligence of Robertson and Dr. Sullivan, and that the jury was required to determine what portion of the $735,000 settlement was attributable to that concurrent negligence. We disagree with Robertson's arguments. The right of contribution is based on the equitable principle that when two or more persons are subject to a common burden, their responsibility shall be borne equally. Nationwide Mut. Ins. Co. v. Minnifield, 213 Va. 797, 800, 196 S.E.2d 75, 77-78 (1973); Nationwide Mut. Ins. Co. v. Jewel Tea Co., 202 Va. 527, 531-32, 118 S.E.2d 646, 649 (1961); Wiley N. Jackson Co. v. City of Norfolk, 197 Va. 62, 66, 87 S.E.2d 781, 784 (1955). A right of contribution against a joint tortfeasor lies when one wrongdoer has paid or settled a claim not involving moral turpitude for which other wrongdoers also are liable. Minnifield, 213 Va. at 798, 196 S.E.2d at 76; Bartlett v. Roberts Recapping, Inc., 207 Va. 789, 793, 153 S.E.2d 193, 196 (1967); Jewel Tea, 202 Va. at 532, 118 S.E.2d at 649; see Code § 8.01-34. The party seeking contribution has the burden of proving that the concurring negligence of the other parties was a proximate cause of the injury for which damages were paid. Jewel Tea, 202 Va. at 531, 118 S.E.2d at 649. When a contribution action is based on a settlement agreement reached between an injured person and one tortfeasor, the remaining tortfeasors may defend against the contribution action on various grounds. Such defenses, which are subject to adjudication in a contribution action, include that the settling 79 tortfeasor was not negligent, that the remaining tortfeasors were not concurrently negligent with the settling tortfeasor, that the remaining tortfeasors' negligence was not a proximate cause of the damages compromised, or that the settlement agreement was unreasonable, excessive, or made in bad faith. Id. If separate and independent acts of negligence of two parties directly cause a single indivisible injury to a third person, either or both wrongdoers are responsible for the whole injury. Maroulis v. Elliott, 207 Va. 503, 511, 151 S.E.2d 339, 345 (1966); Murray v. Smithson, 187 Va. 759, 764, 48 S.E.2d 239, 241 (1948). Thus, in determining the liability of a person whose concurrent negligence results in such an injury, comparative degrees of negligence shall not be considered and both wrongdoers are equally liable irrespective whether one may have contributed in a greater degree to the injury. Maroulis, 207 Va. at 510, 151 S.E.2d at 344; Von Roy v. Whitescarver, 197 Va. 384, 393, 89 S.E.2d 346, 352 (1955); Murray, 187 Va. at 764, 48 S.E.2d at 241; Richmond Coca-Cola Bottling Works, Inc. v. Andrews, 173 Va. 240, 250-51, 3 S.E.2d 419, 423 (1939). Accordingly, each such wrongdoer is responsible for an equal share of the amount paid in damages for a single injury. Only when there are multiple, divisible injuries covered by a compromise settlement is the finder of fact required to attempt an allocation of the amount in contribution a wrongdoer must pay for his negligent act or acts causing one or more of those divisible injuries. See Tazewell Oil Co. v. United Virginia Bank, 243 Va. 94, 115, 413 S.E.2d 611, 622, 8 Va. Law Rep. 1784 (1992). In the present case, Dr. Barrett testified that the effect of the Triamcinolone was cumulative and, therefore, it was impossible to determine what effect any particular dose had on Hopper. According to Dr. Barrett, Hopper's use of Triamcinolone was the dominant contributing factor in Hopper's development of Cushing's syndrome and osteoporosis. Dr. Barrett also stated that several of Hopper's other conditions, including sepsis, pneumonia, and empyema, were caused by the immunosuppressive effect of the Triamcinolone. Dr. Barrett further explained that Hopper received other corticosteroids, and stated that this entire group of drugs, including the Triamcinolone, "all cause the same issues when given in high doses and given repeatedly." By this medical testimony, which was not refuted, Dr. Sullivan established that the cumulative effect of the doses of Triamcinolone given to Hopper caused him an indivisible injury. Thus, if Robertson's actions breached the standard of care, Robertson was liable for the whole injury to Hopper, irrespective whether doses of that drug not supplied by Robertson, or whether other drugs, contributed in a greater degree to Hopper's injury. See Maroulis, 207 Va. at 510, 151 S.E.2d at 344; Von Roy, 197 Va. at 393, 89 S.E.2d at 352; Murray, 187 Va. at 764, 48 S.E.2d at 241; Richmond Coca-Cola Bottling Works, 173 Va. at 250-51, 3 S.E.2d at 423. Viewed in this context, Instruction A was erroneous because it improperly suggested that Robertson could not be found liable for the whole, indivisible 80 injury caused by the various doses of Triamcinolone and other medications supplied to Hopper from different sources. This instruction further was improper because Robertson failed to present any evidence that Hopper suffered injuries separate and divisible from those resulting from his use of Triamcinolone. Hopper's various allegations in the underlying tort action that he suffered injury resulting from medications other than Triamcinolone plainly were not evidence in the present action that Hopper had sustained a divisible injury. Thus, the record before us lacked evidence of a separate, divisible injury for which Robertson was not liable. We also conclude that the circuit court erred in giving Instruction O. This instruction was erroneous because it directed the jury to apportion damages based on the joint tortfeasors' relative degrees of negligence. By improperly directing the jury to compare the negligence of the wrongdoers, Instruction O violated the established principle that comparative degrees of negligence are not to be considered in determining the liability of persons whose concurrent negligence results in an injury. Maroulis, 207 Va. at 510, 151 S.E.2d at 344; Murray, 187 Va. at 764, 48 S.E.2d at 241. We next consider Dr. Sullivan's argument that the circuit court erred in allowing the jury to consider the issue whether the settlement between Dr. Sullivan and Hopper was reasonable. Dr. Sullivan contends that although Instruction 13 was a correct statement of law, Robertson presented no evidence to rebut the presumption that the settlement was reasonable and, thus, the circuit court should not have given that instruction. In response, Robertson argues that the circuit court did not err in allowing the jury to consider the reasonableness of the settlement. Robertson contends that although the settlement may have been reasonable with regard to Dr. Sullivan and Hopper's several claims against Dr. Sullivan, the settlement was unreasonable with regard to Robertson because it included claims, injuries, and damages that were not the product of the concurrent negligence of Dr. Sullivan and Robertson. We find no merit in Robertson's arguments. When a tortfeasor enters into a settlement agreement with a claimant that also releases other tortfeasors, the settling tortfeasor is entitled to obtain contribution from the remaining tortfeasors for reasonable amounts paid to settle the claim. Code § 8.01-35.1. Under this statute, a fact finder may consider the reasonableness of the settlement agreement only with regard to the indivisible injury sustained and may not consider whether the remaining tortfeasors caused the injuries that were the basis for the settlement. Robertson's argument addressing the reasonableness of the settlement is unpersuasive because it confuses these two concepts. The terms of settlement of a claim constitute prima facie evidence of reasonableness, and a defendant in a contribution action bears the burden of producing evidence that the compromise reached was unreasonable or excessive. See Jewel Tea, 202 Va. at 531, 118 S.E.2d at 648-49. Thus, Robertson, as the 81 defendant in the contribution action, had the burden of producing evidence that the settlement was unreasonable before he was entitled to Instruction 13 submitting that issue for the jury's determination. Robertson, however, failed to present any evidence indicating that the settlement was unreasonable or excessive.38 Therefore, having failed to produce more than a scintilla of evidence on the subject, Robertson was not entitled to have the jury instructed on the issue of reasonableness of the settlement. Monahan v. Obici Med. Mgmt. Servs., 271 Va. 621, 636, 628 S.E.2d 330, 339 (2006); Schlimmer v. Poverty Hunt Club, 268 Va. 74, 78, 597 S.E.2d 43, 45 (2004); Pollins v. Jones, 263 Va. 25, 28, 557 S.E.2d 713, 714 (2002). Accordingly, we conclude that the circuit court erred in giving Instruction 13 and in submitting that issue for the jury's consideration. Our holding that the circuit court improperly instructed the jury requires us to reverse the circuit court's judgment. Because the circuit court's improper instructions addressed issues of liability as well as issues of damages, those instructions may have exerted a material influence on the jury in reaching its conclusions on both issues. Therefore, a new trial on all issues is appropriate. See Wright v. Estep, 194 Va. 332, 337-38, 73 S.E.2d 371, 375 (1952); Rawle v. McIlhenny, 163 Va. 735, 750, 177 S.E.2d 214, 221 (1934). For these reasons, we will reverse the circuit court's judgment and remand the case for a new trial on all issues. Reversed and remanded.

Medical Malpractice Castle v. Lester, 2006 Va. Lexis 108 In Castle, the plaintiff, mother of a child who was born with serious neurological injuries, alleged that the defendant Dr. Castle was negligent in monitoring and managing her labor and affecting the child’s delivery. The defendant doctor settled the child’s claim for his severe neurological and physical injuries, pain and suffering, mental anguish, and future medical expenses. In the mother’s claim against the doctor, the doctor filed a motion in limine seeking to exclude any reference to the child’s injuries, damages, life expectancy and costs of medical care. He argued that such evidence would be unfairly prejudicial, would confuse the jury, and would permit the plaintiff to litigate claims already settled, thereby opening the door to double recovery. The mother agreed to exclude evidence of the child’s medical expenses, but she opposed the exclusion of evidence concerning the extent of the child’s injuries and his diminished life

38 Likewise, Robertson failed to present any evidence that the settlement agreement included compensation for injuries involving willful and wanton acts of negligence or moral turpitude or compensation for punitive damages. Therefore, we do not address further his argument that these alleged factors were reflected in the settlement. 82 expectancy. The trial court agreed with the plaintiff and denied the doctor’s motion in limine with respect to evidence about the child’s injuries and life expectancy, but granted it with respect to the costs of treating and raising a neurologically impaired child. At trial, over the doctor’s objection, the jury was instructed that “injury to an unborn child in the womb of the mother is be considered as physical injury to the mother.” Dr. Castle asserted this instruction was not appropriate since this case involved a live birth as opposed to a still birth, and that it would allow the mother to recover for the same physical injuries for which her child had already been compensated. The jury returned a verdict for the plaintiff in the amount of $1.6 million in damages. The trial court entered judgment for the plaintiff mother, and Dr. Castle appealed. The following are portions of the opinion of the Supreme Court affirming the jury verdict for the plaintiff. In this appeal, we once again address two previous rulings of this Court, that an injury to a fetus constitutes an injury to the mother, Modaber v. Kelley, 232 Va. 60, 66, 348 S.E.2d 233, 237, 3 Va. Law Rep. 510 (1986); and that a mother who gives birth to an impaired child is entitled to recover, as part of her individual cause of action, damages for her mental suffering resulting from the birth. Bulala, 239 Va. at 229, 389 S.E.2d at 675; see also Fairfax Hosp. Sys., Inc. v. McCarty, 244 Va. 28, 37, 419 S.E.2d 621, 626-27, 8 Va. Law Rep. 3192 (1992). Dr. Castle asks us to reconsider our holding in Bulala because that decision, he argues, extended "the rule in Modaber beyond its supporting rationale." Dr. Castle's quarrel with Bulala underpins two of his three assignments of error. First, he contends the trial court erred in giving Instruction No. 6 to the jury because Dusty was born alive and therefore had his own separate claim for his personal injuries, for which he had already been compensated. Second, Dr. Castle claims "the trial court erred in allowing . . . jury instructions permitting, and evidence supporting, . . . Lester's claims for damages from mental suffering due to her son's impairment, including evidence regarding her son's life expectancy, condition, and care needs, and [her] depression and lost earnings." In support of these two assignments of error, Dr. Castle argues the decision in Modaber allowing a mother's claim for physical injury and mental anguish arising from her child's stillbirth was necessary to mitigate the harshness of the common law "rule that an unborn child is a part of the mother until birth and, as such, has no juridical existence." Lawrence v. Craven Tire Co., 210 Va. 138, 142, 169 S.E.2d 440, 442 (1969) (internal quotation omitted). Dr. Castle contends the need to allow a mother to recover such damages disappears when the child is born alive, albeit impaired, and becomes a "person" with legal recourse for his or her own prenatal injuries. Furthermore, according to Dr. Castle, when a child is born alive, continued recognition of his or her prenatal injuries as being those of the mother allows an impermissible double recovery for the same injury, once by the mother, and again by the child. The essence of Dr. Castle's argument is that Lester should have recovered only for her own physical injuries and resulting mental anguish and not for any mental suffering caused by the birth of her severely 83 impaired son and the need for her to provide him with around-the-clock care. Thus, Dr. Castle asks this Court to reconsider our decision in Bulala and to hold that the trial court erred in giving Instruction No. 6 and in admitting evidence concerning the severity of Dusty's impairments, his ongoing care needs, and his life expectancy. Of course, Dr. Castle's request that we revisit our decision in Bulala implicates the doctrine of stare decisis. Time and again, we have said: In Virginia, the doctrine of stare decisis is more than a mere cliche. That doctrine plays a significant role in the orderly administration of justice by assuring consistent, predictable, and balanced application of legal principles. And when a court of last resort has established a precedent, after full deliberation upon the issue by the court, the precedent will not be treated lightly or ignored, in the absence of flagrant error or mistake.

Pulliam v. Coastal Emergency Servs., Inc., 257 Va. 1, 10, 509 S.E.2d 307, 312 (1999) (quoting Selected Risks Ins. Co. v. Dean, 233 Va. 260, 265, 355 S.E.2d 579, 581, 3 Va. Law Rep. 2345 (1987)); see also Nunnally v. Artis, 254 Va. 247, 252-53, 492 S.E.2d 126, 128-29 (1997); Kelly v. Trehy, 133 Va. 160, 169, 112 S.E. 757, 760 (1922). We have previously considered the issues presented in this appeal, and we entertain them again today. Nonetheless, we are convinced that our holding in Bulala was not a "flagrant error or mistake," Pulliam, 257 Va. at 10, 509 S.E.2d at 312, but was well reasoned and remains good law. In Modaber, the issue before the Court was whether a mother sustained personal injuries, as well as mental suffering, as a result of the stillbirth of her child. 232 Va. at 61, 348 S.E.2d at 233. A jury found that the defendant- obstetrician's negligence had caused the plaintiff's unborn child to die in the womb. Id. at 62, 65, 348 S.E.2d at 234-36. The trial court in that case gave an instruction identical to the one Dr. Castle assigns as error here: "[I]njury to an unborn child in the womb of the mother is to be considered as physical injury to the mother." Id. at 65, 348 S.E.2d at 236. We concluded that the instruction was a correct statement of the law and that the mother "may recover for such physical injury and mental suffering associated with a stillbirth." Id. at 66, 348 S.E.2d at 236-37. Clearly, the decision in Modaber was a logical consequence of our prior holding that, since a fetus is not a legally cognizable "person" separate from its mother until birth, Virginia's wrongful death statute does not allow a cause of action for the death of an unborn child. Id. at 66, 348 S.E.2d at 236-37 (citing Lawrence, 210 Va. at 140-42, 169 S.E.2d at 441-42). In Bulala, we examined the elements of a mother's compensatory damage claim and that of her child when the defendant-doctor's negligence caused the child, though born alive, to be seriously impaired. 239 Va. at 229-30, 389 S.E.2d at 675-76. We concluded that the mother and child were both "patients" of the defendant, each of whom was entitled to a separate statutory damage cap under 84 the Virginia Medical Malpractice Act. Bulala, 239 Va. at 229, 389 S.E.2d at 675- 76. We preserved Modaber's rule that prenatal injury to a fetus constitutes physical injury to the mother and, therefore, permitted the mother to recover damages for the "mental suffering resulting from the birth of a defective child." Bulala, 239 Va. at 229, 389 S.E.2d at 675. Concluding that, at the moment of birth, the child also became the defendant's "patient," we allowed the child to recover "the usual elements of damage . . . appropriate to any infant's personal injury action." Bulala, 239 Va. at 229-30, 389 S.E.2d at 676. Under the rule we announced the same day in Kalafut v. Gruver, 239 Va. 278, 389 S.E.2d 681, 6 Va. Law Rep. 1474 (1990), damages recoverable by the impaired child included those arising out of harm inflicted on the child by the defendant before birth. Bulala, 239 Va. at 229, 389 S.E.2d at 675. In Kalafut, "[w]e drew the line between nonliability and liability for prenatal injury at the moment of live birth of the child, when the child becomes a 'person,'" Bulala, 239 Va. at 229, 389 S.E.2d at 675, and accordingly held that a "tortfeasor who causes harm to an unborn child is subject to liability to the child, or to the child's estate, for the harm to the child, if the child is born alive." Kalafut, 239 Va. at 283-84, 389 S.E.2d at 684. The decisions in Bulala and Kalafut collectively established that, when a fetus sustains injury and is subsequently born alive, the mother and the impaired child each have a claim for damages resulting from the negligently caused, in utero injury. Those two claims, however, encompass different elements. As the Court in Bulala uniformly accepted, a mother's claim is solely for her mental suffering arising from the birth of a defective child. Whatever disagreement existed in that case as to whom was a proper plaintiff turned on whether the child could assert her own claims for injuries she suffered prior to becoming a legal "person." See Bulala, 239 Va. at 235-37, 389 S.E.2d at 679-80 (Russell, J., dissenting). Even in the absence of settled precedent, Dr. Castle's arguments are without merit. Dr. Castle does not assert that Modaber was wrongly decided. But, in Dr. Castle's view, the mother's physical injury due to injury to her fetus disappears at the moment her child is born alive, as if it had never occurred. Such an outcome would be inconsistent with the holding in Modaber, and we decline to make it the law of the Commonwealth. Neither can we accept Dr. Castle's double-recovery argument as a justification for overturning Bulala. We have considered and discarded the same proposition on more than one occasion. The doctor in Bulala contended that his alleged negligence caused "but one injury--the injury to the child." Brief of Appellant Bulala at 9, Bulala v. Boyd, 239 Va. 218, 389 S.E.2d 670, 6 Va. Law Rep. 1399 (1990) (Record No. 890900). On that basis, he argued further, "Any claim which the parents may have is derivative of the action for the injury to the child." Id. The Court agreed that the claim for emotional distress asserted by the child's father was "wholly derivative of the child's claim," but specifically held, 85 "[T]he mother, as part of her claim, would be entitled to recover for mental suffering resulting from the birth of a defective child." Bulala, 239 Va. at 229, 389 S.E.2d at 675 (emphasis added). Our other decisions confirm that Dr. Castle's double-recovery argument is without merit. In Kalafut, we made it clear that "in Modaber we did not say that injury to the fetus constituted harm only to the mother . . . ." 239 Va. at 285, 389 S.E.2d at 684. Two years later, in McCarty, we upheld an award of damages for a mother's emotional distress resulting from injuries inflicted in utero that caused her child to be born with severe neurological impairments. 244 Va. at 37, 419 S.E.2d at 626-27. The defendant in that case advanced the same argument raised by Dr. Castle, namely, that a mother should not be allowed to recover damages for mental anguish caused by giving birth to an impaired, but living, child. See Brief of Appellant at 35-41, Fairfax Hosp. Sys., Inc. v. McCarty, 244 Va. 28, 419 S.E.2d 621, 8 Va. Law Rep. 3192 (1992) (Record No. 911203). In doing so, the defendant in McCarty suggested that our holding in Bulala did not permit a mother to recover damages for mental suffering resulting from prenatal injury to the fetus, but only recognized a mother's claim for mental anguish damages stemming from the physical injuries she suffered personally, separate and apart from those inflicted upon the fetus. See id. at 39. Despite the fact the mother in McCarty did not suffer an independent physical injury during her labor and delivery of the child, as did the mothers in this case and in Bulala, we dismissed the proposed distinction and, once again, held that a mother can recover damages for her mental suffering resulting from the birth of an impaired child, irrespective of her impaired child's separate cause of action. McCarty, 244 Va. at 37, 419 S.E.2d at 626-27. In light of our conclusion that Bulala remains good law and should not be overturned, Instruction No. 6 was a correct statement of the law, and the trial court did not err in giving the instruction to the jury. Nevertheless, Dr. Castle argues that Instruction No. 6, when read in conjunction with Instruction No. 5, confused the jury as to whom--Lester or Dusty--was entitled to compensation for Dusty's physical injuries. For that reason, he insists giving Instruction No. 6 constituted reversible error. Specifically, he contends that, after the trial court told jurors in Instruction No. 5 that they should consider, in determining Lester's damages, "any bodily injuries she sustained," the instruction, "[I]njury to an unborn child in the womb of the mother is to be considered as physical injury to the mother," wrongly allowed the jury to compensate Lester for all of Dusty's bodily injuries. Undeniably, "the office of an instruction is to fully and fairly inform the jury as to the law of the case applicable to the particular facts, and not to confuse them." Gaalaas v. Morrison, 233 Va. 148, 156, 353 S.E.2d 898, 902, 3 Va. Law Rep. 2008 (1987) (internal quotation omitted). "Instructions should be pertinent to the issues and set out correct legal principles complete in themselves as far as they go with regard to the specific issues involved. If an instruction may reasonably be regarded as having a tendency to mislead the jury, it is error to give 86 it." H.W. Miller Trucking Co. v. Flood, 203 Va. 934, 937, 128 S.E.2d 437, 440 (1962). We will not find error when a jury was instructed correctly as to the law and the surrounding circumstances assure us that the jury was not confused about its obligations. See Murray v. Commonwealth, 225 Va. 13, 16-17, 300 S.E.2d 740, 742-43 (1983). The record in the case at bar reveals multiple instances when the trial court and both parties apprised the jury that Lester's claims were not to be confused with Dusty's. Before impaneling the jury, the trial court provided the veniremen with some details about the case in an instruction drafted by the parties:

The facts are as follows, a brief summary. Dusty Lester, Jr., who is now 15 months old was born on June 22nd of 2004. He suffers from severe neurological injury. This case is being brought by the mother, Karyn Lester, for her damages as a result of injuries to her son. The parties have stipulated as to liability. Therefore, the only issue before you is that of damages.

During voir dire, counsel for Lester explained: [I]n this case the law says that injury to a baby in the womb is injury to the mother. And you will get that instruction later on in the case. Before birth an injury to the baby is an injury to the mother...... And as a result you will not hear testimony about the medical costs of raising the baby, of caring for the baby. You will not hear about the baby's future or anything like that. This is the mother's claim for injury. Counsel for Dr. Castle provided the venire with an even clearer explanation of the issue in the case: This case that you are going to hear . . . is not a case for you to determine injuries to Dusty Lester, Jr., and, more importantly, to compensate Dusty Lester, Jr. for those injuries. Those issues are for another group, another day. It is not your job to award compensation to Dusty Lester, Jr. for injuries that he sustained during the birth process. Rather what you are going to be asked to do is to compensate his mother for her emotional distress in dealing with the fact that her son was injured in the birth process. You are not compensating the child. That's why you're not going to hear anything about the costs of raising the child or anything like that. That's for others to decide. What you are going to decide only, only [sic] is the issue with respect to the mother's 87 damages. He then asked, "[I]s there anybody on this panel who cannot separate the two and deal with only the issue that I've outlined for you?" No one on the panel responded in the affirmative. Before opening statements, the trial court cautioned the jurors: This case involves an action by Karyn Lester, the mother of Dusty Lester. It is separate and apart from any separate action brought by her child, Dusty Lester. You are not to concern yourselves with any action brought on behalf of the child and should only consider this current action by the mother against the defendant, Dr. Castle, which is the case you are deciding today and tomorrow. In his opening argument, Dr. Castle's attorney again reminded the jury that what it was being asked to do is keep separate and apart the case involving the injuries to the child which are admittedly severe. They are catastrophic. There is no doubt about that. But, as I discussed with you earlier this morning and as Judge Finch instructed you a few minutes ago, that's for another group, that's for another day. What we're talking about here are the injuries to Mrs. Lester. Both sides touched on the subject again in their closing arguments. Lester's counsel told the jury, "[Counsel for Dr. Castle] will tell you, 'This is not the baby's case. This is the mother's case. And don't confuse the two.' And he's right. I agree with him there." Counsel for Dr. Castle stated: As I said to you before and as Judge Finch has said to you, those child's problems are for others to view at another time. He admonished you, if you recall, at the beginning of the evidence that you need to and indeed you are instructed to keep the two separate. You are not to compensate Karyn Lester for the injuries that Dusty Lester sustained. You are to compensate Karyn Lester for her injuries...... Clearly the woman is entitled to compensation. However, what she is not entitled to is what belongs to Dusty Lester. What belongs to Dusty Lester is for, as I said, others to decide. We need to separate them. As hard as that it is, we need to separate them. Thus, the record is replete with reminders to the jury about its obligation to compensate Lester only for her damages, not for the damages sustained by her 88 son. Furthermore, the jurors did not hear evidence pertaining to Dusty's claims, for example, evidence of his medical expenses.39 We do observe, however, that Dr. Castle would have been entitled to an instruction clarifying Instructions Nos. 5 and 6 and stating that, although an injury to a fetus is considered a physical injury to the mother, Lester, upon giving birth to an impaired child, was not entitled to recover damages for the child's physical injuries. If Dr. Castle proffered such an instruction and the trial court denied it,40 he has not assigned error to that denial, and we will not consider any such issue on appeal. Rule 5:17(c). Considering the circumstances of the entire trial and the fact that both Instruction Nos. 5 and 6 were correct statements of the law, we find no basis on which to conclude that the two instructions had a tendency to mislead the jury about the issue before it or that the jury awarded damages to Lester for Dusty's physical injuries. As an alternative to overruling Bulala, Dr. Castle urges the Court to limit Lester's recovery to her mental anguish resulting from giving birth to Dusty, as opposed to her emotional distress arising from living with and caring for him. Dr. Castle's proposed dichotomy is rooted in the literal language of the Bulala opinion: "[T]he mother, as a part of her claim, would be entitled to recover for mental suffering resulting from the birth of a defective child." 239 Va. at 229, 389 S.E.2d at 675 (emphasis added). He argues that only evidence related to the "circumstances surrounding birth" should have been introduced at trial because, otherwise, the evidence before the factfinder would be indistinguishable from the evidence presented to prove Dusty's pain-and-suffering claim. In other words, Dr. Castle says the trial court erred in admitting Lester's evidence concerning the daily tasks required to care for Dusty and her use of the cumbersome medical equipment in doing so, her frustration from sleepless nights, and her knowledge that her son will not live more than a few more years. We find no error in the admission of the challenged evidence. Although Dr. Castle settled Dusty's claims and stipulated liability for Lester's injuries, the evidence relating the extent of Dusty's impairments and the nature of the care Lester has to provide to Dusty on a daily basis was relevant to the issue of her

39 Indeed, Lester conceded in her response to Dr. Castle's pretrial motion in limine that evidence of Dusty's medical expenses was immaterial to Lester's claims and should properly be excluded. 40 After Lester rested her case, counsel for Dr. Castle purported to "renew [a] motion" that the jury be reminded that they were not to compensate Lester for the injuries sustained by Dusty. It is not clear from the record whether the "motion" he referred to was his earlier objection to Instruction No. 6 or his pre-trial motion to exclude evidence of Dusty's injuries and life expectancy. Nothing in the record indicates that Dr. Castle offered any formal instruction referring to the admonition he sought. Moreover, the trial court, in denying Dr. Castle's "motion," concluded that it had already made the distinction clear to the jury in "the all-encompassing instruction" it gave before opening arguments.

89 continuing mental anguish caused by giving birth to an impaired child. The jury was entitled to know the severity of Dusty's impairments and his daily needs in order to assess the credibility of Lester's mental anguish claim and to determine whether it was commensurate with the severity of Dusty's impairments. Indeed, if Dusty had recovered from the injuries he sustained in utero, Dr. Castle would undoubtedly want the jury to know that fact in assessing the credibility of Lester's mental suffering claim. Furthermore, Dr. Castle's argument that the event of Dusty's birth should be separated from Lester's ongoing task of caring for her impaired son cannot be reconciled with recognized principles of proximate causation. Our opinion in Naccash v. Burger, 223 Va. 406, 290 S.E.2d 825 (1982), provides a good illustration. In that case, the defendant-physician negligently failed to ensure that a blood sample taken from an expecting parent was properly labeled, thereby depriving the parents of important information needed to make an informed decision about whether to terminate the pregnancy because their unborn child was affected by an incurable genetic disorder. Id. at 414, 290 S.E.2d at 829. We held that the parents were "entitled to recover those damages which are the reasonable and proximate consequences of the breach of the duty owed them, viz., consequences that a reasonable and informed person could have foreseen and anticipated." Id. at 414, 290 S.E.2d at 830 (citing Tullock v. Hoops, 206 Va. 665, 668-69, 145 S.E.2d 152, 154 (1965)). Thus, the parents properly recovered damages for the emotional distress they endured in watching their child, whom they would have aborted but for the defendant's negligence, deteriorate and ultimately die. Id. at 411, 414, 290 S.E.2d at 828, 830. Notably, as in the present case, the evidence included the parents' testimony outlining "the tragic course of the disease in [their daughter] and the nature and extent of the care and treatment she required as her condition degenerated." Id. at 411, 290 S.E.2d at 828. The mental anguish damages sustained by Lester are the reasonably foreseeable consequences of Dr. Castle's negligence. The injury caused by Dr. Castle's breach of his to his patient, Lester, was the in utero injury resulting in her child being neurologically impaired. The mental anguish she suffers almost every waking minute of her life results entirely from that injury, as does her clinical depression and her concomitant inability to work. Dr. Castle has not advanced any reason why we should allow a mother to recover some, but not all, of the mental anguish damages that are proximately caused by his negligence, and we find no reason to do so. Moreover, the ramifications that would flow from bifurcating proximately caused mental suffering damages reinforce our conclusion that such an undertaking is unworkable. If the mother's recovery were limited to emotional injuries arising from "the circumstances surrounding birth," courts would have a difficult task in fashioning a remedy when, as is the case here, the mother learns about the severity of her child's impairment incrementally over time. During oral argument, Dr. Castle suggested that "there has to be some rule of reason that is applied," and that where the line should be drawn between what is and is not 90 compensable will turn "on the facts and circumstances of the case." It is unclear what facts or circumstances would support such an arbitrary distinction, but we are certain they are not present in this case.

University of Virginia v. Carter 267 Va. 242; 591 S.E.2d 76 (2004) Agee, J., delivered the opinion to the court. The Rector and Visitors of the University of Virginia ("UVA") appeal an interlocutory order of the Circuit Court of the City of Charlottesville pursuant to Code § 8.01-670.1. On appeal, UVA argues that the Virginia Tort Claims Act (Code §§ 8.01-195.1 through -195.9) provides for limited waiver of the sovereign immunity of the Commonwealth but leaves intact the sovereign immunity of the Commonwealth's agencies.

I. Background and Proceedings Below This case arises from a medical malpractice action brought by Tina Marie Carter ("Carter") alleging negligence in the insertion of an epidural catheter. Carter timely filed a motion for judgment against the University of Virginia Health System ("UVHS"), and a resident physician. The resident physician filed a plea of sovereign immunity and was dismissed as a party. UVHS then moved for summary judgment asserting it is not capable of being sued because it is not a legal entity. In response, Carter moved to amend her motion for judgment to substitute UVA as the sole defendant in place of UVHS. The trial court granted Carter's motion to amend. The Commonwealth is not named as a party defendant in Carter's pleadings. UVA filed a plea of sovereign immunity, which the trial court denied by order dated October 26, 2001. With Carter's consent, UVA moved the trial court to certify an interlocutory appeal from that order pursuant to Virginia Code § 8.01-670.1. The trial court entered the order of certification dated January 29, 2003. We granted UVA this appeal. II. Analysis The Virginia Tort Claims Act (the "Act"), provides that: the Commonwealth shall be liable for claims for money . . . on account of . . . personal injury or death caused by the negligent or wrongful act or omission of any employee while acting within the scope of his employment under circumstances where the Commonwealth . . ., if a private person, would be liable to the claimant for such . . . injury or death. 91 Code § 8.01-195.3 (emphasis added). UVA argues that the Act provides an express, limited waiver only of the Commonwealth's sovereign immunity but does not disturb the sovereign immunity of the Commonwealth's agencies. We agree. Absent an express statutory or constitutional provision waiving sovereign immunity, the Commonwealth and its agencies are immune from liability for the tortious acts or omissions of their agents and employees. Patten v. Commonwealth, 262 Va. 654, 658, 553 S.E.2d 517, 519 (2001); Baumgardner v. Southwestern Va. Mental Health Inst., 247 Va. 486, 489, 442 S.E.2d 400, 401 (1994). "In 1981, the General Assembly stated in the Act an express, limited waiver of the Commonwealth's immunity from tort claims." Patten, 262 Va. at 658, 553 S.E.2d at 519; see also Baumgardner, 247 Va. at 489, 442 S.E.2d at 402. The limited waiver provided for in the Act will be strictly construed because the Act is a statute in derogation of the common law. Patten, 262 Va. at 658, 553 S.E.2d at 519; Baumgardner, 247 Va. 486, 489, 442 S.E.2d at 402. Under the plain language of the Act, the Commonwealth (and certain "transportation districts" not here relevant) are the only entities for which sovereign immunity is waived. See Code § 8.01-195.3 (stating that "the Commonwealth shall be liable for claims for money"). The Act contains no express provision waiving sovereign immunity for agencies of the Commonwealth, which we have stated repeatedly is a mandatory requirement before waiver occurs. Id. As an agency of the Commonwealth, UVA is entitled to sovereign immunity under the common law absent an express constitutional or statutory provision to the contrary. There is no such waiver in the Act or elsewhere. See James v. Jane, 221 Va. 43, 51, 282 S.E.2d 864, 868 (1980) (noting that UVA is entitled to the sovereign immunity granted to the Commonwealth under the common law). Carter argues that Code § 8.01-195.4, which states that "the Commonwealth shall be a proper party defendant" in all actions brought against the Commonwealth under the Act, implies that the Commonwealth is not a necessary party to litigation under the Act. Because of the strict construction accorded to statutes in derogation of the common law and the lack of an express provision limiting the immunity of the Commonwealth's agencies, we decline to adopt this view. The Act's waiver of the Commonwealth's immunity would make the Commonwealth both a proper party, and given UVA's immunity, a necessary party to a claim by Carter. Carter points out that Code § 8.01-195.6 requires plaintiffs bringing suit under the VTCA to file a written statement "which includes the time and place at which the injury is alleged to have occurred and the agency or agencies alleged to be liable." The fact that the statute refers to "the agency or agencies alleged to be liable," serves as proof, Carter argues, that the sovereign immunity of those entities has been waived. However, this language does not expressly waive agencies' sovereign immunity or even mention the concept. Moreover, as Carter admits, Code § 8.01-195.6 is simply a notice requirement apprising the Attorney 92 General or the Director of the Division of Risk Management of the essential facts of the claim. Finally, Carter asserts that "it is axiomatic that the 'Commonwealth' can act, and thus can commit torts, only through its agencies and employees." The reality, of course, is that "agencies" are nothing more than administrative divisions of the Commonwealth and do not, in and of themselves, act. Ultimately, only an agency's employees can commit torts. Yet, since enactment of the VTCA, we have held on multiple occasions that employees of the Commonwealth are entitled to sovereign immunity. See e.g., Lohr v. Larsen, 246 Va. 81, 88, 431 S.E.2d 642, 646, 9 Va. Law Rep. 1454 (1993); Gargiulo v. Ohar, 239 Va. 209, 215, 387 S.E.2d 787, 791, 6 Va. Law Rep. 1176 (1990); Lentz v. Morris, 236 Va. 78, 83, 372 S.E.2d 608, 611, 5 Va. Law Rep. 516 (1988). The VTCA waives the sovereign immunity of the Commonwealth only. If the General Assembly desired in the Act to waive the sovereign immunity of the Commonwealth's agencies in addition to the immunity of the Commonwealth, it could have easily done so. It did not. Given the Act's lack of an express waiver of the common law sovereign immunity afforded the Commonwealth's agencies, UVA retains its sovereign immunity from the claim brought by Carter. Accordingly, the trial court was in error when it failed to grant UVA's plea of sovereign immunity in its October 26, 2001 order. III. Conclusion For the reasons stated above, we will reverse the trial court's order denying UVA's plea of sovereign immunity. The case will be remanded for entry of an order sustaining the defendant's plea of sovereign immunity and dismissing the case. Reversed and remanded.

Board of Supervisors v. Safeco 226 Va. 329, 310 S.E.2d 445 Cochran, J., delivered the opinion of the Court. The Board of Supervisors of Stafford County (the County) initiated this action in the trial court against Safeco Insurance Company of America (Safeco), surety on four bonds executed by Crow's Nest Harbour (Crow's Nest), a Virginia partnership, as principal, to assure construction of roads, waterlines, and sewer lines in four sections of a subdivision. In its motion for judgment, the County, alleging in four counts that Safeco had defaulted on its obligation to the County under each bond, sought judgment in the face amounts of the bonds, $311,254, $410,949, $373,041, and $192,248, respectively (a total of $1,287,492), with interest, costs, and attorney's fees. 93 In addition to other pleadings, Safeco filed a third-party motion for judgment against Diversified Mortgage Investors (D.M.I.), a Massachusetts Business Trust, alleging that D.M.I. was liable for all or any part of the total of $1,287,492 which the County might recover from Safeco. The third-party claim was settled, and D.M.I. was dismissed as a party. With leave of court, the County filed an amended motion for judgment containing the four counts in the original motion for judgment, for which it again sought to recover a total of $1,287,492, and a fifth count seeking consequential damages in the amount of $2,418,393 for Safeco's refusal to make prompt payment under the bonds. Safeco demurred to the fifth count, and the trial court sustained the demurrer, dismissing the count with prejudice. Safeco asserted numerous defenses to the action, and the County and Safeco engaged in protracted pretrial discovery procedures. At a pretrial conference on March 7, 1980, the trial court in a memorandum opinion ruled as follows: The purpose of the bonds has been frustrated by the failure of the beneficiaries of the bonds to pursue the projects, by the rezoning of the property, and by the general abandonment of the project. This repudiation of the project by the County absolves Safeco of liability to it on the bonds. The defenses of frustration of purpose will be sustained. The court further stated that the County had incurred and would incur no cost as to the contemplated projects and that no liability, therefore, could be imposed on Safeco under principles of indemnification. Notwithstanding these rulings of the trial court, a jury trial was held on November 20 and 21, 1980. After the County presented its evidence, however, the trial court granted Safeco's motion to strike the evidence. The trial judge stated that the "suppositions" upon which the opinion of March 7, 1980, was based were borne out by the evidence. On November 21, 1980, the court entered final judgment dismissing the action. On appeal, the principal contentions of the County are that the trial court erred in sustaining Safeco's motion to strike and in denying the County the right to seek compensatory damages in excess of the face amount of the bonds. In analyzing the motion to strike, of course, we will view the evidence in the light most favorable to the County. In 1971, Crow's Nest purchased 4,726 acres of land, east of Route 1 between Potomac and Aquia Creeks near the Potomac River, on which it proposed to build a planned community. To this end, Crow's Nest had the property rezoned in 1971 for single-family residential, multi-family, and industrial uses. Crow's Nest planned first to develop 700 acres in 346 lots for single-family residences in Sections A, B, C, and D of Crow's Nest Harbour Subdivision, as shown on plats submitted to the County for approval. The plats showed streets, waterlines, and sewer lines which Crow's Nest was to install in the subdivision. 94 Four bonds dated October 2, 1973 in the total face amount of $1,287,492, the estimated cost of the improvements, were executed by Crow's Nest, as principal, and Safeco, as surety. Within 24 months, Crow's Nest was to complete the water and sewer lines and streets within the subdivision in accordance with specifications shown on the plats. Each bond also contained the following provision: NOW, THEREFORE, if the said Principal shall well and faithfully do and perform the things agreed by it to be done, as hereinabove stipulated, then this obligation shall be void, otherwise, the same shall remain in full force and effect; it being expressly understood and agreed that the liability of the Surety for any and all claims hereunder shall in no event exceed the penal amount of this obligation as herein stated. Crow's Nest also agreed to construct waterlines to connect with the County's mains at Route 1, approximately five miles from the subdivision, and to construct access roads and a sewage disposal plant. The County did not require bonds to guarantee completion of these improvements. The final plats for Sections A, B, C, and D were recorded on October 19, 1973. Each plat bore the approval of the Virginia Department of Highways, the Board of Supervisors, the local Planning Commission, and the State Board of Health. The approval of the State Board of Health, however, was subject to the proviso that the development would be served by public water and public sewer approved by the State Health Department. Of the 346 platted lots, 313 were sold.41 The only work done on the project was limited to on-site clearing and grading for roads. No work was ever started on installation of water or sewer lines. The County did not dispute the assertion of Safeco in its trial brief that Crow's Nest had abandoned the development by December, 1974, and that thereafter the general and limited partners of the partnership filed bankruptcy petitions in the United States Bankruptcy Court. George Smerigan, who was employed by the County as Community Development Director in 1973, helped prepare a Comprehensive Development Plan which the County adopted on July 17, 1975. The Plan placed the entire 4,726 acres of Crow's Nest land outside the areas designated for dense population; under the Plan, therefore, the land was not intended to receive central water and sewer service. On June 21, 1976, the County notified Safeco that it was calling the bonds because the roads and water and sewer lines in Section A, B, C, and D had not been completed as required. Safeco refused to pay, and the County brought this action in 1977. In June of 1978, the County adopted a rezoning ordinance which downzoned

41 With leave of Court, counsel for certain purchasers of lots filed a brief in support of the County's position in this appeal. 95

the Crow's Nest land to "A-2 -- Rural Residential" 42 pursuant to the Comprehensive Development Plan. This classification was approved, Smerigan testified, because of the nature of the terrain, lack of adequate facilities at that time, and problems of accessibility. On cross-examination, he conceded that the land was "marginal" for the use of septic tanks for sewage disposal. Smerigan, who was no longer employed by the County, also conceded that in his opinion the land was improperly zoned in 1971. The County presented evidence that the cost of completing the roads and water and sewer lines would have been $2,816,500 on October 3, 1975, $2,869,865 on July 1, 1976, and $4,224,600 on October 30, 1980. The estimated cost of completing only the roads on October 3, 1975, was $1,632,400. The trial court correctly ruled that the bonds in this case were indemnity or performance bonds rather than penal bonds. The purpose of such a bond is to provide "funds to the extent to the amount of the bonds to cover the cost of completion of the improvements." Supervisors v. Ecology One, 219 Va. 29, 36, 245 S.E.2d 425, 430 (1978). The trial court incorrectly ruled, however, that the County could not recover because its evidence showed that it had frustrated performance of the bonded obligations and had incurred and would incur no loss. The County's evidence showed that the performance bonds were properly executed, that the principal failed to fulfill its bonded obligations, that proper notice of default and demand for payment was given to the surety, and that the cost of completing the improvements on and after the date of completion contracted for in the bonds exceeded the face amount of the bonds. On this evidence, the County made out a prima facie case entitling it to recovery of the face amount of the bonds, unless its evidence showed acts on its part that would preclude recovery. There is no evidence that the County frustrated performance by Crow's Nest or abandoned the project before the completion date called for in the bonds. The rezoning to which the trial court referred in its opinion of March 7, 1980, was not approved until 1978, which was after this litigation began. The County approved the Comprehensive Development Plan after Crow's Nest had abandoned the project but several months before the date by which the bonded improvements were required to be completed. Such a plan, however, is not a zoning ordinance but only a guideline for zoning ordinances. Fairfax County v. Snell Corp., 214 Va. 655, 660, 202 S.E.2d 889, 894 (1974). See Shopping Plazas v. Olive, 202 Va. 862, 866, 120 S.E.2d 372, 375 (1961). In approving the plan, the County did not frustrate performance by Crow's Nest of the bonded obligations. It was unnecessary for the County to prove a financial loss as a prerequisite to recovery from Safeco. A performance bond is intended to guarantee completion of the improvements it covers. Thus, the obligee of such a bond need not incur any

42 Diversified Mortgage Investors (D.M.I.), the development lender for Crow's Nest, filed its bill of complaint in the trial court against the County contesting the rezoning of the land. D.M.I. stated in the bill of complaint that it had acquired title to the land by foreclosure. 96 expense or do any work on the improvements before collecting on the bond. See, e.g., Lake View Trust & Savings Bank v. Filmore Construction Co., 74 Ill. App.3d 755, 393 N.W.2d 714 (1979). Although Safeco does not say that the County had to complete the bonded improvements before it could recover on the bonds, it argues that the County had to establish a feasible plan to construct the improvements, and that having failed to produce evidence of such plan, the County cannot recover. Safeco has consistently maintained, as stated in its trial brief, that the County should not be permitted to recover from Safeco and expend these funds on a failed project, when the public interest will be served by maintaining the status quo. It may be, as Safeco's counsel argued before us, that without central water and sewer service, the construction of streets and roads in Crow's Nest subdivision would be a waste of money. But that determination is not now Safeco's to make. Safeco could have determined not to become surety on the bonds because the project was infeasible and the risk of default by Crow's Nest too great. Safeco did not do so. It voluntarily entered into a contractual relationship based upon the implicit assumption that the project was feasible, and regardless of its present concern for the public welfare, it will be held to its contractual obligation as a professional surety. Safeco relies upon language in Ecology One approving the rule that a county may assign its rights under a performance bond upon a showing that the improvements have been made. In that case, however, the face amount of the bond exceeded the cost of completing the improvements and the county had a duty to ascertain that the improvements had been made by the assignee before payment was made. Safeco relies upon three California cases to support the argument that if the obligee has sustained no loss, the surety is not liable under a performance bond. In Morro Palisades Co. v. Hartford Accident & Indemnity Co., 52 Cal.2d 397, 340 P.2d 628 (1959), a contractor failed to complete roads in a subdivision. The obligee, a county, assigned its interest to a landowner in the subdivision. Recovery against the surety was denied. The assignment was held to be invalid because the assignee was not trying to compel performance but was seeking to obtain a money judgment on its own behalf. 52 Cal.2d at 403, 340 P.2d at 632. In County of Yuba v. Central Valley National Bank, 20 Cal. App.3d 109 97 Cal. Rptr. 369 (1971), a subdivision developer obtained an instrument of credit from the defendant bank. Because of a reduction in force at a nearby Air Force base, there was no market for the subdivision, and the developer failed to begin work. Yuba County sought to recover on the bank's instrument of credit. The court denied recovery on the theory that "at least partial improvement of the land and construction of the streets was contemplated as a prerequisite to the emergence of the obligations" of the bank and the developer. 20 Cal. App.3d at 113, 97 Cal. Rptr. at 372. Yuba County suffered no damage, said the court, and "to permit recovery in the circumstances of this case would be to uphold an 'illegal forfeiture.'" Id. at 114, 97 Cal. Rptr. at 372. 97 County of Yuba was later examined in City of Sacramento v. Trans Pacific Industries, Inc., 98 Cal. App.3d 389, 159 Cal. Rptr. 514 (1979). In Sacramento, a developer promised to install certain improvements in a subdivision. After partially completing the work, the developer had financial problems. To avoid having to complete the improvements itself, the developer sold several parcels to one Watkins, who was then unaware that the improvements were incomplete. Since he wanted to use the land as soon as possible, Watkins agreed to complete the improvements himself; in return, the City of Sacramento promised to reimburse him, using any money it recovered on the developer's bond. The city did recover on the bond; in permitting this recovery to stand, the court distinguished County of Yuba on the ground that since the land in County of Yuba was still uninhabited farmland, there was no need for roads. In Sacramento, by contrast, development of some parcels had started, and it was planned for the remaining land. 98 Cal. App.3d at 398, 159 Cal. Rptr. at 518. In the present case, as in Sacramento, development had commenced on the parcels. Clearing and grading had been performed, and 313 of the 346 lots in the four platted sections had been sold. County of Yuba is distinguishable on this basis. Morro, relating to an assignment of a county's rights under a bond, is inapposite. In oral argument, counsel for Safeco said that the County's evidence showed that it was not feasible to complete the bonded improvements and that the County had not shown an intent or need to perform. He conceded that such a defense would not be available to Crow's Nest, the principal, in an action for breach of its obligation under the bonds. Safeco, therefore, may not assert this defense. A surety stands in the place of its principal and may raise only defenses available to the principal. Cohen v. Mayflower Corp., 196 Va. 1153, 1164, 86 S.E.2d 860, 866 (1955). It is not Safeco's responsibility to see to the application of the bond proceeds. Upon failure of Crow's Nest to perform and notice from the County of such default, Safeco could either perform at its own expense or pay the cost of performance up to the face amount of the bonds. It did neither. Liability was fixed as of October 2, 1975. There is a presumption that public officials will perform their duties in accordance with the law. See WTAR Radio-TV v. Virginia Beach, 216 Va. 892, 895, 223 S.E.2d 895, 898 (1976). It is reasonable to presume, therefore, that the County will properly use the bond proceeds. See Pacific County v. Sherwood Pacific, Inc., 17 Wash. App. 790, 797, 567 P.2d 642, 648 (1977); Sioux City v. Western Asphalt Paving Corp., 271 N.W. 624, 632 (Iowa 1937); City of Oakland v. DeGuarda, 95 Cal. App. 270, 287, 272 P. 779, 785 (1928). The County further contends that the trial court erred in ruling it was not entitled to recover any consequential damages, other than interest, shown to have been caused by Safeco's refusal to pay promptly the aggregate face amount of the bonds. The bonds themselves expressly limited recovery to their face amounts, as did the bond in Ecology One. See Noland Company v. Realty Corporation, 206 Va. 938, 942, 147 S.E.2d 105, 109 (1966). Moreover, § 8-353 of the 1950 Code provided that judgment against a surety could not be obtained for more than the 98 amount to which his liability was limited on the bond. The "Revisers' Note" to Code § 8.01-430 (Acts 1977, c. 617) explained that § 8-353 was deleted from the 1977 revision because it merely declared what were "longstanding and clear principles of substantive law." Indeed, as a matter of substantive law the statute would be saved by the provisions of Code § 8.01-1, if we are of opinion that the deletion may materially change the substantive rights of Safeco. The County relies on Continental Realty Corporation v. Andrew J. Crevolin Co., 380 F. Supp. 246 (S.D. W.Va. 1974), in which consequential damages were allowed against a surety which unjustifiably refused to pay after the principal defaulted. Crevolin, which arose under West Virginia law, is inapposite. The acts of the surety were found to be tantamount to bad faith. There is no evidence that Safeco acted in bad faith. Safeco asserted defenses which the trial court ruled were sufficient to bar the County's recovery. Our holding that the court erred in so ruling does not impugn the surety's good faith in asserting the defenses until their viability has been finally determined. Under the statute and the limiting language of the bonds we hold that the trial could correctly ruled that the County could not properly claim consequential damages other than interest. The principal amount of the judgment against Safeco may not exceed the aggregate principal amount of the bonds. We hold that the County has made out a prima facie case for recover of a judgment in the principal amount, limited to the face amount of the bonds. We reject Safeco's assignment of cross-error that the trial court erred in ruling that the question of interest was reserved for trial. The limitation in the bonds and in the statute applies only to the principal amount of the judgment. Under Code § 8.01-382, the fact finder, whether jury or court, "may provide for interest on any principal sum awarded, or any part thereof, and fix the period at which the interest shall commence." If no such provision is made, the judgment bears interest at the judgment rate from date of entry. Accordingly, the trial court properly reserved the question of interest for determination by the jury. Although opposing counsel briefed other assignments of error and cross-error, these were neither discussed nor expressly reserved at oral argument. Therefore, consistent with established procedure, we have not considered them. See Stevens v. For Motor Company, 226 Va. 415, 417, n., 309 S.E.2d 319, 320-21, n. (1983) (this day decided); Cooley v. Cooley, 220 Val. 749, 753, n., 263 S.E.2d 49, 52, n. (1980). For the reasons assigned, we will reverse the judgment entered in favor of Safeco and remand the case for a new trial consistent with the views herein expressed. Reversed and remanded.

Ronald L. Willard, On Behalf Of Moneta Building Supply, Inc. And All Its Shareholders v. Moneta Building Supply, Inc., Et Al. 99 258 Va. 140, 515 S.E.2d 277 Kinser, J., delivered the opinion of the Court. This appeal involves a sale of the assets of a closely held corporation. The minority stockholder of the corporation has attacked the propriety of the transaction, primarily on the grounds that the corporation's directors, who were also its majority stockholders, breached their statutory and common law duties by failing to maximize the sales price, by authorizing a transaction in which they had a conflict of interests, and by failing to comply with the statutory procedures for selling the assets of a corporation, not in the ordinary course of business. Finding no error, we will affirm the circuit court's judgment upholding the transaction. Facts And Material Proceedings In 1978, Ronald L. Willard and Cappellari, Inc. (Cappellari), acquired a building supply business located in Bedford County. Cappellari was a West Virginia corporation owned primarily by Amerigo S. (A.S.) and Rose Mary Cappellari. The purchasers incorporated the newly acquired business in Virginia under the name of Moneta Building Supply, Inc. (Moneta). Willard purchased 20 percent of the shares of stock issued in Moneta, and Cappellari purchased 80 percent. 43 In 1986, A.S. and Rose Mary dissolved Cappellari and distributed its shares of Moneta stock in the following proportions: A.S. received 253 shares (49.8 percent), Rose Mary received 129 shares (25.4 percent), and David Lawrence Cappellari, the son of A.S. and Rose Mary, received 18 shares.44 Willard owned the remaining 100 shares (19.7 percent) of Moneta stock. David served as president, director, and manager of Moneta from its inception until he resigned from those positions in 1996. Willard was Moneta's only other officer and director during those initial years until A.S. and Rose Mary dissolved Cappellari. Then, A.S. and Rose Mary, both of whom had lived in West Virginia and had participated very little in the operation or management of Moneta, moved to Virginia and eventually became officers and directors of the corporation along with David and Willard. No one disputes that Moneta experienced success in the building supply industry and achieved annual sales in excess of four million dollars by 1990. However, David became increasingly concerned about his future at Moneta because of a December 1, 1978 "Stock Purchase Agreement" entered into among

43 Originally, Willard and his wife purchased the 20 percent interest in Moneta. Willard later obtained sole ownership of that interest. 44 David ultimately purchased another eight shares of stock from Moneta after the corporation increased the number of its authorized shares. After that purchase, David owned 26 shares (5.1 percent). 100 Moneta, Cappellari, and the Willards. That agreement granted each of Moneta's stockholders a right of first refusal in the event that any one of the other stockholders desired to dispose of shares of Moneta stock. David was dissatisfied with his percentage of ownership interest in Moneta and his inability to acquire additional shares from his parents due to the "Stock Purchase Agreement.”45 Consequently, David began developing a business plan to start his own building supply company. On September 18, 1996, David resigned from his positions as an officer and director of Moneta. At an October 3, 1996 meeting of the Moneta board of directors, the board accepted David's resignation and elected A.S. as president of Moneta, Rose Mary as vice-president, and Willard as treasurer. The board also decided to continue Moneta's operations and to retain David as the interim manager while the board searched for a new manager. 46 On October 7, 1996, Willard called a special meeting of the stockholders. At that meeting, Willard offered to sell his shares of stock in Moneta for one million dollars. No action was taken on Willard's offer. During the meeting, David informed the stockholders that he might be interested in purchasing Moneta's assets, depending on what direction the company decided to take. When Willard was asked whether he might also be interested in purchasing the assets, he indicated that he was not.47 Subsequent to the meeting, Willard tendered a letter of resignation as a director and officer of Moneta. He cited "continuing oppression and unfair treatment" as the reasons for his decision. After David's resignation from Moneta, he pursued his plans to open a building supply business. He incorporated a new company under the name of Capps Home & Building Supply, Inc. (Capps). On October 8, 1996, David entered into a "Confidentiality Agreement" with Moneta for the "exchange of certain information pertaining to [Moneta] and ... the acquisition of certain assets of [Moneta] by [David]." A.S. executed the agreement in his capacity as president of Moneta. These events prompted Willard to file a suit seeking the dissolution of Moneta and a preliminary injunction to enjoin any Moneta stockholder from competing with Moneta until the corporation could be dissolved and the assets

45 David and his parents challenged the continuing applicability of the "Stock Purchase Agreement" by filing a declaratory judgment action in the Circuit Court of Bedford County. In an order dated November 7, 1995, the court held that the agreement governed both inter vivos and testamentary transfers of shares of Moneta stock. This Court refused a petition for appeal in that case. 46 Willard voted against the election of officers and the decision to employ David as the interim manager. 47 It was also announced at that meeting that another Moneta employee had been promoted to manager, effective November 1, 1996. 101

liquidated.48 The circuit court heard evidence and argument on October 24, 1996, and denied the requested injunction. On November 15, 1996, Capps, through its counsel, submitted a proposed "Asset Purchase Agreement" to A.S. and Rose Mary, in their capacities as directors and officers of Moneta. In the agreement, Capps offered to purchase the assets of Moneta for approximately $1.3 million. The offer would expire, however, if not accepted by November 23, 1996. Capps also informed A.S. and Rose Mary that David had acquired bank financing to provide the necessary funds if the proposed agreement received the approval of Moneta's board of directors and stockholders. Finally, Capps included a valuation of Moneta's assets with the agreement. Hope Player and Associates, P.C., had prepared a valuation report (the Player report) for Capps and, in that report, opined that the fair market value of Moneta's assets as of September 30, 1996, was $1.3 million. On November 19, 1996, A.S. and Rose Mary, as the only remaining members of Moneta's board of directors, held a special meeting of the board at their home to consider the offer from Capps. The board "voted unanimously to accept the offer and direct[ed] the President to sign the Asset Purchase Agreement ... reserving the right to negotiate the Seller's Representations contained in paragraph 4 of the ... Agreement, and any other matters of concern to the shareholders." The board also voted to hire an independent certified public accountant or other valuation expert to evaluate whether the amount of the Capps offer reflected the fair market value of Moneta's assets. Finally, the board decided to refer the proposed transaction to the stockholders without any recommendation from the directors and to call a special meeting of the stockholders to be held on December 20, 1996, for the purpose of voting on the offer from Capps. On November 21, 1996, Capps submitted a revised "Asset Purchase Agreement" to Moneta. In exchange for a reduction in the purchase price of approximately $150,000, Capps agreed to assume certain liabilities of Moneta. A.S. signed the revised agreement as president of Moneta without first presenting the changes to the board of directors. A.S. then sent a notice to all Moneta stockholders advising them that a special meeting would be held on December 20 for the purpose of considering and voting upon the offer from Capps. The notice included a disclosure concerning the familial relationship among A.S., Rose Mary, and David, and copies of the revised "Asset Purchase Agreement" and the Player report. After receiving notice of the December 20 special meeting, Willard sent a letter, dated December 10, 1996, to A.S. and Rose Mary informing them that he

48 This suit was the second time that Willard had attempted to have Moneta dissolved. In the 1995 declaratory judgment action, Willard filed a counterclaim to dissolve Moneta on the basis that the majority stockholders had engaged in oppressive and unfair business practices to the detriment of the corporation and minority stockholder. The counterclaim was dismissed. 102 believed that Capps' offer was too low and that it did not "adequately reflect fair value." In that letter, Willard offered to purchase Moneta's assets for $400,000 more than the amount Capps had offered. However, Willard stipulated that his offer was good only until 3:00 p.m. on December 13, 1996. In a letter dated December 13, 1996, A.S. advised Willard that he and Rose Mary believed that it would be inappropriate for the board to consider his offer prior to the stockholders' meeting on December 20. Since Willard's offer specified that it would expire on December 13, A.S. encouraged Willard to come to the stockholders' meeting and present his offer at that time. One day before the special meeting of the stockholders, Willard sent a second letter to A.S. and Rose Mary. In that letter, Willard increased his offer to $600,000 more than the amount offered by Capps. Willard also requested 30 days in which to evaluate the assets and determine if an even higher purchase price was warranted. As authorized by the board of directors, Moneta obtained an opinion from Dr. Larry A. Lynch, a business valuation expert, with regard to whether the amount of Capps' offer reflected the fair market value of Moneta's assets. In a report dated December 12, 1996, Dr. Lynch stated that the value of Moneta's assets ranged from $1,357,531 to $1,449,746, depending on the valuation method utilized. He concluded that Capps' offer of $1.3 million was fair and reasonable upon taking into consideration the fact that the "going concern assumption may be affected by the loss of key personnel and pending litigation." A copy of Dr. Lynch's report was forwarded to the stockholders prior to the special meeting on December 20. The stockholders' special meeting proceeded as called on December 20, 1996.49 A.S., David, and Willard were in attendance. Rose Mary did not attend, but she had given A.S. her proxy for the purpose of voting her shares of stock.50 All parties in attendance were represented by legal counsel. At the meeting, A.S. informed the other stockholders about the recent offers tendered by Willard, including Willard's offer to sell his shares of stock in Moneta. A.S. advised Willard that he and Rose Mary would sell their stock for the same price per share, but Willard did not respond to that proposal. A.S. further stated "he would consider the best interest of the employees of [Moneta] as well as other non- monetary factors including the business' customers, continuity of management and the realistic threat to [Moneta] from competition if the property were not sold

49 Willard filed an action in the circuit court to enjoin the stockholders from convening the special meeting. After hearing evidence on December 17, 1996, the circuit court denied Willard's request for injunctive relief. 50 David's resignation from Moneta had caused discord within the Cappellari family. Consequently, Rose Mary had delegated her authority as an officer and director of Moneta to A.S. at the end of the year. She was hospitalized at the time of the special meeting of stockholders, but she was present at the special meeting of directors on November 19, 1996. 103 to Capps." Willard noted his objections to the offer from Capps and reiterated that he had a counter-offer on the table. A.S. stated that the only item of business to be acted upon at the meeting was the offer from Capps. A.S. and Rose Mary, by proxy, then voted to accept the offer from Capps. Willard voted against the proposal, and David abstained from voting. Thus, a majority of Moneta's stockholders approved the revised "Asset Purchase Agreement." On April 23, 1997, Willard, on behalf of Moneta and all its stockholders, filed this shareholders' derivative suit pursuant to Code § § 13.1-672.1 et seq., naming Moneta, A.S., Rose Mary, David, and Capps as defendants. In an amended bill of complaint, Willard sought to void the sale of Moneta's assets to Capps on the basis that the transaction violated the provisions of Code § 13.1- 691 dealing with conflict of interests. He also requested an award of damages for breach of fiduciary duties, violation of Code § 18.2-499, and common law conspiracy; the imposition of a constructive trust over the income and assets of Capps; and an award of expenses, attorney's fees, and court costs. During a bench trial, the circuit court heard testimony with regard to the facts already recited. In addition, the court received evidence from several experts who had appraised the value of Moneta's assets. These experts differed in their opinions with regard to the appropriate valuation method and the actual value of the assets. For example, Harry Schwarz testified that he valued the assets at $2,675,000 as of September 30, 1996, but acknowledged that he had not considered what effect, if any, David's leaving Moneta and opening his own building supply business would have on the value of the assets. Schwarz also included cash and securities in his valuation, but those assets were not sold to Capps. Hope Player, who had prepared the Player report, testified that Moneta was surpassing its peers in terms of profitability. She attributed that accomplishment to David's superior management skills. Accordingly, she factored the effect of David's resignation into her valuation. Player also testified that, when comparing two offers to purchase, a prudent seller would take into consideration any contingencies associated with the offers, assuming that the buyers had equal motivation and ability. Dr. Vittorio Bonomo, a professor of finance at Virginia Polytechnic Institute and State University, opined that any amount over $800,000 was a fair price for Moneta's assets. Dr. Bonomo believed that, during the first seven years after David left Moneta and opened his own competing business, Moneta's annual profits would fall by an amount somewhere between $400,000 and $100,000, primarily for two reasons: Moneta would be splitting the market with another competitor and that competitor would have "a good manager" rather than just "a norm manager." Thus, Dr. Bonomo opined that a director who was faced with the events that had occurred during the fall of 1996 would have to consider the subsequent financial consequences to Moneta if the Capps offer were not accepted. 104 In a letter opinion dated May 14, 1998, the circuit court explained that "[t]he wide discrepancy in valuation often depended upon the method utilized by the expert, and the extent to which the expert viewed, as a financial impact, the consequences of a competing business and the loss of key personnel." The testimony of Dr. Bonomo, Dr. Lynch, and Ms. Player was more persuasive to the court than that of the other experts. Finding that Willard had failed to present sufficient evidence to prove his claims, the circuit court dismissed each of the seven counts in his amended bill of complaint in an order dated June 4, 1998. We awarded Willard this appeal. Standard of Review The standard of appellate review applicable to this appeal is well settled. Since the circuit court heard the evidence ore tenus, its factual findings carry the same weight as a jury's verdict. W.S. Carnes, Inc. v. Board of Supervisors of Chesterfield County, 252 Va. 377, 385, 478 S.E.2d 295, 301 (1996). Under the provisions of Code § 8.01-680, the circuit court's judgment cannot be set aside unless it appears from the evidence that the judgment is plainly wrong or without evidence to support it. Thus, we examine the evidence in the light most favorable to the defendants, the prevailing parties at trial. Id. Director's Discharge Of Duties In his first two assignments of error, Willard contends that the circuit court erred by ruling that A.S. and Rose Mary, as the only remaining directors of Moneta, did not have a duty to maximize the price received for the sale of Moneta's assets and by concluding that they discharged their duties in accordance with the provisions of Code § 13.1-690. Willard asks us to judge the directors' decision to sell Moneta's assets to Capps by the test articulated in Revlon, Inc. v. MacAndrews & Forbes Holdings, Inc., 506 A.2d 173 (Del.1986). The Revlon court held that the duty of a board of directors changed from one of preserving the corporate entity "to the maximization of the company's value at a sale for the stockholders' benefit" when it becomes apparent that the sale of the company is inevitable. Id. at 182. "The directors' role [in that instance] change[s] from defenders of the corporate bastion to auctioneers charged with getting the best price for the stockholders at a sale of the company." Id. In addressing these issues, the circuit court found that A.S. and Rose Mary were not liable under Code § 13.1-690 because "[t]he evidence ... clearly demonstrate[d] that defendants A.S. Cappellari and Rose Mary Cappellari, as directors of [Moneta], engaged in an informed decision making process that ... produce[d] a defensible business decision." The court stated that § 13.1- 690 does not require a director to maximize profits by accepting the highest bid when selling the assets of a corporation. Instead, a director is required to "act in accordance with 'his good faith business judgment of the best interests of the corporation.' " The court further concluded that "[a] director may consider not only the quantity of an offer to purchase assets, but the quality of the offer." We agree. 105 The General Assembly has mandated the standard by which to evaluate a director's discharge of duties in Virginia. The applicable statute is Code § 13.1- 690: A. A director shall discharge his duties as a director, including his duties as a member of a committee, in accordance with his good faith business judgment of the best interests of the corporation. B. Unless he has knowledge or information concerning the matter in question that makes reliance unwarranted, a director is entitled to rely on information, opinions, reports or statements, including financial statements and other financial data, if prepared or presented by: 1. One or more officers or employees of the corporation whom the director believes, in good faith, to be reliable and competent in the matters presented; 2. Legal counsel, public accountants, or other persons as to matters the director believes, in good faith, are within the person's professional or expert competence; or 3. A committee of the board of directors of which he is not a member if the director believes, in good faith, that the committee merits confidence. C. A director is not liable for any action taken as a director, or any failure to take any action, if he performed the duties of his office in compliance with this section. D. A person alleging a violation of this section has the burden of proving the violation. Code § 13.1-690(A) does not abrogate the common law duties of a director. It does, however, set the standard by which a director is to discharge those duties. If a director acts in accordance with that standard, Code § 13.1-690(C) provides a "safe harbor" that shields a director from liability for any action taken as a director, and for failure to take action. Commonwealth Transp. Comm'r v. Matyiko, 253 Va. 1, 6, 481 S.E.2d 468, 470 (1997). In adopting Code § 13.1-690, the General Assembly rejected § 8.30 of the Revised Model Business Corporation Act (RMBCA). WLR Foods, Inc. v. Tyson Foods, Inc., 65 F.3d 1172, 1185 (4th Cir. 1995), cert. denied, 516 U.S. 1117, 116 S.Ct. 921, 133 L.Ed.2d 850 (1996); The Revision of Chapters 1 and 2 of Title 13.1 of the Code of Virginia, Report of the Virginia Code Commission to the Governor and the General Assembly of Virginia, H. Doc. No. 13, at 48-49 (1985). That provision of the RMBCA requires a director to discharge the duties of the office in good faith, with the care that an ordinary prudent person in similar circumstances would exercise, and in a manner reasonably believed to be in the best interests of the corporation. 106 The contrast between the provisions of Code § 13.1-690 and those contained in § 8.30 of the RMBCA convinces us that, in Virginia, a director's discharge of duties is not measured by what a reasonable person would do in similar circumstances or by the rationality of the ultimate decision. Instead, a director must act in accordance with his/her good faith business judgment of what is in the best interests of the corporation. Thus, the Revlon test is not applicable in Virginia. Accordingly, we conclude that A.S. and Rose Mary were entitled to consider the quantity and quality of the offers to purchase Moneta's assets.51 Contrary to Willard's argument, they were not required to accept an offer merely because it maximized the purchase price. Such a rule would mean that only one offer, among many, was in the best interests of the corporation. That result would erode the deference afforded a director's discharge of duties under Code § 13.1-690. Turning to the facts of the present case, we agree with the circuit court's judgment that A.S. and Rose Mary engaged in an informed decision-making process. Pursuant to Code § 13.1-690(B), a director can rely on information and opinions from, inter alia, legal counsel, accountants, and other experts unless the director has knowledge that such reliance is unwarranted. Thus, a director may use an informed decision-making process in discharging the duties of the office as long as the director does so in good faith. See WLR Foods, 65 F.3d at 1185. When a director resorts to such a process, the ultimate decision must still reflect the director's "good faith business judgment of the best interests of the corporation" in order to receive the benefit of the "safe harbor" afforded in Code § 13.1- 690(C). A.S. testified that, when he received the first Asset Purchase Agreement, he compared the amount of the purchase price with a report dated July 15, 1996, from James T. Shepherd, a certified public accountant.52 Shepherd had estimated that the value of Moneta was $2,008,300. However, that amount included $240,900 for marketable securities that were not to be sold to Capps. Shepherd also did not include any discounts for marketability or minority interests. A.S. also testified that he looked at the balance sheets for Moneta and concluded that the amount of the offer approximated the total amount of the stockholders' equity.

51 In Mills Acquisition Co. v. Macmillan, Inc., 559 A.2d 1261, 1282 n. 29 (Del.1989), the court recognized that, in obtaining the highest price reasonably available for a corporation, a board of directors may consider "the adequacy and terms of the offer; its fairness and feasibility; the proposed or actual financing for the offer, and the consequences of that financing; ... the risk of nonconsumation; the basic stockholder interests at stake; the bidder's identity, prior background and other business venture experiences; and the bidder's business plans for the corporation and their effects on stockholder interests." 52 David had obtained the report from Shepherd when he first started developing his business plan. The report was sent to A.S. by mistake. 107 So, before the special meeting of the directors on November 19, A.S. and Rose Mary had had the benefit of this information along with the Player report. By the time the stockholders met on December 20, they had received Dr. Lynch's report in which he opined that the offer from Capps was fair to the corporation. Other factors were also relevant to the directors' discharge of their duties with regard to the sale of Moneta's assets. Willard first indicated that he was not interested in purchasing the assets, but then he made an offer that expired three days later. He did not submit his second offer until one day before the stockholders' special meeting. Furthermore, in Willard's second offer, he requested an additional 30 days in which to review the financial records of Moneta in more detail so that he could determine if an even higher purchase price was warranted. Thus, A.S. and Rose Mary were justified in their fear that the value of Moneta's assets would decline significantly if they waited and David opened his new business during those 30 days. A.S. and Rose Mary were obliged to consider this potential consequence. Even Willard had acknowledged the adverse impact that David's new business would have on the value of Moneta's assets.53 Thus, we conclude that A.S. and Rose Mary, in their capacities as directors, acted in good faith and used their business judgment by pursuing a course to achieve the result that they considered to be in the best interests of Moneta. They discharged their duties in accordance with Code § 13.1-690 and are, therefore, protected by the "safe harbor" afforded under subsection C of that statutory provision.54 Conflict of Interests Willard's third and fourth assignments of error address an alleged conflict of interests and a director's duty of loyalty. Specifically, Willard asserts that the circuit court erred by ruling that A.S. and Rose Mary did not have a conflict of interests in the transaction to sell Moneta's assets to a corporation owned by their son.

53 At the hearing on October 24, Willard stated, "After Dave announces his opening and comes out of the ground, you can pretty much shut [Moneta] down by about a third right then." 54 Because the objective reasonableness of a director's decision or conduct is not a relevant inquiry under § 13.1-690, we also conclude that the circuit court correctly held that Willard was not entitled to discover the substance of certain legal and financial advice that the defendants received. See WLR Foods, 65 F.3d at 1187. Furthermore, the circuit court actually reviewed all the requested material in camera and ordered the defendants to provide some of the documents to Willard. "Generally, the granting or denying of discovery is a matter within the discretion of the trial court and will not be reversed on appeal unless 'the action taken was improvident and affected substantial rights.' " O'Brian v. Langley School, 256 Va. 547, 552, 507 S.E.2d 363, 366 (1998) (quoting Rakes v. Fulcher, 210 Va. 542, 546, 172 S.E.2d 751, 755 (1970)). 108 The statute at issue is Code § 13.1-691, which provides the following, in pertinent part: A. A conflict of interests transaction is a transaction with the corporation in which a director of the corporation has a direct or indirect personal interest. A conflict of interests transaction is not voidable by the corporation solely because of the director's interest in the transaction if any one of the following is true: 1. The material facts of the transaction and the director's interest were disclosed or known to the board of directors or a committee of the board of directors and the board of directors or committee authorized, approved, or ratified the transaction; 2. The material facts of the transaction and the director's interest were disclosed to the shareholders entitled to vote and they authorized, approved, or ratified the transaction; or 3. The transaction was fair to the corporation. B. For the purposes of this section, a director of the corporation has an indirect personal interest in a transaction if: 1. Another entity in which he has a material financial interest or in which he is a general partner is a party to the transaction; or 2. Another entity of which he is a director, officer or trustee is a party to the transaction and the transaction is or should be considered by the board of directors of the corporation. Relying on our decision in Izadpanah v. Boeing Joint Venture, 243 Va. 81, 412 S.E.2d 708 (1992), the circuit court ruled that Willard had the initial burden of establishing a conflict of interests and that he failed to do so.55 The court determined that A.S. and Rose Mary, in their capacities as directors, did not have an "indirect personal interest" in the transaction, as that term is defined in Code § 13.1-691(B). Aside from the familial relationship between son and parents, the court also found no evidence of a "direct personal interest in the transaction." According to the court, the evidence actually demonstrated that David's resignation as an officer and director of Moneta and his new business plans had caused considerable discord between him and his parents.

55 The court also stated that if a plaintiff establishes a conflict of interests, the director then has the burden to prove compliance with Code § 13.1-691. This allocation of the burden of proof is correct. "[W]hen a conflict of interest as defined in § 13.1-691 exists, ... the burden shifts to the directors to show that their actions complied with the requirements of that section." Izadpanah, 243 Va. at 83, 412 S.E.2d at 709; accord Giannotti v. Hamway, 239 Va. 14, 24, 387 S.E.2d 725, 731 (1990). 109 As an alternative finding, the court determined that, even if A.S. and Rose Mary had conflicts of interests in their capacities as directors, the transaction was, nevertheless, "fair to the corporation" pursuant to Code § 13.1-691(A)(3). Thus, the circuit court held that the sale of Moneta's assets was not a voidable transaction under Code § 13.1-691. Because we agree that the transaction was "fair," we need not address whether A.S. and Rose Mary had a conflict of interests because their son owned the corporation that purchased the assets of Moneta.56 No inflexible rule can be established by which to test the "fairness" of a transaction. It depends largely on the nature and circumstances of the business action. But generally, a director must act in good faith, and the transaction must, "as a whole, [be] open, fair and honest at the time it was consummated." Deford v. Ballentine Realty Corp., 164 Va. 436, 449, 180 S.E. 164, 169 (1935); accord Adelman v. Conotti Corp., 215 Va. 782, 789-90, 213 S.E.2d 774, 779 (1975). In sum, a transaction in which a director has a conflict of interests should bear "the earmarks of an arm's length bargain" in order to be deemed "fair to the corporation" under Code § 13.1-691(A)(3). Pepper v. Litton, 308 U.S. 295, 306- 07, 60 S.Ct. 238, 84 L.Ed. 281 (1939). Using these guidelines to review all aspects of the transaction in this case, we conclude that A.S. and Rose Mary carried their burden of proving that the sale of Moneta's assets to Capps was "fair to the corporation." Although we believe that the standard by which a transaction is judged under Code § 13.1-691(A)(3) is more exacting than that under § 13.1-690, the facts that support the circuit court's conclusion that A.S. and Rose Mary exercised their "good faith business judgment of the best interests of the corporation" equally sustain the court's judgment on this issue and need not be repeated. Furthermore, when A.S. and Rose Mary, acting as Moneta's directors, accepted the offer from Capps, it was the only offer that had been presented to the board of directors at that time. After Willard made his first offer, the directors did not refuse to consider it. Instead, they believed it would be inappropriate to take any action on the offer prior to the special meeting of the stockholders since the notice for that meeting had already been given to the stockholders. Even though Willard's first offer expired three days after he made it, A.S. encouraged Willard to present his offer to the stockholders. Willard did not make his second offer until one day before the stockholders' special meeting.57 However, that offer

56 Although the General Assembly did not define "direct personal interest," we note that the RMBCA includes, in the definition of a "conflicting interest," a transaction with the corporation when the director knows that he or a related person is a party to or has a beneficial interest in the transaction. § 8.60(1). Under § 8.60(3), the term "related person" encompasses children of the director. 57 In fact, Willard did not present his second offer until after his unsuccessful attempt to enjoin the stockholders from convening the special meeting. 110 included Willard's request for 30 days in which to evaluate the value of Moneta's assets. During the stockholders' meeting, A.S. informed everyone about Willard's offers. The stockholders had already received copies of the revised "Asset Purchase Agreement" and the reports from Dr. Lynch and Player. Thus, the directors and stockholders of this closely held corporation possessed all the available information concerning the value and sale of Moneta's assets. When the stockholders met on December 20, the options were either to accept the offer from Capps or to forego that opportunity to sell Moneta's assets and wait for the outcome of a further evaluation of the assets by Willard while David opened his competing business. Therefore, we conclude that the transaction was, "as a whole, open, fair and honest at the time it was consummated" and is, accordingly, not voidable under Code § 13.1-691. Willard, nevertheless, asserts that a finding that the sale of assets is not voidable under Code § 13.1-691 does not necessarily resolve the question whether A.S. and Rose Mary are liable for breach of their common law duty of loyalty. Generally, we agree with that proposition. However, having established the "fairness" of the transaction under Code § 13.1- 691(A)(3), it necessarily follows that A.S. and Rose Mary discharged their duty of loyalty in compliance with Code § 13.1-690. Majority Stockholders' Rights We next address Willard's contention that the circuit court erred by finding that A.S. and Rose Mary could "avoid the fiduciary duties they owed as directors by simply referring the asset sale to themselves as shareholders and then voting 'as shareholders' to approve the transaction." Willard argues that directors cannot be allowed to abdicate their duties by replacing their "director[s'] hats" with their "shareholder[s'] hats." With regard to the duties of majority stockholders, the circuit court determined that A.S.'s decision to vote his and Rose Mary's shares of stock to accept the revised "Asset Purchase Agreement" was not "illegal, oppressive, fraudulent, or wasteful." Absent a violation of Code § 13.1-747,58 the court opined that stockholders own their stock and can vote it. In Glass v. Glass, 228 Va. 39, 53-54, 321 S.E.2d 69, 78 (1984), we recognized that "majority stockholders [have] rights for which they [are] entitled to protection. They [have] the right to retain their stock, to control the management of the [c]orporation, and to act together to accomplish their legitimate aims." Similarly, in Fein v. Lanston Monotype Mach. Co., 196 Va. 753, 766, 85 S.E.2d 353, 360 (1955), we stated that "[t]he holders of the majority of the shares of a corporation have the right and the power, by the election of

58 Code § 13.1-747 provides, in part, that a circuit court may dissolve a corporation if, inter alia, the directors are acting in a manner that is illegal, oppressive, or fraudulent. 111 directors and by the vote of their stock, to determine the policy of their corporation and to manage and control its action." Accordingly, we conclude that A.S. and Rose Mary were entitled to exercise their rights as the majority stockholders by voting to approve the sale of assets to Capps. We agree with the circuit court's judgment that their conduct was not "illegal, oppressive, or fraudulent" under Code § 13.1-747. Any self-interest on the part of a majority stockholder "is not a disqualification of the right to vote, in the absence of fraud or other disqualification." 196 Va. at 766, 85 S.E.2d at 360. Statutory Requirements For Selling Corporation's Assets Willard next attacks the directors' compliance with the provisions of Code § 13.1-724.59 Specifically, Willard asserts that A.S. and Rose Mary failed to follow the procedures contained in subsection (B)(1) in two respects: (1) that the board of directors failed to communicate the "basis for its determination" that the proposed transaction would be submitted to the stockholders with no recommendation from the directors; and (2) that the proposed "Asset Purchase Agreement" sent to the stockholders for approval was actually different from the one approved by the board of directors. The notice of the December 20, 1996 special meeting of stockholders disclosed the familial relationship among A.S., Rose Mary, and David. According to the circuit court, that relationship was a "special circumstance" that formed the basis of the decision by the board to refer the proposed transaction to the stockholders without a recommendation. We agree. Disclosure of the familial relationship in the notice for the special meeting of stockholders was sufficient notification of the basis for the board's decision. Thus, the disclosure satisfied the requirements of Code § 13.1- 747(B)(1).

59 Code § 13.1-724 provides the following, in pertinent part: A. A corporation may sell, lease, exchange, or otherwise dispose of all, or substantially all, of its property, otherwise than in the usual and regular course of business, on the terms and conditions and for the consideration determined by the corporation's board of directors, if the board of directors adopts and its shareholders approve the proposed transaction. B. For a transaction to be authorized: 1. The board of directors shall submit the proposed transaction to the shareholders with its recommendation unless the board of directors determines that because of conflict of interests or other special circumstances it should make no recommendation and communicates the basis for its determination to the shareholders with the submission of the proposed transaction; and 2. The shareholders entitled to vote shall approve the transaction as provided in subsection E of this section.

112 The court also found that the terms of the revised "Asset Purchase Agreement," which A.S. signed without board approval, fell within the authority to negotiate that the board of directors had granted to him at the special meeting on November 19, 1996. The minutes of the special meeting of the board of directors on November 19 reflect that the board authorized A.S. to sign the agreement but reserved the right for him to negotiate any matters of concern to the stockholders. In the revised document, Capps agreed to assume certain liabilities of Moneta; whereas, the original agreement stated that Capps "shall not assume any liabilities of [Moneta]." While this modification resulted in a reduction in the purchase price, we believe that the outstanding liabilities of the seller and the extent to which the buyer will assume those liabilities are matters of concern to stockholders. Thus, we conclude that A.S. acted within the authority granted to him when he executed the revised "Asset Purchase Agreement" and that the submission of that agreement to the stockholders for approval did not violate the requirements of Code § 13.1- 724(B)(1), even though it contained some terms that were different from those in the original agreement approved by the board of directors. Conclusion To summarize, A.S. and Rose Mary, as the only remaining directors of Moneta, discharged their duties in accordance with their "good faith business judgment of the best interests of the corporation" by approving the sale of Moneta's assets to Capps. They not only engaged in an informed decision- making process to the extent possible, given the limited amount of time in which they had to evaluate the offers from Capps and Willard, but they also considered both the quantity and quality of the offers. Moreover, the transaction was "fair to the corporation" under the more demanding standard mandated by Code § 13.1- 691(A)(3). A.S. and Rose Mary also complied with the procedures required in Code § 13.1-724 for the sale of a corporation's assets, not in the ordinary course of business. Thus, for the reasons stated, we will affirm the judgment of the circuit court.60 Affirmed.

KOONTZ, Justice, with whom Justice HASSELL joins, dissenting. I respectfully dissent. In my view, only by placing form over substance can the record in this case support the trial court's judgment that Ronald L. Willard failed to carry his burden of proof that Amerigo S. and Rose Mary Cappellari, the

60 Willard also assigned error to the circuit court's refusal to impose a constructive trust on the assets sold to Capps and to award Willard his attorney's fees and costs. However, on brief, Willard asked this Court to reverse the circuit court's decision on this issue if we also reversed the court's approval of the transaction. Since we are affirming the circuit court's judgment, we need not address this assignment of error on its merits. 113 sole directors and majority stockholders of Moneta Building Supply, Inc. (Moneta), did not discharge their duty of loyalty in compliance with Code § 13.1- 690. Without repeating the generally undisputed facts recited in the majority opinion, it is clear that the record establishes that Mr. and Mrs. Cappellari knew that the transaction in question involved the sale of Moneta's operating assets to Capps Home & Building Supply Center, Inc. (Capps), a corporation owned by their son, David Lawrence Cappellari. In addition, the record establishes that although Mr. and Mrs. Cappellari were unhappy with their son's decision to leave Moneta and to open Capps in direct competition with it, they were aware that the acquisition of Moneta's assets would shorten the time until Capps would become operational and be a source of substantial income for their son. Indeed, this transaction would permit their son to begin operating Capps in Moneta's real estate with its entire inventory and, thus, become operational immediately upon the close of the transaction without the delays inherent in opening any new business. This benefit to their son is patent. Under these circumstances, Mr. and Mrs. Cappellari had a conflict of interests in this transaction because they had a "direct personal ... interest" in that transaction as contemplated by Code § 13.1-691. That statute does not define this term. However, "direct ... personal interest" is a broad term and, absent restrictive language in the statute, it is not limited to direct financial considerations. Rather, common sense dictates that where a parent is in a position as a director of a closely held corporation to assist his or her child in acquiring the assets of the corporation to the benefit of the child, that director has a direct personal interest in such a transaction as contemplated by Code § 13.1- 691. Notwithstanding this conflict of interests, I do not disagree with the majority's conclusion that on this record this transaction was not void or voidable under Code § 13.1-691. In the context of that code section, the record supports the trial court's judgment, and the majority opinion, that the transaction was "fair to the corporation" under Code § 13.1-691(A)(3). This is so because Capps' offer was at least consistent with the value of Moneta's assets. However, Code § 13.1-691 by its express terms merely protects a conflict of interests transaction from being rendered void solely because of a director's conflict. This code section does not address the potential liability of a director who has a conflict of interests in a particular transaction. That issue is to be resolved under Code § 13.1-690, which requires the director to discharge his duties "in accordance with his good faith business judgment of the best interests of the corporation."…It is in this context that I disagree with the conclusion of the majority opinion, on the particular facts of this case, that because the transaction in question was not voidable because it was "fair" under Code § 13.1-691(A)(3), it necessarily follows that the directors discharged their duty of loyalty in compliance with Code § 13.1- 690. 114 It is undisputed that on November 15, 1996, Capps offered $1.3 million to purchase the assets of Moneta, including its real estate, inventory, equipment, vehicles, supplies, office furniture, fixtures, improvements and the exclusive right to use the trade name "Moneta Building Supply." Without question, once this transaction was complete Moneta would cease to exist as an operating business. All that would remain to be done would be a distribution of the proceeds of this sale to the shareholders. It is also undisputed that prior to the shareholder approval of this offer, the directors received two offers from Willard. In pertinent part, the last offer contained the following provisions: I am now offering to pay $600,000.00 more than Capps for the same assets as set forth in the November 15, 1996 Asset Purchase Agreement, and under the same terms an [sic] conditions as set forth therein, provided that the business is run in the ordinary course until closing and the telephone number of the business is included in the assets. . . . . I am making my offer without any real opportunity to investigate in detail the value of the assets of Moneta Building Supply, Inc. I am confident that if given that opportunity, I would further increase my offer substantially. Accordingly, while the foregoing offer remains in effect, I would request 30 days to fully evaluate the assets and determine whether a higher value is appropriate. There is no suggestion in the record that Willard was not financially able to consummate this offer if it was accepted. Willard's offer of $600,000 more than the Capps offer was not conditioned upon being granted an additional 30 days in which to review financial records of Moneta in more detail. Thus, the record establishes that the directors had two competing offers to consider, and one in which they had a direct personal interest. Significantly, the latter offer was the lower of the two offers. In this context, the record does not support the trial court's conclusion that Mr. and Mrs. Cappellari "engaged in an informed decision making process that ... produce[d] a defensible business decision." The record reflects that they never met as directors to consider Willard's offer. Thus, the record does not support the conclusion that they discharged their duties as directors in accordance with their "good faith business judgment of the best interests of the corporation" as contemplated by Code § 13.1-690. Rather, the record establishes that the directors preferred their son to be able to purchase Moneta's assets and that they engaged professional advice solely to shape a process under Code § 13.1-690 to accomplish that end. This was mere form over substance. While I agree with the majority that Mr. and Mrs. Cappellari were not required to accept Willard's offer merely because it maximized the purchase price and that they were entitled to consider not only the quantity of the offer but also the quality of the offer, the record simply does not support the conclusion that this was done. Moreover, because of their direct personal interest in the Capps 115 transaction, it is clear that they were not exercising good faith business judgment because all their efforts were directed at upholding the Capps offer to the exclusion of any consideration of the Willard offer. Under these circumstances they were not entitled to the protection of Code § 13.2-690(C) and they failed to discharge their duty of loyalty in not considering the offer that would maximize the purchase price for Moneta's assets. For these reasons, I would reverse the judgment of the trial court and remand this case to the trial court for a determination of what damages, if any, Willard might establish in a new trial limited to that issue.

Stockholders Derivative Action In Simmons v. Miller, the minority stockholder, Calvert W. Simmons, accused the majority stockholder, Margaret C. Miller, inter alia, of breach of her fiduciary duty to him and their corporation, Las Palmos, when she participated in the organization of a second corporation which acquired the assets of Las Palmos, the sole owners of which were Miller and Simmons. On appeal, one of the issues was whether Virginia law permits a minority stockholder in a closely held corporation to assert individual claims, distinct from derivative claims, against a corporate officer or director for breach of fiduciary duty. Simmons argued that he was entitled to file a claim against Miller, both individually and on behalf of Las Palmos, and then if he recovered on both claims, he was entitled to elect which judgment to collect. The Supreme Court rejected Simmons argument that in a closely held corporation an individual shareholder should be permitted to maintain an individual claim against a director for breach of fiduciary duties.

Simmons v. Miller, et al. 261 VA. 561, 544 S.E.2d 666 (2001) Lemons, J., delivered the opinion of the Court. Analysis A. Breach of Fiduciary Duty Simmons maintains that a shareholder in a closely held corporation is not confined to a derivative action on behalf of the corporation to redress claims against a corporate officer or director for breach of fiduciary duty to the corporation. Rather, Simmons contends that the shareholder may sue individually and representatively, and if "double recovery" results, the claimant shareholder should be permitted to elect between remedies. The jury returned verdicts in favor of Simmons individually (Count 2) in the amount of $10,000, and in his derivative capacity (Count 14) in the amount of $10,000, against Miller for breach of fiduciary duties. Noting that upholding both verdicts "would constitute a penalty, not compensation," the trial 116 court struck the jury verdict on the individual claim, finding "that in Virginia, claims like those Simmons brought in this case are cognizable as derivative, not individual, actions." A derivative action is an equitable proceeding in which a shareholder asserts, on behalf of the corporation, a claim that belongs to the corporation rather than the shareholder. Rales v Blasband, 634 A.2d 927, 932 (Del.1993). Derivative suits play an "important role in protecting shareholders of corporations from the designing schemes and wiles of insiders who are willing to betray their company's interests in order to enrich themselves."Surowitz v Hilton Hotels Corp., 383 U.S. 363, 371, 86 S.Ct. 845, 15 L.Ed.2d 807 (1966). See also Brown v. Bedford City Land & Improvement Co., 91 Va. 31, 38, 20 S.E. 968, 970 (1895). The overwhelming majority rule is that an action for injuries to a corporation cannot be maintained by a shareholder on an individual basis and must be brought derivatively. See Crocker v. Fed. Deposit Ins. Corp., 826 F.2d 347, 349 (5th Cir.1987); Cowin v. Bresler, 741 F.2d 410, 414 (D.C.Cir.1984); Lewis v. Chiles, 719 F.2d 1044, 1049 (9th Cir.1983); Lewis v. S.L. & E., Inc., 629 F.2d 764, 768 n. 10 (2nd Cir.1980); Brown v. Presbyterian Ministers Fund, 484 F.2d 998, 1005 (3rd Cir.1973); Fifty States Management Corp. v. Niagara Permanent Savings & Loan Ass'n, 58 A.D.2d 177, 179, 396 N.Y.S.2d 925 (1977); Landstrom v. Shaver, 561 N.W.2d 1, 12 (S.D.1997); Rose v. Schantz, 56 Wis.2d 222, 201 N.W.2d 593, 598 (1972). The reasons underlying the general rule are that 1) it prevents a multiplicity of by shareholders; 2) it protects corporate creditors by putting the proceeds of the recovery back in the corporation; 3) it protects the interests of all shareholders by increasing the value of their shares, instead of allowing a recovery by one shareholder to prejudice the rights of others not a party to the suit; and 4) it adequately compensates the injured shareholder by increasing the value of his shares. Thomas v. Dickson, 250 Ga. 772, 301 S.E.2d 49, 51 (1983). As one leading commentator has noted: A shareholder ordinarily cannot, as an individual as distinguished from a representative of the corporation, sue directors or other corporate officers for mismanagement, negligence or the like, on a cause of action which belongs to the corporation. The remedial rights of minority shareholders with respect to wrongs committed against the corporation by the officers and directors in the management of corporate affairs are derivative rights and any action taken by the shareholders to redress such wrongs must be for the benefit of the corporation. 12B William M. Fletcher, Cyclopedia of the law of Private Corporations § 5924, at 497-99 (perm. ed.2000 rev. vol.) (citations and footnotes omitted). See also, 1 F. Hodge O'Neal, Close Corporations § 1.02 (1971, updated 1994). Recognizing the general rule, Simmons, nonetheless, urges the adoption of a closely held corporation exception permitting maintenance of an individual claim for breach of fiduciary duties under limited circumstances. In Coastal 117 Pharmaceutical Co. v. Goldman, 213 Va. 831, 837, 195 S.E.2d 848, 853 (1973), this Court noted: [W]e are aware of the several definitions of a "close corporation" written by various scholars on and off the bench, [but] ... [w]e fear the most precise definition may be imperfect to every occasion, and we find it unnecessary to choose among the scholars or to write a hard and fast definition of our own. While it is also unnecessary in this case to write such a definition because the parties agree that Las Palmas is a closely held corporation, we note that this corporation has a small number of shareholders with no active trading market for their shares, and substantial majority stockholder participation in the management, direction, and operations of the corporation. See, e.g., Donahue v. Rodd Electrotype Co. 367 Mass. 578, 328 N.E.2d 505, 511 (1975); see Masinter v. WEBCO Co., 164 W.Va. 241, 262 S.E.2d 433, 435 (1980). A number of states permit an individual claim under the following principle advocated by the American Law Institute: In the case of a closely held corporation [§ 1.06], the court in its discretion may treat an action raising derivative claims as a direct action, exempt it from those restrictions and defenses applicable only to derivative actions, and order an individual recovery, if it finds that to do so will not (i) unfairly expose the corporation or the defendants to a multiplicity of actions, (ii) materially prejudice the interests of creditors of the corporation, or (iii) interfere with a fair distribution of the recovery among all interested persons. 2 American Law Institute, Principles of Corporate Governance: Analysis and Recommendations § 7.01(d), pg. 17. The rationale for the proposed exception appears to be based upon concerns that derivative claims inure to the benefit of all shareholders, including, in some cases, those who have engaged in wrongdoing. Additionally, several courts have suggested that closely held corporations, in some cases, function more like a partnership than a corporate entity. Galbreath v. Scott, 433 So.2d 454, 457 (Ala.1983); Barth v. Barth, 659 N.E.2d 559, 562 (Ind.1995); Donahue, 328 N.E.2d at 512; Meiselman v. Meiselman, 309 N.C. 279, 307 S.E.2d 551, 557 (1983). Despite gaining some judicial acceptance over the past decade, the closely held corporation exception is not the majority rule and has been subject to criticism. Delaware, for example, has yet to embrace the concept of a direct shareholder action in a closely held corporation. In Bagdon v. Bridgestone/Firestone, Inc., 916 F.2d 379, 384 (7th Cir.1990), the Seventh Circuit noted that under Delaware law a claim that a majority shareholder established a competing business should have been brought as a derivative suit rather than a direct one. The Court noted that, "[c]ommercial rules should be predictable; this objective is best served by treating corporations as what they are, 118 allowing the investors and other participants to vary the rules by contract if they think deviations are warranted." Id. We decline to adopt a closely held corporation exception to the rule requiring that suits for breach of fiduciary duty against officers and directors must be brought derivatively on behalf of the corporation and not as individual shareholder claims. Adherence to the general rule without this proposed exception prevents multiplicity of lawsuits by shareholders. A recovery by the corporation protects all shareholders as well as creditors. Finally, as expressed in Bagdon, consistent application of commercial rules promotes predictability. If shareholders and the corporation desire to vary commercial rules by contract, they are free to do so. Accordingly, the trial court did not err in striking the jury's verdict on Count 2. Although striking the jury's verdict on Simmons' individual claim for breach of fiduciary duty, the trial court denied Miller's motion to strike the jury's verdict on Simmons' derivative claim for breach of fiduciary duty. Miller asserts that she was entitled to the benefit of the statutory business judgment rule61 codified at Code § 13.1 690, which provides: A. A director shall discharge his duties as a director, including his duties as a member of a committee, in accordance with his good faith business judgment of the best interests of the corporation. B. Unless he has knowledge or information concerning the matter in question that makes reliance unwarranted, a director is entitled to rely on information, opinions, reports or statements, including financial statements and other financial data, if prepared or presented by: 1. One or more officers or employees of the corporation whom the director believes, in good faith, to be reliable and competent in the matters presented; 2. Legal counsel, public accountants, or other persons as to matters the director believes, in good faith, are within the person's professional or expert competence; or

61 Miller was sued in her capacity as "a director, officer and majority shareholder." By its express terms Code § 13.1-690 applies to directors only. As one commentator has noted, "[t]he General Assembly elected not to enact a statutory standard of conduct for officers. See Revised Model Act § 8.42. As a result, development of the standard of conduct for officers will be left to the courts." Allen C. Goolsby, Virginia Corporation Law and Practice § 9.7, n. 62. However, in this case, the jury instruction on the was given without objection and made no distinction between Miller's various roles. It became the law of the case. See Rice v. Charles, 260 Va. 157, 169, 532 S.E.2d 318, 325 (2000). Additionally, on appeal, Simmons does not argue any theory of liability based upon Miller's status as majority shareholder.

119 3. A committee of the board of directors of which he is not a member if the director believes, in good faith, that the committee merits confidence. C. A director is not liable for any action taken as a director, or any failure to take any action, if he performed the duties of his office in compliance with this section. D. A person alleging a violation of this section has the burden of proving the violation. Code § 13.1-690 applies to the "discharge [of] duties as a director," and makes no distinction between duties of care and loyalty. We recognized in Willard v. Moneta Building Supply, Inc., 258 Va. 140, 151, 515 S.E.2d 277, 284 (1999) that "Code § 13.1.690(A) does not abrogate the common law duties of a director." However, the protection of § 13.1-690(C) applies only to acts "taken as a director, or any failure to take any action," and is confined to the exercise of business judgment on behalf of the corporation. When the acts in question do not meet these criteria, Code § 13.1-690 does not apply. The acts cited by Simmons as constituting Miller's breach of duty to Las Palmas include "secretly organizing Las Palmas International/Profesor Sila." Clearly, the organization of International, a competitor, was not a corporate act of Las Palmas. In taking this action, Miller was not exercising business judgment on behalf of Las Palmas. Although implicating a common law duty of loyalty, this act does not fall within the scope of Code § 13.1- 690. Miller was not entitled to protection under the statutory business judgment rule. The evidence viewed in the light most favorable to Simmons amply supports the jury's verdict that Miller breached her duty of loyalty to Las Palmas. Accordingly, the trial court did not err in refusing to set aside the jury's verdict on Simmons' derivative claim for breach of fiduciary duty against Miller.

Gina Chin & Associates, Inc. v. First Union Bank 260 Va. 533, 537 S.E.2d 573 Kootz, J., delivered the opinion of the Court. In this appeal, we consider whether the trial court erred in striking the evidence at the conclusion of the plaintiff's case-in-chief by ruling, as a matter of law, that a bank teller who participated in a scheme to deposit forged checks was acting outside the scope of his employment, thus relieving his employer from civil liability for those acts. Background Under well settled principles of law, we will review the evidence in the light most favorable to the plaintiff, the non-moving party. See, e.g., Lenders Financial Corp. v. Talton, 249 Va. 182, 188, 455 S.E.2d 232, 236 (1995). 120 In 1994, Henry Steven Cardenas was employed as a teller by First Union Bank. His duties included, among other things, the receiving of cash and checks for deposit into the accounts of the bank's customers. At the beginning of his employment, Cardenas received "about two weeks" of training. During that training, First Union instructed Cardenas not to accept checks made payable to businesses for deposit into personal accounts or to accept checks for more than $7,000 for deposit without a supervisor's approval. Prior to beginning his employment with First Union, Cardenas was acquainted with Amie Cheryl Lehman, who was dating Cardenas' brother. Shortly after Cardenas began working as a teller, he moved into an apartment with his brother and Lehman. Lehman, who had formerly been a teller at Signet Bank, was employed at that time by Gina Chin & Associates, Inc. (Chin), a food wholesaler, as the firm's accounts payable clerk. After Cardenas had been working at First Union "a little over a year," Lehman, relying on her knowledge as a former bank teller, requested his assistance in depositing a forged check into her First Union account. The check was drawn on Chin's account at Signet Bank,62 and was made payable to one of Chin's suppliers. Lehman created the check by entering a false invoice into Chin's accounts payable computer program, which produced the check on a printer. Lehman then forged both the signature of Gina Chin, Chin's president, as drawer and the endorsement of the supplier making the check payable to Lehman. Cardenas at first refused to assist Lehman, "but then she kept on insisting and insisting and then she convinced me, I guess, by offering me some money on the side." Lehman told Cardenas that "it wouldn't come back to [him] at all" because she reconciled the bank statements for Chin's account and could intercept the statements with the forged checks before they came to the attention of the firm's principals. Cardenas thereafter deposited the check into Lehman's First Union account. The drawer bank paid the check, debiting the amount from Chin's account. Ultimately, using the forgery scheme outlined above, Lehman and Cardenas succeeded in depositing $270,488.72 in forged checks into Lehman's personal account at First Union.63 Cardenas received approximately 20 percent of the funds deposited. After Lehman left her employment with Chin, Signet Bank discovered the forgery scheme and reported its findings to Chin and the police. Lehman and

62 During the course of the ensuing forgery scheme conducted by Lehman and Cardenas, Chin moved its account to Citizen's Bank of Washington, D.C. Checks drawn on both accounts were deposited into Lehman's First Union account. 63 The total amount of the forged checks reflected here is taken from Chin's motion for judgment. Chin concedes in that pleading that this amount is subject to amendment because some of the forged checks were apparently deposited in another bank.

121 Cardenas subsequently were convicted of one count of bank fraud each in federal court. On June 11, 1996, Chin filed a motion for judgment against First Union seeking $270,488.72 in damages resulting from the forgery scheme of Lehman and Cardenas. Chin alleged that First Union was negligent when it accepted for payment checks drawn on Chin's accounts bearing both forged signatures of the drawer and forged endorsements of the payees. Chin further alleged that First Union was vicariously liable for Cardenas' criminal acts. The trial court initially sustained First Union's demurrer to Chin's motion for judgment and entered summary judgment in favor of First Union on the ground that under the factual circumstances asserted by Chin certain provisions of the Uniform Commercial Code barred an action by the drawer of a check against the depository bank. We awarded Chin an appeal from that judgment, reversed it, and remanded the case for further proceedings. Gina Chin & Associates v. First Union Bank, 256 Va. 59, 63, 500 S.E.2d 516, 518 (1998). In doing so, we held that "Chin's motion for judgment pled a cause of action pursuant to §§ 8.3A-404 and § 405 of the Uniform Commercial Code, Code §§ 8.1-101 through 8.11-108." Id. at 61, 500 S.E.2d at 517. We explained that pursuant to these statutes the concept of is employed to determine liability to the person sustaining the loss based upon the premise "that all participants in the process have a duty to exercise ordinary care in the drawing and handling of [checks]." Id. at 62, 500 S.E.2d at 517. Thus, in the context of the present case, the ultimate issue of comparative negligence, which is solely a jury issue, centers upon the conduct of First Union through its employees and that of Chin through its employees. In short, there is no dispute that while First Union accepted the forged checks for payment and Chin permitted access to its checks by its employee who forged them, the ultimate issue still undecided at that point in the proceedings was whether First Union was negligent or whether First Union and Chin were both negligent and, if so, to what comparative extent. Upon remand, a jury trial was commenced in the trial court on July 17, 1999. After First Union prevailed on its motion in limine to exclude the anticipated testimony of Chin's expert witness regarding established banking customs and standards, the trial court stated "the primary issue is scope of employment." Chin then proceeded to produce its evidence to the jury. Cardenas, Lehman, and Donald Chin, Chin's treasurer, were each called as witnesses for Chin. Consistent with the facts previously related herein, Cardenas and Lehman detailed the scheme to forge the checks and to deposit them into Lehman's account. Cardenas further testified that after he left his employment with First Union, Lehman continued the forgery scheme using her account at another bank where Cardenas' brother worked as a teller. Donald Chin testified concerning the failure of Chin to detect the forgery scheme. At the conclusion of Chin's case-in-chief, the jury 122 was read stipulations of fact, including the stipulation that Cardenas' acts were not known to his supervisors.64 First Union moved to strike Chin's evidence, asserting that Chin had failed to establish that Cardenas was acting within the scope of his employment in knowingly accepting the forged checks for deposit. First Union argued that "although taking these checks may have been incidental to First Union's business because it takes checks for deposit, there was no evidence that it was in furtherance of First Union's interest." First Union contended that this was so because Cardenas willfully violated its policies concerning the deposit of commercial checks into personal accounts and accepting certain checks without management approval. Thus, First Union argued that Cardenas was not acting in furtherance of its interest and, hence, not within the scope of his employment. Chin, citing Commercial Business Systems, Inc. v. BellSouth Services, Inc., 249 Va. 39, 453 S.E.2d 261 (1995), and other cases, responded that the specific wrongful act by the employee need not be in furtherance of the employer's interest so long as the service that the employee was performing at the time was in the course of his employment. Chin asserted that its evidence showed that Cardenas was acting as an employee of First Union when he accepted the forged checks for deposit. After a lengthy colloquy in which the trial court and counsel for both parties discussed in detail the case law concerning the doctrine of respondeat superior, the trial court sustained First Union's motion to strike Chin's evidence. In the final order dismissing the case with prejudice, the trial court ruled as a matter of law that Cardenas' acts "were not within the scope of the employee's authority, being in contravention of First Union's directives, and they were not within the scope of employment as they were shown not to be in furtherance of First Union's interests; and ... reasonable persons cannot differ on the conclusion reached herein based on the evidence presented by the Plaintiff, with all inferences most favorable to the Plaintiff." We awarded Chin this appeal. Discussion Initially, we note that the procedural posture of this case, as will be demonstrated, is significant. The case is before us following the trial court's grant of the motion to strike Chin's evidence. In that posture, we are unable to review this case in consideration of all the evidence that may have been produced on the issue in question. Moreover, despite our consideration of this case in the prior appeal, we are unable to reach the ultimate merits, or lack thereof, of Chin's claims against First Union. However, for the reasons that follow, we will reverse the judgment of the trial court and remand the case for further proceedings.

64 First Union had been permitted to call its expert witness out of turn at the end of the first day of the trial, but had not formally begun presenting its case when it moved to strike Chin's evidence. Accordingly, we will not consider the evidence received from that witness in reviewing the trial court's ruling. 123 With respect to an assertion of liability based upon the doctrine of respondeat superior, this Court made the following pertinent observation almost 80 years ago in Davis v. Merrill, 133 Va. 69, 112 S.E. 628 (1922): If a person, acting for himself, willfully and maliciously inflict an injury upon another, he is liable in damages for such injury. And there is no reason why a master should be permitted to turn his business over to servants who have no regard for the public welfare and thereby escape the responsibility which he would otherwise have to bear. It is manifestly right and just that both corporations and individuals be required to answer in damages for wanton and malicious assaults inflicted upon others by their servants, while acting within the scope of the servant's employment and duty, and it matters not whether the act of the servant is due to lack of judgment, the infirmity of temper, or the influence of passion, or that the servant goes beyond his strict line of duty and authority in inflicting such injury.... Id. at 74, 112 S.E. at 630-31. Almost from its first consideration by the courts of this Commonwealth, however, the determination of the issue whether the employee's wrongful act was within the scope of his employment under the facts of a particular case has proved "vexatious." See, e.g., Kidd v. De Witt, 128 Va. 438, 443, 105 S.E. 124, 125 (1920); Appalachian Power Company v. Robertson, 142 Va. 454, 456, 129 S.E. 224, 224 (1925). We have defined "scope of employment" in the following terms: Generally, an act is within the scope of the employment if (1) it was expressly or impliedly directed by the employer, or is naturally incident to the business, and (2) it was performed, although mistakenly or ill-advisedly, with the intent to further the employer's interest, or from some impulse or emotion that was the natural consequence of an attempt to do the employer's business.... Kensington Associates v. West, 234 Va. 430, 432, 362 S.E.2d 900, 901 (1987)(emphasis added). The emphasized language in this definition is the focal point of First Union's assertion in the present case. First Union apparently interprets this language to require that the specific act which caused the injury be performed by the employee with an intent to benefit the employer. At first blush, this language is susceptible to such an interpretation. However, our prior decisions do not support that interpretation by implication, see, e.g., Plummer v. Center Psychiatrists, Ltd., 252 Va. 233, 238, 476 S.E.2d 172, 175 (1996)(counselor engaging in unethical sexual relationship with patient was potentially acting within scope of employment); Commercial Business Systems, 249 Va. at 46, 453 S.E.2d at 266 (employee violating company rule against self-dealing and accepting illegal bribes to award contracts was potentially acting within the scope of employment), and we expressly reject it now. In cases involving a willful and wrongful act of an employee, a narrow and literal reading of the language in this definition, which would create a patent conflict 124 within it, is not to be applied as a matter of law to the facts of a particular case. The present case and First Union's assertions in support of its motion to strike Chin's evidence are illustrative of the point. Where an employee commits a willful and wrongful act that results in injury to others, simple logic suggests that such employee generally does not do so "with the intent to further the employer's interest." That is to say, the employee generally does not intend to benefit the employer. Here, it may well be reasonable to conclude that a bank teller does not intend to further the interest of his employer bank when he knowingly accepts forged checks for deposit for his own gain. However, that does not resolve the legal issue presented, as a matter of law, to the trial court upon a motion to strike the injured party's evidence. Rather, it should be apparent that the proper application of this definition in the context of the doctrine of respondeat superior does not resolve into a simplistic determination that an employee's willful and wrongful act was not done with the intent to further the employer's interest or to benefit the employer in some way. Any doubt that may have existed in that regard was clearly resolved in Commercial Business Systems and in Plummer. As in the present case, we recognize that the difficulty in applying this definition to the facts of a particular case frequently arises where "[t]he real inquiry is, was the question as to whether [the employee] was acting within the scope of his employment ... one to be determined by the Court, or was it a question of fact to be submitted to, and determined by, the jury?" Crowell v. Duncan, 145 Va. 489, 500, 134 S.E. 576, 579 (1926). In that regard, a motion to strike requires the trial court to test the evidence against the applicable burdens of production before permitting the jury to weigh that evidence against the applicable burden of persuasion. Settled principles guide the trial court's considerations. While the plaintiff has the burden of persuasion on the issue whether the employee was acting within the scope of his employment at the time of the act complained of, we have consistently held that proof of the employment relationship creates a prima facie rebuttable presumption of the employer's liability. McNeill v. Spindler, 191 Va. 685, 694-95, 62 S.E.2d 13, 17-18 (1950). Thus, "[w]hen an employer-employee relationship has been established, 'the burden is on the [employer] to prove that the [employee] was not acting within the scope of his employment when he committed the act complained of, and ... if the evidence leaves the question in doubt it becomes an issue to be determined by the jury.' "Kensington Associates, 234 Va. at 432-33, 362 S.E.2d at 901 (quoting Broaddus v. Standard Drug Co., 211 Va. 645, 653-54, 179 S.E.2d 497, 504 (1971)); see also Plummer, 252 Va. at 235, 476 S.E.2d at 174; Turner v. Burford Buick Corp., 201 Va. 693, 698, 112 S.E.2d 911, 915 (1960). Admittedly, the trial court's task may be particularly difficult in cases in which the injury is caused by an intentional, often criminal, tortious act which clearly would not have been contemplated by the employer as being within the scope of employment, but which nonetheless was performed incident to the employment and 125

even facilitated thereby.65 Such cases invoke consideration of whether the employee deviated from the scope of his employment because of an "external, independent, and personal motive ... to do the act upon his own account." Broaddus, 211 Va. at 653, 179 S.E.2d at 503- 04. In that regard, we have distinguished between the motive of the employee and the relevant question whether the service performed was within the scope of employment. In making this distinction, we have held that the motive of the employee in committing the act complained of is not determinative of whether it took place within the scope of the employment relationship. Commercial Business Systems, 249 Va. at 45, 453 S.E.2d at 266; Tri-State Coach Corp. v. Walsh, 188 Va. 299, 305-06, 49 S.E.2d 363, 366 (1948). Rather, the issue is "whether the service itself, in which the tortious act was done, was within the ordinary course of such business." Davis v. Merrill, 133 Va. 69, 78, 112 S.E. 628, 631 (1922); accord Commercial Business Systems, 249 Va. at 44, 453 S.E.2d at 265. In Commercial Business Systems, an employee, in violation of conflict of interest rules established by his employer, created a business to work with companies that provided services to his employer. The employee then used his position as a contract negotiator and administrator to funnel business to suppliers who agreed to work with his company and pay him illegal "kickbacks." 249 Va. at 43, 453 S.E.2d at 265. We held that these facts did not "conclusively establish that [the employee] was not acting within the scope of his employment." Id. at 46, 453 S.E.2d at 266. Although the employee's motive was to advance his self-interest, rather than the interest of his employer, he was nonetheless "performing his duties ... in the execution of the services for which he was employed." Id. We emphasize that the employee's improper motive is not irrelevant to the issue whether the act was within the scope of employment. Rather, it is merely a factor to be considered in making that determination, and, unless the deviation from the employer's business is slight on the one hand, or marked and unusual on the other, but falls instead between those two extremes, the question is for the jury. McNeill, 191 Va. at 695, 62 S.E.2d at 18; accord Kensington Associates, 234 Va. at 433, 362 S.E.2d at 902. Thus, in Commercial Business Systems, we held that "the evidence presents a jury issue whether [the employee] acted within the scope of his

65 An alternate approach in such circumstances has been to assign liability to the employer not vicariously through respondeat superior, but directly through the torts of negligent hiring and negligent retention. See, e.g., J. v. Victory Tabernacle Baptist Church, 236 Va. 206, 208-09, 372 S.E.2d 391, 393 (1988)(confirming prior recognition of the tort of negligent hiring); Philip Morris Inc. v. Emerson, 235 Va. 380, 401, 368 S.E.2d 268, 279 (1988)(recognizing tort of negligent retention). Chin did not allege either of these torts in its motion for judgment. Chin did allege negligent failure to supervise as a theory of liability in its motion for judgment, but abandoned that claim at the outset of trial on remand. Accordingly, the viability of that claim is not before us in this appeal.

126 employment when he committed the wrongful acts." 249 Va. at 46, 453 S.E.2d at 266; see also Plummer, 252 Va. at 238, 476 S.E.2d at 175. Applying these principles, the issue presented to the trial court by First Union's motion to strike was whether the evidence presented by Chin was such that, as a matter of law, a reasonable juror could not find that an employer-employee relationship existed between Cardenas and First Union or that, although such a relationship existed, Cardenas was acting within the scope of that employment at the time of the commission of the acts which injured Chin. First Union does not contest that Chin produced clear evidence that established the necessary employment relationship between Cardenas and First Union. Accordingly, Chin's evidence established a prima facie case of First Union's liability. First Union contends, however, that Chin's evidence was also sufficient to meet First Union's burden of production on the issue whether Cardenas' acts were nevertheless outside the scope of that employment and, moreover, that this evidence was sufficient to rebut the presumption of liability as a matter of law. We disagree. First Union asserts that Chin's evidence establishes that Cardenas' wrongful acts were not "expressly or impliedly directed by the employer" because he violated directives in accepting commercial checks for deposit into a personal account, in failing to obtain a manager's approval to accept high value checks for deposit, and in knowingly accepting checks for deposit with forged endorsements. This assertion is without merit because the act need not be expressly or impliedly directed by the employer in order for the act to occur within the scope of the employment. Similarly, an act committed in violation of an employer's direction is not always beyond the scope of the employment. Rather, as previously noted, the test is "whether the service itself, in which the tortious act was done, was within the ordinary course of" the employer's business. In this instance, it is clear that accepting checks for deposit by a bank teller is a service within the ordinary course of First Union's banking business. First Union further asserts that Chin's evidence also establishes that Cardenas was acting exclusively for his own benefit and that of Lehman. Thus, First Union contends that Cardenas was acting outside the scope of his employment because he had an "external, independent, and personal motive" to perform the act. There can be no doubt that Cardenas was not steadfast in the performance of his duties and obligations to his employer when he chose to participate in a criminal scheme to accept forged checks for deposit. Cardenas was acting out of self-interest in participating in Lehman's scheme, and his conduct was "outrageous and violative of his employer's rules." Commercial Business Systems, 249 Va. at 46, 453 S.E.2d at 266. Nonetheless, it is clear that in doing so he was performing a normal function of a bank teller in accepting checks for deposit. In sum, First Union's assertions, and the apparent basis of the trial court's decision to strike Chin's evidence and to award summary judgment to First Union, are premised not on the failure of Chin to present sufficient evidence to establish a prima 127 facie case of the necessary employment relationship at the time of the injury to Chin, but on the failure of that evidence to prove that the acts complained of were committed within the scope of that employment. As we have explained, Chin did not have the burden of presenting evidence that Cardenas' acts were within the scope of his employment. Rather, having established that the employment relationship existed, Chin was entitled to have the case go forward with the burden on First Union to prove that Cardenas acted outside the scope of his employment. The procedural posture of the case, as we noted above, is significant. Chin's evidence, without any additional evidence offered by First Union, was sufficient to establish a jury issue whether Cardenas acted within the scope of his employment. That issue therefore, on the evidence presented, did not lend itself to a resolution as a matter of law by the trial court. Conclusion For these reasons, we hold that the trial court erred in sustaining First Union's motion to strike Chin's evidence and awarding summary judgment to First Union. Accordingly, we will reverse the judgment of the trial court and remand the case for further proceedings consistent with the views expressed in this opinion. Reversed and remanded. Peace v. Conway 246 Va. 278, 435 S.E.2d 133 (1993) Hassell, J. delivered the Opinion. In this appeal from a judgment for an employer in an action for tortious interference with contracts, we consider whether former employees' acts of soliciting the business of their former employer's customers constitute "improper methods." Hugh A. Conway, Jr., trading as Apollo Hair Systems, began to operate a hair replacement business in 1978. He obtained a franchise from a hair replacement company that conducts business nationally. Conway sold hair replacement units to customers. The units, ordered from Conway's franchisor, were designed to match the color and texture of the customers' natural hair. Conway's employees attached the units to the customers' hair, then cut and styled each unit to blend with the customers' natural hair. Each customer executed a written contract with Conway. Wendy Dickens began to work for Conway in 1981. Conway hired Sally Peace in 1984. Conway did not execute employment contracts with Peace and Dickens; nor did either employee sign a covenant not to compete. As Conway's employees, Peace and Dickens sold hair replacement units to Conway's customers and serviced these units. Peace and Dickens were aware that Conway had written contracts with 325 active customers. On March 17, 1992, Peace and Dickens terminated their employment with Conway without giving him prior notice. They did not take any supplies, equipment, or products with them; nor did they take any written customer lists or documents. 128 On March 18, 1992, Peace and Dickens began to operate a competing business and solicited Conway's customers by telephone, utilizing a list they had compiled solely from their memories. Peace and Dickens informed Conway's customers that they had terminated their association with Conway and had established their own business in another location. They contacted more than 100 of Conway's customers, and, eventually, Conway had only 37 active customers. Conway filed a bill of complaint against Peace and Dickens, alleging, among other things, that they had tortiously interfered with Conway's contracts with his customers. Conway requested, and was granted, a temporary injunction restraining Peace and Dickens from soliciting Conway's customers and "using any confidential information belonging to [Conway], and from dealing with, in any way, any of [Conway's] customers." At the conclusion of a trial on the merits, the court held that the contracts between Conway and his customers were terminable at will; that valid contractual relationships or business expectancies existed between Conway and his customers; that Peace and Dickens had knowledge of the relationships or expectancies; that they had intentionally interfered with the contractual relationships or business expectancies; that Conway had been damaged; and that Peace and Dickens had employed improper methods. The trial court entered a permanent injunction prohibiting Peace and Dickens from contacting or dealing with any person who had been Conway's customer as of March 1, 1992. We awarded Peace and Dickens an appeal. Peace and Dickens argue that they were entitled to rely upon their memories to compile a list of Conway's customers and solicit their business and that these acts do not constitute "improper methods" within the meaning of Duggin v. Adams, 234 Va. 221, 360 S.E.2d 832 (1987). In response, Conway argues that the trial court made a factual determination that Peace and Dickens had utilized improper methods to solicit his customers and that there is evidence in the record to support this conclusion. In Duggin, we considered the elements of a cause of action for tortious interference with a terminable at-will sales contract. We stated: [W]hen a contract is terminable at will, a plaintiff, in order to present a prima facie case of tortious interference, must allege and prove not only an intentional interference that caused the termination of the at-will contract, but also that the defendant employed "improper methods." Methods of interference considered improper are those means that are illegal or independently tortious, such as violations of statutes, regulations, or recognized common-law rules.... Improper methods may include violence, threats or intimidation, bribery, unfounded litigation, fraud, misrepresentation or deceit, , duress, undue influence, misuse of inside or confidential information, or breach of a fiduciary relationship. 129 234 Va. at 226-27, 360 S.E.2d at 836 (citations omitted). Here, we must decide whether the record supports a finding that Dickens and Peace misused confidential information. Our review of the record before us, including the trial transcript and exhibits, reveals that it is uncontroverted that Dickens and Peace relied solely upon their memories when they contacted Conway's customers.66 Peace and Dickens argue, and we agree, that this fact does not support the conclusion that they used improper methods of interference. We find the Restatement (Second) of Agency §396 (1958), instructive here: Unless otherwise agreed, after the termination of the agency, the agent: (a) has no duty not to compete with the principal; (b) has a duty to the principal not to use or to disclose to third persons, on his own account or on account of others, in competition with the principal or to his injury, trade secrets, written lists of names, or other similar confidential matters given to him only for the principal's use or acquired by the agent in violation of duty. The agent is entitled to use general information concerning the method of business of the principal and the names of the customers retained in his memory, if not acquired in violation of his duty as agent[.] We hold that Peace and Dickens did not employ improper methods by utilizing their memories to compile a list of the names of Conway's customers and soliciting business from those customers. We reiterate that Peace and Dickens did not take any documents or utilize any property that belonged to Conway when contacting his customers. Moreover, it is not unusual in the business world for an employee to leave his employment and start a competing business. When this occurs, inevitably customers of the former employer will desire to continue to deal with the former employee in the new business. Therefore, had Conway desired to prevent Peace and Dickens from soliciting his customers, he could have required his employees to execute covenants not to compete. This would have prohibited Peace and Dickens from soliciting those customers upon termination of the employment relationships. Even though the record reveals that Conway discussed the possibility of executing such a covenant with Dickens, for whatever reason, he chose not to require it.

66 Conway argues on brief that "[a]lthough no transcript is available for [the initial hearing on the preliminary injunction, Peace] testified that she and Wendy Dickens compiled two lists of Apollo customers containing a total of more than 100 names, and she claimed this was done only by memory. However, upon questioning, Peace could only remember one [customer's name and that name was not on either list.]" We cannot consider this argument because this transcript was not made a part of the record. Rule 5:10. 130 We will reverse the judgment of the trial court and remand this case with instructions to dissolve the injunction and enter final judgment on behalf of Dickens and Peace. Reversed and remanded.

Va. Code Section 8.01-15.1 Anonymous Plaintiff; Motion for Identification; Factors to be Considered by Court A. In any legal proceeding commenced anonymously, any party may move for an order concerning the propriety of anonymous participation in the proceeding. The trial court may allow maintenance of the proceeding under a pseudonym if the anonymous litigant discharges the burden of showing special circumstances such that the need for anonymity outweighs the public's interest in knowing the party's identity and outweighs any prejudice to any other party. The court may consider whether the requested anonymity is intended merely to avoid the annoyance and criticism that may attend any litigation or is to preserve privacy in a sensitive and highly personal matter; whether identification poses a risk of retaliatory physical or mental harm to the requesting party or to innocent nonparties; the ages of the persons whose privacy interests are sought to be protected; whether the action is against a governmental or private party; and the risk of unfairness to other parties if anonymity is maintained. B. If the court initially permits a party to proceed anonymously, the issue of the propriety of continued anonymous participation in the proceedings may be raised at any stage of the litigation when circumstances warrant a reconsideration of the issue. In all cases, all parties have the right to know the true identities of all other parties under such provisions of confidentiality as the court may deem appropriate. C. If the court orders that the anonymous litigant be identified, the pleadings and any relevant dockets shall be reformed to reflect the party's true name, and the identification shall be deemed to relate back to the date of filing of the proceeding by the anonymous party. D. In any legal proceeding in which a party is proceeding anonymously, the court shall enter appropriate orders to afford all parties the rights, procedures and discovery to which they are otherwise entitled. Added by Acts 2003, c. 572.

Miller v. Highland County 274 Va. 355; 650 S.E.2d 532; 2007 Va. LEXIS 119 Keenan, J., delivered the opinion for the court. In these appeals, two issues assigned as cross-error determine the outcome of the cases. Those issues are 1) whether a county board of supervisors is a 131 required party defendant in a legal action contesting the board's decision to grant a conditional use permit; and 2) whether neighboring landowners may file a declaratory judgment action contesting a county planning commission's decision that a certain conditional use is in "substantial accord" with that county's comprehensive plan. I. Factual Background In July 2004, Highland New Wind Development, LLC (New Wind) filed an application seeking a conditional use permit (CUP application) to build an electric generation substation in the County on property that is located in an agricultural zoning district, zone "A-2," as provided in the Highland County Zoning Ordinance (zoning ordinance). In addition to the substation, New Wind sought approval to construct 20 wind turbines about 400 feet in height, a height that exceeds the maximum height permitted by the zoning ordinance. The zoning ordinance designates zone "A-2" as a district in which construction of an electric generation substation is permitted only after "the [g]overning body finds, as a fact, that the proposed use is compatible with surrounding uses, is consistent with the intent of this [o]rdinance and of the Land Use Element of the Comprehensive Plan, is in the public interest, and will comply with all other provisions of law and ordinances of Highland County or the Town of Monterey." The Board of Supervisors (the Board) approved an amendment to the zoning ordinance (the height amendment), which authorized the Board to issue conditional use permits allowing structures that exceed the maximum heights provided in the zoning ordinance. After conducting a public hearing on the CUP application, the Board adopted a resolution in July 2005, granting New Wind a conditional use permit (the CUP) for construction of the wind turbine project. In its resolution, the Board made several "findings," including that the CUP was compatible with surrounding uses, was consistent with the intent of the zoning ordinance and the land use element of the comprehensive plan, and would be in compliance with all other statutes and ordinances. Additionally, the Board's resolution stated, "[t]he authority granted by this [p]ermit shall be conditioned on the receipt of all required state and federal approvals and review pursuant to Code § 15.2-2232." In February 2006, New Wind filed an application asking that the planning commission review the CUP under the provisions of Code § 15.2-2232. After conducting a public hearing on New Wind's application, the planning commission determined that the CUP was in "substantial accord" with the comprehensive plan as required by Code § 15.2-2232. II. Miller's Proceedings in Circuit Court Lucile Swift Miller and several other owners of property adjoining the proposed wind turbine site (collectively, Miller) filed a bill of complaint for declaratory judgment in the circuit court, alleging that the Board acted in an arbitrary and capricious manner, and without authority, in approving the height 132 amendment. Miller named "Highland County, Virginia" as the sole defendant in the bill of complaint. Pendleton Stokes Goodall, III, and several other landowners adjoining the proposed wind turbine site (collectively, Goodall), filed a separate bill of complaint for declaratory judgment against "Highland County, Virginia," New Wind, and the owners of the wind turbine project site, Tamarack of Highland, LLC, and Red Oak Ranch, LLC (Tamarack and Red Oak). Goodall alleged that the CUP was invalid because the planning commission had not made a determination whether the CUP was in "substantial accord" with the comprehensive plan before the Board issued the CUP and that, therefore, the CUP did not satisfy the requirements of Code § 15.2-2232. Goodall also alleged, among other things, that the CUP was inconsistent with the comprehensive plan and was an arbitrary and capricious exercise of the Board's power. The circuit court consolidated Miller's and Goodall's cases for trial. New Wind, Red Oak, and Tamarack (collectively, New Wind) filed a demurrer and a plea in bar, asserting that the actions filed by Miller and Goodall (collectively, Miller) were barred because Miller failed to name the Board as a party to the actions. The circuit court overruled the demurrer and plea in bar. All parties filed motions for summary judgment. After conducting a hearing, the circuit court granted partial summary judgment in favor of Highland County and New Wind, holding that the height amendment was valid and that the CUP was properly issued even though the planning commission did not make its "substantial accord" determination under Code § 15.2-2232 before the Board issued the CUP. The circuit court denied summary judgment and ordered a bench trial on the separate issues whether the Board made factual findings that complied with the requirements of the ordinance before the Board issued the CUP and whether the Board's actions were arbitrary and capricious. After a trial in which several witnesses testified concerning the subjects the Board considered when it granted the CUP, the circuit court upheld the Board's decision. The circuit court concluded that the Board made factual findings as required by the ordinance, that the evidence was conflicting whether the Board's decision to issue the CUP was "reasonable," and that, as a result, the Board's decision issuing the CUP was "fairly debatable." The circuit court entered final judgment in favor of New Wind and the County. Miller appeals. III. Miller's Appeal In Miller's appeal, New Wind and Highland County (collectively, New Wind) argue as a matter of cross-error that the circuit court erred in denying New Wind's plea in bar. According to New Wind, Miller's action is barred because she failed to name the Board as a party to the action within 30 days after the Board's decision as required by Code § 15.2-2285(F). New Wind asserts that we held in Friends of Clark Mountain Found., Inc. v. Board of Supervisors, 242 Va. 16, 406 S.E.2d 19, 7 Va. Law Rep. 2773 (1991), that a local governing body is a required 133 party to an action contesting a decision by that governing body. New Wind further contends that "Highland County, Virginia" is not the legal equivalent of the "Board of Supervisors of Highland County," because "Highland County" is a "locality," while the Board is a "governing body." In response, Miller argues that "Highland County, Virginia" is a "locality" as defined by Code § 15.2-102, and that Code § 15.2-1404 subjects a "locality" to being sued in its own name regarding all matters connected with its duties. Miller further asserts that Code § 15.2-2285(F) does not mandate that a local governing body be named in an action challenging one of its decisions, but only requires that such an action be filed within 30 days of the local governing body's decision. Relying on our decision in Board of Supervisors v. Board of Zoning Appeals, 268 Va. 441, 604 S.E.2d 7 (2004), Miller contends that a person aggrieved by a local governing body's decision may, pursuant to Code § 15.2-1404, contest that decision by naming the "locality" as the defendant. Finally, Miller also argues that if the Board is a necessary party, this Court may join the Board as a party to the action or, if the Board is a required party, the name of Highland County is a misnomer and may be amended to name the Board. We disagree with Miller's arguments. We resolve these issues by considering the provisions of several statutes, in addition to some of our prior decisions. In interpreting the various statutory provisions, we are presented with pure questions of law that we consider de novo on appeal. Budd v. Punyanitya, 273 Va. 583, 591, 273 Va. 583, 643 S.E.2d 180, 184 (2007); Boynton v. Kilgore, 271 Va. 220, 227, 623 S.E.2d 922, 925 (2006); Horner v. Dep't of Mental Health, 268 Va. 187, 192, 597 S.E.2d 202, 204 (2004); Ainslie v. Inman, 265 Va. 347, 352, 577 S.E.2d 246, 248 (2003). Our central focus is to ascertain and give effect to the intention of the General Assembly. Boynton, 271 Va. at 227, 623 S.E.2d at 925; Chase v. DaimlerChrysler Corp., 266 Va. 544, 547, 587 S.E.2d 521, 522 (2003); Halifax Corp. v. First Union National Bank, 262 Va. 91, 99, 546 S.E.2d 696, 702 (2001). We determine that legislative intent from the words used in the statute. Crawford v. Haddock, 270 Va. 524, 528, 621 S.E.2d 127, 129 (2005); Horner, 268 Va. at 192, 597 S.E.2d at 204; Woods v. Mendez, 265 Va. 68, 74, 574 S.E.2d 263, 266 (2003). We must assume that the General Assembly chose, with deliberation and care, the words it employed in the statute. Jackson v. Fidelity & Deposit Co., 269 Va. 303, 313, 608 S.E.2d 901, 906 (2005); Simon v. Forer, 265 Va. 483, 490, 578 S.E.2d 792, 796 (2003); Halifax Corp., 262 Va. at 100, 546 S.E.2d at 702. Additionally, when construing statutes that impact the same subject, we harmonize their provisions whenever possible. Peerless Ins. Co. v. County of Fairfax, 274 Va. 236, 244, 274 Va. 236, 645 S.E.2d 478, 483 (2007); Alliance to Save the Mattaponi v. Commonwealth, 270 Va. 423, 439-40, 621 S.E.2d 78, 87 (2005); Capelle v. Orange County, 269 Va. 60, 65, 607 S.E.2d 103, 105 (2005). We conclude that, as employed in the statutes relevant to this case, the terms "locality" and "board of supervisors" are not synonymous or interchangeable. Title 134 15.2 of the Code, which addresses the matters raised in these appeals, provides distinct definitions of the two terms. A "locality," within the meaning of Title 15.2, "shall be construed to mean a county, city, or town as the context may require." Code § 15.2-102. In contrast, the term "[b]oard of supervisors" refers to the "governing body of a county." Id. Title 15.2 contains several additional statutes that illustrate the General Assembly's intent to recognize governing bodies as entities distinct from their respective localities. These statutes clarify that although localities are given certain powers by statute, those powers may only be exercised through the authority of the governing bodies. For example, Code § 15.2-1401 provides that, generally, "all powers granted to localities shall be vested in their respective governing bodies." Id. More specific to the subject of Miller's appeal, Code § 15.2-1425 gives the "governing body" of each locality the authority to "adopt, as appropriate, ordinances, resolutions and motions." Thus, while providing that "[a]ny locality may, by ordinance, classify the territory under its jurisdiction" for purposes of land use, Code § 15.2-2280, the General Assembly has vested the actual power to make such decisions in each locality's governing body. See Code §§ 15.2-1401 and -1425. Because we must assume that the General Assembly acted with great deliberation and care in choosing the words establishing this statutory scheme, we conclude that the governing body of a locality is a distinct legal entity authorized in Title 15.2 to exercise the statutory powers of that locality. Thus, we are faced with the question whether this distinct legal entity must be joined as a party defendant in a legal action contesting its legislative exercise of a zoning power. In answering this question, we consider the language of Code § 15.2- 2285(F), under which the present action was filed contesting the Board's decision granting the CUP. This statutory provision states: Every action contesting a decision of the local governing body adopting or failing to adopt a proposed zoning ordinance or amendment thereto or granting or failing to grant a special exception shall be filed within thirty days of the decision with the circuit court having jurisdiction of the land affected by the decision. However, nothing in this subsection shall be construed to create any new right to contest the action of a local governing body. In drafting Code § 15.2-2285(F), the General Assembly employed plain language in providing a right of appeal from various zoning decisions of a local "governing body." The statute fixes a 30-day period from the date of the decision by the local "governing body" for filing an action in the circuit court contesting such decision. The complete absence of any language in Code § 15.2-2285(F) referring to a "locality" indicates a legislative intent that only the "governing body," the entity that rendered the contested decision, be a required party defendant in an action challenging that decision. 135 Our decision in Friends of Clark Mountain directly supports this construction of Code § 15.2-2285(F). There, we were presented with a question under former Code § 15.1-493(G), the predecessor statute of Code § 15.2-2285(F), regarding which parties were required to be named as defendants within the statutory period of 30 days. We rejected the argument of a board of supervisors that all parties having an interest in the property at issue had to be named as party defendants within the 30-day period. We stated that: [W]hen the action contesting the governing body's decision is filed, the only required parties to a proceeding under [the statute] are the contestant and the local governing body. After the contesting action has been instituted and is pending, however, and the absence of a necessary party is noted of record, the trial court should not adjudicate the controversy until that party has intervened or has been brought into the proceeding. 242 Va. at 21, 406 S.E.2d at 22; accord Riverview Farm Assocs. v. Board of Supervisors, 259 Va. 419, 426, 528 S.E.2d 99, 102-03 (2000). Thus, in Friends of Clark Mountain, we concluded that a local governing body is a required party defendant to an action brought under Code § 15.2-2285(F) contesting certain types of zoning decisions, including the type at issue here, made by the governing body. 242 Va. at 21, 406 S.E.2d at 22. Miller's position advocating a contrary result in this appeal is unavailing. Code § 15.2-1404, on which Miller relies, details the manner in which an action may be brought against a "locality." This statute provides, in relevant part: "Every locality may sue or be sued in its own name in relation to all matters connected with its duties." Code § 15.2-1404. This general provision, however, does not address the issue whether a board of supervisors is a required party defendant in a legal action contesting that board's exercise of its legislative power, but merely states that a locality may be a plaintiff or be named as a defendant in a legal action involving the locality's duties. Notably, Code § 15.2-1404 also provides that in actions brought against a locality, process instituting such actions "shall be served as provided in [Code] § 8.01-300." Id. Those provisions of Code § 8.01-300 specify that when an action is filed against a county, service of process generally is made on its county attorney. Code § 8.01-300(2). However, when an action is filed against a county board of supervisors, process may be served on "any member of the governing body of such entity." Code § 8.01-300(3). In specifying these different methods of service of process, the General Assembly further manifested its intent that a "locality" and its "governing body" are not interchangeable terms but have separate legal identities that must be observed in initiating an action against either as a party defendant in a legal action. Next, we disagree with Miller's contention that our decision in Board of Supervisors v. Board of Zoning Appeals, 268 Va. at 446, 604 S.E.2d at 9, identified Code § 15.2-1404 as the only source of authority for bringing suit 136 against a locality or a local governing body. In that decision, we simply stated that the statute enables a local governing body to institute an action to ensure compliance with that body's legislative enactments. 268 Va. at 446, 604 S.E.2d at 9. Moreover, we observe that our holding in that case is consistent with the statutes in Title 15.2 vesting the powers of a locality in its local governing body. See Code §§ 15.2-1401 and -1425. Based on our consideration of the several statutes discussed above and on our decision in Friends of Clark Mountain, we conclude that in an action under Code § 15.2-2285(F) contesting a decision of a local "governing body," that body is a required party defendant against whom suit must be initiated within the time limit specified in the statute. Thus, we hold that the Board was a required party defendant to Miller's action. We find no merit in Miller's additional arguments that she should be permitted to add the Board as a party to the present appeal or to "correct" as a misnomer the naming of "Highland County, Virginia" and name the Board in Highland County's stead. Even if we assume, without deciding, that such remedies could in some cases be employed on appeal, they are inappropriate here. Because the Board was a required party to Miller's action under Code § 15.2-2285(F), the Board could not be added as a party after the 30-day period from the date of the Board's decision had run. See Braddock, L.C. v. Board of Supervisors, 268 Va. 420, 426, 601 S.E.2d 552, 555 (2004) (action filed by person without standing is nullity and could not be resurrected by addition of parties after 30-day period set by Code § 15.2-2285(F) had expired); see also Harmon v. Sadjadi, 273 Va. 184, 198, 273 Va. 184, 639 S.E.2d 294, 301-02 (2007) (action filed by person without standing was nullity and did not toll applicable statute of limitations). Likewise, Miller cannot employ the statutory remedy provided by Code § 8.01-6 for correcting a misnomer. A misnomer occurs when the right person or entity is incorrectly named. Cook v. Radford Cmty. Hosp., Inc., 260 Va. 443, 451, 536 S.E.2d 906, 910 (2000); Swann v. Marks, 252 Va. 181, 184, 476 S.E.2d 170, 172 (1996). Here, as we have explained, Miller did not incorrectly name the right entity, but named a different entity. Therefore, we hold that the circuit court erred in denying New Wind's plea in bar, and in entering judgment on the merits of Miller's bill of complaint. We further hold that Miller's failure to name the Board, a required party, as a defendant in the action requires us to dismiss Miller's appeal. IV. Brody's Proceedings In Circuit Court Tom Brody, Patty Reum, and several other landowners who own property near the wind turbine project site (collectively, Brody) filed a motion for declaratory judgment in the circuit court. Brody named as defendants Highland County, Virginia, the Highland County Planning Commission, and the Highland County Board of Supervisors (collectively, the Highland County Board), and Highland New Wind Development, LLC, Tamarack of Highland, LLC, and Red Oak Ranch, LLC (collectively, New Wind), and sought to invalidate the planning commission's determination that the CUP was in "substantial accord" with 137 Highland County's comprehensive plan. Brody asked the circuit court to declare that the planning commission did not have jurisdiction or authority to review the CUP after it was issued by the Board. Alternatively, Brody asked the circuit court to declare, among other things, that the planning commission decision was "not in accord with law," was not "in accord with the existing County comprehensive plan," and was "arbitrary and capricious, and void." The Highland County Board filed a motion for summary judgment arguing that Code § 15.2-2232 conferred jurisdiction on the planning commission to review the permit, that the CUP was in "substantial accord" with the comprehensive plan, and that Code § 15.2-2232 does not provide to a private third-party a right of action for persons such as Brody to contest the planning commission's decision. New Wind joined in the Highland County Board's motion for summary judgment. Brody also filed a motion for summary judgment. In his motion, Brody asserted that the planning commission's decision that the CUP was in "substantial accord" with the comprehensive plan was invalid because it was not supported by factual findings. The circuit court conducted a hearing on the motions and concluded that the planning commission's decision that the CUP was in "substantial accord" with the comprehensive plan was sufficiently supported by evidence in the record, despite the fact that the planning commission review pursuant to Code § 15.2-2232 occurred after the Board issued the permit. The circuit court granted the motions for summary judgment filed by the Highland County Board and New Wind but did not address the Board's argument that Brody had no right of action under Code § 15.2-2232. Brody appeals. V. Brody's Appeal In Brody's appeal, the Highland County Board argues as a matter of cross- error that Brody's action is barred because Code § 15.2-2232 does not create a private third-party right of action to challenge a planning commission's finding that a proposed use is in "substantial accord" with a comprehensive plan. The Highland County Board contends that under Code § 15.2-2232(B), only a property owner who has been denied a conditional use permit may appeal a planning commission's "substantial accord" determination, and that this right of appeal lies only to the local governing body. The Highland County Board also asserts that Brody's attempted use of the declaratory judgment statutes to challenge the planning commission's determination is invalid under this Court's holding in Shilling v. Jimenez, 268 Va. 202, 597 S.E.2d 206 (2004). Brody concedes that there is no specific statutory right to appeal a decision by the planning commission. However, Brody responds that under these circumstances, a declaratory judgment action provides the only mechanism for review of the planning commission determination at issue. 138 In addressing these arguments, we consider both the general nature of a declaratory judgment action and the particular language of Code § 15.2-2232. [HN9] A circuit court has the power to issue declaratory judgments under Code §§ 8.01-184 through -191. Pursuant to this authority, circuit courts may make "binding adjudications of right" in cases of "actual controversy" when there is "antagonistic assertion and denial of right." Code § 8.01-184; Hoffman Family, L.L.C. v. Mill Two Assocs. P'ship, 259 Va. 685, 692, 529 S.E.2d 318, 323 (2000); Blue Cross & Blue Shield v. St. Mary's Hosp., 245 Va. 24, 35, 426 S.E.2d 117, 123, 9 Va. Law Rep. 726 (1993); Erie Ins. Group v. Hughes, 240 Va. 165, 170, 393 S.E.2d 210, 212, 6 Va. Law Rep. 2698 (1990). The purpose of the declaratory judgment statutes is to provide a mechanism for resolving uncertainty in controversies over legal rights, without requiring one party to invade the asserted rights of another in order to permit an ordinary civil action for damages. Code § 8.01-191; Umstattd v. Centex Homes, G.P., 274 Va. ____, ____, ____ S.E.2d ____, ____, 274 Va. 541, 650 S.E.2d 527, 2007 Va. LEXIS 98, (2007) (this day decided); Hoffman, 259 Va. at 693, 529 S.E.2d at 323; Cupp v. Board of Supervisors, 227 Va. 580, 592, 318 S.E.2d 407, 413 (1984); Liberty Mutual Ins. Co. v. Bishop, 211 Va. 414, 418, 177 S.E.2d 519, 522 (1970). Thus, the remedy that may be obtained in a declaratory judgment action is preventive relief, upon assertion of an actual controversy. Chaffinch v. Chesapeake & Potomac Tel. Co., 227 Va. 68, 72, 313 S.E.2d 376, 378 (1984); Bishop, 211 Va. at 419, 177 S.E.2d at 522; Williams v. Southern Bank of Norfolk, 203 Va. 657, 662, 125 S.E.2d 803, 807 (1962). Our declaratory judgment statutes do not create or alter any substantive rights, or bring any other additional rights into being. Bishop, 211 Va. at 419, 177 S.E.2d at 522; Williams, 203 Va. at 662, 125 S.E.2d at 807. We emphasized this basic principle in our decision in Cupp v. Board of Supervisors, stating: The intent of the declaratory judgment statutes is not to give parties greater rights than those which they previously possessed, but to permit the declaration of those rights before they mature. In other words, the intent of the act is to have courts render declaratory judgments which may guide parties in their future conduct in relation to each other, thereby relieving them from the risk of taking undirected action incident to their rights, which action, without direction, would jeopardize their interests. 227 Va. at 592, 318 S.E.2d at 413 (quoting Bishop, 211 Va. at 421, 177 S.E.2d at 524) (emphasis omitted). Viewed in this context, Brody's pleadings do not assert a valid request for declaratory relief because, among other reasons, the pleadings do not seek preventive relief but effectively attempt to create a right of appeal that does not exist by statute. Code § 15.2-2232, which addresses the planning commission's duty to render a "substantial accord" determination in certain cases, provides in relevant part: 139 (A) Whenever a local planning commission recommends a comprehensive plan or part thereof for the locality and such plan has been approved and adopted by the governing body, . . . [t]hereafter, unless a feature is already shown on the adopted master plan . . . no street or connection to an existing street, park or other public area, public building or public structure, public utility facility or public service corporation facility other than railroad facility, whether publicly or privately owned, shall be constructed, established or authorized, unless and until the general location or approximate location, character, and extent thereof has been submitted to and approved by the commission as being substantially in accord with the adopted comprehensive plan or part thereof. . . . (B) The commission shall communicate its findings to the governing body, indicating its approval or disapproval with written reasons therefor. The governing body may overrule the action of the commission by a vote of a majority of its membership. . . . The owner or owners or their agents may appeal the decision of the commission to the governing body within ten days after the decision of the commission. The appeal shall be by written petition to the governing body setting forth the reasons for the appeal. The appeal shall be heard and determined within sixty days from its filing. A majority vote of the governing body shall overrule the commission. Id. Under the plain language of these statutory provisions, only the owner of the property at issue, or the owner's agent, may appeal to the governing body from a "substantial accord" determination of the planning commission. Notably, the statute does not provide third parties with a right of appeal from such a determination. We have previously held that the declaratory judgment statutes may not be used to attempt a third-party challenge to a governmental action when such a challenge is not otherwise authorized by statute. In Shilling, a neighboring landowner filed a declaratory judgment action asking a circuit court to declare void the creation of a certain "family subdivision" approved under an ordinance permitting conveyances to members of a landowner's immediate family. 268 Va. at 205-06, 597 S.E.2d at 208. The neighboring landowner alleged that the subdivision was "wrongfully" approved by local officials based on misrepresentations of fact made by the applicant. Id. at 205-06, 597 S.E.2d at 208. The defendants filed demurrers alleging that the local governing body was the sole entity authorized to enforce the ordinance, and that the complainants could not seek to enforce the ordinance provisions by using the remedy of declaratory judgment. The circuit court sustained the demurrers and dismissed the bill of complaint with prejudice. Id. at 206, 597 S.E.2d at 208. We affirmed the circuit court's judgment, holding that the complainants did not have a third-party 140 right of action to enforce a county's application of its subdivision ordinance in a declaratory judgment suit when there was no specific statutory authorization allowing third parties this right. Id. at 208, 597 S.E.2d at 209-10. The rationale underlying our decision in Shilling applies equally well here. The declaratory judgment statutes are not intended to provide, and do not create, a right of appeal that does not otherwise exist. In attempting to create such a right in his bill of complaint, Brody failed to state a cause of action. Therefore, we hold that the circuit court erred in concluding that Brody had a right to bring an action in the circuit court challenging the planning commission's "substantial accord" determination. The circuit court, however, reached the correct result in Brody's case by granting the defendants' motion for summary judgment, although on grounds incorrectly addressing the merits of the suit. When a circuit court has reached the correct result for the wrong reason, we will assign the correct reason and affirm the relevant portion of the circuit court's judgment. Almy v. Grisham, 273 Va. 68, 82, 273 Va. 68, 639 S.E.2d 182, 189 (2007); Mitchem v. Counts, 259 Va. 179, 191, 523 S.E.2d 246, 253 (2000); Hartzell Fan, Inc. v. Waco, Inc., 256 Va. 294, 303, 505 S.E.2d 196, 202 (1998). VI. Conclusion Based on our holdings in these appeals, we will reverse the circuit court's final judgment in favor of New Wind and Highland County in Miller's case, and we will dismiss Miller's bill of complaint with prejudice because Miller failed to join the Board as a party to the action within 30 days of the Board's decision. We also will affirm the circuit court's award of summary judgment in favor of New Wind and the Highland County Board, because Brody failed to assert a valid request for declaratory relief. Reversed and dismissed. VEPCO v. Dungee 524 S.E.2nd 164, 258 Va. 235 LACY, J. James A. Dungee, a minor (James or the plaintiff), by his next friend, filed a motion for judgment against Virginia Electric and Power Company (Virginia Power) seeking damages for burns he sustained while he was in a Virginia Power substation and came in contact with 13,200 volts of electricity. James alleged that Virginia Power was negligent in failing to properly install, maintain, and inspect the fence surrounding the substation. Virginia Power denied that it was negligent and asserted the affirmative defenses of contributory negligence and assumption of risk. A jury returned a verdict in favor of James in the amount of $20,000,000. The trial court denied Virginia Power's motion to set aside the verdict or order remittitur and entered judgment on the jury's verdict. Virginia Power filed an 141 appeal assigning error to a number of rulings of the trial court. Because we find no error in these rulings, we will affirm the judgment of the trial court. Venue Virginia Power first assigns error to the trial court's denial of its motion to transfer the action from Charles City County to the City of Richmond. Virginia Power contends that although Charles City County is a permissible venue under Code § 8.01-262(3) because it conducts business there, application of the principles set out in Norfolk & Western Railway Co. v. Williams, 239 Va. 390, 389 S.E.2d 714 (1990), required that the action be transferred because Charles City County has no practical nexus with the litigation. We disagree. For negligence cases, among others, the Code of Virginia provides a plaintiff with a choice of forums in which an action can be brought. Code § 8.01-262. However, Code § 8.01-265, the so-called forum non-conveniens statute, allows the transfer of any action, even if it was originally filed in a proper venue, to "any fair and convenient forum" in the Commonwealth upon a motion by the defendant and "for good cause shown." Code § 8.01-265. "Good cause" under the statute includes, but is not limited to, "the avoidance of substantial inconvenience to the parties or the witnesses." Id. Whether to grant such a motion is within the discretion of the trial court, and the trial court's denial of the motion will not be reversed absent an abuse of that discretion. Williams, 239 Va. at 392, 389 S.E.2d at 715. To secure a change in venue, Virginia Power had the burden of showing that there was good cause to transfer the case from Charles City County to the City of Richmond. In ruling on Virginia Power's motion, the trial court considered the impact on the witnesses and parties of holding the trial in Charles City County, as compared with holding it in Richmond. It concluded that traveling thirty miles to Charles City County from Richmond imposed minimal cost and inconvenience on those parties and witnesses who lived in Richmond, and that holding the trial in Charles City County would not impose any material inconvenience on witnesses coming from other areas of the country because the Richmond airport is located midway between Richmond and Charles City County. The court also concluded that there was no evidence that overnight stays in Charles City County would be required for those witnesses who lived in Richmond. Based on these factors, the trial court concluded that traveling thirty miles imposed minimal inconvenience and that there was no showing of substantial inconvenience to the parties or witnesses. Virginia Power argues that the test for good cause is not exclusively substantial inconvenience. According to Virginia Power, our decision in Williams established that "a trial court abuses its discretion under Va.Code § 8.01-265 if it declines to transfer venue from a forum with no practical nexus to the cause of action to a more convenient forum with a strong nexus." We agree with Virginia Power that Code § 8.01-265 does not limit the definition of "good cause" to "the avoidance of substantial inconvenience to the parties or the witnesses;" however, we disagree with Virginia Power's characterization of our holding in Williams. 142 The plaintiff in Williams was an employee of a railroad company based in Roanoke. He was injured when he fell from a chair in his office in Roanoke. He filed a personal injury action against the railroad company in Portsmouth, a permissible venue. The information before the trial court relevant to the question of transfer was that all the witnesses were from Roanoke and they all "faced the inconvenience of being away from families, homes, and jobs while traveling to Portsmouth to testify,...." 239 Va. at 395, 389 S.E.2d at 717. Given the location of the parties and witnesses as well as the accident itself, we concluded that the litigation had "no practical nexus" with Portsmouth but had "a strong nexus" with Roanoke. Id. at 396, 389 S.E.2d at 717. However, contrary to Virginia Power's contention, the degree of the "nexus" does not alone provide the good cause required for transfer under the statute. In Williams, we stated that the circumstances to be considered when ruling on motions to transfer venue included accessibility of sources of proof, compulsory process, cost of witness attendance, possibility of a view of the premises, and other "practical problems," in addition to the statutory ground of avoiding substantial inconvenience to the parties and witnesses. Id. at 393, 389 S.E.2d at 716. We concluded that the trial court abused its discretion in failing to transfer the action to Roanoke, not simply because Portsmouth had "no practical nexus" with the action, but because the railroad company met its burden of presenting "sufficient information to show good cause to transfer, including substantial inconvenience to the parties and witnesses" and other factors. Id. at 396, 389 S.E.2d at 718. This holding does not support the construction Virginia Power advocates--that transfer is required based solely on the lack of a practical nexus of the venue with the litigation. We thus reject Virginia Power's argument on this issue. Finding that the trial court did not abuse its discretion, we will affirm the trial court's denial of Virginia Power's motion to transfer venue. International Shoe v. State of Washington et al. 326 U.S. 310, 66 S.Ct. 154 (1945) Stone, J., delivered the opinion of the Court. The questions for decision are (1) whether, within the limitations of the due process clause of the Fourteenth Amendment, appellant, a Delaware corporation, has by its activities in the State of Washington rendered itself amenable to proceedings in the courts of that state to recover unpaid contributions to the state unemployment compensation fund exacted by state statutes, Washington Unemployment Compensation Act, Washington Revised Statutes, § 9998-103(a) through § 9998-123(a), 1941 Supp., and (2) whether the state can exact those contributions consistently with the due process clause of the Fourteenth Amendment. The statutes in question set up a comprehensive scheme of unemployment compensation, the costs of which are defrayed by contributions required to be made by employers to a state unemployment compensation fund. The contributions are a 143 specified percentage of the wages payable annually by each employer for his employees' services in the state. The assessment and collection of the contributions and the fund are administered by appellees. Section 14 (c) of the Act (Wash. Rev. Stat., 1941 Supp., § 9998-114(c) authorizes appellee Commissioner to issue an order and notice of assessment of delinquent contributions upon prescribed personal service of the notice upon the employer if found within the state, or, if not so found, by mailing the notice to the employer by registered mail at his last known address. That section also authorizes the Commissioner to collect the assessment by distraint if it is not paid within ten days after service of the notice. By §§ 14(e) and 6(b) the order of assessment may be administratively reviewed by an appeal tribunal within the office of unemployment upon petition of the employer, and this determination is by § 6(i) made subject to judicial review on questions of law by the state Superior Court, with further right of appeal in the as in other civil cases. In this case notice of assessment for the years in question was personally served upon a sales solicitor employed by appellant in the State of Washington, and a copy of the notice was mailed by registered mail to appellant at its address in St. Louis, Missouri. Appellant appeared specially before the office of unemployment and moved to set aside the order and notice of assessment on the ground that the service upon appellant's salesman was not proper service upon appellant; that appellant was not a corporation of the State of Washington and was not doing business within the state; that it had no agent within the state upon whom service could be made; and that appellant is not an employer and does not furnish employment within the meaning of the statute. The motion was heard on evidence and a stipulation of facts by the appeal tribunal which denied the motion and ruled that appellee Commissioner was entitled to recover the unpaid contributions. That action was affirmed by the Commissioner; both the Superior Court and the Supreme Court affirmed. 22 Wash. 2d 146, 154 P. 2d 801. Appellant in each of these courts assailed the statute as applied, as a violation of the due process clause of the Fourteenth Amendment, and as imposing a constitutionally prohibited burden on interstate commerce. The cause comes here on appeal under § 237 (a) of the Judicial Code, 28 U.S.C. § 344 (a), appellant assigning as error that the challenged statutes as applied infringe the due process clause of the Fourteenth Amendment and the commerce clause. The facts as found by the appeal tribunal and accepted by the state Superior Court and Supreme Court, are not in dispute. Appellant is a Delaware corporation, having its principal place of business in St. Louis, Missouri, and is engaged in the manufacture and sale of shoes and other footwear. It maintains places of business in several states, other than Washington, at which its manufacturing is carried on and from which its merchandise is distributed interstate through several sales units or branches located outside the State of Washington. Appellant has no office in Washington and makes no contracts either for sale or purchase of merchandise there. It maintains no stock of merchandise in that state and makes there no deliveries of goods in intrastate commerce. During the years from 144 1937 to 1940, now in question, appellant employed eleven to thirteen salesmen under direct supervision and control of sales managers located in St. Louis. These salesmen resided in Washington; their principal activities were confined to that state; and they were compensated by commissions based upon the amount of their sales. The commissions for each year totaled more than $31,000. Appellant supplies its salesmen with a line of samples, each consisting of one shoe of a pair, which they display to prospective purchasers. On occasion they rent permanent sample rooms, for exhibiting samples, in business buildings, or rent rooms in hotels or business buildings temporarily for that purpose. The cost of such rentals is reimbursed by appellant. The authority of the salesmen is limited to exhibiting their samples and soliciting orders from prospective buyers, at prices and on terms fixed by appellant. The salesmen transmit the orders to appellant's office in St. Louis for acceptance or rejection, and when accepted the merchandise for filling the orders is shipped f.o.b. from points outside Washington to the purchasers within the state. All the merchandise shipped into Washington is invoiced at the place of shipment from which collections are made. No salesman has authority to enter into contracts or to make collections. The Supreme Court of Washington was of opinion that the regular and systematic solicitation of orders in the state by appellant's salesmen, resulting in a continuous flow of appellant's product into the state, was sufficient to constitute doing business in the state so as to make appellant amenable to suit in its courts. But it was also of opinion that there were sufficient additional activities shown to bring the case within the rule frequently stated, that solicitation within a state by the agents of a foreign corporation plus some additional activities there are sufficient to render the corporation amenable to suit brought in the courts of the state to enforce an obligation arising out of its activities there. International Harvester Co. v. Kentucky, 234 U.S. 579, 587; People's Tobacco Co. v. American Tobacco Co., 246 U.S. 79, 87; Frene v. Louisville Cement Co., 77 U.S. App. D.C. 129, 134 F. 2d 511, 516. The court found such additional activities in the salesmen's display of samples sometimes in permanent display rooms, and the salesmen's residence within the state, continued over a period of years, all resulting in a substantial volume of merchandise regularly shipped by appellant to purchasers within the state. The court also held that the statute as applied did not invade the constitutional power of Congress to regulate interstate commerce and did not impose a prohibited burden on such commerce. Appellant's argument, renewed here, that the statute imposes an unconstitutional burden on interstate commerce need not detain us. For 53 Stat. 1391, 26 U.S.C. § 1606 (a) provides that "No person required under a State law to make payments to an unemployment fund shall be relieved from compliance therewith on the ground that he is engaged in interstate or foreign commerce, or that the State law does not distinguish between employees engaged in interstate or foreign commerce and those engaged in intrastate commerce." It is no longer debatable that Congress, in the exercise of the commerce power, may authorize the states, in specified ways, to regulate interstate commerce or impose burdens upon it. 145 Kentucky Whip & Collar Co. v. Illinois Central R. Co., 299 U.S. 334; Perkins v. Pennsylvania, 314 U.S. 586; Standard Dredging Corp. v. Murphy, 319 U.S. 306, 308; Hooven & Allison Co. v. Evatt, 324 U.S. 652, 679; Southern Pacific Co. v. Arizona, 325 U.S. 761, 769. Appellant also insists that its activities within the state were not sufficient to manifest its "presence" there and that in its absence the state courts were without jurisdiction, that consequently it was a denial of due process for the state to subject appellant to suit. It refers to those cases in which it was said that the mere solicitation of orders for the purchase of goods within a state, to be accepted without the state and filled by shipment of the purchased goods interstate, does not render the corporation seller amenable to suit within the state. See Green v. Chicago, B. & Q.R. Co., 205 U.S. 530, 533; International Harvester Co. v. Kentucky, supra, 586-587; Philadelphia & Reading R. Co. v. McKibbin, 243 U.S. 264, 268; People's Tobacco Co. v. American Tobacco Co., supra, 87. And appellant further argues that since it was not present within the state, it is a denial of due process to subject it to taxation or other money exaction. It thus denies the power of the state to lay the tax or to subject appellant to a suit for its collection. Historically the jurisdiction of courts to render judgment in personam is grounded on their de facto power over the defendant's person. Hence his presence within the territorial jurisdiction of a court was prerequisite to its rendition of a judgment personally binding him. Pennoyer v. Neff, 95 U.S. 714, 733. But now that the capias ad respondendum has given way to personal service of summons or other form of notice, due process requires only that in order to subject a defendant to a judgment in personam, if he be not present within the territory of the forum, he have certain minimum contacts with it such that the maintenance of the suit does not offend "traditional notions of fair play and substantial justice." Milliken v. Meyer, 311 U.S. 457, 463. See Holmes, J., in McDonald v. Mabee, 243 U.S. 90, 91. Compare Hoopeston Canning Co. v. Cullen, 318 U.S. 313, 316, 319. See Blackmer v. United States, 284 U.S. 421; Hess v. Pawloski, 274 U.S. 352; Young v. Masci, 289 U.S. 253. Since the corporate personality is a fiction, although a fiction intended to be acted upon as though it were a fact, Klein v. Board of Supervisors, 282 U.S. 19, 24, it is clear that unlike an individual its "presence" without, as well as within, the state of its origin can be manifested only by activities carried on in its behalf by those who are authorized to act for it. To say that the corporation is so far "present" there as to satisfy due process requirements, for purposes of taxation or the maintenance of suits against it in the courts of the state, is to beg the question to be decided. For the terms "present" or "presence" are used merely to symbolize those activities of the corporation's agent within the state which courts will deem to be sufficient to satisfy the demands of due process. L. Hand, J., in Hutchinson v. Chase & Gilbert, 45 F. 2d 139, 141. Those demands may be met by such contacts of the corporation with the state of the forum as make it reasonable, in the context of our federal system of government, to require the corporation to defend the particular suit which is brought there. An "estimate of the inconveniences" which would result to the corporation 146 from a trial away from its "home" or principal place of business is relevant in this connection. Hutchinson v. Chase & Gilbert, supra, 141. "Presence" in the state in this sense has never been doubted when the activities of the corporation there have not only been continuous and systematic, but also give rise to the liabilities sued on, even though no consent to be sued or authorization to an agent to accept service of process has been given. St. Clair v. Cox, 106 U.S. 350, 355; Connecticut Mutual Co. v. Spratley, 172 U.S. 602, 610-611; Pennsylvania Lumbermen's Ins. Co. v. Meyer, 197 U.S. 407, 414-415; Commercial Mutual Co. v. Davis, 213 U.S. 245, 255-256; International Harvester Co. v. Kentucky, supra; cf. St. Louis S.W.R. Co. v. Alexander, 227 U.S. 218. Conversely it has been generally recognized that the casual presence of the corporate agent or even his conduct of single or isolated items of activities in a state in the corporation's behalf are not enough to subject it to suit on causes of action unconnected with the activities there. St. Clair v. Cox, supra, 359, 360; Old Wayne Life Assn. v. McDonough, 204 U.S. 8, 21; Frene v. Louisville Cement Co., supra, 515, and cases cited. To require the corporation in such circumstances to defend the suit away from its home or other jurisdiction where it carries on more substantial activities has been thought to lay too great and unreasonable a burden on the corporation to comport with due process. While it has been held, in cases on which appellant relies, that continuous activity of some sorts within a state is not enough to support the demand that the corporation be amenable to suits unrelated to that activity, Old Wayne Life Assn. v. McDonough, supra; Green v. Chicago, B. & Q.R. Co., supra; Simon v. Southern R. Co., 236 U.S. 115; People's Tobacco Co. v. American Tobacco Co., supra; cf. Davis v. Farmers Co-operative Co., 262 U.S. 312, 317, there have been instances in which the continuous corporate operations within a state were thought so substantial and of such a nature as to justify suit against it on causes of action arising from dealings entirely distinct from those activities. See Missouri, K. & T.R. Co. v. Reynolds, 255 U.S. 565; Tauza v. Susquehanna Coal Co., 220 N.Y. 259, 115 N.E. 915; cf. St. Louis S.W.R. Co. v. Alexander, supra. Finally, although the commission of some single or occasional acts of the corporate agent in a state sufficient to impose an obligation or liability on the corporation has not been thought to confer upon the state authority to enforce it, Rosenberg Bros. & Co. v. Curtis Brown Co., 260 U.S. 516, other such acts, because of their nature and quality and the circumstances of their commission, may be deemed sufficient to render the corporation liable to suit. Cf. Kane v. New Jersey, 242 U.S. 160; Hess v. Pawloski, supra; Young v. Masci, supra. True, some of the decisions holding the corporation amenable to suit have been supported by resort to the legal fiction that it has given its consent to service and suit, consent being implied from its presence in the state through the acts of its authorized agents. Lafayette Insurance Co. v. French, 18 How. 404, 407; St. Clair v. Cox, supra, 356; Commercial Mutual Co. v. Davis, supra, 254; Washington v. Superior Court, 289 U.S. 361, 364-365. But more realistically it may be said that those authorized acts were of such a nature as to justify the fiction. Smolik v. Philadelphia & Reading Co., 147 222 F. 148, 151. Henderson, The Position of Foreign Corporations in American Constitutional Law, 94-95. It is evident that the criteria by which we mark the boundary line between those activities which justify the subjection of a corporation to suit, and those which do not, cannot be simply mechanical or quantitative. The test is not merely, as has sometimes been suggested, whether the activity, which the corporation has seen fit to procure through its agents in another state, is a little more or a little less. St. Louis S.W.R. Co. v. Alexander, supra, 228; International Harvester Co. v. Kentucky, supra, 587. Whether due process is satisfied must depend rather upon the quality and nature of the activity in relation to the fair and orderly administration of the laws which it was the purpose of the due process clause to insure. That clause does not contemplate that a state may make binding a judgment in personam against an individual or corporate defendant with which the state has no contacts, ties, or relations. Cf. Pennoyer v. Neff, supra; Minnesota Commercial Assn. v. Benn, 261 U.S. 140. But to the extent that a corporation exercises the privilege of conducting activities within a state, it enjoys the benefits and protection of the laws of that state. The exercise of that privilege may give rise to obligations, and, so far as those obligations arise out of or are connected with the activities within the state, a procedure which requires the corporation to respond to a suit brought to enforce them can, in most instances, hardly be said to be undue. Compare International Harvester Co. v. Kentucky, supra, with Green v. Chicago, B. & Q.R. Co., supra, and People's Tobacco Co. v. American Tobacco Co., supra. Compare Connecticut Mutual Co. v. Spratley, supra, 619, 620 and Commercial Mutual Co. v. Davis, supra, with Old Wayne Life Assn. v. McDonough, supra. See 29 Columbia Law Review, 187-195. Applying these standards, the activities carried on in behalf of appellant in the State of Washington were neither irregular nor casual. They were systematic and continuous throughout the years in question. They resulted in a large volume of interstate business, in the course of which appellant received the benefits and protection of the laws of the state, including the right to resort to the courts for the enforcement of its rights. The obligation which is here sued upon arose out of those very activities. It is evident that these operations establish sufficient contacts or ties with the state of the forum to make it reasonable and just, according to our traditional conception of fair play and substantial justice, to permit the state to enforce the obligations which appellant has incurred there. Hence we cannot say that the maintenance of the present suit in the State of Washington involves an unreasonable or undue procedure. We are likewise unable to conclude that the service of the process within the state upon an agent whose activities establish appellant's "presence" there was not sufficient notice of the suit, or that the suit was so unrelated to those activities as to make the agent an inappropriate vehicle for communicating the notice. It is enough that appellant has established such contacts with the state that the particular form of 148 substituted service adopted there gives reasonable assurance that the notice will be actual. Connecticut Mutual Co. v. Spratley, supra, 618, 619; Board of Trade v. Hammond Elevator Co., 198 U.S. 424, 437-438; Commercial Mutual Co. v. Davis, supra, 254-255. Cf. Riverside Mills v. Menefee, 237 U.S. 189, 194, 195; see Knowles v. Gaslight & Coke Co., 19 Wall. 58, 61; McDonald v. Mabee, supra; Milliken v. Meyer, supra. Nor can we say that the mailing of the notice of suit to appellant by registered mail at its home office was not reasonably calculated to apprise appellant of the suit. Compare Hess v. Pawloski, supra, with McDonald v. Mabee, supra, 92, and Wuchter v. Pizzutti, 276 U.S. 13, 19, 24; cf. Becquet v. MacCarthy, 2 B. & Ad. 951; Maubourquet v. Wyse, 1 Ir. Rep. C.L. 471. See Washington v. Superior Court, supra, 365. Only a word need be said of appellant's liability for the demanded contributions to the state unemployment fund. The Supreme Court of Washington, construing and applying the statute, has held that it imposes a tax on the privilege of employing appellant's salesmen within the state measured by a percentage of the wages, here the commissions payable to the salesmen. This construction we accept for purposes of determining the constitutional validity of the statute. The right to employ labor has been deemed an appropriate subject of taxation in this country and England, both before and since the adoption of the Constitution. Steward Machine Co. v. Davis, 301 U.S. 548, 579, et seq. And such a tax imposed upon the employer for unemployment benefits is within the constitutional power of the states. Carmichael v. Southern Coal Co., 301 U.S. 495, 508, et seq. Appellant having rendered itself amenable to suit upon obligations arising out of the activities of its salesmen in Washington, the state may maintain the present suit in personam to collect the tax laid upon the exercise of the privilege of employing appellant's salesmen within the state. For Washington has made one of those activities, which taken together establish appellant's "presence" there for purposes of suit, the taxable event by which the state brings appellant within the reach of its taxing power. The state thus has constitutional power to lay the tax and to subject appellant to a suit to recover it. The activities which establish its "presence" subject it alike to taxation by the state and to suit to recover the tax. Equitable Life Society v. Pennsylvania, 238 U.S. 143, 146; cf. International Harvester Co. v. Department of Taxation, 322 U.S. 435, 442, et seq.; Hoopeston Canning Co. v. Cullen, supra, 316-319; see General Trading Co. v. Tax Comm'n, 322 U.S. 335. Affirmed.

Hanson, executrix, et al. v. Denckla, et al. 357 U.S. 235, 78 S.Ct. 1228 (1958) Warren, C.J., delivered the opinion of the Court. This controversy concerns the right to $400,000, part of the corpus of a trust established in Delaware by a settlor who later became domiciled in Florida. One group of claimants, "legatees," urge that this property passed under the residuary 149 clause of the settlor's will, which was admitted to probate in Florida. The Florida courts have sustained this position. 100 So. 2d 378. Other claimants, "appointees" and "beneficiaries," contend that the property passed pursuant to the settlor's exercise of the inter vivos power of appointment created in the deed of trust. The Delaware courts adopted this position and refused to accord full faith and credit to the Florida determination because the Florida court had not acquired jurisdiction over an indispensable party, the Delaware trustee. --- Del. ---, 128 A. 2d 819. We postponed the question of jurisdiction in the Florida appeal, No. 107, 354 U.S. 919, and granted certiorari to the Delaware Supreme Court, No. 117, 354 U.S. 920. The trust whose validity is contested here was created in 1935. Dora Browning Donner, then a domiciliary of Pennsylvania, executed a trust instrument in Delaware naming the Wilmington Trust Co., of Wilmington, Delaware, as trustee. The corpus was composed of securities. Mrs. Donner reserved the income for life, and stated that the remainder should be paid to such persons or upon such trusts as she should appoint by inter vivos or testamentary instrument. The trust agreement provided that Mrs. Donner could change the trustee, and that she could amend, alter or revoke the agreement at any time. A measure of control over trust administration was assured by the provision that only with the consent of a trust "advisor" appointed by the settlor could the trustee (1) sell trust assets, (2) make investments, and (3) participate in any plan, proceeding, reorganization or merger involving securities held in the trust. A few days after the trust was established Mrs. Donner exercised her power of appointment. That appointment was replaced by another in 1939. Thereafter she left Pennsylvania, and in 1944 became domiciled in Florida, where she remained until her death in 1952. Mrs. Donner's will was executed Dec. 3, 1949. On that same day she executed the inter vivos power of appointment whose terms are at issue here.67 After making modest appointments in favor of a hospital and certain family retainers (the "appointees"),68 she appointed the sum of $200,000 to each of two trusts previously established with another Delaware trustee, the Delaware Trust Co. The balance of the trust corpus, over $1,000,000 at the date of her death, was appointed to her executrix. That amount passed under the residuary clause of her will and is not at issue here. The two trusts with the Delaware Trust Co. were created in 1948 by Mrs. Donner's daughter, Elizabeth Donner Hanson, for the benefit of Elizabeth's children, Donner Hanson and Joseph Donner Winsor. In identical terms they provide that the income not required for the beneficiary's support should be accumulated to age 25, when the beneficiary should be paid 1/4 of the corpus and receive the income from the balance for life. Upon the death of the beneficiary the remainder was to go to such of the beneficiary's issue or Elizabeth Donner Hanson's issue as the beneficiary should appoint by inter vivos or testamentary instrument; in default of appointment

67 The appointment was partially revoked July 7, 1950 in a respect not material to the instant controversy. 68 The hospital received $ 10,000. Six servants qualified for appointments totaling $ 7,000. 150 to the beneficiary's issue alive at the time of his death, and if none to the issue of Elizabeth Donner Hanson. Mrs. Donner died Nov. 20, 1952. Her will, which was admitted to probate in Florida, named Elizabeth Donner Hanson as executrix. She was instructed to pay all debts and taxes, including any which might be payable by reason of the property appointed under the power of appointment in the trust agreement with the Wilmington Trust Co. After disposing of personal and household effects, Mrs. Donner's will directed that the balance of her property (the $1,000,000 appointed from the Delaware trust) be paid in equal parts to two trusts for the benefit of her daughters Katherine N. R. Denckla and Dorothy B. R. Stewart. This controversy grows out of the residuary clause that created the last- mentioned trusts. It begins: "All the rest, residue and remainder of my estate, real, personal and mixed, whatsoever and wheresoever the same may be at the time of my death, including any and all property, rights and interest over which I may have power of appointment which prior to my death has not been effectively exercised by me or has been exercised by me in favor of my Executrix, I direct my Executrix to deal with as follows . . . ". Residuary legatees Denckla and Stewart, already the recipients of over $500,000 each, urge that the power of appointment over the $400,000 appointed to sister Elizabeth's children was not "effectively exercised" and that the property should accordingly pass to them. Fourteen months after Mrs. Donner's death these parties petitioned a Florida chancery court for a declaratory judgment "concerning what property passes under the residuary clause" of the will. Personal service was had upon the following defendants: (1) executrix Elizabeth Donner Hanson, (2) beneficiaries Donner Hanson and Joseph Donner Winsor, and (3) potential beneficiary William Donner Roosevelt, also one of Elizabeth's children. Curtin Winsor, Jr., another of Elizabeth's children and also a potential beneficiary of the Delaware trusts, was not named as a party and was not served. About a dozen other defendants were nonresidents and could not be personally served. These included the Wilmington Trust Co. ("trustee"), the Delaware Trust Co. (to whom the $400,000 had been paid shortly after Mrs. Donner's death), certain individuals who were potential successors in interest to complainants Denckla and Stewart, and most of the named appointees in Mrs. Donner's 1949 appointment. A copy of the pleadings and a "Notice to Appear and Defend" were sent to each of these defendants by ordinary mail, and notice was published locally as required by the Florida statutes dealing with constructive service.69 With the exception of two individuals whose interests

69 Fla. Stat., 1957, c. 48, § 48.01: "Service of process by publication may be had, in any of the several courts of this state, and upon any of the parties mentioned in § 48.02 in any suit or proceeding: 151 coincided with complainants Denckla and Stewart, none of the nonresident defendants made any appearance. The appearing defendants (Elizabeth Donner Hanson and her children) moved to dismiss the suit because the exercise of jurisdiction over indispensable parties, the Delaware trustees, would offend Section 1 of the Fourteenth Amendment. The Chancellor ruled that he lacked jurisdiction over these nonresident defendants because no personal service was had and because the trust corpus was outside the territorial jurisdiction of the court. The cause was dismissed as to them. As far as parties before the court were concerned, however, he ruled that the power of appointment was testamentary and void under the applicable Florida law. In a decree dated Jan. 14, 1955, he ruled that the $400,000 passed under the residuary clause of the will. After the Florida litigation began, but before entry of the decree, the executrix instituted a declaratory judgment action in Delaware to determine who was entitled to participate in the trust assets held in that State. Except for the addition of beneficiary Winsor and several appointees, the parties were substantially the same as in the Florida litigation. Nonresident defendants were notified by registered mail. All of the trust companies, beneficiaries, and legatees except Katherine N. R. Denckla, appeared and participated in the litigation. After the Florida court enjoined executrix Hanson from further participation, her children pursued their own interests. When the Florida decree was entered the legatees unsuccessfully urged it as res judicata of the Delaware dispute. In a decree dated Jan. 13, 1956, the Delaware Chancellor ruled that the trust and power of appointment were valid under the applicable Delaware law, and that the trust corpus had properly been paid to the Delaware Trust Co. and the other appointees. --- Del. Ch. ---, 119 A. 2d 901. Alleging that she would be bound by the Delaware decree, the executrix moved the Florida Supreme Court to remand with instructions to dismiss the Florida suit then pending on appeal. No full faith and credit question was raised. The motion was denied. The Florida Supreme Court affirmed its Chancellor's conclusion that Florida law applied to determine the validity of the trust and power of appointment. Under

"(1) To enforce any legal or equitable lien upon or claim to any title or interest in real or personal property within the jurisdiction of the court or any fund held or debt owing by any party upon whom process can be served within this state...... "(5) For the construction of any will, deed, contract or other written instrument and for a judicial declaration or enforcement of any legal or equitable right, title, claim, lien or interest thereunder." § 48.02: "Where personal service of process cannot be had, service of process by publication may be had upon any party, natural or corporate, known or unknown, including: (1) Any known or unknown natural person ... (2) Any corporation or other legal entity, whether its domicile be foreign, domestic or unknown . . . ." 152 that law the trust was invalid because the settlor had reserved too much power over the trustee and trust corpus, and the power of appointment was not independently effective to pass the property because it was a testamentary act not accompanied by the requisite formalities. The Chancellor's conclusion that there was no jurisdiction over the trust companies and other absent defendants was reversed. The court ruled that jurisdiction to construe the will carried with it "substantive" jurisdiction "over the persons of the absent defendants" even though the trust assets were not "physically in this state." Whether this meant jurisdiction over the person of the defendants or jurisdiction over the trust assets is open to doubt. In a motion for rehearing the beneficiaries and appointees urged for the first time that Florida should have given full faith and credit to the decision of the Delaware Chancellor. The motion was denied without opinion, Nov. 28, 1956. The full faith and credit question was first raised in the Delaware litigation by an unsuccessful motion for new trial filed with the Chancellor Jan. 20, 1956. After the Florida Supreme Court decision the matter was renewed by a motion to remand filed with the Delaware Supreme Court. In a decision of Jan. 14, 1957, that court denied the motion and affirmed its Chancellor in all respects. The Florida decree was held not binding for purposes of full faith and credit because the Florida court had no over the trust companies and no jurisdiction over the trust res. The issues for our decision are, first, whether Florida erred in holding that it had jurisdiction over the nonresident defendants, and second, whether Delaware erred in refusing full faith and credit to the Florida decree. We need not determine whether Florida was bound to give full faith and credit to the decree of the Delaware Chancellor since the question was not seasonably presented to the Florida court. Radio Station WOW v. Johnson, 326 U.S. 120, 128. No. 107, The Florida Appeal. The question of our jurisdiction was postponed until the hearing of the merits. The appeal is predicated upon the contention that as applied to the facts of this case the Florida statute providing for constructive service is contrary to the Federal Constitution. 28 U.S.C. § 1257 (2). But in the state court appellants (the "beneficiaries") did not object that the statute was invalid as applied, but rather that the effect of the state court's exercise of jurisdiction in the circumstances of this case deprived them of a right under the Federal Constitution.70 Accordingly, we are without jurisdiction of the appeal and it must be dismissed. Wilson v. Cook, 327 U.S. 474, 482; Charleston Fed. Sav. & L. Assn. v. Alderson, 324

70 The record discloses no mention of the state statute until the petition for rehearing in the Florida Supreme Court. In the trial court, appellant's motion to dismiss raised the federal question in this manner: "The exercise by this Court of the jurisdiction sought to be invoked by the plaintiffs herein would contravene the Constitution and Laws of the State of Florida and the Constitution of the United States, and, in particular, Section 1 of the Fourteenth Amendment to the United States Constitution." No. 107, R. 41. 153 U.S. 182. Treating the papers whereon appeal was taken as a petition for certiorari, 28 U.S.C. 2103, certiorari is granted. Relying upon the principle that a person cannot invoke the jurisdiction of this Court to vindicate the right of a third party,71 appellees urge that appellants lack standing to complain of a defect in jurisdiction over the nonresident trust companies, who have made no appearance in this action. Florida adheres to the general rule that a trustee is an indispensable party to litigation involving the validity of the trust.72 In the absence of such a party a Florida court may not proceed to adjudicate the controversy.73 Since state law required the acquisition of jurisdiction over the nonresident trust company74 before the court was empowered to proceed with the action, any defendant affected by the court's judgment has that "direct and substantial personal interest in the outcome" that is necessary to challenge whether that jurisdiction was in fact acquired. Chicago v. Atchison, T. & S.F.R. Co., 357 U.S. 77. Appellants charge that this judgment is offensive to the Due Process Clause of the Fourteenth Amendment because the Florida court was without jurisdiction. There is no suggestion that the court failed to employ a means of notice reasonably calculated to inform nonresident defendants of the pending proceedings,75 or denied them an opportunity to be heard in defense of their interests.76 The alleged defect is the absence of those "affiliating circumstances"77 without which the courts of a State may not enter a judgment imposing obligations on persons (jurisdiction in personam) or affecting interests in property (jurisdiction in rem or quasi in rem).78

71 See Liberty Warehouse Co. v. Burley T.G. Co-op. M. Assn., 276 U.S. 71, 88; Smith v. , 191 U.S. 138, 148; Tyler v. Judges of the Court of Registration, 179 U.S. 405; Robertson and Kirkham, Jurisdiction of the Supreme Court (Wolfson and Kurland ed.), 298. 72 Trueman Fertilizer Co. v. Allison, 81 So. 2d 734, 738; Winn v. Strickland, 34 Fla. 610, 633, 16 So. 606, 613; Wilson v. Russ, 17 Fla. 691, 697; McArthur v. Scott, 113 U.S. 340, 396; Sadler v. Industrial Trust Co., 327 Mass. 10, 97 N.E. 2d 169. 73 Martinez v. Balbin, 76 So. 2d 488, 490; Florida Land Rock Phosphate Co. v. Anderson, 50 Fla. 501, 512-513, 39 So. 392, 396. 74 Hereafter the terms "trust," "trust company" and "trustee" have reference to the trust established in 1935 with the Wilmington Trust Co., the validity of which is at issue here. It is unnecessary to determine whether the Delaware Trust Co., to which the $ 400,000 remainder interest was appointed and was paid after Mrs. Donner's death, is also an indispensable party to this proceeding. 75 Walker v. City of Hutchinson, 352 U.S. 112; Mullane v. Central Hanover B. & T. Co., 339 U.S. 306; McDonald v. Mabee, 243 U.S. 90. 76 Roller v. Holly, 176 U.S. 398. 77 Sunderland, The Problem of Jurisdiction, Selected Essays on Constitutional Law, 1270, 1272. 78 A judgment in personam imposes a personal liability or obligation on one person in favor of another. A judgment in rem affects the interests of all persons in designated property. A 154 While the in rem and in personam classifications do not exhaust all the situations that give rise to jurisdiction,79 they are adequate to describe the affiliating circumstances suggested here, and accordingly serve as a useful means of approach to this case. . Founded on physical power, McDonald v. Mabee, 243 U.S. 90, 91, the in rem jurisdiction of a state court is limited by the extent of its power and by the coordinate authority of sister States.80 The basis of the jurisdiction is the presence of the subject property within the territorial jurisdiction of the forum State. Rose v. Himely, 4 Cranch 241, 277; Overby v. Gordon, 177 U.S. 214, 221-222. Tangible property poses no problem for the application of this rule, but the situs of intangibles is often a matter of controversy.81 In considering restrictions on the power to tax, this Court has concluded that "jurisdiction" over intangible property is not limited to a single State. Tax Commission v. Aldrich, 316 U.S. 174; Curry v. McCanless, 307 U.S. 357. Whether the type of "jurisdiction" with which this opinion deals may be exercised by more than one State we need not decide. The parties seem to assume that the trust assets that form the subject matter of this action82 were located in Delaware and not in Florida. We can see nothing in the record contrary to that assumption, or sufficient to establish a situs in Florida.83

judgment quasi in rem affects the interests of particular persons in designated property. The latter is of two types. In one the plaintiff is seeking to secure a pre-existing claim in the subject property and to extinguish or establish the nonexistence of similar interests of particular persons. In the other the plaintiff seeks to apply what he concedes to be the property of the defendant to the satisfaction of a claim against him. Restatement, Judgments, 5-9. For convenience of terminology this opinion will use "in rem" in lieu of "in rem and quasi in rem." 79 E.g., Mullane v. Central Hanover Bank & Trust Co., 339 U.S. 306, 312; Williams v. North Carolina, 317 U.S. 287, 297. Fraser, Jurisdiction by Necessity, 100 U. of Pa. L. Rev. 305. 80 Baker v. Baker, Eccles & Co., 242 U.S. 394, 400; Riley v. New York Trust Co., 315 U.S. 343, 349; Overby v. Gordon, 177 U.S. 214, 221-222; Pennoyer v. Neff, 95 U.S. 714; Rose v. Himely, 4 Cranch 241, 277. 81 See Andrews, Situs of Intangibles in Suits against Non-Resident Claimants, 49 Yale L.J. 241. 82 This case does not concern the situs of a beneficial interest in trust property. These appellees were contesting the validity of the trust. Their concern was with the legal interest of the trustee or, if the trust was invalid, the settlor. Therefore, the relevant factor here is the situs of the stocks, bonds, and notes that make up the corpus of the trust. Properly speaking such assets are intangibles that have no "physical" location. But their embodiment in documents treated for most purposes as the assets themselves makes them partake of the nature of tangibles. Cf. Wheeler v. Sohmer, 233 U.S. 434, 439. 83 The documents evidencing ownership of the trust property were held in Delaware, cf. Bank of Jasper v. First Nat. Bank, 258 U.S. 112, 119, by a Delaware trustee who was the obligee of the credit instruments and the record owner of the stock. The location of the obligors and the domicile of the corporations do not appear. The trust instrument was executed in Delaware by a 155 The Florida court held that the presence of the subject property was not essential to its jurisdiction. Authority over the probate and construction of its domiciliary's will, under which the assets might pass, was thought sufficient to confer the requisite jurisdiction.84 But jurisdiction cannot be predicated upon the contingent role of this Florida will. Whatever the efficacy of a so-called "in rem" jurisdiction over assets admittedly passing under a local will, a State acquires no in rem jurisdiction to adjudicate the validity of inter vivos dispositions simply because its decision might augment an estate passing under a will probated in its courts. If such a basis of jurisdiction were sustained, probate courts would enjoy nationwide service of process to adjudicate interests in property with which neither the State nor the decedent could claim any affiliation. The settlor-decedent's Florida domicile is equally unavailing as a basis for jurisdiction over the trust assets. For the purpose of jurisdiction in rem the maxim that personalty has its situs at the domicile of its owner85 is a fiction of limited utility. Green v. Van Buskirk, 7 Wall. 139, 150. The maxim is no less suspect when the domicile is that of a decedent. In analogous cases, this Court has rejected the suggestion that the probate decree of the State where decedent was domiciled has an in rem effect on personalty outside the forum State that could render it conclusive on the interests of nonresidents over whom there

settlor then domiciled in Pennsylvania. Without expressing any opinion on the significance of these or other factors unnamed, we note that none relates to Florida. 84 The Florida Supreme Court's opinion states: "We held [in Henderson v. Usher, 118 Fla. 688, 160 So. 9] that constructive service was valid in that state of the record because substantive jurisdiction existed in the Florida court by virtue of construction of a will, which was also involved, the testator having been domiciled in Florida. We observed that it was not essential that the assets of the trust be physically in this state in order that constructive service be binding upon a non-resident where the problem presented to the court was to adjudicate, inter alia, the status of the securities incorporated in the trust estate and the rights of the non-resident therein. It is entirely consistent with the Henderson case to hold, as we do, that the court below erred in ruling that it lacked jurisdiction over the persons of the absent defendants." 100 So. 2d, at 385. The foregoing leaves unclear whether the court was invoking in personam jurisdiction over the trustee, or in rem jurisdiction over the trust assets. Henderson v. Usher, supra, which was an action by testamentary trustees for a construction of the will establishing a trust whose assets were held in New York, found it unnecessary to decide the basis of the jurisdiction exercised. In response to the jurisdictional objections of a specially appearing nonresident defendant, the Florida Supreme Court ruled: "Since the interpretation of the will is the primary question with which we are confronted we are impelled to hold that the res is at least constructively in this state and that the Florida courts are empowered to advise the trustees how to proceed under it and what rights those affected have in it. For the immediate purpose of this suit the will is the res and when that is voluntarily brought into the courts of Florida to be construed the trust created by it is to all intents and purposes brought with it." 118 Fla., at 692, 160 So., at 10. 85 We assume arguendo for the purpose of this discussion that the trust was invalid so that Mrs. Donner was the "owner" of the subject property. 156 was no personal jurisdiction. Riley v. New York Trust Co., 315 U.S. 343, 353; Baker v. Baker, Eccles & Co., 242 U.S. 394, 401; Overby v. Gordon, 177 U.S. 214.86 The fact that the owner is or was domiciled within the forum State is not a sufficient affiliation with the property upon which to base jurisdiction in rem. Having concluded that Florida had no in rem jurisdiction, we proceed to consider whether a judgment purporting to rest on that basis is invalid in Florida and must therefore be reversed. Prior to the Fourteenth Amendment an exercise of jurisdiction over persons or property outside the forum State was thought to be an absolute nullity,87 but the matter remained a question of state law over which this Court exercised no authority. 88 With the adoption of that Amendment, any judgment purporting to bind the person of a defendant over whom the court had not acquired in personam jurisdiction was void within the State as well as without. Pennoyer v. Neff, 95 U.S. 714. Nearly a century has passed without this Court being called upon to apply that principle to an in rem judgment dealing with property outside the forum State. The invalidity of such a judgment within the forum State seems to have been assumed -- and with good reason. Since a State is forbidden to enter a judgment attempting to bind a person over whom it has no jurisdiction, it has even less right to enter a judgment purporting to extinguish the interest of such a person in property over which the court has no jurisdiction.89 Therefore, so far as it purports to rest upon jurisdiction over the trust assets, the judgment of the Florida court cannot be sustained. Sadler v. Industrial Trust Co., 327 Mass. 10, 97 N.E. 2d 169. In personam jurisdiction. Appellees' stronger argument is for in personam jurisdiction over the Delaware trustee. They urge that the circumstances of this case amount to sufficient affiliation with the State of Florida to empower its courts to exercise personal jurisdiction over this nonresident defendant. Principal reliance is placed upon McGee v. International Life Ins. Co., 355 U.S. 220. In McGee the Court noted the trend of expanding personal jurisdiction over nonresidents. As technological progress has increased the flow of commerce between States, the need for jurisdiction over nonresidents has undergone a similar increase. At the same

86 Though analogous, these cases are not squarely in point. They concerned the efficacy of such judgments in the courts of another sovereign, while the issue here is the validity of such an exercise of jurisdiction within the forum State. 87 See Pennoyer v. Neff, 95 U.S. 714, 720-728, 732; Story, Commentaries on the Conflict of Laws (6th ed. 1865), §§ 539, 550-551; Cooley, Constitutional Limitations (1st ed. 1868), 404-405; Rheinstein, The Constitutional Bases of Jurisdiction, 22 U. of Chi. L. Rev. 775, 792-793. 88 See Baker v. Baker, Eccles & Co., 242 U.S. 394, 403. 89 This holding was forecast in Pennoyer v. Neff, supra. When considering the effect of the Fourteenth Amendment, this Court declared that in actions against nonresidents substituted service was permissible only where "property in the State is brought under the control of the court, and subjected to its disposition by process adapted to that purpose . . . ." (Emphasis supplied.) 95 U.S., at 733. 157 time, progress in communications and transportation has made the defense of a suit in a foreign tribunal less burdensome. In response to these changes, the requirements for personal jurisdiction over nonresidents have evolved from the rigid rule of Pennoyer v. Neff, 95 U.S. 714, to the flexible standard of International Shoe Co. v. Washington, 326 U.S. 310. But it is a mistake to assume that this trend heralds the eventual demise of all restrictions on the personal jurisdiction of state courts. See Vanderbilt v. Vanderbilt, 354 U.S. 416, 418. Those restrictions are more than a guarantee of immunity from inconvenient or distant litigation. They are a consequence of territorial limitations on the power of the respective States. However minimal the burden of defending in a foreign tribunal, a defendant may not be called upon to do so unless he has had the "minimal contacts" with that State that are a prerequisite to its exercise of power over him. See International Shoe Co. v. Washington, 326 U.S. 310, 319. We fail to find such contacts in the circumstances of this case. The defendant trust company has no office in Florida, and transacts no business there. None of the trust assets has ever been held or administered in Florida, and the record discloses no solicitation of business in that State either in person or by mail. Cf. International Shoe Co. v. Washington, 326 U.S. 310; McGee v. International Life Ins. Co., 355 U.S. 220; Travelers Health Assn. v. Virginia, 339 U.S. 643. The cause of action in this case is not one that arises out of an act done or transaction consummated in the forum State. In that respect, it differs from McGee v. International Life Ins. Co., 355 U.S. 220, and the cases there cited. In McGee, the nonresident defendant solicited a reinsurance agreement with a resident of California. The offer was accepted in that State, and the insurance premiums were mailed from there until the insured's death. Noting the interest California has in providing effective redress for its residents when nonresident insurers refuse to pay claims on insurance they have solicited in that State, the Court upheld jurisdiction because the suit "was based on a contract which had substantial connection with that State." In contrast, this action involves the validity of an agreement that was entered without any connection with the forum State. The agreement was executed in Delaware by a trust company incorporated in that State and a settlor domiciled in Pennsylvania. The first relationship Florida had to the agreement was years later when the settlor became domiciled there, and the trustee remitted the trust income to her in that State. From Florida Mrs. Donner carried on several bits of trust administration that may be compared to the mailing of premiums in McGee.90 But the record discloses no instance in which the trustee performed any acts in Florida that bear the same relationship to the agreement as the solicitation in McGee. Consequently, this suit cannot be said to be one to enforce an obligation that arose from a privilege the defendant exercised in Florida. Cf. International Shoe Co. v.

90 By a letter dated Feb. 5, 1946, Mrs. Donner changed the compensation to be paid the trust advisor. April 2, 1947, she revoked the trust as to $ 75,000, returning that amount to the trustee December 22, 1947. To these acts may be added the execution of the two powers of appointment mentioned earlier. 158 Washington, 326 U.S. 310, 319. This case is also different from McGee in that there the State had enacted special legislation (Unauthorized Insurers Process Act) to exercise what McGee called its "manifest interest" in providing effective redress for citizens who had been injured by nonresidents engaged in an activity that the State treats as exceptional and subjects to special regulation. Cf. Travelers Health Assn. v. Virginia, 339 U.S. 643, 647-649; Doherty & Co. v. Goodman, 294 U.S. 623, 627; Hess v. Pawloski, 274 U.S. 352. The execution in Florida of the powers of appointment under which the beneficiaries and appointees claim does not give Florida a substantial connection with the contract on which this suit is based. It is the validity of the trust agreement, not the appointment, that is at issue here.91 For the purpose of applying its rule that the validity of a trust is determined by the law of the State of its creation, Florida ruled that the appointment amounted to a "republication" of the original trust instrument in Florida. For choice-of-law purposes such a ruling may be justified, but we think it an insubstantial connection with the trust agreement for purposes of determining the question of personal jurisdiction over a nonresident defendant. The unilateral activity of those who claim some relationship with a nonresident defendant cannot satisfy the requirement of contact with the forum State. The application of that rule will vary with the quality and nature of the defendant's activity, but it is essential in each case that there be some act by which the defendant purposefully avails itself of the privilege of conducting activities within the forum State, thus invoking the benefits and protections of its laws. International Shoe Co. v. Washington, 326 U.S. 310, 319. The settlor's execution in Florida of her power of appointment cannot remedy the absence of such an act in this case. It is urged that because the settlor and most of the appointees and beneficiaries were domiciled in Florida the courts of that State should be able to exercise personal jurisdiction over the nonresident trustees. This is a non sequitur. With personal jurisdiction over the executor, legatees, and appointees, there is nothing in federal law to prevent Florida from adjudicating concerning the respective rights and liabilities of those parties. But Florida has not chosen to do so. As we understand its law, the trustee is an indispensable party over whom the court must acquire jurisdiction before it is empowered to enter judgment in a proceeding affecting the validity of a trust.92 It does not acquire that jurisdiction by being the "center of gravity" of the controversy, or the most convenient location for litigation. The issue

91 The Florida Supreme Court's opinion makes repeated references to the "invalidity" of the trust, and uses other language of like import. See 100 So. 2d, at 381, 382, 383, 384, 385. Its ruling that the 1949 and 1950 "appointments" were ineffective to pass title to the property (because lacking the requisite testamentary formalities) proceeded from this initial ruling that the trust agreement was "invalid," 100 So. 2d, at 383, or "illusory," 100 So. 2d, at 384, and therefore created no power of appointment. There was no suggestion that the appointment was ineffective as an exercise of whatever power was created by the trust agreement. 92 See note 6, supra. 159 is personal jurisdiction, not choice of law. It is resolved in this case by considering the acts of the trustee. As we have indicated, they are insufficient to sustain the jurisdiction.93 Because it sustained jurisdiction over the nonresident trustees, the Florida Supreme Court found it unnecessary to determine whether Florida law made those defendants indispensable parties in the circumstances of this case. Our conclusion that Florida was without jurisdiction over the Delaware trustee, or over the trust corpus held in that State, requires that we make that determination in the first instance. As we have noted earlier, the Florida Supreme Court has repeatedly held that a trustee is an indispensable party without whom a Florida court has no power to adjudicate controversies affecting the validity of a trust.94 For that reason the Florida judgment must be reversed not only as to the nonresident trustees but also as to appellants, over whom the Florida court admittedly had jurisdiction. No. 117, The Delaware Certiorari. The same reasons that compel reversal of the Florida judgment require affirmance of the Delaware one. Delaware is under no obligation to give full faith and credit to a Florida judgment invalid in Florida because offensive to the Due Process Clause of the Fourteenth Amendment. 28 U.S.C. ' 1738. Even before passage of the Fourteenth Amendment this Court sustained state courts in refusing full faith and credit to judgments entered by courts that were without jurisdiction over nonresident defendants. D'Arcy v. Ketchum, 11 How. 165; Hall v. Lanning, 91 U.S. 160. See Baker v. Baker, Eccles & Co., 242 U.S. 394; Riley v. New York Trust Co., 315 U.S. 343. Since Delaware was entitled to conclude that Florida law made the trust company an indispensable party, it was under no obligation to give the Florida judgment any faith and credit -- even against parties over whom Florida's jurisdiction was unquestioned. It is suggested that this disposition is improper -- that the Delaware case should be held while the Florida cause is remanded to give that court an opportunity to determine whether the trustee is an indispensable party in the circumstances of this case. But this is not a case like Herb v. Pitcairn, 324 U.S. 117, where it is appropriate to remand for the state court to clarify an ambiguity in its opinion that may reveal an adequate state ground that would deprive us of power to affect the result of the controversy. Nor is this a circumstance where the state court has never ruled on the question of state law that we are deciding. Although the question was left open in this case, there is ample Florida authority from which we may determine the appropriate answer. The rule of primacy to the first final judgment is a necessary incident to the requirement of full faith and credit. Our only function is to determine whether judgments are consistent with the Federal Constitution. In determining the

93 This conclusion makes unnecessary any consideration of appellants' contention that the contacts the trust agreement had with Florida were so slight that it was a denial of due process of law to determine its validity by Florida law. See Home Insurance Co. v. Dick, 281 U.S. 397. 94 See notes 6 and 7, supra. 160 correctness of Delaware's judgment we look to what Delaware was entitled to conclude from the Florida authorities at the time the Delaware court's judgment was entered. To withhold affirmance of a correct Delaware judgment until Florida has had time to rule on another question would be participating in the litigation instead of adjudicating its outcome. The judgment of the Delaware Supreme Court is affirmed, and the judgment of the Florida Supreme Court is reversed and the cause is remanded for proceedings not inconsistent with this opinion. It is so ordered. Keeton v. Hustler Magazine, Inc., et al. 465 U.S. 770, 104 S.Ct. 1473 (1984) Rehnquist, J., delivered the opinion of the Court. Petitioner Kathy Keeton sued respondent Hustler Magazine, Inc., and other defendants in the United States District Court for the District of , alleging jurisdiction over her libel complaint by reason of diversity of citizenship. The District Court dismissed her suit because it believed that the Due Process Clause of the Fourteenth Amendment to the United States Constitution forbade the application of New Hampshire's long-arm statute in order to acquire personal jurisdiction over respondent. The Court of Appeals for the First Circuit affirmed, 682 F. 2d 33 (1982), summarizing its concerns with the statement that "the New Hampshire tail is too small to wag so large an out-of-state dog." Id., at 36. We granted certiorari, 459 U.S. 1169 (1983), and we now reverse. Petitioner Keeton is a resident of New York. Her only connection with New Hampshire is the circulation there of copies of a magazine that she assists in producing. The magazine bears petitioner's name in several places crediting her with editorial and other work. Respondent Hustler Magazine, Inc., is an Ohio corporation, with its principal place of business in California. Respondent's contacts with New Hampshire consist of the sale of some 10,000 to 15,000 copies of Hustler Magazine in that State each month. See App. 81a-86a. Petitioner claims to have been libeled in five separate issues of respondent's magazine published between September 1975 and May 1976.95 The Court of Appeals, in its opinion affirming the District Court's dismissal of petitioner's complaint, held that petitioner's lack of contacts with New Hampshire rendered the State's interest in redressing the tort of libel to petitioner too attenuated for an assertion of personal jurisdiction over respondent. The Court of Appeals observed that the "single publication rule" ordinarily applicable in multistate libel

95 Initially, petitioner brought suit for libel and invasion of privacy in Ohio, where the magazine was published. Her libel claim, however, was dismissed as barred by the Ohio statute of limitations, and her invasion-of-privacy claim was dismissed as barred by the New York statute of limitations, which the Ohio court considered to be "migratory." Petitioner then filed the present action in October 1980. 161 cases would require it to award petitioner "damages caused in all states" should she prevail in her suit, even though the bulk of petitioner's alleged injuries had been sustained outside New Hampshire. 682 F. 2d, at 35.96 The court also stressed New Hampshire's unusually long (6-year) limitations period for libel actions. New Hampshire was the only State where petitioner's suit would not have been time- barred when it was filed. Under these circumstances, the Court of Appeals concluded that it would be "unfair" to assert jurisdiction over respondent. New Hampshire has a minimal interest in applying its unusual statute of limitations to, and awarding damages for, injuries to a nonresident occurring outside the State, particularly since petitioner suffered such a small proportion of her total claimed injury within the State. Id., at 35-36. We conclude that the Court of Appeals erred when it affirmed the dismissal of petitioner's suit for lack of personal jurisdiction. Respondent's regular circulation of magazines in the forum State is sufficient to support an assertion of jurisdiction in a libel action based on the contents of the magazine. This is so even if New Hampshire courts, and thus the District Court under Klaxon Co. v. Stentor Co., 313 U.S. 487 (1941), would apply the so-called "single publication rule" to enable petitioner to recover in the New Hampshire action her damages from "publications" of the alleged libel throughout the United States.97 The District Court found that "[t]he general course of conduct in circulating magazines throughout the state was purposefully directed at New Hampshire, and inevitably affected persons in the state." App. to Pet. for Cert. 5a. Such regular monthly sales of thousands of magazines cannot by any stretch of the imagination be characterized as random, isolated, or fortuitous. It is, therefore, unquestionable that New Hampshire jurisdiction over a complaint based on those contacts would ordinarily satisfy the requirement of the Due Process Clause that a State's assertion of personal jurisdiction over a nonresident defendant be predicated on "minimum contacts" between the defendant and the State. See World-Wide Volkswagen Corp. v. Woodson, 444 U.S. 286, 297-298 (1980); International Shoe Co. v. Washington, 326 U.S. 310, 317 (1945). And, as the Court of Appeals acknowledged, New Hampshire has adopted a "long-arm" statute authorizing service of process on nonresident corporations whenever permitted by the Due Process Clause. 682 F. 2d,

96 The "single publication rule" has been summarized as follows: "As to any single publication, (a) only one action for damages can be maintained; (b) all damages suffered in all jurisdictions can be recovered in the one action; and (c) a judgment for or against the plaintiff upon the merits of any action for damages bars any other action for damages between the same parties in all jurisdictions." Restatement (Second) of Torts 577A(4) (1977). 97 "It is the general rule that each communication of the same defamatory matter by the same defamer, whether to a new person or to the same person, is a separate and distinct publication, for which a separate cause of action arises." Id., 577A, Comment a. The "single publication rule" is an exception to this general rule. 162

at 33.98 Thus, all the requisites for personal jurisdiction over Hustler Magazine, Inc., in New Hampshire are present. We think that the three concerns advanced by the Court of Appeals, whether considered singly or together, are not sufficiently weighty to merit a different result. The "single publication rule," New Hampshire's unusually long statute of limitations, and plaintiff's lack of contacts with the forum State do not defeat jurisdiction otherwise proper under both New Hampshire law and the Due Process Clause. In judging minimum contacts, a court properly focuses on "the relationship among the defendant, the forum, and the litigation," Shaffer v. Heitner, 433 U.S. 186, 204 (1977). See also Rush v. Savchuk, 444 U.S. 320, 332 (1980). Thus, it is certainly relevant to the jurisdictional inquiry that petitioner is seeking to recover damages suffered in all States in this one suit. The contacts between respondent and the forum must be judged in the light of that claim, rather than a claim only for damages sustained in New Hampshire. That is, the contacts between respondent and New Hampshire must be such that it is "fair" to compel respondent to defend a multistate lawsuit in New Hampshire seeking nationwide damages for all copies of the five issues in question, even though only a small portion of those copies were distributed in New Hampshire. The Court of Appeals expressed the view that New Hampshire's "interest" in asserting jurisdiction over plaintiff's multistate claim was minimal. We agree that the "fairness" of haling respondent into a New Hampshire court depends to some extent on whether respondent's activities relating to New Hampshire are such as to give that State a legitimate interest in holding respondent answerable on a claim related to those activities. See World-Wide Volkswagen Corp. v. Woodson, supra, at 292; McGee v. International Life Ins. Co., 355 U.S. 220, 223 (1957). But insofar as the State's "interest" in adjudicating the dispute is a part of the Fourteenth Amendment due process equation, as a surrogate for some of the factors already mentioned, see Insurance Corp. of Ireland v. Compagnie des Bauxites de Guinee, 456 U.S. 694, 702-703, n. 10 (1982), we think the interest is sufficient. The Court of Appeals acknowledged that petitioner was suing, at least in part, for damages suffered in New Hampshire. 682 F. 2d, at 34. And it is beyond dispute

98 New Hampshire Rev. Stat. Ann. 300:14 (1977) provides in relevant part: "If a foreign corporation . . . commits a tort in whole or in part in New Hampshire, such ac[t] shall be deemed to be doing business in New Hampshire by such foreign corporation and shall be deemed equivalent to the appointment by such foreign corporation of the secretary of the state of New Hampshire and his successors to be its true and lawful attorney upon whom may be served all lawful process in any actions or proceedings against such foreign corporation arising from or growing out of such . . . tort." This statute has been construed in the New Hampshire courts to extend jurisdiction over nonresident corporations to the fullest extent permitted under the Federal Constitution. See, e.g., Roy v.. North American Newspaper Alliance, Inc., 106 N.H. 92, 95, 205 A. 2d 844, 846 (1964). 163 that New Hampshire has a significant interest in redressing injuries that actually occur within the State. S "'A state has an especial interest in exercising judicial jurisdiction over those who commit torts within its territory. This is because torts involve wrongful conduct which a state seeks to deter, and against which it attempts to afford protection, by providing that a tort-feasor shall be liable for damages which are the proximate result of his tort.'" Leeper v. Leeper, 114 N.H. 294, 298, 319 A. 2d 626, 629 (1974) (quoting Restatement (Second) of Conflict of Laws 36, Comment c (1971)).I This interest extends to libel actions brought by nonresidents. False statements of fact harm both the subject of the falsehood and the readers of the statement. New Hampshire may rightly employ its libel laws to discourage the deception of its citizens. There is "no constitutional value in false statements of fact." Gertz v. Robert Welch, Inc., 418 U.S. 323, 340 (1974). New Hampshire may also extend its concern to the injury that in-state libel causes within New Hampshire to a nonresident. The tort of libel is generally held to occur wherever the offending material is circulated. Restatement (Second) of Torts 577A, Comment a (1977). The reputation of the libel victim may suffer harm even in a State in which he has hitherto been anonymous.99 The communication of the libel may create a negative reputation among the residents of a jurisdiction where the plaintiff's previous reputation was, however small, at least unblemished. New Hampshire has clearly expressed its interest in protecting such persons from libel, as well as in safeguarding its populace from falsehoods. Its criminal defamation statute bears no restriction to libels of which residents are the victim.100 Moreover, in 1971 New Hampshire specifically deleted from its long-arm statute the requirement that a tort be committed "against a resident of New Hampshire."101 New Hampshire also has a substantial interest in cooperating with other States, through the "single publication rule," to provide a forum for efficiently litigating all issues and damages claims arising out of a libel in a unitary proceeding.102 This rule reduces the potential serious drain of libel cases on judicial resources. It also serves to protect defendants from harassment resulting from multiple suits. Restatement

99 We do not, therefore, rely for our holding on the fact that petitioner's name appears in fine print in several places in a magazine circulating in New Hampshire. 100 New Hampshire Rev. Stat. Ann. § 644:11(I) (1974) makes it a misdemeanor for anyone to "purposely communicat[e] to any person, orally or in writing, any information which he knows to be false and knows will tend to expose any other living person to public hatred, contempt or ridicule." (Emphasis added.) 101 See N.H. Rev. Stat. Ann. § 300:14 (1977), History. 102 The great majority of the States now follow the "single publication rule." Restatement (Second) of Torts § 577A, Appendix, Reporter's Note (1977). 164 (Second) of Torts 577A, Comment f (1977). In sum, the combination of New Hampshire's interest in redressing injuries that occur within the State and its interest in cooperating with other States in the application of the "single publication rule" demonstrates the propriety of requiring respondent to answer to a multistate libel action in New Hampshire.103 The Court of Appeals also thought that there was an element of due process "unfairness" arising from the fact that the statutes of limitations in every jurisdiction except New Hampshire had run on the plaintiff's claim in this case.104 Strictly speaking, however, any potential unfairness in applying New Hampshire's statute of limitations to all aspects of this nationwide suit has nothing to do with the jurisdiction of the court to adjudicate the claims. "The issue is personal jurisdiction, not choice of law." Hanson v. Denckla, 357 U.S. 235, 254 (1958). The question of the applicability of New Hampshire's statute of limitations to claims for out-of-state damages presents itself in the course of litigation only after jurisdiction over respondent is established, and we do not think that such choice-of-law concerns should complicate or distort the jurisdictional inquiry. The chance duration of statutes of limitations in nonforum jurisdictions has nothing to do with the contacts among respondent, New Hampshire, and this multistate libel action. Whether Ohio's limitations period is six months or six years does not alter the jurisdictional calculus in New Hampshire. Petitioner's successful search for a State with a lengthy statute of limitations is no different from the litigation strategy of countless plaintiffs who seek a forum with favorable substantive of procedural rules or sympathetic local populations. Certainly Hustler Magazine, Inc., which chose to enter the New Hampshire market, can be charged with knowledge of its laws and no doubt would have claimed the benefit of them if it had a complaint against a subscriber, distributor, or other commercial partner.

103 Of course, to conclude that petitioner may properly seek multistate damages in this New Hampshire suit is not to conclude that such damages should, in fact, be awarded if petitioner makes out her case for libel. The actual applicability of the "single publication rule" in the peculiar circumstances of this case is a matter of substantive law, not personal jurisdiction. We conclude only that the District Court has jurisdiction to entertain petitioner's multistate libel suit. 104 Under traditional choice-of-law principles, the law of the forum State governs on matters of procedure. See Restatement (Second) of Conflict of Laws § 122 (1971). In New Hampshire, statutes of limitations are considered procedural. Gordon v.. Gordon, 118 N.H. 356, 360, 387 A. 2d 339, 342 (1978); Barrett v.. Boston & Maine R. Co., 104 N.H. 70, 178 A. 2d 291 (1962). There has been considerable academic criticism of the rule that permits a forum State to apply its own statute of limitations regardless of the significance of contacts between the forum State and the litigation. See, e.g., R. Weintraub, Commentary on the Conflict of Laws § 9.2B, p. 517 (2d ed. 1980); Martin, Constitutional Limitations on Choice of Law, 61 Cornell L. Rev. 185, 221 (1976); Comment, The Statute of Limitations and the Conflict of Laws, 28 Yale L.J. 492, 496-497 (1919). But we find it unnecessary to express an opinion at this time as to whether any arguable unfairness rises to the level of a due process violation. 165 Finally, implicit in the Court of Appeals' analysis of New Hampshire's interest is an emphasis on the extremely limited contacts of the plaintiff with New Hampshire. But we have not to date required a plaintiff to have "minimum contacts" with the forum State before permitting that State to assert personal jurisdiction over a nonresident defendant. On the contrary, we have upheld the assertion of jurisdiction where such contacts were entirely lacking. In Perkins v. Benguet Mining Co., 342 U.S. 437 (1952), none of the parties was a resident of the forum State; indeed, neither the plaintiff nor the subject matter of his action had any relation to that State. Jurisdiction was based solely on the fact that the defendant corporation had been carrying on in the forum "a continuous and systematic, but limited, part of its general business." Id., at 438. In the instant case, respondent's activities in the forum may not be so substantial as to support jurisdiction over a cause of action unrelated to those activities.105 But respondent is carrying on a "part of its general business" in New Hampshire, and that is sufficient to support jurisdiction when the cause of action arises out of the very activity being conducted, in part, in New Hampshire. The plaintiff's residence is not, of course, completely irrelevant to the jurisdictional inquiry. As noted, that inquiry focuses on the relations among the defendant, the forum, and the litigation. Plaintiff's residence may well play an important role in determining the propriety of entertaining a suit against the defendant in the forum. That is, plaintiff's residence in the forum may, because of defendant’s relationship with the plaintiff enhance defendant’s contacts with the forum. Plaintiff's residence may be the focus of the activities of the defendant out of which the suit arises. See Calder v. Jones, post, at 788-789; McGee v. International Life Ins. Co., 355 U.S. 220 (1957). But plaintiff's residence in the forum State is not a separate requirement, and lack of residence will not defeat jurisdiction established on the basis of defendant's contacts. It is undoubtedly true that the bulk of the harm done to petitioner occurred outside New Hampshire. But that will be true in almost every libel action brought somewhere other than the plaintiff's domicile. There is no justification for restricting

105 The defendant corporation's contacts with the forum State in Perkins were more substantial than those of respondent with New Hampshire in this case. In Perkins, the corporation's mining operations, located in the Philippine Islands, were completely halted during the Japanese occupation. The president, who was also general manager and principal stockholder of the company, returned to his home in Ohio where he carried on "a continuous and systematic supervision of the necessarily limited wartime activities of the company." 342 U.S., at 448. The company's files were kept in Ohio, several directors' meetings were held there, substantial accounts were maintained in Ohio banks, and all key business decisions were made in the State. Ibid. In those circumstances, Ohio was the corporation's principal, if temporary, place of business so that Ohio jurisdiction was proper even over a cause of action unrelated to the activities in the State. 166

libel actions to the plaintiff's home forum.106 The victim of a libel, like the victim of any other tort, may choose to bring suit in any forum with which the defendant has "certain minimum contacts . . . such that the maintenance of the suit does not offend 'traditional notions of fair play and substantial justice.' Milliken v. Meyer, 311 U.S. 457, 463 [(1940)]." International Shoe Co. v. Washington, 326 U.S., at 316. Where, as in this case, respondent Hustler Magazine, Inc., has continuously and deliberately exploited the New Hampshire market, it must reasonably anticipate being haled into court there in a libel action based on the contents of its magazine. World-Wide Volkswagen Corp. v. Woodson, 444 U.S., at 297-298. And, since respondent can be charged with knowledge of the "single publication rule," it must anticipate that such a suit will seek nationwide damages. Respondent produces a national publication aimed at a nationwide audience. There is no unfairness in calling it to answer for the contents of that publication wherever a substantial number of copies are regularly sold and distributed. The judgment of the Court of Appeals is reversed,107 and the cause is remanded for proceedings consistent with this opinion. Brennan, J., concurring in the judgment. I agree with the Court that "[r]espondent's regular circulation of magazines in the forum State is sufficient to support an assertion of jurisdiction in a libel action based on the contents of the magazine." Ante, at 773-774. These contacts between the respondent and the forum State are sufficiently important

106 As noted in Calder v.. Jones, post, at 790-791, we reject categorically the suggestion that invisible radiations from the First Amendment may defeat jurisdiction otherwise proper under the Due Process Clause. 107 In addition to Hustler Magazine, Inc., Larry Flynt, the publisher, editor, and owner of the magazine, and L.F.P., Inc., Hustler's holding company, were named as defendants in the District Court. It does not of course follow from the fact that jurisdiction may be asserted over Hustler Magazine, Inc., that jurisdiction may also be asserted over either of the other defendants. In Calder v.. Jones, post, at 790, we today reject the suggestion that employees who act in their official capacity are somehow shielded from suit in their individual capacity. But jurisdiction over an employee does not automatically follow from jurisdiction over the corporation which employs him; nor does jurisdiction over a parent corporation automatically establish jurisdiction over a wholly owned subsidiary. Consolidated Textile Co. v.. Gregory, 289 U.S. 85, 88 (1933); Peterson v.. Chicago, R.I. & P.R. Co., 205 U.S. 364, 391 (1907). Each defendant's contacts with the forum State must be assessed individually. See Rush v.. Savchuk, 444 U.S. 320, 332 (1980) ("The requirements of International Shoe . . . must be met as to each defendant over whom a state court exercises jurisdiction"). Because the Court of Appeals concluded that jurisdiction could not be had even against Hustler Magazine, Inc., it did not inquire into the propriety of jurisdiction over the other defendants. Such inquiry is, of course, open upon remand.

167 and sufficiently related to the underlying cause of action to foreclose any concern that the constitutional limits of the Due Process Clause are being violated. This is so, moreover, irrespective of the State's interest in enforcing its substantive libel laws or its unique statute of limitations. Indeed, as we recently explained in Insurance Corp. of Ireland v. Compagnie des Bauxites de Guinee, 456 U.S. 694 (1982), these interests of the State should be relevant only to the extent that they bear upon the liberty interests of the respondent that are protected by the Fourteenth Amendment. "The restriction on state sovereign power described in World-Wide Volkswagen Corp. [v. Woodson, 444 U.S. 286, 291-292 (1980)] must be seen as ultimately a function of the individual liberty interest preserved by the Due Process Clause. That Clause is the only source of the personal jurisdiction requirement and the Clause itself makes no mention of federalism concerns." Id., at 702-703, n. 10.

Shaffer et al. v. Heitner 433 U.S. 186, 97 S.Ct. 2569 (1977) Marshall, J., delivered the opinion of the Court. The controversy in this case concerns the constitutionality of a Delaware statute that allows a court of that State to take jurisdiction of a lawsuit by sequestering any property of the defendant that happens to be located in Delaware. Appellants contend that the sequestration statute as applied in this case violates the Due Process Clause of the Fourteenth Amendment both because it permits the state courts to exercise jurisdiction despite the absence of sufficient contacts among the defendants, the litigation, and the State of Delaware and because it authorizes the deprivation of defendants' property without providing adequate procedural safeguards. We find it necessary to consider only the first of these contentions. I. Appellee Heitner, a nonresident of Delaware, is the owner of one share of stock in the Greyhound Corp., a business incorporated under the laws of Delaware with its principal place of business in Phoenix, Ariz. On May 22, 1974, he filed a shareholder's derivative suit in the Court of Chancery for New Castle County, Del., in which he named as defendants Greyhound, its wholly owned subsidiary Greyhound Lines, Inc.,108 and 28 present or former officers or directors of one or both of the corporations. In essence, Heitner alleged that the individual defendants had violated their duties to Greyhound by causing it and its subsidiary to engage in actions that resulted in the corporations being held liable for substantial damages in a

108 Greyhound Lines, Inc., is incorporated in California and has its principal place of business in Phoenix, Ariz. 168

private antitrust suit109 and a large fine in a criminal contempt action.110 The activities which led to these penalties took place in Oregon. Simultaneously with his complaint, Heitner filed a motion for an order of sequestration of the Delaware property of the individual defendants pursuant to Del. Code Ann., Tit. 10, § 366 (1975).111 This motion was accompanied by a supporting affidavit of counsel which stated that the individual defendants were nonresidents of Delaware. The affidavit identified the property to be sequestered as

109 A judgment of $13,146,090 plus attorney's fees was entered against Greyhound in Mt. Hood Stages, Inc. v. Greyhound Corp., 1972-3 Trade Cas. P74,824, aff'd, 555 F.2d 687 (CA9 1977); App. 10. 110 See United States v. Greyhound Corp., 363 F.Supp. 525 (ND Ill. 1973) and 370 F.Supp. 881 (ND Ill.), aff'd, 508 F.2d 529 (CA7 1974). Greyhound was fined $100,000 and Greyhound Lines $500,000. 111 Section 366 provides: "(a) If it appears in any complaint filed in the Court of Chancery that the defendant or any one or more of the defendants is a nonresident of the State, the Court may make an order directing such nonresident defendant or defendants to appear by a day certain to be designated. Such order shall be served on such nonresident defendant or defendants by mail or otherwise, if practicable, and shall be published in such manner as the Court directs, not less than once a week for 3 consecutive weeks. The Court may compel the appearance of the defendant by the seizure of all or any part of his property, which property may be sold under the order of the Court to pay the demand of the plaintiff, if the defendant does not appear, or otherwise defaults. Any defendant whose property shall have been so seized and who shall have entered a general appearance in the cause may, upon notice to the plaintiff, petition the Court for an order releasing such property or any part thereof from the seizure. The Court shall release such property unless the plaintiff shall satisfy the Court that because of other circumstances there is a reasonable possibility that such release may render it substantially less likely that plaintiff will obtain satisfaction of any judgment secured. If such petition shall not be granted, or if no such petition shall be filed, such property shall remain subject to seizure and may be sold to satisfy any judgment entered in the cause. The Court may at any time release such property or any part thereof upon the giving of sufficient security. "(b) The Court may make all necessary rules respecting the form of process, the manner of issuance and return thereof, the release of such property from seizure and for the sale of the property so seized, and may require the plaintiff to give approved security to abide any order of the Court respecting the property. "(c) Any transfer or assignment of the property so seized after the seizure thereof shall be void and after the sale of the property is made and confirmed, the purchaser shall be entitled to and have all the right, title and interest of the defendant in and to the property so seized and sold and such sale and confirmation shall transfer to the purchaser all the right, title and interest of the defendant in and to the property as fully as if the defendant had transferred the same to the purchaser in accordance with law." 169 "common stock, 3% Second Cumulative Preferenced Stock and stock unit credits of the Defendant Greyhound Corporation, a Delaware corporation, as well as all options and all warrants to purchase said stock issued to said individual Defendants and all contractural [sic] obligations, all rights, debts or credits due or accrued to or for the benefit of any of the said Defendants under any type of written agreement, contract or other legal instrument of any kind whatever between any of the individual Defendants and said corporation." The requested sequestration order was signed the day the motion was filed.112 Pursuant to that order, the sequestrator113 "seized" approximately 82,000 shares of Greyhound common stock belonging to 19 of the defendants,114 and options belonging to another 2 defendants.115 These seizures were accomplished by placing "stop transfer" orders or their equivalents on the books of the Greyhound Corp. So far as the record shows, none of the certificates representing the seized property was physically present in Delaware. The stock was considered to be in Delaware, and so subject to seizure, by virtue of Del. Code Ann., Tit. 8, 169 (1975), which makes Delaware the situs of ownership of all stock in Delaware corporations.116

112 As a condition of the sequestration order, both the plaintiff and the sequestrator were required to file bonds of $1,000 to assure their compliance with the orders of the court. App. 24. Following a technical amendment of the complaint, the original sequestration order was vacated and replaced by an alias sequestration order identical in its terms to the original. 113 The sequestrator is appointed by the court to effect the sequestration. His duties appear to consist of serving the sequestration order on the named corporation, receiving from that corporation a list of the property which the order affects, and filing that list with the court. For performing those services in this case, the sequestrator received a fee of $100 under the original sequestration order and $100 under the alias order. 114 The closing price of Greyhound stock on the day the sequestration order was issued was $14 3/8. New York Times, May 23, 1974, p. 62. Thus, the value of the sequestered stock was approximately $1.2 million. 115 Debentures, warrants, and stock unit credits belonging to some of the defendants who owned either stock or options were also sequestered. In addition, Greyhound reported that it had an employment contract with one of the defendants calling for payment of $250,000 over a 12- month period. Greyhound refused to furnish any further information on that debt on the ground that since the sums due constituted wages, their seizure would be unconstitutional. See Sniadach v. Family Finance Corp., 395 U. S. 337 (1969). Heitner did not challenge this refusal. The remaining defendants apparently owned no property subject to the sequestration order. 116 Section 169 provides: "For all purposes of title, action, attachment, garnishment and jurisdiction of all courts held in this State, but not for the purpose of taxation, the situs of the ownership of the capital stock of 170 All 28 defendants were notified of the initiation of the suit by certified mail directed to their last known addresses and by publication in a New Castle County newspaper. The 21 defendants whose property was seized (hereafter referred to as appellants) responded by entering a for the purpose of moving to quash service of process and to vacate the sequestration order. They contended that the ex parte sequestration procedure did not accord them due process of law and that the property seized was not capable of attachment in Delaware. In addition, appellants asserted that under the rule of International Shoe Co. v. Washington, 326 U. S. 310 (1945), they did not have sufficient contacts with Delaware to sustain the jurisdiction of that State's courts. The Court of Chancery rejected these arguments in a letter opinion which emphasized the purpose of the Delaware sequestration procedure: "The primary purpose of 'sequestration' as authorized by 10 Del. C. § 366 is not to secure possession of property pending a trial between resident debtors and creditors on the issue of who has the right to retain it. On the contrary, as here employed, 'sequestration' is a process used to compel the personal appearance of a nonresident defendant to answer and defend a suit brought against him in a court of equity. Sands v. Lefcourt Realty Corp., Del. Supr., 117 A. 2d 365 (1955). It is accomplished by the appointment of a sequestrator by this Court to seize and hold property of the nonresident located in this State subject to further Court order. If the defendant enters a general appearance, the sequestered property is routinely released, unless the plaintiff makes special application to continue its seizure, in which event the plaintiff has the burden of proof and persuasion." App. 75-76.I This limitation on the purpose and length of time for which sequestered property is held, the court concluded, rendered inapplicable the due process requirements enunciated in Sniadach v. Family Finance Corp., 395 U. S. 337 (1969); Fuentes v. Shevin, 407 U.S. 67 (1972); and Mitchell v. W. T. Grant Co., 416 U.S. 600 (1974). App. 75-76, 80, 83-85. The court also found no state-law or federal constitutional barrier to the sequestrator's reliance on Del. Code Ann., Tit. 8, § 169 (1975). App. 76-79. Finally, the court held that the statutory Delaware situs of the stock provided a sufficient basis for the exercise of quasi in rem jurisdiction by a Delaware court. Id., at 85-87. On appeal, the Delaware Supreme Court affirmed the judgment of the Court of Chancery. Greyhound Corp. v. Heitner, 361 A. 2d 225 (1976). Most of the Supreme Court's opinion was devoted to rejecting appellants' contention that the sequestration procedure is inconsistent with the due process analysis developed in the Sniadach line of cases. The court based its rejection of that argument in part on its agreement with the Court of Chancery that the purpose of the sequestration procedure is to all corporations existing under the laws of this State, whether organized under this chapter or otherwise, shall be regarded as in this State." 171 compel the appearance of the defendant, a purpose not involved in the Sniadach cases. The court also relied on what it considered the ancient origins of the sequestration procedure and approval of that procedure in the opinions of this Court,117 Delaware's interest in asserting jurisdiction to adjudicate claims of mismanagement of a Delaware corporation, and the safeguards for defendants that it found in the Delaware statute. 361 A. 2d, at 230-236. Appellants' claim that the Delaware courts did not have jurisdiction to adjudicate this action received much more cursory treatment. The court's analysis of the jurisdictional issue is contained in two paragraphs: S "There are significant constitutional questions at issue here but we say at once that we do not deem the rule of International Shoe to be one of them.... The reason, of course, is that jurisdiction under § 366 remains... quasi in rem founded on the presence of capital stock here, not on prior contact by defendants with this forum. Under 8 Del. C. § 169 the 'situs of the ownership of the capital stock of all corporations existing under the laws of this State... [is] in this State,' and that provides the initial basis for jurisdiction. Delaware may constitutionally establish situs of such shares here,... it has done so and the presence thereof provides the foundation for § 366 in this case.... On this issue we agree with the analysis made and the conclusion reached by Judge Stapleton in U.S. Industries, Inc. v. Gregg, D. Del., 348 F.Supp. 1004 (1972).118 I

117 The court relied, 361 A. 2d, at 228, 230-231, on our decision in Ownbey v. Morgan, 256 U.S. 94 (1921), and references to that decision in North Georgia Finishing, Inc. v. Di-Chem, Inc., 419 U.S. 601, 610 (1975) (POWELL, J., concurring in judgment); Calero-Toledo v. Pearson Yacht Leasing Co., 416 U.S. 663, 679 n. 14 (1974); Mitchell v. W. T. Grant Co., 416 U.S. 600, 613 (1974); Fuentes v. Shevin, 407 U.S. 67, 91 n. 23 (1972); Sniadach v. Family Finance Corp., supra, at 339. The only question before the Court in Ownbey was the constitutionality of a requirement that a defendant whose property has been attached file a bond before entering an appearance. We do not read the recent references to Ownbey as necessarily suggesting that Ownbey is consistent with more recent decisions interpreting the Due Process Clause. Sequestration is the equity counterpart of the process of foreign attachment in suits at law considered in Ownbey. Delaware's sequestration statute was modeled after its attachment statute. See Sands v. Lefcourt Realty Corp., 35 Del. Ch. 340, 344-345, 117 A. 2d 365, 367 (Sup. Ct. 1955); Folk & Moyer, Sequestration in Delaware: A Constitutional Analysis, 73 Colum. L. Rev. 749, 751-754 (1973). 118 The District Court judgment in U.S. Industries was reversed by the Court of Appeals for the Third Circuit. 540 F.2d 142 (1976), cert. pending, No. 76-359. The Court of Appeals characterized the passage from the Delaware Supreme Court's opinion quoted in text as "cryptic conclusions." Id., at 149. 172 "We hold that seizure of the Greyhound shares is not invalid because plaintiff has failed to meet the prior contacts tests of International Shoe." We noted probable jurisdiction. 429 U.S. 813. 119 We reverse. II The Delaware courts rejected appellants' jurisdictional challenge by noting that this suit was brought as a quasi in rem proceeding. Since quasi in rem jurisdiction is traditionally based on attachment or seizure of property present in the jurisdiction, not on contacts between the defendant and the State, the courts considered appellants' claimed lack of contacts with Delaware to be unimportant. This categorical analysis assumes the continued soundness of the conceptual structure founded on the century- old case of Pennoyer v. Neff, 95 U. S. 714 (1878). Pennoyer was an ejectment action brought in federal court under the . Pennoyer, the defendant in that action, held the land under a deed purchased in a sheriff's sale conducted to realize on a judgment for attorney's fees obtained against Neff in a previous action by one Mitchell. At the time of Mitchell's suit in an Oregon State court, Neff was a nonresident of Oregon. An Oregon statute allowed service by publication on nonresidents who had property in the State,120 and Mitchell had used that procedure to bring Neff before the court. The United States Circuit Court for the District of Oregon, in which Neff brought his ejectment action,

119 Under Delaware law, defendants whose property has been sequestered must enter a general appearance, thus subjecting themselves to in personam liability, before they can defend on the merits. See Greyhound Corp. v. Heitner, 361 A. 2d 225, 235-236 (1976). Thus, if the judgment below were considered not to be an appealable final judgment, 28 U. S. C. § 1257 (2), appellants would have the choice of suffering a default judgment or entering a general appearance and defending on the merits. This case is in the same posture as was Cox Broadcasting Corp. v. Cohn, 420 U. S. 469, 485 (1975): "The [Delaware] Supreme Court's judgment is plainly final on the federal issue and is not subject to further review in the state courts. Appellants will be liable for damages if the elements of the state cause of action are proved. They may prevail at trial on nonfederal grounds, it is true, but if the [Delaware] court erroneously upheld the statute, there should be no trial at all." Accordingly, "consistent with the pragmatic approach that we have followed in the past in determining finality," Id., at 486, we conclude that the judgment below is final within the meaning of § 1257. 120 The statute also required that a copy of the summons and complaint be mailed to the defendant if his place of residence was known to the plaintiff or could be determined with reasonable diligence. 95 U. S., at 718. Mitchell had averred that he did not know and could not determine Neff's address, so that the publication was the only "notice" given. Id., at 717. 173 refused to recognize the validity of the judgment against Neff in Mitchell's suit, and accordingly awarded the land to Neff.121 This Court affirmed. Mr. Justice Field's opinion for the Court focused on the territorial limits of the States' judicial powers. Although recognizing that the States are not truly independent sovereigns, Mr. Justice Field found that their jurisdiction was defined by the "principles of public law" that regulate the relationships among independent nations. The first of those principles was "that every State possesses exclusive jurisdiction and sovereignty over persons and property within its territory." The second was "that no State can exercise direct jurisdiction and authority over persons or property without its territory." Id., at 722. Thus, "in virtue of the State's jurisdiction over the property of the non-resident situated within its limits," the state courts "can inquire into that non-resident's obligations to its own citizens... to the extent necessary to control the disposition of the property." Id., at 723. The Court recognized that if the conclusions of that inquiry were adverse to the nonresident property owner, his interest in the property would be affected. Ibid. Similarly, if the defendant consented to the jurisdiction of the state courts or was personally served within the State, a judgment could affect his interest in property outside the State. But any attempt "directly" to assert extraterritorial jurisdiction over persons or property would offend sister States and exceed the inherent limits of the State's power. A judgment resulting from such an attempt, Mr. Justice Field concluded, was not only unenforceable in other States,122 but was also void in the rendering State because it had been obtained in violation of the Due Process Clause of the Fourteenth Amendment. Id., at 732-733. See also, e.g., Freeman v. Alderson, 119 U.S. 185, 187-188 (1886). This analysis led to the conclusion that Mitchell's judgment against Neff could not be validly based on the State's power over persons within its borders, because Neff had not been personally served in Oregon, nor had he consensually appeared before the Oregon court. The Court reasoned that even if Neff had received personal notice of the action, service of process outside the State would have been ineffectual since the State's power was limited by its territorial boundaries. Moreover, the Court held, the action could not be sustained on the basis of the State's power over property within its borders because that property had not been brought before the court by

121 The Federal Circuit Court based its ruling on defects in Mitchell's affidavit in support of the order for service by publication and in the affidavit by which publication was proved. Id., at 720. Mr. Justice Field indicated that if this Court had confined itself to considering those rulings, the judgment would have been reversed. Id., at 721. 122 The doctrine that one State does not have to recognize the judgment of another State's courts if the latter did not have jurisdiction was firmly established at the time of Pennoyer. See, e.g., D'Arcy v. Ketchum, 11 How. 165 (1851); Boswell's Lessee v. Otis, 9 How. 336 (1850); Kibbe v. Kibbe, 1 Kirby 119 (Conn. Super. Ct. 1786). 174

attachment or any other procedure prior to judgment.123 Since the judgment which authorized the sheriff's sale was therefore invalid, the sale transferred no title. Neff regained his land. From our perspective, the importance of Pennoyer is not its result, but the fact that its principles and corollaries derived from them became the basic elements of the constitutional doctrine governing state-court jurisdiction. See, e.g., Hazard, A General Theory of State-Court Jurisdiction, 1965 Sup. Ct. Rev. 241 (hereafter Hazard). As we have noted, under Pennoyer state authority to adjudicate was based on the jurisdiction's power over either persons or property. This fundamental concept is embodied in the very vocabulary which we use to describe judgments. If a court's jurisdiction is based on its authority over the defendant's person, the action and judgment are denominated "in personam" and can impose a personal obligation on the defendant in favor of the plaintiff. If jurisdiction is based on the court's power over property within its territory, the action is called "in rem" or "quasi in rem." The effect of a judgment in such a case is limited to the property that supports jurisdiction and does not impose a personal liability on the property owner, since he is not before the court.124 In Pennoyer's terms, the owner is affected only "indirectly" by an in rem judgment adverse to his interest in the property subject to the court's disposition. By concluding that "[t]he authority of every tribunal is necessarily restricted by the territorial limits of the State in which it is established," 95 U. S., at 720, Pennoyer sharply limited the availability of in personam jurisdiction over defendants not resident in the forum State. If a nonresident defendant could not be found in a State, he could not be sued there. On the other hand, since the State in which property was located was considered to have exclusive sovereignty over that property, in rem actions could proceed regardless of the owner's location. Indeed, since a State's process could not reach beyond its borders, this Court held after Pennoyer that due process did not require any effort to give a property owner

123 Attachment was considered essential to the state court's jurisdiction for two reasons. First, attachment combined with substituted service would provide greater assurance that the defendant would actually receive notice of the action than would publication alone. Second, since the court's jurisdiction depended on the defendant's ownership of property in the State and could be defeated if the defendant disposed of that property, attachment was necessary to assure that the court had jurisdiction when the proceedings began and continued to have jurisdiction when it entered judgment. 95 U. S., at 727-728. 124 "A judgment in rem affects the interests of all persons in designated property. A judgment quasi in rem affects the interests of particular persons in designated property. The latter is of two types. In one the plaintiff is seeking to secure a pre-existing claim in the subject property and to extinguish or establish the nonexistence of similar interests of particular persons. In the other the plaintiff seeks to apply what he concedes to be the property of the defendant to the satisfaction of a claim against him. Restatement, Judgments, 5-9." Hanson v. Denckla, 357 U. S. 235, 246 n. 12 (1958). As did the Court in Hanson, we will for convenience generally use the term "in rem" in place of "in rem and quasi in rem." 175 personal notice that his property was involved in an in rem proceeding. See, e.g., Ballard v. Hunter, 204 U. S. 241 (1907); Arndt v. Griggs, 134 U.S. 316 (1890); Huling v. Kaw Valley R. Co., 130 U.S. 559 (1889). The Pennoyer rules generally favored nonresident defendants by making them harder to sue. This advantage was reduced, however, by the ability of a resident plaintiff to satisfy a claim against a nonresident defendant by bringing into court any property of the defendant located in the plaintiff's State. See, e.g., Zammit, Quasi-In- Rem Jurisdiction: Outmoded and Unconstitutional?, 49 St. John's L. Rev. 668, 670 (1975). For example, in the well-known case of Harris v. Balk, 198 U. S. 215 (1905), Epstein, a resident of Maryland, had a claim against Balk, a resident of North Carolina. Harris, another North Carolina resident, owed money to Balk. When Harris happened to visit Maryland, Epstein garnished his debt to Balk. Harris did not contest the debt to Balk and paid it to Epstein's North Carolina attorney. When Balk later sued Harris in North Carolina, this Court held that the Full Faith and Credit Clause, U. S. Const., Art. IV, § 1, required that Harris' payment to Epstein be treated as a discharge of his debt to Balk. This Court reasoned that the debt Harris owed Balk was an intangible form of property belonging to Balk, and that the location of that property traveled with the debtor. By obtaining personal jurisdiction over Harris, Epstein had "arrested" his debt to Balk, 198 U. S., at 223, and brought it into the Maryland court. Under the structure established by Pennoyer, Epstein was then entitled to proceed against that debt to vindicate his claim against Balk, even though Balk himself was not subject to the jurisdiction of a Maryland tribunal.125 See also, e.g., Louisville & N.R. Co. v. Deer, 200 U. S. 176 (1906); Steele v. G. D. Searle & Co., 483 F.2d 339 (CA5 1973), cert. denied, 415 U. S. 958 (1974).

125 The Court in Harris limited its holding to States in which the principal defendant (Balk) could have sued the garnishee (Harris) if he had obtained personal jurisdiction over the garnishee in that State. 198 U. S., at 222-223, 226. The Court explained: "The importance of the fact of the right of the original creditor to sue his debtor in the foreign State, as affecting the right of the creditor of that creditor to sue the debtor or garnishee, lies in the nature of the attachment proceeding. The plaintiff, in such proceeding in the foreign State is able to sue out the attachment and attach the debt due from the garnishee to his (the garnishee's) creditor, because of the fact that the plaintiff is really in such proceeding a representative of the creditor of the garnishee, and therefore if such creditor himself had the right to commence suit to recover the debt in the foreign State his representative has the same right, as representing him, and may garnish or attach the debt, provided the municipal law of the State where the attachment was sued out permits it." Id., at 226. The problem with this reasoning is that unless the plaintiff has obtained a judgment establishing his claim against the principal defendant, see, e.g., Baltimore & O. R. Co. v. Hostetter, 240 U. S. 620 (1916), his right to "represent" the principal defendant in an action against the garnishee is at issue. See Beale, The Exercise of Jurisdiction in Rem to Compel Payment of a Debt, 27 Harv. L. Rev. 107, 118-120 (1913). 176 Pennoyer itself recognized that its rigid categories, even as blurred by the kind of action typified by Harris, could not accommodate some necessary litigation. Accordingly, Mr. Justice Field's opinion carefully noted that cases involving the personal status of the plaintiff, such as divorce actions, could be adjudicated in the plaintiff's home State even though the defendant could not be served within that State. 95 U. S., at 733-735. Similarly, the opinion approved the practice of considering a foreign corporation doing business in a State to have consented to being sued in that State. Id., at 735-736; see Lafayette Ins. Co. v. French, 18 How. 404 (1856). This basis for in personam jurisdiction over foreign corporations was later supplemented by the doctrine that a corporation doing business in a State could be deemed "present" in the State, and so subject to service of process under the rule of Pennoyer. See, e.g., International Harvester Co. v. Kentucky, 234 U. S. 579 (1914); Philadelphia & Reading R. Co. v. McKibbin, 243 U. S. 264 (1917). See generally Note, Developments in the Law, State-Court Jurisdiction, 73 Harv. L. Rev. 909, 919-923 (1960) (hereafter Developments). The advent of automobiles, with the concomitant increase in the incidence of individuals causing injury in States where they were not subject to in personam actions under Pennoyer, required further moderation of the territorial limits on jurisdictional power. This modification, like the accommodation to the realities of interstate corporate activities, was accomplished by use of a legal fiction that left the conceptual structure established in Pennoyer theoretically unaltered. Cf. Olberding v. Illinois Central R. Co., 346 U. S. 338, 340-341 (1953). The fiction used was that the out-of-state motorist, who it was assumed could be excluded altogether from the State's highways, had by using those highways appointed a designated state official as his agent to accept process. See Hess v. Pawloski, 274 U.S. 352 (1927). Since the motorist's "agent" could be personally served within the State, the state courts could obtain in personam jurisdiction over the nonresident driver. The motorists' consent theory was easy to administer since it required only a finding that the out-of-state driver had used the State's roads. By contrast, both the fictions of implied consent to service on the part of a foreign corporation and of corporate presence required a finding that the corporation was "doing business" in the forum State. Defining the criteria for making that finding and deciding whether they were met absorbed much judicial energy. See, e.g., International Shoe Co. v. Washington, 326 U. S., at 317-319. While the essentially quantitative tests which emerged from these cases purported simply to identify circumstances under which presence or consent could be attributed to the corporation, it became clear that they were in fact attempting to ascertain "what dealings make it just to subject a foreign corporation to local suit." Hutchinson v. Chase & Gilbert, 45 F.2d 139, 141 (CA2 1930) (L. Hand, J.). In International Shoe, we acknowledged that fact. The question in International Shoe was whether the corporation was subject to the judicial and taxing jurisdiction of Washington. Mr. Stone's opinion for the Court began its analysis of that question by noting that the historical basis of in personam jurisdiction was a court's power over the defendant's person. That power, however, was no longer the central concern: 177 "But now that the capias ad respondendum has given way to personal service of summons or other form of notice, due process requires only that in order to subject a defendant to a judgment in personam, if he be not present within the territory of the forum, he have certain minimum contacts with it such that the maintenance of the suit does not offend 'traditional notions of fair play and substantial justice.' Milliken v. Meyer, 311 U.S. 457, 463." 326 U.S., at 316.I Thus, the inquiry into the State's jurisdiction over a foreign corporation appropriately focused not on whether the corporation was "present" but on whether there have been such contacts of the corporation with the state of the forum as make it reasonable, in the context of our federal system of government, to require the corporation to defend the particular suit which is brought there." Id., at 317.I Mechanical or quantitative evaluations of the defendant's activities in the forum could not resolve the question of reasonableness: S "Whether due process is satisfied must depend rather upon the quality and nature of the activity in relation to the fair and orderly administration of the laws which it was the purpose of the due process clause to insure. That clause does not contemplate that a state may make binding a judgment in personam against an individual or corporate defendant with which the state has no contacts, ties, or relations." Id., at 319.I 126 Thus, the relationship among the defendant, the forum, and the litigation, rather than the mutually exclusive sovereignty of the States on which the rules of Pennoyer rest, became the central concern of the inquiry into personal jurisdiction.127 The immediate effect of this departure from Pennoyer's conceptual apparatus was to increase the ability of the state courts to obtain personal jurisdiction over nonresident defendants. See, e.g., Green, Jurisdictional Reform in California, 21 Hastings L. J. 1219, 1231-1233 (1970); Currie, The Growth of the Long Arm: Eight Years of Extended Jurisdiction in Illinois, 1963 U. Ill. L. F. 533; Developments 1000-1008.

126 As the language quoted indicates, the International Shoe Court believed that the standard it was setting forth governed actions against natural persons as well as corporations, and we see no reason to disagree. See also McGee v. International Life Ins. Co., 355 U. S. 220, 222 (1957) (International Shoe culmination of trend toward expanding state jurisdiction over "foreign corporations and other nonresidents"). The differences between individuals and corporations may, of course, lead to the conclusion that a given set of circumstances establishes state jurisdiction over one type of defendant but not over the other. 127 Nothing in Hanson v. Denckla, 357 U. S. 235 (1958), is to the contrary. The Hanson Court's statement that restrictions on state jurisdiction "are a consequence of territorial limitations on the power of the respective States," id., at 251, simply makes the point that the States are defined by their geographical territory. After making this point, the Court in Hanson determined that the defendant over which personal jurisdiction was claimed had not committed any acts sufficiently connected to the State to justify jurisdiction under the International Shoe standard. 178 No equally dramatic change has occurred in the law governing jurisdiction in rem. There have, however, been intimations that the collapse of the in personam wing of Pennoyer has not left that decision unweakened as a foundation for in rem jurisdiction. Well-reasoned lower court opinions have questioned the proposition that the presence of property in a State gives that State jurisdiction to adjudicate rights to the property regardless of the relationship of the underlying dispute and the property owner to the forum. See, e.g., U.S. Industries, Inc. v. Gregg, 540 F.2d 142 (CA3 1976), cert. pending, No. 76-359; Jonnet v. Dollar Savings Bank, 530 F.2d 1123, 1130-1143 (CA3 1976) (Gibbons, J., concurring); Camire v. Scieszka, 116 N.H. 281, 358 A. 2d 397 (1976); Bekins v. Huish, 1 Ariz. App. 258, 401 P. 2d 743 (1965); Atkinson v. Superior Court, 49 Cal. 2d 338, 316 P. 2d 960 (1957), appeal dismissed and cert. denied sub nom. Columbia Broadcasting System v. Atkinson, 357 U. S. 569 (1958). The overwhelming majority of commentators have also rejected Pennoyer's premise that a proceeding "against" property is not a proceeding against the owners of that property. Accordingly, they urge that the "traditional notions of fair play and substantial justice" that govern a State's power to adjudicate in personam should also govern its power to adjudicate personal rights to property located in the State. See, e.g., Von Mehren & Trautman, Jurisdiction to Adjudicate: A Suggested Analysis, 79 Harv. L. Rev. 1121 (1966) (hereafter Von Mehren & Trautman); Traynor, Is This Conflict Really Necessary?, 37 Texas L. Rev. 657 (1959) (hereafter Traynor); Ehrenzweig, The Transient Rule of Personal Jurisdiction: The "Power" Myth and Forum Conveniens, 65 Yale L. J. 289 (1956); Developments; Hazard. Although this Court has not addressed this argument directly, we have held that property cannot be subjected to a court's judgment unless reasonable and appropriate efforts have been made to give the property owners actual notice of the action. Schroeder v. City of New York, 371 U.S. 208 (1962); Walker v. City of Hutchinson, 352 U.S. 112 (1956); Mullane v. Central Hanover Bank & Trust Co., 339 U.S. 306 (1950). This conclusion recognizes, contrary to Pennoyer, that an adverse judgment in rem directly affects the property owner by divesting him of his rights in the property before the court. Schroeder v. City of New York, supra, at 213; cf. Continental Grain Co. v. Barge FBL-585, 364 U. S. 19 (1960) (separate actions against barge and barge owner are one "civil action" for purpose of transfer under 28 U.S.C. 1404(a)). Moreover, in Mullane we held that Fourteenth Amendment rights cannot depend on the classification of an action as in rem or in personam, since that is "a classification for which the standards are so elusive and confused generally and which, being primarily for state courts to define, may and do vary from state to state." 339 U.S., at 312. It is clear, therefore, that the law of state-court jurisdiction no longer stands securely on the foundation established in Pennoyer.128 We think that the time is ripe

128 Cf. Restatement (Second) of Conflict of Laws § 59, Comment a (possible inconsistency between principle of reasonableness which underlies field of judicial jurisdiction and traditional rule of in 179 to consider whether the standard of fairness and substantial justice set forth in International Shoe should be held to govern actions n rem as well as in personam. III. The case for applying to jurisdiction in rem the same test of "fair play and substantial justice" as governs assertions of jurisdiction in personam is simple and straightforward. It is premised on recognition that "[t]he phrase, 'judicial jurisdiction over a thing,' is a customary elliptical way of referring to jurisdiction over the interests of persons in a thing." Restatement (Second) of Conflict of Laws § 56, Introductory Note (1971) (hereafter Restatement). 129 This recognition leads to the conclusion that in order to justify an exercise of jurisdiction in rem, the basis for jurisdiction must be sufficient to justify exercising "jurisdiction over the interests of persons in a thing."130 The standard for determining whether an exercise of jurisdiction over the interests of persons is consistent with the Due Process Clause is the minimum-contacts standard elucidated in International Shoe. This argument, of course, does not ignore the fact that the presence of property in a State may bear on the existence of jurisdiction by providing contacts among the forum State, the defendant, and the litigation. For example, when claims to the property itself are the source of the underlying controversy between the plaintiff and the defendant,131 it would be unusual for the State where the property is located not to have jurisdiction. In such cases, the defendant's claim to property located in the State would normally132 indicate that he expected to benefit from the State's protection of his interest.133 The State's strong interests in assuring the marketability

rem jurisdiction based solely on land in State); § 60, Comment a (same as to jurisdiction based solely on chattel in State); § 68, Comment c (rule of Harris v. Balk "might be thought inconsistent with the basic principle of reasonableness") (1971). 129 "All proceedings, like all rights, are really against persons. Whether they are proceedings or rights in rem depends on the number of persons affected." Tyler v. Court of Registration, 175 Mass. 71, 76, 55 N. E. 812, 814 (Holmes, C.J.), appeal dismissed, 179 U. S. 405 (1900). 130 It is true that the potential liability of a defendant in an in rem action is limited by the value of the property, but that limitation does not affect the argument. The fairness of subjecting a defendant to state-court jurisdiction does not depend on the size of the claim being litigated.Cf. Fuentes v. Shevin, 407 U. S., at 88-90; n. 32, infra. 131 This category includes true in rem actions and the first type of quasi in rem proceedings. See n. 17, supra. 132 In some circumstances the presence of property in the forum State will not support the inference suggested in text. Cf., e.g., Restatement § 60, Comments c, d; Traynor 672-673; Note, The Power of a State to Affect Title in a Chattel Atypically Removed to It, 47 Colum. L. Rev. 767 (1947). 133 Cf. Hanson v. Denckla, 357 U. S., at 253. 180

of property within its borders134 and in providing a procedure for peaceful resolution of disputes about the possession of that property would also support jurisdiction, as would the likelihood that important records and witnesses will be found in the State.135 The presence of property may also favor jurisdiction in cases, such as suits for injury suffered on the land of an absentee owner, where the defendant's ownership of the property is conceded but the cause of action is otherwise related to rights and duties growing out of that ownership.136 It appears, therefore, that jurisdiction over many types of actions which now are or might be brought in rem would not be affected by a holding that any assertion of state-court jurisdiction must satisfy the International Shoe standard.137 For the type of quasi in rem action typified by Harris v. Balk and the present case, however, accepting the proposed analysis would result in significant change. These are cases where the property which now serves as the basis for state-court jurisdiction is completely unrelated to the plaintiff's cause of action. Thus, although the presence of the defendant's property in a State might suggest the existence of other ties among the defendant, the State, and the litigation, the presence of the property alone would not support the State's jurisdiction. If those other ties did not exist, cases over which the State is now thought to have jurisdiction could not be brought in that forum. Since acceptance of the International Shoe test would most affect this class of cases, we examine the arguments against adopting that standard as they relate to this category of litigation. 138 Before doing so, however, we note that this type of case also presents the clearest illustration of the argument in favor of assessing assertions of jurisdiction by a single standard. For in cases such as Harris and this one, the only role played by the property is to provide the basis for bringing the defendant into

134 See, e.g., Tyler v. Court of Registration, supra. 135 We do not suggest that these illustrations include all the factors that may affect the decision, nor that the factors we have mentioned are necessarily decisive. 136 Cf. Dubin v. Philadelphia, 34 Pa. D. & C. 61 (1938). If such an action were brought under the in rem jurisdiction rather than under a long-arm statute, it would be a quasi in rem action of the second type. See n. 17, supra. 137 Cf. Smit, The Enduring Utility of In Rem Rules: A Lasting Legacy of Pennoyer v. Neff, 43 Brooklyn L. Rev. 600 (1977). We do not suggest that jurisdictional doctrines other than those discussed in text, such as the particularized rules governing adjudications of status, are inconsistent with the standard of fairness. See, e.g., Traynor 660-661. 138 Concentrating on this category of cases is also appropriate because in the other categories, to the extent that presence of property in the State indicates the existence of sufficient contacts under International Shoe, there is no need to rely on the property as justifying jurisdiction regardless of the existence of those contacts. 181

court. 139 Indeed, the express purpose of the Delaware sequestration procedure is to compel the defendant to enter a personal appearance. 140 In such cases, if a direct assertion of personal jurisdiction over the defendant would violate the Constitution, it would seem that an indirect assertion of that jurisdiction should be equally impermissible. The primary rationale for treating the presence of property as a sufficient basis for jurisdiction to adjudicate claims over which the State would not have jurisdiction if International Shoe applied is that a wrongdoer S "should not be able to avoid payment of his obligations by the expedient of removing his assets to a place where he is not subject to an in personam suit." Restatement § 66, Comment a.I Accord, Developments 955. This justification, however, does not explain why jurisdiction should be recognized without regard to whether the property is present in the State because of an effort to avoid the owner's obligations. Nor does it support jurisdiction to adjudicate the underlying claim. At most, it suggests that a State in which property is located should have jurisdiction to attach that property, by use of proper procedures,141 as security for a judgment being sought in a forum where the litigation can be maintained consistently with International Shoe. See, e.g., Von Mehren & Trautman 1178; Hazard 284-285; Beale, supra, n.18, at 123-124. Moreover, we know of nothing to justify the assumption that a debtor can avoid paying his obligations by removing his property to a State in which his creditor cannot obtain personal jurisdiction over him.142 The Full Faith and Credit Clause, after all, makes the valid in personam judgment of one State enforceable in all other States.143

139 The value of the property seized does serve to limit the extent of possible liability, but that limitation does not provide support for the assertion of jurisdiction. See n. 23, supra. In this case, appellants' potential liability under the in rem jurisdiction exceeds $1 million. See nn. 7, 8, supra. 140 See supra, at 193, 194. This purpose is emphasized by Delaware's refusal to allow any defense on the merits unless the defendant enters a general appearance, thus submitting to full in personam liability. See n. 12, supra. 141 See North Georgia Finishing, Inc. v. Di-Chem, Inc., 419 U. S. 601 (1975); Mitchell v. W. T. Grant Co., 416 U. S. 600 (1974); Fuentes v. Shevin, 407 U.S. 67 (1972); Sniadach v. Family Finance Corp., 395 U. S. 337 (1969). 142 The role of in rem jurisdiction as a means of preventing the evasion of obligations, like the usefulness of that jurisdiction to mitigate the limitations Pennoyer placed on in personam jurisdiction, may once have been more significant. Von Mehren & Trautman 1178. 143 Once it has been determined by a court of competent jurisdiction that the defendant is a debtor of the plaintiff, there would seem to be no unfairness in allowing an action to realize on that debt in a State where the defendant has property, whether or not that State would have jurisdiction to determine the existence of the debt as an original matter. Cf. n. 18, supra. 182 It might also be suggested that allowing in rem jurisdiction avoids the uncertainty inherent in the International Shoe standard and assures a plaintiff of a forum.144 See Folk & Moyer, supra, n. 10, at 749, 767. We believe, however, that the fairness standard of International Shoe can be easily applied in the vast majority of cases. Moreover, when the existence of jurisdiction in a particular forum under International Shoe is unclear, the cost of simplifying the litigation by avoiding the jurisdictional question may be the sacrifice of "fair play and substantial justice." That cost is too high. We are left, then, to consider the significance of the long history of jurisdiction based solely on the presence of property in a State. Although the theory that territorial power is both essential to and sufficient for jurisdiction has been undermined, we have never held that the presence of property in a State does not automatically confer jurisdiction over the owner's interest in that property. 145 This history must be considered as supporting the proposition that jurisdiction based solely on the presence of property satisfies the demands of due process, cf. Ownbey v. Morgan, 256 U. S. 94, 111 (1921), but it is not decisive. "[T]raditional notions of fair play and substantial justice" can be as readily offended by the perpetuation of

144 This case does not raise, and we therefore do not consider, the question whether the presence of a defendant's property in a State is a sufficient basis for jurisdiction when no other forum is available to the plaintiff. 145 To the contrary, in Pennington v. Fourth Nat. Bank, 243 U. S. 269, 271 (1917), we said: "The Fourteenth Amendment did not, in guaranteeing due process of law, abridge the jurisdiction which a State possessed over property within its borders, regardless of the residence or presence of the owner. That jurisdiction extends alike to tangible and to intangible property. Indebtedness due from a resident to a non-resident - of which bank deposits are an example is property within the State. Chicago, Rock Island & Pacific Ry. Co. v. Sturm, 174 U. S. 710. It is, indeed, the species of property which courts of the several States have most frequently applied in satisfaction of the obligations of absent debtors. Harris v. Balk, 198 U. S. 215. Substituted service on a non-resident by publication furnishes no legal basis for a judgment in personam. Pennoyer v. Neff, 95 U. S. 714. But garnishment or foreign attachment is a proceeding quasi in rem. Freeman v. Alderson, 119 U. S. 185, 187. The thing belonging to the absent defendant is seized and applied to the satisfaction of his obligation. The Federal Constitution presents no obstacle to the full exercise of this power." See also Huron Holding Corp. v. Lincoln Mine Operating Co., 312 U.S. 183, 193 (1941). More recent decisions, however, contain no similar sweeping endorsements of jurisdiction based on property. In Hanson v. Denckla, 357 U. S., at 246, we noted that a state court's in rem jurisdiction is "[f]ounded on physical power" and that "[t]he basis of the jurisdiction is the presence of the subject property within the territorial jurisdiction of the forum State." We found in that case, however, that the property which was the basis for the assertion of in rem jurisdiction was not present in the State. We therefore did not have to consider whether the presence of property in the State was sufficient to justify jurisdiction. We also held that the defendant did not have sufficient contact with the State to justify in personam jurisdiction. 183 ancient forms that are no longer justified as by the adoption of new procedures that are inconsistent with the basic values of our constitutional heritage. Cf. Sniadach v. Family Finance Corp., 395 U. S., at 340; Wolf v. Colorado, 338 U.S. 25, 27 (1949). The fiction that an assertion of jurisdiction over property is anything but an assertion of jurisdiction over the owner of the property supports an ancient form without substantial modern justification. Its continued acceptance would serve only to allow state-court jurisdiction that is fundamentally unfair to the defendant. We therefore conclude that all assertions of state-court jurisdiction must be evaluated according to the standards set forth in International Shoe and its progeny.146 IV. The Delaware courts based their assertion of jurisdiction in this case solely on the statutory presence of appellants' property in Delaware. Yet that property is not the subject matter of this litigation, nor is the underlying cause of action related to the property. Appellants' holdings in Greyhound do not, therefore, provide contacts with Delaware sufficient to support the jurisdiction of that State's courts over appellants. If it exists, that jurisdiction must have some other foundation.147 Appellee Heitner did not allege and does not now claim that appellants have ever set foot in Delaware. Nor does he identify any act related to his cause of action as having taken place in Delaware. Nevertheless, he contends that appellants' positions as directors and officers of a corporation chartered in Delaware148 provide

146 It would not be fruitful for us to re-examine the facts of cases decided on the rationales of Pennoyer and Harris to determine whether jurisdiction might have been sustained under the standard we adopt today. To the extent that prior decisions are inconsistent with this standard, they are overruled. 147 Appellants argue that our determination that the minimum-contacts standard of International Shoe governs jurisdiction here makes unnecessary any consideration of the existence of such contacts. Brief for Appellants 27; Brief for Appellants 9. They point out that they were never personally served with a summons, that Delaware has no long-arm statute which would authorize such service, and that the Delaware Supreme Court has authoritatively held that the existence of contacts is irrelevant to jurisdiction under Del. Code Ann., Tit. 10, § 366 (1975). As part of its sequestration order, however, the Court of Chancery directed its clerk to send each appellant a copy of the summons and complaint by certified mail. The record indicates that those mailings were made and contains return receipts from at least 19 of the appellants. None of the appellants has suggested that he did not actually receive the summons which was directed to him in compliance with a Delaware statute designed to provide jurisdiction over nonresidents. In these circumstances, we will assume that the procedures followed would be sufficient to bring appellants before the Delaware courts, if minimum contacts existed. 148 On the view we take of the case, we need not consider the significance, if any, of the fact that some appellants hold positions only with a subsidiary of Greyhound which is incorporated in California. 184 sufficient "contacts, ties, or relations," International Shoe Co. v. Washington, 326 U. S., at 319, with that State to give its courts jurisdiction over appellants in this stockholder's derivative action. This argument is based primarily on what Heitner asserts to be the strong interest of Delaware in supervising the management of a Delaware corporation. That interest is said to derive from the role of Delaware law in establishing the corporation and defining the obligations owed to it by its officers and directors. In order to protect this interest, appellee concludes, Delaware's courts must have jurisdiction over corporate fiduciaries such as appellants. This argument is undercut by the failure of the Delaware Legislature to assert the state interest appellee finds so compelling. Delaware law bases jurisdiction, not on appellants' status as corporate fiduciaries, but rather on the presence of their property in the State. Although the sequestration procedure used here may be most frequently used in derivative suits against officers and directors, Hughes Tool Co. v. Fawcett Publications, Inc., 290 A. 2d 693, 695 (Del. Ch. 1972), the authorizing statute evinces no specific concern with such actions. Sequestration can be used in any suit against a nonresident,149 see, e.g., U.S. Industries, Inc. v. Gregg, 540 F.2d 142 (CA3 1976), cert. pending, No. 76-359 (breach of contract); Hughes Tool Co. v. Fawcett Publications, Inc., supra (same), and reaches corporate fiduciaries only if they happen to own interests in a Delaware corporation, or other property in the State. But as Heitner's failure to secure jurisdiction over seven of the defendants named in his complaint demonstrates, there is no necessary relationship between holding a position as a corporate fiduciary and owning stock or other interests in the corporation. 150 If Delaware perceived its interest in securing jurisdiction over corporate fiduciaries to be as great as Heitner suggests, we would expect it to have enacted a statute more clearly designed to protect that interest. Moreover, even if Heitner's assessment of the importance of Delaware's interest is accepted, his argument fails to demonstrate that Delaware is a fair forum for this litigation. The interest appellee has identified may support the application of Delaware law to resolve any controversy over appellants' actions in their capacities as officers and directors. 151 But we have rejected the argument that if a State's law can properly be applied to a dispute, its courts necessarily have jurisdiction over the parties to that dispute. S

149 Sequestration is an equitable procedure available only in equity actions, but a similar procedure may be utilized in actions at law. See n. 10, supra. 150 Delaware does not require directors to own stock. Del. Code Ann., Tit. 8, § 141 (b) (Supp. 1976). 151 In general, the law of the State of incorporation is held to govern the liabilities of officers or directors to the corporation and its stockholders. See Restatement § 309. But see Cal. Corp. Code § 2115 (West Supp. 1977). The rationale for the general rule appears to be based more on the need for a uniform and certain standard to govern the internal affairs of a corporation than on the perceived interest of the State of incorporation. Cf. Koster v. Lumbermens Mutual Casualty Co., 330 U. S. 518, 527-528 (1947). 185 "[The State] does not acquire... jurisdiction by being the 'center of gravity' of the controversy, or the most convenient location for litigation. The issue is personal jurisdiction, not choice of law. It is resolved in this case by considering the acts of the [appellants]." Hanson v. Denckla, 357 U. S. 235, 254 (1958).I152 Appellee suggests that by accepting positions as officers or directors of a Delaware corporation, appellants performed the acts required by Hanson v. Denckla. He notes that Delaware law provides substantial benefits to corporate officers and directors,153 and that these benefits were at least in part the incentive for appellants to assume their positions. It is, he says, "only fair and just" to require appellants, in return for these benefits, to respond in the State of Delaware when they are accused of misusing their power. Brief for Appellee 15. But like Heitner's first argument, this line of reasoning establishes only that it is appropriate for Delaware law to govern the obligations of appellants to Greyhound and its stockholders. It does not demonstrate that appellants have "purposefully avail[ed themselves] of the privilege of conducting activities within the forum State," Hanson v. Denckla, supra, at 253, in a way that would justify bringing them before a Delaware tribunal. Appellants have simply had nothing to do with the State of Delaware. Moreover, appellants had no reason to expect to be haled before a Delaware court. Delaware, unlike some States,154 has not enacted a statute that treats acceptance of a directorship as consent to jurisdiction in the State. And "[i]t strains reason... to suggest that anyone buying securities in a corporation formed in Delaware 'impliedly ' to subject himself to Delaware's... jurisdiction on any cause of action." Folk & Moyer, supra, n.10, at 785. Appellants, who were not required to acquire interests in Greyhound in order to hold their positions, did not by acquiring those interests surrender their right to be brought to judgment only in States with which they had had "minimum contacts." The Due Process Clause S "does not contemplate that a state may make binding a judgment... against an individual or corporate defendant with which the state has no contacts, ties, or relations." International Shoe Co. v. Washington, 326 U. S., at 319.I Delaware's assertion of jurisdiction over appellants in this case is inconsistent with that constitutional limitation on state power. The judgment of the Delaware Supreme Court must, therefore, be reversed. It is so ordered.

152 Mr. Justice Black, although dissenting in Hanson, agreed with the majority that "the question whether the law of a State can be applied to a transaction is different from the question whether the courts of that State have jurisdiction to enter a judgment...." 357 U.S., at 258. 153 See, e.g., Del. Code Ann., Tit. 8, §§ 143, 145 (1975 ed. and Supp. 1976). 154 See, e.g., Conn. Gen. Stat. Rev. § 33-322 (1976); N. C. Gen. Stat. § 55-33 (1975); S.C. Code Ann. § 33-5-70 (1977). 186

Volkswagen v. Woodson 444 U.S. 286, 100 S. Ct. 559 (1980) White, J., delivered the opinion of the court. The issue before us is whether, consistently with the Due Process Clause of the Fourteenth Amendment, an Oklahoma court may exercise in personam jurisdiction over a nonresident automobile retailer and its wholesale distributor in a products- liability action, when the defendants' only connection with Oklahoma is the fact that an automobile sold in New York to New York residents became involved in an accident in Oklahoma. I. Respondents Harry and Kay Robinson purchased a new Audi automobile from petitioner Seaway Volkswagen, Inc. (Seaway), in Massena, N.Y., in 1976. The following year the Robinson family, who resided in New York, left that State for a new home in Arizona. As they passed through the State of Oklahoma, another car struck their Audi in the rear, causing a fire which severely burned Kay Robinson and her two children.155 The Robinsons156 subsequently brought a products-liability action in the District Court for Creek County, Okla., claiming that their injuries resulted from defective design and placement of the Audi's gas tank and fuel system. They joined as defendants the automobile's manufacturer, Audi NSU Auto Union Aktiengesellschaft (Audi); its importer, Volkswagen of America, Inc. (Volkswagen); its regional distributor, petitioner World-Wide Volkswagen Corp. (World-Wide); and its retail dealer, petitioner Seaway. Seaway and World-Wide entered special appearances,157 claiming that Oklahoma's exercise of jurisdiction over them would offend the limitations on the State's jurisdiction imposed by the Due process Clause of the Fourteenth Amendment. 158 The facts presented to the District Court showed that World-Wide is incorporated and has its business office in New York. It distributes vehicles, parts,

155 The driver of the other automobile does not figure in the present litigation. 156 Kay Robinson sued on her own behalf. The two children sued through Harry Robinson as their father and next friend. 157 Volkswagen also entered a special appearance in the District Court, but unlike World-Wide and Seaway did not seek review in the Supreme Court of Oklahoma and is not a petitioner here. Both Volkswagen and Audi remain as defendants in the litigation pending before the District Court in Oklahoma. 158 The papers filed by the petitioners also claimed that the District Court lacked "venue of the subject matter," App. 9, or "venue over the subject matter," Id., at 11. 187 and accessories, under contract with Volkswagen, to retail dealers in New York, New Jersey, and Connecticut. Seaway, one of these retail dealers, is incorporated and has its place of business in New York. Insofar as the record reveals, Seaway and World-Wide are fully independent corporations whose relations with each other and with Volkswagen and Audi are contractual only. Respondents adduced no evidence that either World-Wide or Seaway does any business in Oklahoma, ships or sells any products to or in that State, has an agent to receive process there, or purchases advertisements in any media calculated to reach Oklahoma. In fact, as respondents' counsel conceded at oral argument, Tr. of Oral Arg. 32, there was no showing that any automobile sold by World-Wide or Seaway has ever entered Oklahoma with the single exception of the vehicle involved in the present case. Despite the apparent paucity of contacts between petitioners and Oklahoma, the District Court rejected their constitutional claim and reaffirmed that ruling in denying petitioners' motion for reconsideration159. Petitioners then sought a writ of prohibition in the Supreme Court of Oklahoma to restrain the District Judge, respondent Charles S. Woodson, from exercising in personam jurisdiction over them. They renewed their contention that, because they had no "minimal contacts," App. 32, with the State of Oklahoma, the actions of the District Judge were in violation of their rights under the Due Process Clause. The Supreme Court of Oklahoma denied the writ, 585 P. 2d 351 (1978),160 holding that personal jurisdiction over petitioners was authorized by Oklahoma's "long-arm" statute, Okla. Stat., Tit. 12, § 1701.03(a)(4) (1971).161 Although the court noted that the proper approach was to test jurisdiction against both statutory and constitutional standards, its analysis did not distinguish these questions, probably because § 1701.03(a)(4) has been interpreted as conferring jurisdiction to the limits

159 The District Court's rulings are unreported, and appear at App. 13 and 20. 160 Five judges joined in the opinion. Two concurred in the result, without opinion, and one concurred in part and dissented in part, also without opinion. 161 This subsection provides: "A court may exercise personal jurisdiction over a person, who acts directly or by an agent, as to a cause of action or claim for relief arising from the person's... causing tortious injury in this state by an act or omission outside this state of he regularly does or solicits business or engages in any other persistent course of conduct, or derives substantial revenue from goods used or consumed or services rendered, in this state...." The State Supreme Court rejected jurisdiction based on § 1701.03(a)(3), which authorizes jurisdiction over any person "causing tortious injury in this state by an act or omission in this state." Something in addition to the infliction of tortious injury was required. 188

permitted by the United States Constitution. 162 The court's rationale was contained in the following paragraph, 585 P.2d, at 354: "In the case before us, the product being sold and distributed by the petitioners is by its very design and purpose so mobile that petitioners can foresee its possible use in Oklahoma. This is especially true of the distributor, who has the exclusive right to distribute such automobile in New York, New Jersey and Connecticut. The evidence presented below demonstrated that goods sold and distributed by the petitioners were used in the State of Oklahoma, and under the facts we believe it reasonable to infer, given the retail value of the automobile, that the petitioners derive substantial income from automobiles which from time to time are used in the State of Oklahoma. This being the case, we hold that under the facts presented, the trial court was justified in concluding that the petitioners derive substantial revenue from goods used or consumed in this State." We granted certiorari, 440 U.S. 907 (1979), to consider an important constitutional question with respect to state-court jurisdiction and to resolve a conflict between the Supreme Court of Oklahoma and the highest courts of at least four other States. 163 We reverse. II. The Due Process Clause of the Fourteenth Amendment limits the power of a state court to render a valid personal judgment against a nonresident defendant. Kulko v. California Superior Court, 436 U.S. 84, 91 (1978). A judgment rendered in violation of due process is void in the rendering State and is not entitled to full faith and credit elsewhere. Pennoyer v. Neff, 95 U.S. 714, 732-733 (1878). Due process requires that the defendant be given adequate notice of the suit, Mullanev. Central Hanover Trust Co., 339 U.S. 306, 313-314 (1950), and be subject to the personal jurisdiction of the court, International Shoe Co. v. Washington, 326 U.S. 310 (1945). In the present case, it is not contended that notice was inadequate; the only question is whether these particular petitioners were subject to the jurisdiction of the Oklahoma courts. As has long been settled, and as we reaffirm today, a state court may exercise personal jurisdiction over a nonresident defendant only so long as there exist "minimum contacts" between the defendant and the forum State. International Shoe Co. v. Washington, supra, at 316. The concept of minimum contacts, in turn, can be

162 Fields v. Volkswagen of America, Inc., 555 P. 2d 48 (Okla. 1976); Carmack v. Chemical Bank New York Trust Co., 536 P. 2d 897 (Okla. 1975); Hines v. Clendenning, 465 P. 2d 460 (Okla. 1970). 163 Cf. Tilley v. Keller Truck & Implement Corp., 200 Kan. 641, 438 P. 2d 128 (1968); Granite States Volkswagen, Inc. v. District Court, 177 Colo. 42, 492 P. 2d 624 (1972); Pellegrini v. Sachs & Sons, 522 P. 2d 704 (Utah 1974); Oliver v. American Motors Corp., 70 Wash. 2d 875, 425 P. 2d 647 (1967). 189 seen to perform two related, but distinguishable, functions. It protects the defendant against the burdens of litigating in a distant or inconvenient forum. And it acts to ensure that the States, through their courts, do not reach out beyond the limits imposed on them by their status as coequal sovereigns in a federal system. The protection against inconvenient litigation is typically described in terms of "reasonableness" or "fairness." We have said that the defendant's contacts with the forum State must be such that maintenance of the suit "does not offend 'traditional notions of fair play and substantial justice.'" International Shoe Co. v. Washington, supra, at 316, quoting Milliken v. Meyer, 311 U.S. 457, 463 (1940). The relationship between the defendant and the forum must be such that it is "reasonable... to require the corporation to defend the particular suit which is brought there." 326 U.S., at 317. Implicit in this emphasis on reasonableness is the understanding that the burden on the defendant, while always a primary concern, will in an appropriate case be considered in light of other relevant factors, including the forum State's interest in adjudicating the dispute, see McGee v. International interest in obtaining convenient and effective relief, see Kulko v. California Superior Court, supra, at 92, at least when that interest is not adequately protected by the plaintiff's power to choose the forum, cf. Shaffer v. Heitner, 433 U.S. 186, 211, n. 37 (1977); the interstate judicial system's interest in obtaining the most efficient resolution of controversies; and the shared interest of the several States in furthering fundamental substantive social policies, see Kulko v. California Superior Court, supra, at 93, 98. The limits imposed on state jurisdiction by the Due Process Clause, in its role as a guarantor against inconvenient litigation, have been substantially relaxed over the years. As we noted in McGee v. International Life Ins. Co., supra, at 222-223, this trend is largely attributable to a fundamental transformation in the American economy: "Today many commercial transactions touch two or more States and may involve parties separated by the full continent. With this increasing nationalization of commerce has come a great increase in the amount of business conducted by mail across state lines. At the same time modern transportation and communication have made it much less burdensome for a party sued to defend himself in a State where he engages in economic activity." The historical developments noted in McGee, of course, have only accelerated in the generation since that case was decided. Nevertheless, we have never accepted the proposition that state lines are irrelevant for jurisdictional purposes, nor could we, and remain faithful to the principles of interstate federalism embodied in the Constitution. The economic interdependence of the States was foreseen and desired by the Framers. In the Commerce Clause, they provided that the Nation was to be a common market, a "free trade unit" in which the States are debarred from acting as separable economic entities. H.P. Hood & Sons, Inc. v. Du Mond, 336 U.S. 525, 538 (1949). But the Framers also intended that the States retain many essential attributes of sovereignty, 190 including, in particular, the sovereign power to try causes in their courts. The sovereignty of each State, in turn, implied a limitation on the sovereignty of all of its sister States -- a limitation express or implicit in both the original scheme of the Constitution and the Fourteenth Amendment. Hence, even while abandoning the shibboleth that "[t]he authority of every tribunal is necessarily restricted by the territorial limits of the State in which it is established," Pennoyer v. Neff, supra, at 720, we emphasized that the reasonableness of asserting jurisdiction over the defendant must be assessed "in the context of our federal system of government," International Shoe Co. v. Washington, 326 U. S. at 317, and stressed that the Due Process Clause ensures not only fairness, but also the "orderly administration of the laws," id., at 319. As we noted in Hanson v. Denckla, 357 U.S. 235, 250-251 (1958): "As technological progress has increased the flow of commerce between the States, the need for jurisdiction over nonresidents has undergone a similar increase. At the same time, progress in communications and transportation has made the defense of a suit in a foreign tribunal less burdensome. In response to these changes, the requirements for personal jurisdiction over nonresidents have evolved from the rigid rule of Pennoyer v. Neff, 95 U.S. 714, to the flexible standard of International Shoe Co. v. Washington, 326 U.S. 310. But it is a mistake to assume that this trend heralds the eventual demise of all restrictions on the personal jurisdiction of state courts. [Citation omitted.] Those restrictions are more than a guarantee of immunity from inconvenient or distant litigation. They are a consequence of territorial limitations on the power of the respective States." Thus, the Due Process Clause "does not contemplate that a state may make binding a judgment in personam against an individual or corporate defendant with which the state has no contacts, ties, or relations." International Shoe Co. v. Washington, 326 U.S., at 319. Even if the defendant would suffer minimal or no inconvenience from being forced to litigate before the tribunals of another State; even if the forum State has a strong interest in applying its law to the controversy; even if the forum State is the most convenient location for litigation, the Due Process Clause, acting as an instrument of interstate federalism, may sometimes act to divest the State of its power to render a valid judgment. Hanson v. Denckla, supra, at 251, 254. III. Applying these principles to the case at hand,164 we find in the record before us a total absence of those affiliating circumstances that are a necessary predicate to

164 Respondents argue, as a threshold matter, that petitioners waived any objections to personal jurisdiction by (1) joining with their special appearances a challenge to the District Court's subject-matter jurisdiction, see n. 4, supra, and (2) taking depositions on the merits of the case in Oklahoma. The trial court, however, characterized the appearances as "special," and the 191 any exercise of state-court jurisdiction. Petitioners carry on no activity whatsoever in Oklahoma. They close no sales and perform no services there. They avail themselves of none of the privileges and benefits of Oklahoma law. They solicit no business there either through salespersons or through advertising reasonably calculated to reach the State. Nor does the record show that they regularly sell cars at wholesale or retail to Oklahoma customers or residents or that they indirectly, through others, serve or seek to serve the Oklahoma market. In short, respondents seek to base jurisdiction on one, isolated occurrence and whatever inferences can be drawn therefrom: the fortuitous circumstance that a single Audi automobile, sold in New York to New York residents, happened to suffer an accident while passing through Oklahoma. It is argued, however, that because an automobile is mobile by its very design and purpose it was "foreseeable" that the Robinsons' Audi would cause injury in Oklahoma. Yet "foreseeability" alone has never been a sufficient benchmark for personal jurisdiction under the Due Process Clause. In Hanson v. Denckla, supra, it was no doubt foreseeable that the settlor of a Delaware trust would subsequently move to Florida and seek to exercise a power of appointment there; yet we held that Florida courts could not constitutionally exercise jurisdiction over a Delaware trustee that had no other contacts with the forum State. In Kulko v. California Superior Court, 436 U.S. 84 (1978), it was surely "foreseeable" that a divorced wife would move to California from New York, the domicile of the marriage, and that a minor daughter would live with the mother. Yet we held that California could not exercise jurisdiction in a child-support action over the former husband who had remained in New York. If foreseeability were the criterion, a local California tire retailer could be forced to defend in Pennsylvania when a blowout occurs there, see Erlanger Mills, Inc. v. Cohoes Fibre Mills, Inc., 239 F.2d 502, 507 (CA4 1956); a Wisconsin seller of a defective automobile jack could be haled before a distant court for damage caused in New Jersey, Reilly v. Phil Tolkan Pontiac, Inc., 372 F. Supp. 1205 (NJ 1974); or a Florida soft-drink concessionaire could be summoned to Alaska to account for injuries happening there, see Uppgren v. Executive Aviation Services, Inc., 304 F. Supp. 165, 170-171 (Minn. 1969). Every seller of chattels would in effect appoint the chattel his agent for service of process. His amenability to suit would travel with the chattel. We recently abandoned the outworn rule of Harris v. Balk, 198 U.S. 215 (1905), that the interest of a creditor in a debt could be extinguished or otherwise affected by any State having transitory jurisdiction over the debtor. Shaffer v. Heitner, 433 U.S. 186 (1977). Having interred the mechanical

Oklahoma Supreme Court, rather than finding jurisdiction waived, reached and decided the statutory and constitutional questions. Cf. Kulko v. California Superior Court, 436 U.S. 84, 91, n. 5 (1978). 192 rule that a creditor's amenability to a quasi in rem action travels with his debtor, we are unwilling to endorse an analogous principle in the present case. 165 This is not to say, of course, that foreseeability is wholly irrelevant. But the foreseeability that is critical to due process analysis is not the mere likelihood that a product will find its way into the forum State. Rather, it is that the defendant's conduct and connection with the forum State are such that he should reasonably anticipate being haled into court there. See Kulko v. California Superior Court, supra, at 97-98; Shaffer v. Heitner, 433 U.S., at 216; and see id., at 217-219 (STEVENS, J., concurring in judgment). The Due Process Clause, by ensuring the "orderly administration of the laws," International Shoe Co. v. Washington, 326 U.S., at 319, gives a degree of predictability to the legal system that allows potential defendants to structure their primary conduct with some minimum assurance as to where that conduct will and will not render then liable to suit. When a corporation "purposefully avails itself of the privilege of conducting activities within the forum State," Hanson v. Denckla, 357 U.S., at 253, it has clear notice that it is subject to suit there, and can act to alleviate the risk of burdensome litigation by procuring insurance, passing the expected costs on to customers, or, if the risks are too great, severing its connection with the State. Hence if the sale of a product of a manufacturer or distributor such as Audi or Volkswagen is not simply an isolated occurrence, but arises from the efforts of the manufacturer or distributor to serve, directly or indirectly, the market for its product in other States, it is not unreasonable to subject it to suit in one of those States if its allegedly defective merchandise has there been the source of injury to its owner or to others. The forum State does not exceed its powers under the Due Process Clause if it asserts personal jurisdiction over a corporation that delivers its products into the stream of commerce with the expectation that they will be purchased by consumers in the forum State. Compare Gray v. American Radiator & Standard Sanitary Corp., 22 Ill. 2d 432, 176 N.E. 2d 761 (1961). But there is no such or similar basis for Oklahoma jurisdiction over World- Wide or Seaway in this case. Seaway's sales are made in Massena, N.Y. World- Wide's market, although substantially larger, is limited to dealers in New York, New

165 Respondents' counsel, at oral argument, see Tr. of Oral Arg. 19-22, 29, sought to limit the reach of the foreseeability standard by suggesting that there is something unique about automobiles. It is true that automobiles are uniquely mobile, see Tyson v. Whitaker & Son, Inc., 407 A.2d 1, 6, and n. 11 (Me. 1979) (McKusick, C.J.), that they did play a crucial role in the expansion of personal jurisdiction through the fiction of implied consent, e.g., Hess v. Pawloski, 274 U.S. 352 (1927), and that some of the cases have treated the automobile as a "dangerous instrumentality." But today, under the regime of International Shoe, we see no difference for jurisdictional purposes between an automobile and any other chattel. The "dangerous instrumentality" concept apparently was never used to support personal jurisdiction; and to the extent it has relevance today it bears not on jurisdiction but on the possible desirability of imposing substantive principles of tort law such as strict liability. 193 Jersey, and Connecticut. There is no evidence of record that any automobiles distributed by World-Wide are sold to retail customers outside this tri-state area. It is foreseeable that the purchasers of automobiles sold by World-Wide and Seaway may take them to Oklahoma. But the mere "unilateral activity of those who claim some relationship with a nonresident defendant cannot satisfy the requirement of contact with the forum State." Hanson v. Denckla, supra, at 253. In a variant on the previous argument, it is contended that jurisdiction can be supported by the fact that petitioners earn substantial revenue from goods used in Oklahoma. The so found, 585 P. 2d, at 354-355, drawing the inference that because one automobile sold by petitioners had been used in Oklahoma, others might have been used there also. While this inference seems less than compelling on the facts of the instant case, we need not question the court's factual findings in order to reject its reasoning. This argument seems to make the point that the purchase of automobiles in New York, from which the petitioners earn substantial revenue, would not occur but for the fact that the automobiles are capable of use in distant States like Oklahoma. Respondents observe that the very purpose of an automobile is to travel, and that travel of automobiles sold by petitioners is facilitated by an extensive chain of Volkswagen service centers throughout the country, including some in Oklahoma. 166 However, financial benefits accruing to the defendant from a collateral relation to the forum State will not support jurisdiction if they do not stem from a constitutionally cognizable contact with that State. See Kulko v. California Superior Court, 436 U.S., at 94-95. In our view, whatever marginal revenues petitioners may receive by virtue of the fact that their products are capable of use in Oklahoma is far too attenuated a contact to justify that State's exercise of in personam jurisdiction over them. Because we find that petitioners have no "contacts, ties, or relations" with the State of Oklahoma, International Shoe Co. v. Washington, supra, at 319, the judgment of the Supreme Court of Oklahoma is reversed.

Womack v. Eldridge 215 Va. 338; 210 S.E.2d 145 (1974) Hanson, C.J., delivered the opinion of the court. Plaintiff, Danny Lee Womack, instituted this action against the defendant, Rosalie Eldridge, to recover compensatory and punitive damages for mental shock and distress allegedly caused by the defendant's willful, wanton, malicious, fraudulent and deceitful acts and conduct toward him. The question of punitive damages was stricken by the trial court and the jury returned a verdict for the

166 As we have noted, petitioners earn no direct revenues from these service centers. See supra, at 288-289. 194 plaintiff in the amount of $45,000. The trial court set aside the verdict non obstante veredicto on the ground that there could be no recovery for emotional distress in the absence of "physical damage or other bodily harm." We granted plaintiff a writ of error. Defendant did not assign cross-error, although the record shows she excepted to many rulings in the court below and several of them are relied upon in her brief and argument before us. Plaintiff assigned numerous errors, but the controlling question is whether one who by extreme and outrageous conduct intentionally or recklessly causes severe emotional distress to another is subject to liability for such emotional distress absent any bodily injury. The evidence shows that defendant had been engaged in the business of investigating cases for attorneys for many years. She was employed by Richard E. Seifert and his attorney to obtain a photograph of the plaintiff to be used as evidence in the trial of Seifert, who was charged with sexually molesting two young boys. On May 27, 1970, about 8 a.m., defendant went to plaintiff's home and upon gaining admittance told him that she was a Mrs. Jackson from the newspaper and that she was writing an article on Skateland. Defendant asked plaintiff, who was a coach at Skateland, if she could take a picture of him for publication with the article, and he readily consented. Shortly thereafter defendant delivered the photograph to Seifert's counsel while he was representing Seifert at his preliminary hearing. Seifert's counsel showed plaintiff's photograph to the two young boys and asked if he was the one who molested them. When they replied that he was not, counsel withdrew the photograph and put it in his briefcase. However, the Commonwealth's Attorney then asked to see the photograph and requested additional information about the person shown in it. Defendant was then called to the stand and she supplied the plaintiff's name and address. Plaintiff's photograph in no way resembled Seifert, and the only excuse given by defendant for taking plaintiff's picture was that he was at Skateland when Seifert was arrested. However, the offenses alleged against Seifert did not occur at Skateland. The Commonwealth's Attorney then directed a detective to go to plaintiff's home and bring him to court. The detective told plaintiff that his photograph had been presented in court; that the Commonwealth's Attorney wanted him to appear at the proceedings; and that he could either appear voluntarily then or he would be summoned. Plaintiff agreed to go voluntarily. When called as a witness, plaintiff testified as to the circumstances under which defendant had obtained his photograph. He also said that he had not molested any children and that he knew nothing about the charges against Seifert. A police officer questioned plaintiff several times thereafter. Plaintiff was also summoned to appear as a witness before the grand jury but he was not called. However, he was summoned to appear several times at Seifert's trial in the circuit court because of continuances of the cases. 195 Plaintiff testified that he suffered great shock, distress and nervousness because of defendant's fraud and deceit and her wanton, willful and malicious conduct in obtaining his photograph and turning it over to Seifert's attorney to be used in court. He suffered great anxiety as to what people would think of him and feared that he would be accused of molesting the boys. He had been unable to sleep while the matter was being investigated. While testifying in the instant case he became emotional and incoherent. Plaintiff's wife also testified that her husband experienced great shock and mental depression from the involvement. The precise issue presented on this appeal has not been decided by this court. In the recent case of Hughes v. Moore, 214 Va. 27, 31, 197 S.E.2d 214, 219 (1973), where we also clarified Bowles v. May, 159 Va. 419, 437-38, 166 S.E. 550, 557 (1932), we held that when conduct is merely negligent, not willful, wanton or vindictive, and physical impact is lacking, there can be no recovery for emotional disturbance alone. However, where emotional disturbance is accompanied by physical injury there may be a recovery for negligent conduct, notwithstanding the lack of physical impact, provided the injured party proves by clear and convincing evidence a causal connection between the negligent act, the emotional disturbance and the physical injury. We have also said that a recovery is permitted for mental distress and physical injuries unaccompanied by actual physical contact where the injuries were caused by a willful, . Moore v. Jefferson Hospital, Inc., 208 Va. 438, 441, 158 S.E.2d 124, 127 (1967). The case of Awtrey v. Norfolk & W. Ry. Co., 121 Va. 284, 93 S.E. 570 (1917), relied upon by the defendant, is distinguishable on the facts from the present case. There, liability was based on a negligent wrongful act; here, liability is based on willful, wanton, fraudulent and deceitful conduct. Courts from other jurisdictions are not in accord on whether there can be a recovery for emotional distress unaccompanied by physical injury. However, most of the courts which have been presented with the question in recent years have held that there may be a recovery against one who by his extreme and outrageous conduct intentionally or recklessly causes another severe emotional distress.167 Annot., 64 A.L.R.2d 100, 8 at 120, and the many cases there cited. The Restatement (Second) of Torts, 46 at 71, provides: "(1) One who by extreme and outrageous conduct intentionally or recklessly causes severe emotional distress to another is subject to liability for such emotional distress, and if bodily harm to the other results from it, for such bodily harm."

167 Our research reveals that at least 26 jurisdictions permit such causes of action, while apparently 7 do not. 196 In comment (i) to the Restatement it is expressly stated that this rule also covers a situation where the actor knows that distress is certain, or substantially certain, to result from his conduct. A great majority of cases allowing recovery for such a cause of action do so when the act was intentional and the wrongdoer desired the emotional distress or knew or should have known that it would likely result. Aetna Life Insurance Co. v. Burton, 104 Ind.App. 576, 580, 12 N.E.2d 360, 362 (1938); Kirksey v. Jernigan, 45 So.2d 188, 189 (Fla. 1950); Boyle v. Chandler, 33 Del. 323, 329, 138 A. 273, 276 (1927); Samms v. Eccles, 11 Utah 2d 289, 293, 358 P.2d 344, 346-47 (1961); Prosser on Torts, "Infliction of Mental Distress," § 12 at 60 (4th ed. 1971). In Samms, the Supreme Court of Utah aptly stated: ". . . [The] best considered view recognizes an action for severe emotional distress, though not accompanied by bodily impact or physical injury, where the defendant intentionally engaged in some conduct toward the plaintiff, (a) with the purpose of inflicting emotional distress, or, (b) where any reasonable person would have known that such would result; and his actions are of such a nature as to be considered outrageous and intolerable in that they offend against the generally accepted standards of decency and morality." (Footnote omitted; emphasis added.) 11 Utah 2d at 293, 358 P.2d at 346-47. We adopt the view that a cause of action will lie for emotional distress, unaccompanied by physical injury, provided four elements are shown: One, the wrongdoer's conduct was intentional or reckless. This element is satisfied where the wrongdoer had the specific purpose of inflicting emotional distress or where he intended his specific conduct and knew or should have known that emotional distress would likely result. Two, the conduct was outrageous and intolerable in that it offends against the generally accepted standards of decency and morality. This requirement is aimed at limiting frivolous suits and avoiding litigation in situations where only bad manners and mere hurt feelings are involved. Three, there was a causal connection between the wrongdoer's conduct and the emotional distress. Four, the emotional distress was severe. "It is for the court to determine, in the first instance, whether the defendant's conduct may reasonably be regarded as so extreme and outrageous as to permit recovery, or whether it is necessarily so. Where reasonable men may differ, it is for the jury, subject to the control of the court, to determine whether, in the particular case, the conduct has been sufficiently extreme and outrageous to result in liability." Restatement (Second) of Torts, supra, at 77. In the case at bar, reasonable men may disagree as to whether defendant's conduct was extreme and outrageous and whether plaintiff's emotional distress was severe. Thus, the questions presented were for a jury to determine. A jury could conclude from the evidence presented that defendant willfully, recklessly, 197 intentionally and deceitfully obtained plaintiff's photograph for the purpose of permitting her employers to use it as a defense in a criminal case without considering the effect it would have on the plaintiff. There is nothing in the evidence that even suggests that plaintiff may have been involved in the child molesting cases. The record shows that the only possible excuse for involving the plaintiff was that Seifert was arrested at the place where plaintiff was employed. A reasonable person would or should have recognized the likelihood of the serious mental distress that would be caused in involving an innocent person in child molesting cases. If the two boys had hesitated in answering that the man in the photograph was not the one who had molested them, it is evident that the finger of suspicion would have been pointed at the plaintiff. Defendant contended in her brief, and in oral argument before us, that the trial court erred in granting instruction 1-A in that it was contradictory and misled the jury; that the amount of damages fixed by the jury was excessive; and that the action of the Commonwealth's Attorney in causing plaintiff's name to be revealed was an intervening cause which absolved her of any liability. We will not consider those contentions because defendant did not assign cross- error. Beasley v. Barnes, 201 Va. 593, 598, 113 S.E.2d 62, 65 (1960); Blue Ridge Poultry and Egg Co., Inc. v. Clark, 211 Va. 139, 141, 176 S.E.2d 323, 325 (1970); Rule 5:7, Rules of Court. For the reasons stated, the judgment of the court below is reversed, the jury verdict reinstated, and final judgment hereby entered for the plaintiff.

Miller v. Johnson 231 Va. 177, 343 S.E.2d 301 (1986) Cochran, J., delivered the opinion of the court. The appeal in each of these cases arises from an action by a mother against a physician for damages from what has been characterized as "wrongful pregnancy." In each case, the mother sought an , the abortion failed, and subsequently a child was born. In each case, the mother sought to recover damages related to the unsuccessful abortion, the continuing pregnancy, and the childbirth and, in addition, the costs of rearing the child to majority. In one case, the trial court entered judgment on the jury verdict awarding damages under an instruction permitting consideration of all these elements. In the other case, the trial court sustained a demurrer to the motion for judgment on the ground that no such action could be maintained. The appeals, therefore, coming from opposite results in the respective trial courts, present the question whether a cause of action for wrongful pregnancy is maintainable in Virginia and, if so, the damages recoverable in such an action. Laura Johnson 198 For economic reasons, Laura Johnson -- a mother of four children, the oldest physically handicapped -- and her husband sought to avoid having any more children. She consulted Dr. Donald Miller, an obstetrician and gynecologist, who agreed to perform a tubal ligation. Because she was then being treated for a vision problem with a drug which might cause complications, Miller delayed the sterilization operation. In September 1979, Johnson learned she was pregnant and asked Miller to perform an abortion and the sterilization procedure. In October, he performed a bilateral tubal ligation and attempted to perform a suction abortion. Miller noticed nothing unusual about her condition when he examined her a week later. A pathology report on the material removed during the attempted abortion, which showed the abortion was not successfully completed, was sent to Miller's office and filed without first being reviewed by a physician in his office. In November, Johnson telephoned Miller complaining of nausea and, upon examination, she was found still to be pregnant. Johnson was advised by both Miller and a second doctor that neither could perform a suction abortion at this stage of her pregnancy. The second doctor testified he presented Johnson with the options of going elsewhere for a suction abortion, having a more dangerous saline abortion, or continuing the pregnancy. Johnson denied that he told her that a second suction abortion was still possible. Johnson decided to continue the pregnancy and gave birth in May 1980 to a healthy, normal boy. She and her husband did not consider placing the child for adoption. In December 1980, Johnson filed suit against Miller, alleging that his negligence resulted in the wrongful birth of her son. A jury heard the case and was instructed that, upon a finding of negligence, it could award damages for Johnson's past and future pain and suffering, inconvenience, and medical expenses, her past loss of wages related to the pregnancy and birth, and the reasonable costs of rearing the child to the age of 18 years. The jury awarded Johnson $100,000, and the trial court entered judgment on this verdict. On appeal, Miller challenges only the allowance of damages for the costs of rearing the child to majority. Fung Mai Hwang Fung Mai Hwang and Yuh Chin Hwang, her husband, brought an action against Gerald J. Ruth, M.D., and Gerald J. Ruth, M.D., P.C., a professional corporation of which Gerald J. Ruth, M.D., was an employee, alleging, inter alia, that Ruth's negligent attempt to perform an abortion on Fung Mai Hwang was unsuccessful and resulted in the birth of her child. She sought damages for her lost wages, pain and suffering, expenses of pregnancy and childbirth, and the costs of rearing the child to majority. Yuh Chin Hwang also sought damages. The Hwangs did not allege that the child was healthy, nor did they allege to the contrary. Defendants filed a motion to dismiss and a demurrer based on several grounds, one of which was that the law does not recognize a cause of action for the "alleged wrongful birth of a healthy child." On Yuh Chin Hwang's motion, he was nonsuited as a party plaintiff. 199 The trial court sustained the demurrer and dismissed the action with prejudice, concluding that public policy prohibits recovery of damages for the birth of a healthy child. On appeal, Fung Mai Hwang challenges this ruling and, in addition, contends that the trial court erred in dismissing her action in which she also sought damages for negligence in performing an abortion, failure to obtain informed consent to a medical procedure, failure to provide proper post-treatment care, and failure to perform the abortion properly and terminate the pregnancy as agreed. The Law Some confusion has existed in the terminology applied to the relatively new field of tort law involving actions in which negligence is alleged to have resulted in the birth of a child. The terms "wrongful birth," "," "wrongful pregnancy," and "wrongful conception" have gained recent acceptance and distinguish the various birth-related tort actions. A wrongful birth action is brought by parents on their own behalf, seeking damages resulting from the birth of a defective child after a failed abortion or the failure of a physician to advise the parents of risk of genetic or birth defects and thereby allow an informed decision as to termination of the pregnancy. See Naccash v. Burger, 223 Va. 406, 409, 290 S.E.2d 825, 826-27 (1982) (action for wrongful birth of child afflicted with Tay-Sachs disease). A wrongful life action is a similar action brought by or on behalf of the defective child for the physician's failure to warn of potential defects or failure to prevent or terminate the pregnancy in light of known risks. Most courts have rejected this theory that the life of the defective child is worth less than the child's nonexistence. See, e.g., Elliott v. Brown, 361 So. 2d 546, 548 (Ala. 1978); Blake v. Cruz, 108 Idaho 253, 259-60, 698 P.2d 315, 322 (1984); Becker v. Schwartz, 46 N.Y.2d 401, 412, 386 N.E.2d 807, 812, 413 N.Y.S.2d 895, (1978); Azzolino v. Dingfelder, 315 N.C. 103, 109, 337 S.E.2d 528, 533 (1985); Nelson v. Krusen, 678 S.W.2d 918, 925 (Tex. 1984); Dumer v. St. Michael's Hospital, 69 Wis. 2d 766, 773, 233 N.W.2d 372, 375-76 (1975); Beardsley v. Wierdsman, 650 P.2d 288, 292 (Wyo. 1982). Those few courts allowing wrongful life claims have limited the damages recoverable to the extraordinary expenses attributable to the child's impaired condition. See, e.g., Turpin v. Sortini, 31 Cal. 3d 220, 237, 643 P.2d 954, 965, 182 Cal. Rptr. 337, 348-49 (1982); Procanik v. Cillo, 97 N.J. 339, 352, 478 A.2d 755, 762 (1984); Harbeson v. Parke-Davis, Inc., 98 Wash. 2d 460, 475, 656 P.2d 483, 496-67 (1983). Wrongful conception and wrongful pregnancy actions are suits by parents for damages arising from the negligent performance of a sterilization procedure or an abortion and the subsequent birth of a child. See Boone v. Mullendore, 416 So. 2d 718, 720 (Ala. 1982); University of Ariz. v. Superior Court, 136 Ariz. 579, 581 n.1, 667 P.2d 1294, 1296 n.1 (1983); Garrison v. Foy, 486 N.E.2d 5, 7 (Ind. App. 3 Dist. 1985); Nanke v. Napier, 346 N.W.2d 520, 521 (Iowa 1984); Kingsbury v. Smith, 122 N.H. 237, 240, 442 A.2d 1003, 1004 (1982). These actions most frequently have involved normal, healthy children, although they may involve children with a disease 200 or abnormality where the disease or abnormality was not foreseeable and its prevention was not the purpose of the failed abortion or sterilization procedure. See, e.g., Garrison, 486 N.E.2d at 7; see also Boone, 416 So. 2d at 723 (court expressly restricted holding in wrongful pregnancy case, reserving decision on the measure of damages in cases involving children "born and afflicted with predetermined or readily foreseeable genetic or hereditary defects"). The trial court in Hwang (Record No. 841536) relied on dicta in McNeal v. United States, 689 F.2d 1200, 1202 (4th Cir. 1982), predicting that Virginia would not permit recovery of damages for wrongful pregnancy as a matter of public policy. Such reliance is misplaced. We have held that whether a cause of action exists for wrongful birth, where the child is fatally defective, is a question to be determined in accordance with traditional tort principles. Naccash, 223 Va. at 413, 290 S.E.2d at 829. Holding such an action exists, we approved damages for the extraordinary care and treatment of the fatally defective child during the 31 months of her life. Id. at 414, 290 S.E.2d at 829-30. We reaffirm the inclusion of the expenses of such care and treatment as allowable damages in a wrongful birth case. We see no reason not to apply traditional tort principles to determine whether a cause of action exists for wrongful pregnancy or wrongful conception, where the child is reasonably healthy, both physically and mentally. Within specified limits a woman is entitled to have an abortion if she so chooses. See Roe v. Wade, 410 U.S. 113, 153-54 (1973); Code 18.2-71 to -76.2. Individuals are likewise free to practice contraception to further their constitutionally-protected choice not to have children. See Eisenstadt v. Baird, 405 U.S. 438, 453-54 (1972); Griswold v. Connecticut, 381 U.S. 479, 485-86 (1965). Under traditional tort principles, it is clear that a physician who performs an abortion or sterilization procedure owes a legal duty to the patient. Where the patient can establish failure to perform the procedure with reasonable care and damages proximately resulting from breach of the duty, she is entitled to recover as in any other medical malpractice action. See Naccash, 223 Va. at 414, 290 S.E.2d at 829-30; Fulton-DeKalb Hosp. Authority v. Graves, 252 Ga. 441, 443, 314 S.E.2d 653, 654 (1984); Jones v. Malinowski, 299 Md. 257, 263, 473 A.2d 429, 432 (1984); Sherlock v. Stillwater Clinic, 260 N.W.2d 169, 174-75 (Minn. 1977); Kingsbury, 122 N.H. at 242, 442 A.2d at 1005-06; Mason v. Western Pennsylvania Hosp., 499 Pa. 484, 486, 453 A.2d 974, 975 (1982); James G. v. Caserta, 332 S.E.2d 872, 876 (W. Va. 1985); Beardsley, 650 P.2d at 292. As the New Hampshire court reasoned: Non-recognition of any cause of action for wrongful conception [or wrongful pregnancy] leaves a void in the area of recovery for medical malpractice and dilutes the standard of professional conduct and expertise in the area of family planning, which has been clothed with constitutional protection. Kingsbury, 122 N.H. at 242, 442 A.2d at 1005-06 (citations omitted); accord Garrison, 486 N.E.2d at 8. Accordingly, we hold that an action for wrongful pregnancy or wrongful conception may be maintained in Virginia. 201 What then is the proper measure of damages in a wrongful pregnancy action where the child is born reasonably sound and healthy? Under traditional tort principles, which we held to be applicable in Naccash, recoverable damages are those which are the reasonable and proximate consequences of the breach of duty.1 223 Va. at 414, 290 S.E.2d at 830. The mother, therefore, may recover damages, if proven, for medical expenses, pain and suffering, and lost wages for a reasonable period, directly resulting from the negligently performed abortion, the continuing pregnancy, and the ensuing childbirth. The mother is also entitled under the general rule to recover damages, if proven, for emotional distress causally resulting from the tortiously caused physical injury. See Naccash, 223 Va. at 416, 290 S.E.2d at 831; Hughes v. Moore, 214 Va. 27, 34, 197 S.E.2d 214, 219 (1973). The divisive issue which has troubled the courts, however, is whether, in a wrongful pregnancy action, allowable damages may include the expenses of rearing the healthy child to the age of majority. A substantial majority of jurisdictions exclude such child-rearing expenses. See Boone v. Mullendore, 416 So. 2d 718 (Ala. 1982); Wilbur v. Kerr, 275 Ark. 239, 628 S.W.2d 568 (1982); Coleman v. Garrison, 349 A.2d 8 (Del. 1975); Flowers v. District of Columbia, 478 A.2d 1073 (D.C. 1984); Fassoulas v. Ramey, 450 So. 2d 822 (Fla. 1984); Fulton-DeKalb Hosp. Authority v. Graves, 252 Ga. 441, 314 S.E.2d 653 (1984); Cockrum v. Baumgartner, 95 Ill. 2d 193, 447 N.E.2d 385, cert. denied sub nom. Raja v. Michael Reese Hosp. & Med. Center, 464 U.S. 846 (1983); Garrison v. Foy, 486 N.E.2d 5 (Ind. App. 3 Dist. 1985); Nanke v. Napier, 346 N.W.2d 520 (Iowa 1984); Byrd v. Wesley Medical Center, 237 Kan. 215, 699 P.2d 459 (1985); Schork v. Huber, 648 S.W.2d 861 (Ky. 1983); Macomber v. Dillman, 505 A.2d 810 (Me. 1986); Kingsbury v. Smith, 122 N.H. 237, 442 A.2d 1003 (1982); P. v. Portadin, 179 N.J. Super. 465, 432 A.2d 556 (1981); O'Toole v. Greenberg, 64 N.Y.2d 427, 477 N.E.2d 445, 488 N.Y.S.2d 143 (1985); Mason v. Western Pennsylvania Hosp., 499 Pa. 484, 453 A.2d 974 (1982); Hickman v. Myers, 632 S.W.2d 869 (Tex. Ct. App. 1982); McKernan v. Aasheim, 102 Wash. 2d 411, 687 P.2d 850 (1984); James G. v. Caserta, 332 S.E.2d 872 (W. Va. 1985); Rieck v. Medical Protective Co. of Fort Wayne, Ind., 64 Wis. 2d 514, 219 N.W.2d 242 (1974); Beardsley v. Wierdsman, 650 P.2d 288 (Wyo. 1982). The rationale for denying recovery for child-rearing expenses varies from court to court. Many courts have held that the birth of a normal, healthy child is not a compensable injury. See, e.g., Boone, 416 So. 2d at 721; Fassoulas, 450 So. 2d at 823-24; Fulton-DeKalb, 252 Ga. at 444, 314 S.E.2d at 655-56; Cockrum, 95 Ill. 2d at 202-03, 447 N.E.2d at 389; Nanke, 346 N.W.2d at 522-23; Byrd, 237 Kan. at 225, 699 P.2d at 468; Macomber, 505 A.2d at 813; O'Toole, 64 N.Y.2d at 429, 477 N.E.2d at 448, 488 N.Y.S.2d at 146; Hickman, 632 S.W.2d at 871; Beardsley, 650

1 In Naccash, the basis of our holding that extraordinary costs were recoverable was that parents of a fatally defective child could recover costs of care and treatment as "consequences that a reasonable and informed person could have foreseen or anticipated." 223 Va. at 414, 290 S.E.2d at 830. We did not decide in that case whether such damages would be recoverable upon the birth of a defective or diseased child when the defect or disease was not reasonably foreseeable. 202 P.2d at 293. These courts have reasoned that as a matter of law the benefits derived from the birth of a normal, healthy child outweigh the expenses of rearing the child. See Cockrum, 95 Ill. 2d at 200-01, 447 N.E.2d at 389; Public Health Trust v. Brown, 388 So. 2d 1084, 1085-86 (Fla. Ct. App. 1980), pet. for rev. denied, 399 So. 2d 1140 (Fla. 1981). Other courts as a matter of policy have denied recovery to avoid what they believed would otherwise be an unreasonable burden on the tortfeasor and an unjustified windfall for the parent or parents who would retain the parental benefits but transfer the financial responsibility to another. See, e.g., Kingsbury, 122 N.H. at 243, 442 A.2d at 1006; Hickman, 632 S.W.2d at 871; Rieck, 64 Wis. 2d at 518-19, 219 N.W.2d at 244-45; Beardsley, 650 P.2d at 292. Thus, these courts conclude that the result would be disproportionate to the degree of culpability. Some courts, concerned about the emotional or psychological harm to the child upon his discovery that he was unwanted and worth less to his parents than the costs of his care, conclude as a matter of policy that allowance of child-rearing expenses will undermine society's need for strong family relationships. See, e.g., Boone, 416 So. 2d at 722; Wilbur, 275 Ark. at 244, 628 S.W.2d at 571; McKernan, 102 Wash. 2d at 421, 687 P.2d at 855-56. A few courts have based denial of recovery of child- rearing costs in part on the fear of a proliferation of fraudulent claims. See, e.g., Rieck, 64 Wis. 2d at 517, 219 N.W.2d at 245; Beardsley, 650 P.2d at 292. Other courts have concluded that the principle of tort law prohibiting recovery of remote or speculative damages precludes recovery for child-rearing expenses. See, e.g., Boone, 416 So. 2d at 722; Coleman, 349 A.2d at 12; Schork, 648 S.W.2d at 863; Sorkin v. Lee, 78 A.D.2d 180, 181, 434 N.Y.S.2d 300, 303 (1980); Terrell v. Garcia, 496 S.W.2d 124, 127-28 (Tex. Civ. App. 1973), cert. denied, 415 U.S. 927 (1974); McKernan, 102 Wash. 2d at 419, 687 P.2d at 855; James G., 332 S.E.2d at 878. A minority of jurisdictions addressing this issue have concluded that the costs of rearing the child to majority are recoverable as the proximate result of the physician's negligence in performing the sterilization procedure or abortion. Applying the rule of tort law which requires any benefit conferred by the tortious conduct to be considered in mitigation of damages, see Restatement (Second) of Torts §§ 920 (1979), these courts have limited the recovery of child-rearing expenses by requiring that they be offset by the value of any benefits conferred on the parents by the existence of the child.2 See University of Ariz. v. Superior Court, 136 Ariz.

2 Some courts have stated that Bowman v. Davis, 48 Ohio St. 2d 41, 356 N.E.2d 496 (1976), and Custodio v. Bauer, 251 Cal. App. 2d 303, 59 Cal. Rptr. 463 (1967), allow full recovery of child- rearing costs without any offset of the value of benefits received. In Bowman, however, the court expressly declined to rule on the issue whether damages should be limited to the expenses of the pregnancy because that issue was not properly before the court. 48 Ohio St. 2d at 44 n.1, 356 N.E.2d at 498 n.1. Furthermore, in Custodio, the court had an insufficient record to determine the damages to which the parents would be entitled, and it is therefore unclear whether 203 579, 584, 667 P.2d 1294, 1299 (1983); Stills v. Gratton, 55 Cal. App. 3d 698, 709, 127 Cal. Rptr. 652, 658-59 (1976); Ochs v. Borrelli, 187 Conn. 253, 260-61, 445 A.2d 883, 885-86 (1982); Jones v. Malinowski, 299 Md. 257, 273-74, 473 A.2d 429, 437 (1984); Green v. Sudakin, 81 Mich. App. 545, 548, 265 N.W.2d 411, 412 (1978) (unperformed tubal ligation), following Troppi v. Scarf, 31 Mich. App. 240, 261, 187 N.W.2d 511, 517-19 (improperly filled prescription for pills), leave to appeal denied, 385 Mich. 753 (1971); Sherlock v. Stillwater Clinic, 260 N.W.2d 169, 176 (Minn. 1977). We find the cases permitting recovery of child-rearing expenses unpersuasive. The parent is placed in the degrading position of disparaging her child to establish that the expenses of rearing him exceed the benefits derived from his existence. Moreover, in addition to the "benefits rule" there is the rule that a plaintiff must act reasonably to minimize her damages. Lawrence v. Wirth, 226 Va. 408, 412, 309 S.E.2d 315, 317 (1983); Haywood v. Massie, 188 Va. 176, 182, 49 S.E.2d 281, 284 (1948); Restatement, supra, § 918. Application of this principle may raise an issue whether the plaintiff should have submitted to another abortion or should have placed the child for adoption. We conclude that the costs of rearing a reasonably healthy child to majority are not recoverable in a wrongful pregnancy or wrongful conception action. We do not presume, however, to base our ruling on public policy. We are unwilling to hold that as a matter of law the birth of a child, even a healthy, normal child, can never result in tortious injury to the parents. Moreover, we deem it inappropriate for us to weigh the potential impact on a child of litigation in which his parents seek to impose on another the expenses of rearing him. Such policy decisions are best left to the General Assembly. Nor do we base our holding on a fear that fraudulent claims may be brought or that damages disproportionate to the tort may be awarded; we trust that our jury system could effectively prevent such occurrences. See McKernan, 102 Wash. 2d at 418, 687 P.2d at 854. To the contrary, we rely on traditional principles of tort law. Damages which cannot be established with reasonable certainty are speculative or conjectural and may not be recovered. Cassady v. Martin, 220 Va. 1093, 1100, 266 S.E.2d 104, 108 (1980); Phillips v. Stewart, 207 Va. 214, 221, 148 S.E.2d 784, 789 (1966); Barnes v. Quarries, Inc., 204 Va. 414, 418-19, 132 S.E.2d 395, 397-98 (1963). We conclude that a court or jury is not capable of determining with any reasonable certainty the costs of bringing a child to maturity less the offsetting value of the child's life.

an offset would have been allowed. 251 Cal. App. 2d at 325-26, 59 Cal. Rptr. at 477-78. With respect to a separate element of damages, however, the court noted the "benefits rule" and acknowledged that offset would be appropriate. Id. at 323, 59 Cal. Rptr. at 476. The later case of Stills v. Gratton approved the Custodio holding allowing recovery of child-rearing costs but required an offset for benefits conferred. 55 Cal. App. 3d 698, 709, 127 Cal. Rptr. 652, 658-59. 204 may routinely determine the damages resulting from a life that has been terminated or permanently injured. But even those courts that allow recovery of damages for the expenses of child-rearing concede the difficulty of determining the value of the offsetting benefits from the child's life. See, e.g., Troppi, 31 Mich. App. at 261, 187 N.W.2d at 521. Nevertheless, they are willing to impose this burden on juries. We are unwilling to do so because of our conclusion that the results would necessarily be based on speculation and conjecture. Who, indeed, can strike a pecuniary balance between the triumphs, the failures, the ambitions, the disappointments, the joys, the sorrows, the pride, the shame, the redeeming hope that the child may bring to those who love him? Conclusion Donald Miller, M.D. v. Laura Johnson (Record No. 822020). We will reverse the judgment of the trial court and remand the case for a new trial limited to the issue of damages consistent with the views herein expressed. Fung Mai Hwang v. Gerald J. Ruth, M.D., et al. (Record No. 841536). We will reverse the judgment of the trial court and remand the case for further proceedings consistent with the views herein expressed. Record No. 822020 - Reversed and remanded. Record No. 841536 - Reversed and remanded.

Naccash v. Burger 223 Va. 406, 290 S.E.2d 825 (1982) Carrico, C.J., delivered the opinion of the court. The determinative question presented by this appeal is whether a cause of action exists in favor of parents for the so-called "wrongful birth" of a child. The question arose in the context of a motion for judgment filed in the trial court by Joseph Burger and Trudy Burger against Edmund P. Naccash, M.D., and certain other health care providers. The motion alleged that the defendants had negligently failed to discover that the fetus carried by Trudy Burger was affected by an incurable genetic disorder, causing her to forego an abortion and carry the child to term. The Burgers sought damages for the care and treatment of the child and for their mental anguish and suffering. All the defendants except Dr. Naccash were dismissed by the trial court. The case against Dr. Naccash was submitted to a jury, which returned a verdict in favor of the Burgers for $180,948.06. We awarded Dr. Naccash an appeal from the final order confirming the verdict. The record shows that Carrie Burger, the child in question, was born February 20, 1974, and that she died October 6, 1976, of Tay-Sachs disease. Tay-Sachs is an invariably fatal disease of the brain and spinal cord that occurs in Jewish infants of eastern European ancestry. A diseased child appears normal at birth, but, at four to 205 six months, its central nervous system begins to degenerate, and it suffers eventual blindness, deafness, paralysis, seizures, and mental retardation. The life expectancy of an afflicted child is two to four years. At the time of the events in question, a blood test was in general use throughout the country to identify carriers of the Tay-Sachs trait among potential parents having Jewish ancestry. A carrier is not affected by Tay-Sachs, but a child whose parents both are carriers stands a 25% chance of having the disease. If tests show that both parents are carriers, a further test known as amniocentesis is recommended to determine whether the fetus is afflicted with Tay-Sachs.1 Both Joseph and Trudy Burger are of eastern European ancestry. On September 5, 1973, when Mrs. Burger was three and one-half months pregnant with Carrie, her first child, the Burgers went to Arlington Hospital for Tay-Sachs tests. They were interviewed by Rosalie Green, a technician in the Cytogenetics Laboratory. Ms. Green advised the Burgers that there was no need to test Mrs. Burger unless Mr. Burger tested positive. Accordingly, Ms. Green withdrew blood from Mr. Burger alone. The blood was placed in two tubes labeled only with a number ostensibly assigned to Joseph Burger. The blood sample then was forwarded to a medical facility in Richmond for analysis, pursuant to arrangements previously made by Dr. Naccash and Ms. Green. Subsequently, Ms. Green reported to the Burgers that the test results showed Mr. Burger was not a Tay-Sachs carrier. Satisfied with the report, Mrs. Burger "went ahead and had" her baby. Although the child developed normally at first, at four months she began showing signs of abnormality. She was examined and found to have Tay-Sachs. Further tests showed that both Mr. and Mrs. Burger were Tay-Sachs carriers. The original blood sample purportedly withdrawn from Mr. Burger on September 5, 1973, was retested and again found negative. A positive sample supposedly withdrawn from another man at Arlington Hospital on the same date was also retested and again found positive. However, new tests of the other man's blood showed he was not a Tay-Sachs carrier. These circumstances prompted an expert witness to testify below that "only one conclusion... can be drawn, and that is [Mr. Burger's] blood sample was incorrectly labeled [by Arlington Hospital]." The same witness stated that the error could have been averted simply by identifying each sample with the initials as well as the number of the particular donor. Both Joseph and Trudy Burger testified that, had they known they were Tay- Sachs carriers, they would have insisted upon an amniocentesis and, if that test showed the fetus was afflicted with Tay-Sachs, Mrs. Burger would have had an

1 Amniocentesis involves the analysis of amniotic fluid withdrawn from the mother's uterus. The analysis reveals whether there are gross chromosome defects present in the fetus. 206

abortion.2 Mrs. Burger expressed her feeling in these words: "There is nothing on this earth that would have made me have a baby with Tay-Sachs Disease." The Burgers outlined for the jury the tragic course of the disease in Carrie and the nature and extent of the care and treatment she required as her condition degenerated; in her final months, she was confined in the Northern Virginia Training Center where she ultimately died. The parents also recounted the emotional stress and mental anguish they suffered as a result of the child's worsening condition. Finally, the Burgers detailed the expenses they claimed for Carrie's care and treatment. The expenses totaled $30,948.06, including $2,274.26 for costs connected with Carrie's funeral and grave marker. On appeal, Dr. Naccash contends that the essence of the parents' claim is for "wrongfully permitting the birth of the child to occur" and that, if a cause of action exists for this claim, it exists on behalf of the child alone and not the parents. Nothing that this is a case of first impression in Virginia, Dr. Naccash cites Howard v. Lecher, 42 N.Y.2d 109, 366 N.E.2d 64, 397 N.Y.S.2d 363 (1977), where a physician had failed to test Jewish parents to determine whether their child would be affected by Tay-Sachs disease. When the child was born with Tay-Sachs, the parents brought a damage action against the doctor for their emotional stress and for the expenses of the child's care and treatment. By stipulation, the claim for care and treatment expenses was discontinued. On the claim for emotional stress, the court held that "[n]o cause of action exists... for the unintentional infliction of harm to a person solely by reason of that person's mental and emotional reaction to a direct injury suffered by another." 42 N.Y.2d at 112, 366 N.E.2d at 66, 397 N.Y.S.2d at 365. As the Burgers point out, however, Howard does not stand for the proposition that parents have no cause of action at all for damages sustained as a result of the birth of an impaired child; the decision disallowed only emotional damages. Eighteen months after Howard, the New York court decided in Becker v. Schwartz, 46 N.Y.2d 401, 386 N.E.2d 807, 413 N.Y.S.2d 895 (1978), that parents can recover care and treatment damages resulting from a wrongful birth. The Burgers rely upon Becker and a New Jersey decision, Berman v. Allan, 80 N.J. 421, 404 A.2d 8 (1979). In Berman, the parents of a child born afflicted with Down's Syndrome, or mongolism, brought an action against physicians for their failure to inform the parents of the availability of amniocentesis to determine whether the fetus was defective. The parents claimed damages both for the expenses necessary to raise the child and for their own past and future mental and emotional suffering. The New Jersey court held that the parents could not recover the expenses necessary to raise the child, stating that the parents desired to retain all the benefits

2 In 1973, when the Burgers were given the erroneous Tay-Sachs report, Code § 18.1-62.1 provided that it was lawful for a physician to perform an abortion if in his medical opinion there was "a substantial medical likelihood that the child will be born with an irremediable and incapacitating mental or physical defect." 207 inhering in the birth of the infant while saddling the defendants with the enormous expense of raising the child. This result, the court opined, would be wholly disproportionate to the culpability involved, would constitute a windfall to the parents, and would place an unreasonable financial burden upon the physicians. 80 N.J. at 432, 404 A.2d at 14. However, the court upheld the parents' right to recover emotional damages. The court stated that, in failing to inform the mother of the availability of amniocentesis, the physicians "directly deprived her -- and, derivatively, her husband -- of the option to accept or reject a parental relationship with the child and thus caused them to experience mental and emotional anguish upon their realization that they had given birth to a child afflicted with Down's Syndrome." 80 N.J. at 433, 404 A.2d at 14.3 The Burgers rely also upon Gildiner v. Thomas Jefferson Univ. Hospital, 451 F. Supp. 692 (E.D. Pa. 1978). There, blood tests of the prospective parents revealed that both were Tay-Sachs carriers. An amniocentesis showed, however, that the fetus was unaffected by the disease. Foregoing the option of abortion, the mother proceeded with the pregnancy and gave birth to a child afflicted with Tay-Sachs. Contending that no cause of action existed on behalf of the parents, the defendants argued, inter alia, that the damages sought were not recoverable and that any cause of action should be created by the legislature. The court rejected these arguments and, anticipating what the Pennsylvania Supreme Court would decide, ruled that the parents could recover the expenses for the medical treatment of the child.4 Because Dr. Naccash's argument suggests this court should defer to the legislature, we note with special interest the Gildiner court's observation on the question: [The] holding that the [parents] have stated a cause of action for damages caused by negligence in the performance and interpretation of an amniocentesis involves the application of the doctrine of negligence... to a recently developed medical procedure. The determination of the scope of the common law doctrine of negligence is within the province of the judiciary. 451 F.Supp. at 696. Whether a cause of action exists for the wrongs complained of and the damages sought here is a

3 The Berman decision to permit recovery of emotional damages is of special interest because it represents the reversal of a position taken by the New Jersey court twelve years earlier in Gleitman v. Cosgrove, 49 N.J. 22, 227 A.2d 689 (1967). One of the reasons assigned by the court for its change in view was that the Supreme Court's ruling in Roe v. Wade, 410 U.S. 113 (1973), had altered the public policy against allowing damages for "the denial of the opportunity to take an embryonic life." 80 N.J. at 431, 404 A.2d at 14. 4 The court reserved judgment on the question whether the parents could also recover damages for emotional pain and suffering. In a case decided subsequently, Speck v. Finegold, _____ Pa. _____, 439 A.2d 110 (1981), the Pennsylvania Supreme Court recognized a cause of action permitting parents to recover damages for their mental distress and physical inconvenience and for expenses attributable to the birth and raising of their genetically afflicted child. 208 question that should be determined, in our opinion, according to traditional tort principles. Only a novel twist in the medical setting differentiates the present situation from the ordinary malpractice action. Hence, like the Gildiner court, we believe we need not defer to the legislature, but may appropriately decide the question ourselves.5 Essential to the recognition of a cause of action in favor of the Burgers is the existence of a legal duty owed them. Clearly, when the Burgers presented themselves to the Cytogenetics Laboratory at Arlington Hospital for Tay-Sachs testing, they were owed the duty of reasonable care in the handling of the blood withdrawn for the tests; this duty encompassed the obligation to provide them with reasonably accurate information concerning the condition of their unborn child so they could make an informed decision regarding abortion. Then, there must be a breach of the duty. Beyond question, there was a breach in this case; indeed, the negligence of Rosalie Green in mislabeling Joseph Burger's blood is virtually conceded. Also essential to a cause of action for the Burgers is a showing of a causal connection between the breach of duty and any claimed injury or damage. The evidence establishes that, as a result of the negligent mislabeling of Mr. Burger's blood, his sample was switched with the sample withdrawn from another man on the same date; because the Burgers received a negative Tay-Sachs report, they decided to continue the pregnancy rather than abort the fetus. The final link essential to the recognition of a cause of action in favor of the Burgers is the existence of actionable injury, meaning direct, rather than indirect, injury. Following the lead of the New Jersey court in Berman, we hold that the erroneous Tay-Sachs report given Mrs. Burger deprived her, and, derivatively, her husband, of the opportunity to accept or reject the continuance of her pregnancy and the birth of her fatally defective child; this, in our opinion, was direct injury. It follows that the Burgers are entitled to recover those damages which are the reasonable and proximate consequences of the breach of the duty owed them, viz., consequences that a reasonable and informed person could have foreseen or anticipated. Tullock v. Hoops, 206 Va. 665, 668-69, 145 S.E.2d 152, 154 (1965). In applying these standards, we agree with the New York court's holding in Becker that parents injured as the Burgers have been injured are entitled to recover damages for expenses incurred in the care and treatment of their afflicted child. In this respect,

5 In addition to New Jersey, New York, and Pennsylvania, whose cases have been previously cited herein, courts in Illinois, Michigan, South Carolina, Texas, and Wisconsin have recognized a cause of action in favor of parents for the wrongful birth of a child. Robak v. United States, 658 F.2d 471 (7th Cir. 1981) (applying Alabama law); Eisbrenner v. Stanley, 106 Mich. App. 357, 308 N.W. 2d 209 (1981); Phillips v. United States, 508 F.Supp. 537 (D.S.C. 1980); Jacobs v. Theimer, 519 S.W.2d 846 (Tex. 1975); Dumer v. St. Michael's Hospital, 69 Wis.2d 766, 233 N.W.2d 372 (1975). 209 we disagree with the New Jersey court's holding in Berman to the extent that it disallowed the claim for care and treatment expenses. The consideration that prompted the New Jersey court's disallowance, viz., the enormity of the financial burden that might be imposed upon the negligent physician, is not present here. The child in Berman was still alive and could anticipate an extended life span. Carrie Burger's life span was measured in months, and the cost of her care and treatment was relatively inexpensive. Even so, we do not necessarily agree that, if liability is established and the damages claimed are compensable and just, the court should perform a balancing test between competing economic interests in determining whether an injured party is entitled to a particular category of damages. We do agree with Dr. Naccash, however, concerning part of the expenses the trial court permitted the jury to consider. That part, obviously allowed by the jury, consists of the costs connected with Carrie's funeral and grave marker. These items of damage were not proximate consequences of the breach of duty involved in this case. Carrie Burger's death was caused by Tay-Sachs disease. The disease was not caused by Rosalie Green's failure to handle properly Joseph Burger's blood, but by hereditary factors. Yet, we need not reverse the trial court's judgment for this error; we can simply modify the judgment by subtracting the amount of the expenses we now disallow. This bring us to the question of the Burgers' entitlement to damages for emotional distress. As a general rule, such damages are not recoverable unless they result directly from tortiously caused physical injury. Our decisions demonstrate, however, that there are exceptions to this general rule. In Hughes v. Moore, 214 Va. 27, 34, 197 S.E.2d 214, 219 (1973), we held that where the claim is for emotional distress and physical injury resulting therefrom, recovery is permissible notwithstanding the lack of physical impact, provided there is shown by "clear and convincing evidence" an "unbroken chain of causal connection between the negligent act, the emotional disturbance, and the physical injury." And in Womack v. Eldridge, 215 Va. 338, 342, 210 S.E.2d 145, 148 (1974), we held that emotional distress resulting directly from a non-tactile tort may be compensable, provided "four elements are shown," viz., that the tort is intentional or reckless, that the tort feasor's conduct is outrageous and intolerable, that the wrongful conduct and the emotional distress are causally connected, and that the emotional distress is severe. Dr. Naccash contends that the Burgers have not brought their claim for emotional damages within the rationale of either Hughes or Womack. He argues that the Burgers have proved neither physical injury resulting from emotional distress nor emotional distress resulting from intentional or reckless conduct. Therefore, Dr. Naccash maintains, the parents' "entire claim rests on their witnessing the birth, suffering, and death of their child," and thus any injury to the parents was "indirect rather than direct." 210 We believe, however, that the circumstances of this case justify another exception to the general rule that damages for emotional distress are not allowable unless they result directly from tortiously caused physical injury. The restrictions upon recovery imposed by the provisos in Hughes and Womack were designed to discourage spurious claims asserted by chance witnesses to physical torts involving others. The considerations prompting imposition of the limitations do not exist here; no one suggests that the Burgers' emotional distress was feigned or that their claim was fraudulent. Indeed, to apply the restrictions here, or to refuse to recognize an exception to he general rule, "would constitute a perversion of fundamental principles of justice." Berman, 80 N.J. at 433, 404 A.2d at 15. Furthermore, we believe it would be wholly unrealistic to say that the Burgers were mere witnesses to the consequences of the tortious conduct involved in this case. In our view, the parents' emotional distress was no less a direct result of wrongful conduct than the distress endured by the plaintiffs in Hughes and Womack; the evidence shows an unbroken chain of causal connection directly linking the erroneous Tay-Sachs report, the deprivation of the parents' opportunity to accept or reject the continuance of Mrs. Burger's pregnancy, and the emotional distress the parents suffered following the birth of their fatally defective child. Before leaving the subject of emotional damages, we note an argument advanced by Dr. Naccash concerning an instruction granted by the trial court that permitted the jury to award damages for any humiliation or embarrassment suffered by the Burgers. Dr. Naccash asserts that one may recover damages for humiliation and embarrassment only if he suffers some disfigurement or deformity resulting from an injury, and the Burgers offered no evidence to support such a proposition. We believe, however, that, while the jury properly might have inferred the Burgers were humiliated and embarrassed by the course of events involving their daughter's illness, the granting of the instruction, if error, was harmless; the evidence of other factors affecting emotional distress was so overwhelming that the instruction could have had only inconsequential impact upon the jury. Remaining for disposition is a contention by Dr. Naccash that, even if a cause of action exists in favor of the Burgers, he is not liable thereon. The evidence fails to show, Dr. Naccash maintains, that a doctor-patient relationship ever existed between him and the Burgers or their afflicted child. He would be liable for the negligence of Rosalie Green, Dr. Naccash submits, only on the basis of the doctrine of respondeat superior, and the evidence fails to establish the necessary master-servant relationship between him and Ms. Green to support liability under that doctrine. The record discloses that the case was submitted to the jury upon instructions delineating the respective positions of the parties concerning the doctrine of respondeat superior. The jury's verdict in favor of the Burgers necessarily determined that a master-servant relationship existed between Dr. Naccash and Ms. Green. The question, therefore, is whether the evidence supports that determination. The evidence shows that the Cytogenetics Laboratory at Arlington Hospital formerly was under the supervision of Dr. William Dolan, chief of pathology. He 211 employed Rosalie Green in 1969, and she worked under him as a technician in the Laboratory, although her salary was paid by the hospital. In February, 1973, Dr. Dolan determined that the workload of the Laboratory did not justify continuance of the facility, and he terminated Ms. Green's employment. Dr. Dolan testified below that it was his belief Dr. Naccash then hired Ms. Green and that she was under Dr. Naccash's supervision thereafter. Dr. Naccash, a private-physician member of the staff, was chief of the department of obstetrics and gynecology at the hospital. When he learned of Dr. Dolan's plan to close the Cytogenetics Laboratory, Dr. Naccash urged that it be kept open "so the community... and the doctors in the community" could "make use of it." He proposed that, if the Board of Trustees would provide "some space," he would be willing, without compensation, to oversee the operation of the Laboratory and supervise Ms. Green in her work; under the arrangement, "the hospital would have nothing to do with hiring, firing, making decisions or anything." The Board agreed to the proposal and directed the hospital administrator to prepare a written contract, but one was never prepared. In his testimony, Dr. Naccash took the position that, because his agreement with the hospital was never formalized by a written instrument, he was without "any authority or power" with respect to the Cytogenetics Laboratory; he claimed the "department was running by itself." He admitted, however, that he had testified in a pretrial that he was the acting head of the Laboratory pending the formalization of his agreement with the hospital. Ms. Green testified that, when Dr. Dolan indicated an intention to close the Laboratory, it was transferred to Dr. Naccash and the latter thereafter supervised her work. She testified further that she reported directly to Dr. Naccash; that she had frequent communications with him and consulted him "[m]ost of the time" about problems and policies; that he made the decision to add the Tay-Sachs program to the Laboratory's activities and participated in making arrangements for the program's implementation; and that he approved using numbers alone on test tubes containing blood intended for Tay-Sachs analysis. Ms. Green was placed on administrative leave in September, 1974, and her employment was terminated effective December 31, 1974. The personnel from terminating Ms. Green's employment, admitted as an exhibit, states: The Cytogenetics Laboratory has been abolished pursuant to the recommendation of the Medical Staff of the hospital. Mrs. Green functioned as the Cytogeneticist under the direction of Dr. Naccash who was responsible for the over- all operation of the Laboratory. With the abolishment of the Laboratory the position of the Cytogeneticist was also abolished. Dr. Dolan was asked at trial whether Dr. Naccash had terminated Ms. Green's employment; the witness stated, "[a]apparently so." For factors enter into determination of the question whether a master-servant relationship exists within the contemplation of the doctrine of respondeat superior, 212 (1) selection and engagement of the servant, (2) payment of compensation, (3) power of dismissal, and (4) power of control. The first three factors are not essential to the existence of the relationship; the fourth, the power of control, is determinative. Whitfield v. Whittaker Mem. Hospital, 210 Va. 176, 181, 169 S.E.2d 563, 567 (1969); A.C.L.R. Co. v. Tredway's Admx., 120 Va. 735, 744-45, 93 S.E. 560, 562-63 (1917), cert. denied, 245 U.S. 670 (1918). It is clear that, during the period pertinent to this case, Ms. Green's salary was paid by the hospital and not Dr. Naccash; hence, any question concerning factor (2) must be resolved in Dr. Naccash's favor. With respect to the existence or nonexistence of factors (1) and (3), there was evidence from which the jury could have decided either way. But, with respect to factor (4), viz., the power of control, the evidence was overwhelming that Dr. Naccash not only held the power to control Ms. Green's actions but also exercised the power whenever necessary; indeed, the only contrary evidence is Dr. Naccash's assertion that the "department was running by itself." Hence, there was ample evidence to support the jury's finding that a master-servant relationship existed between Dr. Naccash and Ms. Green. Citing Whitfield, however, Dr. Naccash argues that a fifth factor must be considered in determining whether a master-servant relationship exists. He quotes from the Whitfield opinion, where we said that "the work has to be done on the business of the principal or for his benefit." 210 Va. at 181, 169 S.E.2d at 567. Dr. Naccash asserts that Ms. Green's activities were not on his business or for his benefit. But the quoted statement means only that the servant must have acted within the scope of his or her employment to render the master liable for the agent's torts. There can be no question in this case that Ms. Green was acting within the scope of her employment when she handled the blood sample withdrawn from Mr. Burger. We will modify the judgment of the trial court by subtracting therefrom $2,274.26, representing the costs connected with Carrie Burger's funeral and grave marker, thus reducing the award to $178,673.80. In all other respects, the judgment will be affirmed. Modified and, as modified, affirmed.

Sea-Land v. O'Neal 224 Va. 343, 297 S.E.2d 647, 115 L.R.R.M. 4242 (1982) Carrico, C.J., delivered the opinion of the court. In the court below, Nancy O'Neal (O'Neal) filed a motion for judgment seeking compensatory and punitive damages against Sea-Land Service, Inc. (Sea-Land), for its alleged breach of an employment contract and its alleged fraud in inducing O'Neal to resign from one position in return for a promise, never fulfilled, of employment in another. A jury awarded O'Neal $125,000 in compensatory damages but denied her any punitive award. Sea-Land has appealed. 213 The record shows that O'Neal was first employed by Sea-Land in 1970 as a teletype operator-messenger in its Portsmouth terminal. Through a series of promotions, she advanced to management level. At the time of the incidents in question, she occupied the position of sales representative in one of the company's divisions, earning in excess of $19,000 annually, with extensive fringe benefits. Her most recent performance appraisal was "excellent," and she intended to remain in Sea-Land's employ until retirement.6 In the performance appraisal form, a space was provided to indicate the "performance improvement plan" the "evaluator" and the employee agreed upon "for the next year." One of the suggestions listed in this space on O'Neal's appraisal form was that she "[a]ttend junior college - spring or summer 1978." It was O'Neal's desire to secure a college education that brought about the incidents in question. Stated in the light most favorable to O'Neal, the evidence relating to these incidents shows that in late December, 1977, or the early part of January, 1978, O'Neal learned that her old job of teletype operator/messenger was or soon would be vacant. This position required less travel than the sales representative job, and she believed it would permit her to attend school at night while providing her with sufficient funds to support herself until a better-paying position at Sea-Land became available.7 She discussed the possibility of a transfer with James Chang, her immediate supervisor, with Ruby Porter, under whom she would work if transferred, and with Louis Nappi, the terminal manager whose approval of the transfer was necessary. Chang, Porter, and Nappi all approved the transfer. They told O'Neal, however, that she would have to resign from her position as sales representative before "they could officially say that [she] had the teletype and messenger job." Nappi expressly stated to O'Neal that she "could have the other job" if she "turned the letter [of resignation] in." Accordingly, on Friday, January 13, O'Neal signed and delivered to Chang a letter in which she resigned as sales representative and accepted the teletype position. At an operational sales meeting held in the office the same day and attended by O'Neal, Chang announced that she was leaving his division and Nappi stated that she "would be taking the teletype and the messenger's job." When O'Neal reported for work Monday morning, Nappi informed her she "could not have the job" as teletype operator/messenger because she was "over qualified [and] all he needed was somebody with two legs and a driver's license." When she asked him why he was "doing this," he replied that he "didn't have time to be bothered with [her]." O'Neal then telephoned Charles Hauser, Chang's superior in Jacksonville, Florida, and asked whether she could retract her letter of resignation. He agreed to

6 O'Neal was 39 years old at time of trial and would have been eligible to retire at age 55. 7 The teletype operator/messenger job paid $168.68 per 35-hour week, with the opportunity for overtime pay. 214 look into the matter, but told her afterward that "it was too late" to retract the letter. Hauser did tell her "not to worry about it," for there were "a couple other positions that might be coming open," and he would be "getting back to [her]." No other offers of employment with Sea-Land developed, however, and O'Neal's last day of work was March 10, 1978, after she had spent eight weeks training her replacement. At the time of trial, she was employed as a "sales representative" in a furniture store, working on a "straight commission" basis. On appeal, Sea-Land assigns ten separate errors and condenses them into these four questions, as quoted from its brief: I. Whether Nancy O'Neal had an employment contract with the defendant and if she did what was the nature of the contract? II. Whether the evidence was sufficient as a matter of law to permit Nancy O'Neal's claim of fraud and deceit to go to the jury? III. Whether the matter of damages was properly submitted to the jury under either the contract or the fraud and deceit theories? IV. Whether, if either... Nancy O'Neal's contract or tort claim is deficient, the rendering of a general verdict requires remand? I. With respect to the contract question, Sea-Land first complains of the trial court's failure "to require Mrs. O'Neal to identify and describe the contract which she alleged was breached by [Sea-Land]." Sea-Land points out that, in her motion for judgment, O'Neal alleged the breach of a "contract of employment," and later, in response to an interrogatory seeking the terms of the contract, she identified two contracts of employment, "#1" being the contract covering her position as a sales representative, and "#2" the agreement under which she "was to be" a teletype operator/messenger. When Sea-Land moved to compel O'Neal to provide "more specific answers as to the contract," the court deferred the motion to the date of trial. Then, at trial, Sea-Land claims, the court not only failed to require O'Neal to identify further the contract she relied upon but also permitted her to inject a third contract, viz, an "agreement to exchange one job for the other." This action of the court, Sea- Land maintains, was error. We disagree with Sea-Land. It argued below that the contract O'Neal asserted at trial was not "the contract... sued, on," that the "suit speaks in terms of a contract of employment," and that O'Neal had changed her position "to say it's a contract to exchange jobs." We fail to see, however, why a contract to exchange jobs should not be considered a contract of employment; indeed, we do not believe it can logically be considered otherwise. Furthermore, O'Neal's identification at trial of a contract to exchange jobs did not constitute the allegation of a third contract or even of a new theory. In her answers to interrogatories, O'Neal stated that, under position "#2" she "was to be" a teletype operator/messenger, that this represented a "switch from management to 215 [non-management] status," and that upon assuming her duties "under #2 [she] was to relinquish [her] position under #1." These statements were sufficient to apprise Sea- Land of O'Neal's theory of a contract based upon an exchange of positions. But, Sea-Land argues, under all the alleged contracts, the "employments involved were terminable at the will of either plaintiff or defendant and thus were indefinite as to duration"; accordingly, "there was no contract whatsoever." O'Neal admitted at trial, Sea-Land says, that there were "no 'terms' as to the duration of her contract" of employment, either as a sales representative or as a teletype operator/messenger, and that there was "no limitation on [Sea-Land's] right to terminate her employment." In a case cited by Sea-Land, we recognized that, where no specific time is fixed for the duration of employment, it is presumed to be an employment terminable at will, providing a dismissed employee no basis for recovery of damages against his erstwhile employer. Hoffman Company v. Pelouze, 158 Va. 586, 164 S.E. 397 (1932). We said, however, that "this presumption... is rebuttable." Id. at 594, 164 S.E. at 399. We held that the presumption was rebutted in Hoffman by "the interpretation which the parties themselves placed upon the matter"; although the employer "undoubtedly had the right to terminate the contract at any time without more ado," it did not do so, but asked the employee by letter to submit his resignation and "threw out to him the gratuity of more than a month's salary as an inducement." This, we said, "does not import overmuch confidence in [the employer's] contention that the contract was of indefinite duration and so terminable at will." Id. Here, as in Hoffman, although Sea-Land may have had the right to terminate O'Neal's employment at will either while she was still a sales representative or in the event she became a teletype operator/messenger, the company did not dismiss her this way. Instead, it promised her that, if she resigned from the one position, she would be employed in the other. This was an undertaking separate and apart from any contract covering the particular position involved and was not subject to any presumption of terminability at will that might have applied to such a contract. Once O'Neal performed her part of the bargain by resigning from the first position, Sea- Land became obligated to perform on its part and breached that obligation to her damage when it refused to employ her in the teletype operator/messenger position. Sea-Land suggests, however, that this separate agreement was not supported by a valid consideration. Sea-Land cites Tow v. Miners Memorial Hospital Association, Inc., 199 F. Supp. 926 (S.D. W. Va. 1961), aff'd 305 F.2d 73 (4th Cir. 1962), a case interpreting West Virginia law, which Sea-Land says is "closely analogous to the present matter." In Sea-Land's words, Tow stands for the proposition that "the surrender by the employee of former employment as a necessary incident to the acceptance of new employment is not such consideration as will make the contract of employment anything other than terminable at will." The court did say this was the law in West Virginia; however, it stated that "the rule in Virginia is to the contrary," 199 F. Supp. at 937, citing Twohy v. Harris, 194 Va. 69, 72 S.E.2d 329 (1952). 216 Twohy involved an employee who threatened to resign because of inadequate compensation. The employer promised to hold certain corporate stock for the benefit of the employee if he would agree to continue his employment. We held that the employer's promise concerning the stock was supported by consideration when the employee refrained from exercising his right to resign and continued to perform the services required of him. We quoted with approval the rule that: [W]here one makes a promise conditioned upon the doing of an act by another, and the latter does the act, the contract is not void for want of mutuality, and the promisor is liable.... [U]pon the performance of the condition by the promisee, the contract becomes clothed with a valid consideration which renders the promise obligatory. 194 Va. at 81, 72 S.E.2d at 336. We believe this rule is applicable to the present case and demonstrates that O'Neal's act of resigning furnished adequate consideration for Sea-Land's promise to employ her in the teletype operator/messenger position. As a corollary to its contract argument, Sea-Land contends that the trial court erred in granting Instruction No. 4. This instruction permitted the jury to find a plaintiff's verdict if it believed O'Neal and Sea-Land entered into "an employment agreement whereby [she] was to resign as sales representative and be employed as teletype operator and messenger." Sea-Land objected to the instruction on the ground that it "assumes existence of a contract which has never been proven." Because, as we have demonstrated, O'Neal did prove the existence of the contract specified in Instruction No. 4, we hold that the granting of the instruction was not error.8 II. Sea-Land contends that O'Neal failed, as a matter of law, to establish fraud by clear, cogent, and convincing evidence. Sea-Land points out that O'Neal alleged the fraud was intentional and with malice; intentional fraud "consists of deception, intentionally practiced, to induce another to part with property or to surrender some legal right, and which accomplishes the end designed." Further, Sea-Land maintains, an action of fraud cannot be based upon a statement or promise relating to future events. Yet, Sea-Land asserts, O'Neal failed to show any intentional act on its part, to establish that any of its representatives bore her any ill will, or to prove that anyone made her a promise based upon existing or past events. A case called to our attention by Sea-Land provides a complete answer to this argument. Sea-Land cites Lloyd v. Smith, 150 Va. 132, 142 S.E. 363 (1928), for the proposition that "an action based upon fraud must aver the misrepresentation of present [or] pre-existing facts, and cannot ordinarily be predicated on unfulfilled promises or statements as to future events." 150 Va. at 145, 142 S.E. at 365. We opined further that, "[w]ere the general rule otherwise, every breach of contract could

8 Sea-Land originally assigned error to the refusal of its proffered Instruction No. A1, relating to the terminability at will of an employment contract of indefinite duration. Sea-Land did not argue the refusal on brief, however; hence, we will not consider the point. 217 be made the basis of an action in tort for fraud." Id. But, in the very next paragraph of the opinion, we said this: There are, however, some real and apparent exceptions. The courts are not agreed as to all of these exceptions, but there is much authority to the effect that an action in tort for deceit and fraud may sometimes be predicated on promises which are made with a present intention not to perform them.... It has been stated that the gist of fraud in such case is not the breach of the agreement to perform, but the fraudulent intent. Id. See also Restatement (Second) of Torts § 530 comment c (1977). The evidence in this case clearly, cogently, and convincingly supports the conclusion that, when Nappi told O'Neal she "could have the [teletype operator/messenger] job" if she "turned [in] the letter [of resignation from the sales representative position]," he made this promise with the then present intention not to perform it. Hence, O'Neal proved her allegation of intentional fraud, and it was not error for the trial court to submit the fraud question to the jury. III. With respect to the damage issue, the trial court granted Instruction No. 8, which reads: The Court instructs the jury that if, from the evidence and the other instructions of the Court, you find your verdict in favor of the plaintiff for compensatory damages, then in assessing the damages to which she is entitled, you may take into consideration any of the following: 1. Any loss of severance pay and any loss of earnings in the past and any loss of earnings she may reasonably be expected to sustain in the future; 2. Any other financial losses directly related to the loss of a job with the defendant; 3. Any damage caused by embarrassment or humiliation resulting from the loss of employment; And from these as proven by the evidence, your verdict should be for such sum as will fully and fairly compensate the plaintiff for the damages sustained by her. In the court below, Sea-Land confined its objections concerning this instruction to those portions permitting the jury to award damages for future loss of earnings and for embarrassment and humiliation. Consequently, we will confine our consideration to the same portions and the same objections. Regarding future loss of earnings, Sea-Land argued below that Instruction No. 8 permitted the jury to speculate because there was no evidence of any future loss nor were there any facts upon which the jury could intelligently assess the loss. Particularizing, Sea-Land told the court there was no evidence "as to [O'Neal's] future working life" and no showing she would remain in Sea-Land's employ. 218 It is true that O'Neal did not introduce any specific evidence to establish the span of her "working life." She did tell the jury, however, that she was thirty-nine years old and that she intended to work until she was at least fifty-five. This testimony would have permitted the jury to make an informed and reasonable estimate of the duration of O'Neal's "working life." O'Neal also testified that she intended to remain in Sea-Land's employ until she retired. Sea-Land argues, however, that, although the trial court failed to require O'Neal to specify what contract she relied upon and, further, even instructed the jury on a contract "never described," her employment was terminable at will under all the alleged agreements. Hence, Sea-Land says, there was nothing to support an award for future loss of earnings. But, as we demonstrated in Part I, supra, the so-called "never described" contract was properly submitted to the jury. We noted further that this contract carried no presumption of terminability at will and that Sea-Land breached the contract when it refused to employ O'Neal in the teletype operator/messenger position. Considering O'Neal's age, the past recognition of the quality of her work, and her intention to remain in Sea-Land's employ, we believe there was an adequate basis for the jury to determine a reasonable period during which O'Neal would have continued in Sea-Land's employ as a teletype operator/messenger, had she been given that position. Hence, she was entitled to have the jury consider whether she suffered damage for future loss of earnings on her breach of contract theory. On her tort theory, however, O'Neal was entitled to have the jury consider damages resulting from future loss of earnings based upon her former position as a sales representative. After all, it was that position from which she resigned as a result of Sea-Land's trickery. Of course, she could not recover the same damages twice, once on a contract basis and once on a tort theory, but the jury was warned against this sort of duplication in an instruction granted at Sea-Land's request.9 Concerning the portion of Instruction No. 8 which permitted the jury to award "damage caused by embarrassment or humiliation resulting from the loss of employment," Sea-Land objected below on the ground there was no "physical harm sustained by [O'Neal]" and "no evidence concerning intent or ill will" on Sea-Land's part which would support such an award.10 Citing D. Dobbs, Handbook on the Law of Remedies 12.25 (1973), Sea-Land argues "[i]t is settled law that an employee cannot recover damages from an employer in a breach of contract for humiliation or injury to feelings." Then, citing Bowles v. May, 159 Va. 419, 166 S.E. 550 (1932),

9 In Instruction No. G, also granted at Sea-Land's request, the trial court told the jury that the amounts O'Neal "could have earned, did earn and will in the future earn, by accepting other employment, must be deducted from such damages as the jury may award." 10 Sea-Land did not object below, and does not contend here, that O'Neal failed to show she was embarrassed or humiliated by Sea-Land's conduct. 219 Sea-Land maintains there can be no recovery of damages for harm to feelings in the absence of physical injury or wanton or willful conduct. Sea-Land's analysis of Dobbs' views is correct as far as it goes. What the author actually says is that, "absent some tort," damages for "humiliation or injury to feelings" are not recoverable in an action for breach of contract. D. Dobbs, supra, § 12.25, at 927. Sea-Land does state correctly the general rule applicable to tort cases that, absent proof of physical injury or wanton or willful conduct, there can be no recovery of damages for mental anguish, emotional distress, or humiliation. As with most general rules, however, there are recognized exceptions. We established in Part II, supra, that Sea-Land committed an intentional tort against O'Neal. Previously, in at least five classes of cases involving intentional torts, we have approved the recovery of damages for humiliation, embarrassment, and similar harm to feelings, although unaccompanied by actual physical injury, where a cause of action existed independently of such harm. The cases and the torts are: Peshine v. Shepperson, 58 Va. (17 Gratt.) 472, 486 (1867) (deliberate trespass); Ches, & Pot. Tel. Co. v. Carless, 127 Va. 5, 9, 102 S.E. 569, 570 (1920) (wrongful suspension of telephone service); W.T. Grant Co. v. Owens, 149 Va. 906, 925, 141 S.E. 860, 866 (1928) (); James v. Powell, 154 Va. 96, 117, 152 S.E. 539, 547 (1930) (libel); and Spitzer v. Clatterbuck, 202 Va. 1001, 1006-07, 121 S.E.2d 4668 469-70 (1961) (). By way of comparison, the potential for distress to O'Neal from the loss of her job through Sea-Land's trickery was not substantially less than the harm caused by the torts involved in the cases cited above. Similarly, the wrong committed by Sea- Land was not materially less egregious than the conduct of at least several of the defendants involved in the earlier decisions. In this case as well as each of those cited, harm to the feelings of the prospective victim was readily foreseeable. We perceive no logical reason, therefore, to permit recovery of distress damages there and to deny similar damages here. IV. Finally, Sea-Land contends that, because the jury returned a general verdict, the judgment appealed from must be reversed and the case remanded "if this court determines that either the contract claim or fraud claim is deficient...." Having determined that neither claim is deficient, and finding that Sea-Land has failed to demonstrate reversible error otherwise, we will affirm the judgment of the trial court. Affirmed. Russo v. White 241 Va. 23, 400 S.E.2d 160 Compton, J., delivered the opinion of the Court. 220 In this tort action, the plaintiff seeks recovery in damages for alleged intentional infliction of emotional distress, independent of any physical injury and unaccompanied by any physical impact. On appeal, we determine whether the trial court erred in sustaining the defendant's demurrer. We will consider the plaintiff's allegations according to "the settled rule that a demurrer admits the truth of all well-pleaded material facts. All reasonable factual inferences fairly and justly drawn from the facts alleged must be considered in aid of the pleading. However, a demurrer does not admit the correctness of the pleader's conclusions of law." Fox v. Custis, 236 Va. 69, 71, 372 S.E.2d 373, 374 (1988). In an amended motion for judgment, appellant Patricia B. Russo sought to recover against appellee Burton White for his allegedly outrageous conduct. The plaintiff asserted that she is a single parent who lives with her teen-age daughter. She alleged that in the Spring of 1987 she "went on a date with defendant" and thereafter "did not date defendant again." According to the pleading, plaintiff began receiving numerous "hang-up" calls from April through June, 1987. She asserted that in August 1987, defendant was convicted under Code §18.2-429 of "causing telephone to ring with intent to annoy," a misdemeanor. Plaintiff further alleged that the same type of calls resumed in the Fall of 1987 and she began "keeping a log." Between November 25, 1987 and January 28, 1988, she received 340 "hang-up" calls, according to the plaintiff. Continuing, she alleged that she contacted the police in January 1988, and, with the aid of the police and the telephone company, "defendant was observed making 15 phone calls to plaintiff in quick succession from a telephone booth." She asserted that defendant was served with 15 warrants for committing the same crime for which he had been convicted during the previous August. The charges, she noted, "were taken under advisement." The plaintiff also alleged that some of the calls were made at times which made "it apparent that defendant was watching plaintiff's house." According to plaintiff, defendant's conduct caused her "extreme emotional distress" because "not knowing defendant very well, she was not . . . aware of his proclivity for violence." She asserted that this "consideration" weighed heavily on her, "due to her vulnerability as a single parent, and since she must leave her minor daughter alone at times." Concluding, plaintiff alleged that, as a proximate result of defendant's "intentional acts," she suffered "severe emotional distress." This resulted, she asserted, in "nervousness, sleeplessness, stress and its physical symptoms, withdrawal from activities which might necessitate plaintiff leaving her daughter at home, [and] lack of concentration at work to the point where she received a reprimand." In a demurrer to the amended motion, defendant contended that plaintiff failed to sufficiently set forth "either the legal elements or factual basis" to support a claim of "intentional infliction of emotional harm." Upon consideration of argument of 221 counsel, the trial court sustained the demurrer. We awarded the plaintiff this appeal from the January 1990 judgment order dismissing the action. In Womack v. Eldridge, 215 Va. 338, 210 S.E.2d 145 (1974), this Court joined a growing number of jurisdictions which explicitly recognized the existence of an independent tort referred to as "the intentional infliction of emotional distress," sometimes called the tort of "outrage." See annot., Modern Status of Intentional Infliction of Mental Distress as Independent Tort; "Outrage." 38 A.L.R.4th 998 (1985). Academics take credit for the development of this modern tort, which was finally defined in the Restatement (Second) of Torts 46 (1965) (hereinafter Restatement). Givelber, The Right to Minimum Social Decency and the Limits of Evenhandedness: Intentional Infliction of Emotional Distress by Outrageous Conduct, 82 Colum. L. Rev. 42, 42-43 (1982). The tort, however, "differs from traditional intentional torts in an important respect: it provides no clear definition of the prohibited conduct." Id. at 51. , , and false imprisonment "describe specific forms of behavior," but the term "outrageous" "does not objectively describe an act or series of acts; rather, it represents an evaluation of behavior. The concept thus fails to provide clear guidance either to those whose conduct it purports to regulate, or to those who must evaluate that conduct." Id. Indeed, we have said recently that such torts are "not favored" in the law. Ruth v. Fletcher, 237 Va. 366, 373, 377 S.E.2d 412, 415 (1989). Nevertheless, in an effort to establish meaningful standards for adjudication of such claims, we adopted a four-pronged approach in Womack, patterned after the Restatement definition. We stated that emotional distress resulting from a non-tactile tort may be compensated if the plaintiff alleges, and proves by clear and convincing evidence, that: the wrongdoer's conduct is intentional or reckless; the conduct is outrageous and intolerable; the alleged wrongful conduct and emotional distress are causally connected; and, the distress is severe. 215 Va. at 342, 210 S.E.2d at 148. In this case, the defendant does not dispute that the plaintiff's pleading sufficiently alleges facts to comply with the first and third prongs of Womack. Thus, we will address the remaining two prongs, keeping in mind that the trial court must initially determine whether the facts alleged will support a finding of both outrageousness and severe emotional distress. See Restatement comments h and j; Ruth, 237 Va. at 368, 377 S.E.2d at 413. Under the second prong, it is insufficient for a defendant to have "acted with an intent which is tortious or even criminal." Restatement comment d. Even if a defendant "has intended to inflict emotional distress," or his conduct can be "characterized by 'malice,' or a degree of aggravation which would entitle the plaintiff to punitive damages for another tort," the requirement of the second prong has not been satisfied. Id. "Liability has been found only where the conduct has been so outrageous in character, and so extreme in degree, as to go beyond all possible bounds of decency, and to be regarded as atrocious, and utterly intolerable in a civilized community." Id. 222 The plaintiff contends that for "White to call her over a two month period an average of 5.6 times per day is intolerable and offends any sense of decency and morality in a civilized society." Conceding that defendant did not speak during the calls, plaintiff argues that they nonetheless were "threatening" because of "their frequency and the fact that White was calling a single parent with a young child who had extremely limited contact with him so as not to be able to judge White's proclivity for violence." She contends that, given the persistence with which defendant "harassed" her with "these threatening calls, it was more than reasonable for her to feel that White was likely to escalate the matter to the point of violence." Thus, according to plaintiff, defendant's conduct constituted intentional infliction of emotional distress. We will agree with the plaintiff and assume, without deciding, that defendant's conduct rose to the level of outrageousness required to support the cause of action. Consequently, we will focus on the fourth prong of Womack and decide whether the plaintiff's emotional distress was "severe." The term "emotional distress" travels under many labels, such as, "mental suffering, mental anguish, mental or nervous shock . . . . It includes all highly unpleasant mental reactions, such as fright, horror, grief, shame, humiliation, embarrassment, anger, chagrin, disappointment, worry, and nausea." Restatement comment j. But liability arises only when the emotional distress is extreme, and only where the distress inflicted is so severe that no reasonable person could be expected to endure it. Id. Here, plaintiff alleged that she suffered "severe emotional distress" and "extreme emotional distress." But, even on demurrer, the court is not bound by such conclusory allegations when the issue involves, as here, a mixed question of law and fact. This is not a negligence case where, according to Rule 3:16(b), an allegation of "negligence" is sufficient without specifying the particulars. In the present claim, "a plaintiff must allege all facts necessary to establish" the cause of action. Ely v. Whitlock, 238 Va. 670, 677, 385 S.E.2d 893, 897 (1989) (trial court erred in failing to sustain demurrer to count in motion for judgment alleging intentional infliction of emotional distress). The plaintiff has alleged that she was nervous, could not sleep, experienced stress and "its physical symptoms," withdrew from activities, and was unable to concentrate at work. There is no claim, for example, that she had any objective physical injury caused by the stress, that she sought medical attention, that she was confined at home or in a hospital, or that she lost income. Consequently, we conclude that the alleged effect on the plaintiff's sensitivities is not the type of extreme emotional distress that is so severe that no reasonable person could be expected to endure it. Therefore, we hold that the trial court correctly sustained the demurrer, and the judgment of dismissal will be Affirmed.

223 Almy v. Grisham 273 Va. 68; 639 S.E.2d 182 (2007 Keenan, J., delivered the opinion of the court. In this appeal involving an action for intentional infliction of emotional distress and a related civil conspiracy claim, we consider whether the circuit court erred in sustaining the defendants' demurrers. As part of our consideration, we decide the issue of first impression whether a civil claim for conspiracy to intentionally inflict emotional distress will be recognized as a cause of action in this Commonwealth. I. Material Facts And Proceedings In February 2004, Katharine Almy filed a motion for judgment against John Grisham, Jr., Alan Swanson, Donna Swanson, David Liebman, and Cina L. Wong (collectively, defendants), alleging claims including intentional infliction of emotional distress and conspiracy to intentionally inflict emotional distress. Almy had asserted similar claims in a previous action, which was dismissed without prejudice on her motion for nonsuit. The defendants each filed demurrers asserting that Almy had failed to state a cause of action. At a hearing on the demurrers, defendant Grisham asked that the circuit court take judicial notice of the deposition testimony of Dr. Stephen Alexander, a licensed professional counselor and potential witness in the case, who had given the deposition testimony in the previous action. Almy did not object to Grisham's request. After considering the parties' arguments, the circuit court issued a letter opinion stating: [T]he intentional infliction of emotional distress and conspiracy to intentionally inflict emotional distress claims will not survive demurrer, based on the depositions which are part of the record in this case. The depositions allow the court to evaluate and decide the merits of claims set forth in the motion for judgment.11 In a final order incorporating its letter opinion, the circuit court sustained the defendants' demurrers and dismissed the action with prejudice. Almy's motion for judgment recounted a series of events that allegedly occurred between 1996 and 1999. Beginning in 1996 and continuing through 1998, Donna Swanson (Donna) received several anonymous, hand-written letters that made various accusations, including allegations of marital infidelity on the part of Alan Swanson (Alan), Donna's husband. In 1998, Grisham also received an anonymous, hand-written letter. According to Almy's allegations, Grisham and the Swansons decided together that they should determine the source of the

11 Although the circuit court did not identify which depositions it was considering, Dr. Alexander's deposition was the only deposition before the court. 224 anonymous letters, suspecting that Almy was the author. Grisham allegedly stated during a tape-recorded conversation that he "really, really wanted to make Ms. Almy suffer for writing those letters." As part of their effort to determine if Almy was the author of the letters, Grisham and the Swansons contacted Liebman, a handwriting analyst. Liebman asked to see the anonymous letters, along with known samples of Almy's handwriting. Grisham produced for Liebman's analysis a "thank-you" note written by Almy and a form Almy had completed when she registered her daughter to play baseball in a league in which Grisham was a coach. Liebman later requested additional samples of Almy's handwriting. To provide Liebman with the requested additional samples, Grisham and Alan allegedly agreed to obtain documents bearing Almy's handwriting from her children's files at St. Anne's- Belfield School (St. Anne's). Grisham served on the board of directors at St. Anne's, and Alan was a teacher there. Alan, without permission from anyone at St. Anne's, allegedly obtained from the school files an enrollment and medical release form that Almy had completed, which was marked "Strictly Confidential" and contained confidential and personal information. Alan provided a copy of the document to Grisham, who allegedly sent it to Liebman. Wong, a handwriting examiner who worked with Liebman, also analyzed the submitted samples. Liebman and Wong concluded in a written report (Liebman report) that it was possible Almy had written the letters, and that she appeared to have addressed the envelopes containing the letters. Almy alleged that Grisham, Liebman, and Wong collaborated regarding the desired contents and phrasing of the Liebman report. Grisham and the Swansons next met with Grisham's attorney, John Zunka. Grisham allegedly told Zunka that the Liebman report concluded that Almy had written the anonymous letters. Based on this information, Zunka advised Grisham to contact the local Commonwealth's Attorney, James Camblos, to initiate criminal proceedings against Almy. Grisham and the Swansons met with Camblos and allegedly told him that their handwriting experts concluded that Almy had written some of the anonymous letters and had addressed the envelopes containing those letters. Camblos contacted Detective Thomas Grimes of the Albemarle County Police Department, who arranged a meeting with the Swansons. The Swansons provided Grimes with copies of the anonymous letters and told him that they thought Almy was the author. In August 1998, Grimes confronted Almy at her residence and asked her if she had written the anonymous letters. After Almy denied writing the letters, Grimes informed Almy that she was not under arrest but that he "want[ed] the letters to stop." Almy alleged that Grimes was "rude and demeaning" during the visit, causing her to cry and become upset. 225 Almy asserted that as a result of Grimes' visit in August 1998, she suffered severe emotional distress, including nervousness, sleeplessness, stress with accompanying physical symptoms, and an inability to concentrate. Almy further alleged that after Grimes' visit she withdrew from her customary activities, could not perform her duties as wife and mother, was unable to manage her mother's real estate properties, and could not perform her administrative duties at a nonprofit organization. In November 1998, Almy sought treatment for her emotional distress from Dr. Alexander, who concluded that Almy suffered from a "major depressive disorder." Almy refused medication for her depression but, over the next seven months, she received therapy from Dr. Alexander on several occasions. Almy alleged that her depressed condition improved until about August 1999, when she learned that Grisham and the Swansons earlier had obtained materials from certain files at St. Anne's containing confidential information about Almy's children. According to Almy's allegations, upon learning that Grisham and the Swansons had made copies of documents from those files, Almy felt "extremely violated, outraged, deeply disturbed and worried," and she "feared for how her children would be treated during the upcoming school year." As a result, Almy allegedly suffered a serious "setback" in her depression. She asserted that her husband and several friends observed a "return of her depressive state and debilitating functioning." Almy also alleged that she again sought counseling from Dr. Alexander, who concluded that Almy's discovery concerning her children's files had caused the "setback" in her depression. II. Arguments On Appeal Almy argues that the circuit court erred in considering Dr. Alexander's deposition testimony when ruling on the defendants' demurrers, because a demurrer addresses only the legal sufficiency of the allegations of a motion for judgment. Almy also contends that the circuit court erred in sustaining the demurrers because Almy properly pleaded all required elements of intentional infliction of emotional distress and an accompanying conspiracy claim. In response, Grisham initially argues that Almy did not preserve for appeal the issue whether the circuit court erred in relying on Dr. Alexander's deposition testimony when ruling on the demurrers.12 Next, addressing the merits of Almy's pleadings, Grisham contends that the pleadings fail to state a cause of action. Grisham asserts that Almy's allegations of emotional distress are identical to the plaintiff's allegations in Russo v. White, 241 Va. 23, 400 S.E.2d 160, 7 Va. Law Rep. 1253 (1991), in which this Court held that the pleadings were insufficient to support a claim of intentional infliction of emotional distress.

12 The Swansons and Wong assert essentially the same arguments as Grisham. Liebman has not filed a brief in this appeal. 226 Grisham also argues that Almy's pleadings are deficient because they do not allege facts sufficient to establish that the defendants' actions were intentional or reckless and were outrageous. He further contends that because Almy's pleadings do not support a claim for intentional infliction of emotional distress, her conspiracy claim based on that underlying tort likewise fails. III. Analysis We first observe that when ruling on a demurrer, in contrast to ruling on a motion for summary judgment, a court is not permitted to decide the merits of a claim but only may decide whether a plaintiff's factual allegations are sufficient to state a cause of action. Barber v. Vista RMS, Inc., 272 Va. 319, 327, 634 S.E.2d 706, 711 (2006); see Fun v. Virginia Mil. Inst., 245 Va. 249, 252, 427 S.E.2d 181, 183, 9 Va. Law Rep. 971 (1993); Elliott v. Shore Stop, Inc., 238 Va. 237, 239-40, 384 S.E.2d 752, 753, 6 Va. Law Rep. 346 (1989). Thus, a demurrer presents an issue of law, not an issue of fact. See Code § 8.01-273; Harris v. Kreutzer, 271 Va. 188, 196, 624 S.E.2d 24, 28 (2006); Glazebrook v. Board of Supervisors, 266 Va. 550, 554, 587 S.E.2d 589, 591 (2003). In the present case, the circuit court erred in considering the factual merit of Almy's allegations in ruling on the defendants' demurrers.13 Our analysis does not end here, however, because Almy asks us to review the circuit court's express holding that her claims "will not survive demurrer." Almy's failure to object to the circuit court's consideration of the deposition testimony does not affect our review because, given the court's erroneous mode of procedure, we do not address the substance of the court's analysis but consider only whether the court reached the correct result, albeit for the wrong reason. Thus, we confine our review to the legal sufficiency of Almy's pleadings.14 See Harris, 271 Va. at 195, 624 S.E.2d at 28; Dreher v. Budget Rent-A-Car Sys., Inc., 272 Va. 390, 395, 634 S.E.2d 324,

13 We find no merit in the defendants' argument that, based on our decision in Fleming v. Anderson, 187 Va. 788, 48 S.E.2d 269 (1948), the circuit court properly considered Dr. Alexander's deposition when ruling on the demurrer. Fleming is inapposite because, there, the circuit court took judicial notice of prior judicial proceedings when ruling on a demurrer solely because the plaintiff's cause of action arose from the outcome of those prior proceedings. Id. at 794-95, 48 S.E.2d at 272-73. 14 We observe, in contrast, that on at least two prior occasions when a circuit court erroneously decided the merits of a case in ruling on a demurrer, we nevertheless reviewed the circuit court's decision as if it were a ruling on a motion for summary judgment. See Shelor Motor Co. v. Miller, 261 Va. 473, 544 S.E.2d 345 (2001); Carmel v. City of Hampton, 241 Va. 457, 403 S.E.2d 335, 7 Va. Law Rep. 2291 (1991). In those cases, however, the parties, as well as the circuit court, treated the pleadings in this manner. Here, the parties did not ask the circuit court to rule on the merits of the claims, and the defendants merely asserted that Dr. Alexander's deposition supported their position that Almy had failed to state a claim upon which relief could be granted. 227 326-27 (2006); Thompson v. Skate Am., Inc., 261 Va. 121, 128, 540 S.E.2d 123, 126-27 (2001). We consider the factual allegations of the motion for judgment in the light most favorable to the plaintiff. McDermott v. Reynolds, 260 Va. 98, 100, 530 S.E.2d 902, 903 (2000); W.S. Carnes, Inc. v. Board of Supervisors, 252 Va. 377, 384, 478 S.E.2d 295, 300 (1996). We will consider as true the facts alleged therein, the facts impliedly alleged, and the reasonable inferences of fact that can be drawn from the facts alleged. See McDermott, 260 Va. at 100, 530 S.E.2d at 903; Delk v. Columbia/HCA Healthcare Corp., 259 Va. 125, 129, 523 S.E.2d 826, 829 (2000); Breeding v. Hensley, 258 Va. 207, 211-12, 519 S.E.2d 369, 371 (1999). A. Intentional Infliction of Emotional Distress We first recognized this intentional tort as a cause of action in Womack v. Eldridge, 215 Va. 338, 210 S.E.2d 145 (1974). There, we held the tort has four elements that must be proved: 1) the wrongdoer's conduct was intentional or reckless; 2) the conduct was outrageous or intolerable; 3) there was a causal connection between the wrongdoer's conduct and the resulting emotional distress; and 4) the resulting emotional distress was severe. Id. at 342, 210 S.E.2d at 148; accord, Harris, 271 Va. at 203, 624 S.E.2d at 33; Delk, 259 Va. at 136, 523 S.E.2d at 833; Jordan v. Shands, 255 Va. 492, 498-99, 500 S.E.2d 215, 218-19 (1998). Because of problems inherent in proving a tort alleging injury to the mind or emotions in the absence of accompanying physical injury, the tort of intentional infliction of emotional distress is "not favored" in the law. Harris, 271 Va. at 203- 04, 624 S.E.2d at 33; Russo, 241 Va. at 26, 400 S.E.2d at 162; Ruth v. Fletcher, 237 Va. 366, 373, 377 S.E.2d 412, 415-16, 5 Va. Law Rep. 1915 (1989). Thus, in contrast to a claim of negligence, a plaintiff alleging a claim for intentional infliction of emotional distress must allege in her motion for judgment all facts necessary to establish the cause of action in order to withstand challenge on demurrer. Harris, 271 Va. at 204, 624 S.E.2d at 33; Russo, 241 Va. at 28, 400 S.E.2d at 163. Accordingly, we must consider whether Almy alleged sufficient facts to establish each element of the tort. 1) Intentional or Reckless Conduct We conclude that Almy's pleadings sufficiently allege that Grisham, Alan, and Donna intended to cause Almy severe emotional distress. This element of the tort is set forth in Almy's allegations that Grisham, Alan, and Donna acted intentionally to falsely accuse Almy, with the specific purpose of causing her humiliation, ridicule, and severe emotional distress. Almy further alleged that these three defendants intentionally manufactured evidence to cause her distress, and that Grisham expressed his intent to have her "really, really, suffer" for writing the letters. 228 Almy fails to allege in her motion for judgment, however, that Liebman and Wong engaged in conduct with the intent to cause Almy emotional distress. Likewise, Almy's pleadings do not contain allegations that the actions of Liebman and Wong were reckless, such that they knew or should have known their act of writing a false report likely would cause Almy severe emotional distress. Therefore, we hold that Almy has failed to state a cause of action against Liebman and Wong for intentional infliction of emotional distress. 2) Outrageous or Intolerable Conduct We conclude that Almy sufficiently alleged the element of outrageous conduct perpetrated by Grisham, Alan, and Donna. This conduct is described in Almy's allegations that the three defendants devised a scheme to falsely accuse Almy of writing the letters and that, in furtherance of this scheme, Alan and Grisham provided Liebman with the confidential documents improperly obtained from St. Anne's. Almy further alleged that Alan and Donna knew or should have known that Grisham inappropriately influenced the wording of Liebman's report, causing Liebman to issue a false report implicating Almy. In addition, Almy alleged that Grisham, Alan, and Donna caused Officer Grimes to confront Almy by providing false information that a handwriting examiner had determined that Almy was the author of the letters. In reviewing these allegations, we acknowledge that the term "outrageous" does not objectively describe particular acts but instead represents an evaluation of behavior. Russo, 241 Va. at 26, 400 S.E.2d at 162. Nevertheless, in the absence of an objective definition of the term, we must make this threshold assessment in determining the sufficiency of Almy's allegations. See id. We hold that reasonable persons could view the conduct alleged, if proved, as being "so outrageous in character, and so extreme in degree, as to go beyond all possible bounds of decency, and to be regarded as atrocious, and utterly intolerable in a civilized community." See Russo, 241 Va. at 27, 400 S.E.2d at 162 (quoting Ruth, 237 Va. at 368, 377 S.E.2d at 413). When reasonable persons could view alleged conduct in this manner and the other elements of the tort are properly pleaded, the controversy must be resolved at a trial on the merits of the claim, rather than by a circuit court on demurrer. See Burroughs v. Keffer, 272 Va. 162, 168, 630 S.E.2d 297, 301 (2006); Chapman v. City of Virginia Beach, 252 Va. 186, 191, 475 S.E.2d 798, 804 (1996); Womack, 215 Va. at 342, 210 S.E.2d at 148. 3) Causal Connection Between Conduct and Distress We hold that Almy alleged sufficient facts to support a conclusion that the conduct of Grisham, Alan, and Donna proximately caused her severe emotional distress. Almy's pleadings contain two primary allegations of proximate causation. First, Almy alleged that these three defendants provided false information to local law enforcement officials and that, as a result, Detective Grimes confronted Almy, causing her to suffer severe emotional distress and 229 depression. Second, Almy alleged that she suffered severe emotional distress caused by her discovery that Grisham and Alan had removed from school files confidential information related to her family. Thus, these allegations of proximate causation were sufficient to survive the defendants' demurrers. 4) Severity of Resulting Emotional Distress Finally, we hold that Almy adequately alleged that she suffered severe emotional distress. Almy asserted that the conduct of Grisham, Alan, and Donna caused her to suffer from several debilitating conditions, including depression, nervousness, and an inability to sleep, which ultimately caused a complete disintegration of virtually every aspect of her life. She allegedly was unable to manage her mother's financial affairs, to carry out her family duties, or to perform her various charitable endeavors. Also relevant are Almy's allegations that due to her "major depressive disorder" caused by the defendants' false accusations, she was required to undergo extensive therapy from Dr. Alexander.15 We hold that these allegations are materially different from the allegations of severe emotional distress in Russo, which we held were inadequate to survive a demurrer. Unlike the plaintiff in Russo, Almy alleged that she was required to seek professional counseling because of her depression occasioned by the defendants' misconduct. We likewise conclude that Almy's allegations of severe emotional distress exceed those alleged by the plaintiff in Harris v. Kreutzer, 271 Va. 188, 624 S.E.2d 24 (2006). While both Almy and the plaintiff in Harris alleged that they required counseling and suffered from severe psychological trauma, depression, humiliation, and injury to reputation, Almy additionally alleged that the defendants' actions rendered her functionally incapable of carrying out any of her work or family responsibilities. See Id. at 204-05, 624 S.E.2d at 34. According to Almy, her emotional distress reached such a level of severity that "[e]very aspect of [her] life [was] fundamentally and severely altered," such that she "had trouble even walking out of the front door." As a result, Almy's motion for judgment sufficiently alleges emotional distress "so severe that no reasonable person could be expected to endure it." See id. at 205, 624 S.E.2d at 34 (citing Russo, 241 Va. at 28, 400 S.E.2d at 163). Thus, we hold that Almy's factual allegations describing her severe emotional distress are adequate to survive a demurrer on this fourth and final element of the tort. B. Conspiracy Allegations

15 In addition, the motion for judgment alleges that Almy obtained a forensic psychiatric assessment conducted by David Pickar, M.D. Although the assessment was obtained for purposes of litigation and Almy did not seek treatment from Dr. Pickar, Dr. Pickar nevertheless allegedly concluded that Almy suffered from a major depressive disorder as a result of the defendants' actions. 230 We next consider Almy's conspiracy allegations. We decide the question whether the tort of conspiracy to intentionally inflict emotional distress should be recognized as a cause of action in this Commonwealth. We begin our analysis with the observation that, in Virginia, a common law claim of civil conspiracy generally requires proof that the underlying tort was committed. See Commercial Bus. Sys. v. Halifax Corp., 253 Va. 292, 300, 484 S.E.2d 892, 896 (1997). This general rule reflects the view of a majority of states that have considered the question. See, e.g., Macomber v. Travelers Prop. & Cas. Corp., 277 Conn. 617, 894 A.2d 240, 254-55 (Conn. 2006); Paul v. Howard Univ., 754 A.2d 297, 310 n. 27 (D.C. 2000); Alexander & Alexander Inc. v. B. Dixon Evander & Assocs., 336 Md. 635, 650 A.2d 260, 265 (Md. 1994); Jones v. BP Oil Co., 632 So.2d 435, 439 (Ala. 1993); Middlesex Concrete Prods. & Excav. Corp. v. The Carteret Indus. Ass'n, 37 N.J. 507, 181 A.2d 774, 779 (N.J. 1962); Cook v. Robinson, 216 Ga. 328, 116 S.E.2d 742, 744-45 (Ga. 1960). "The gist of the civil action of conspiracy is the damage caused by the acts committed in pursuance of the formed conspiracy and not the mere combination of two or more persons to accomplish an unlawful purpose or use an unlawful means. "CaterCorp, Inc. v. Catering Concepts, Inc., 246 Va. 22, 28, 431 S.E.2d 277, 281-82, 9 Va. Law Rep. 1421 (1993) (quoting Gallop v. Sharp, 179 Va. 335, 338, 19 S.E.2d 84, 86 (1942)); accord, Commercial Business Sys. v. BellSouth Servs., 249 Va. 39, 48, 453 S.E.2d 261, 267 (1995). As stated above, a claim for intentional infliction of severe emotional distress requires proof of severe emotional distress proximately caused by a defendant's outrageous conduct that is intentional or reckless. See Harris, 271 Va. at 203, 624 S.E.2d at 33; Delk, 259 Va. at 136, 523 S.E.2d at 833; Jordan, 255 Va. at 499, 500 S.E.2d at 219; Womack, 215 Va. at 342, 210 S.E.2d at 148. Thus, under the common law in Virginia, a conspiracy claim based on this underlying tort would include these same elements of proof. See Halifax, 253 Va. at 300, 484 S.E.2d at 896. As we already have observed, the tort of intentional infliction of emotional distress is "not favored" in the law. See Harris, 271 Va. at 204, 624 S.E.2d at 33; Russo, 241 Va. at 16, 26, 400 S.E.2d at 162; Ruth, 237 Va. at 373, 377 S.E.2d at 416. A primary reason for the tort's disfavored status is that because the prohibited conduct cannot be defined objectively, clear guidance is lacking, both to those wishing to avoid committing the tort, and to those who must evaluate whether certain alleged conduct satisfies all elements of the tort. See Russo, 241 Va. at 26, 400 S.E.2d at 162. If we were to recognize a conspiracy claim based on an agreement to commit this tort, the difficulties resulting from this absence of clear guidance would be compounded. Courts and juries would be faced with the amorphous task of determining whether parties have entered into an agreement to engage in conduct that cannot be defined objectively. See id. Determinations of this nature would invite great uncertainty and speculation on the part of the fact finder. 231 We also observe that, in Virginia, a plaintiff can allege joint liability of parties who acted in concert to commit the tort of intentional infliction of emotional distress without the need to assert a claim of conspiracy. The case before us plainly illustrates this point. Accordingly, upon consideration of these several factors, we hold that a plaintiff may not assert a cause of action in Virginia for civil conspiracy to intentionally inflict severe emotional distress. IV. Conclusion When a circuit court has reached the correct result for the wrong reason, we will assign the correct reason and affirm the relevant portion of the court's judgment. Whitley v. Commonwealth, 260 Va. 482, 492, 538 S.E.2d 296, 301 (2000); Mitchem v. Counts, 259 Va. 179, 191, 523 S.E.2d 246, 253 (2000); Hartzell Fan, Inc. v. Waco, Inc., 256 Va. 294, 303, 505 S.E.2d 196, 202 (1998). Therefore, based on our holdings in this appeal, we will affirm the circuit court's dismissal of Almy's conspiracy claim with regard to all defendants. We also will affirm the circuit court's dismissal with prejudice the claims of intentional infliction of emotional distress with regard to David Liebman and Cina L. Wong. We will reverse the circuit court's dismissal of the claim of intentional infliction of emotional distress with regard to John Grisham, Jr., Alan Swanson, and Donna Swanson, and remand the case to the circuit court for a trial on the merits of the remaining claims. Sensenbrenner v. Rust, Orling & Neale 236 Va. 419, 374 S.E.2d 55 (1988) Russell, J., delivered the opinion of the court. Pursuant to Rule 5:42, the United States Court of Appeals for the Fourth Circuit, on March 2, 1988, certified to this Court two questions of Virginia law, which we accepted by order entered May 5, 1988. The certified questions were stated as follows: 4. Does Virginia law permit recovery by a home purchaser against the pool installer and the architect for damages to the indoor swimming pool and to the foundation of the house caused by a leaking pool, where the pool installer and the architect were not in privity of contract with the home purchaser, on the basis that the damages were injuries to property and not economic losses? 5. Whether, if the indoor swimming pool and its separate room enclosure were built against the house but outside its foundation, would that fact in any way affect the result? The facts are stated as set forth in the complaint filed in the federal court and in the certificate. On October 3, 1984, F. James Sensenbrenner, Jr., and Cheryl Warren Sensenbrenner (the plaintiffs) entered into a contract with O'Hara and Company, Inc. (O'Hara) under which O'Hara would construct a new home for the plaintiffs on a lot in the city of Alexandria. The home was to include an enclosed swimming pool. 232 Rust, Orling & Neale, Architects, Inc. (the architect) was to design the home, including the pool and its enclosure. The plaintiffs contracted only with O'Hara, who in turn contracted with the architect. After the architect had furnished the requisite plans, O'Hara subcontracted the construction of the pool to KDI Sylvan Pools, Inc. (the pool contractor). The work was completed in the summer of 1985 and O'Hara conveyed the property to the plaintiffs at a closing held on August 15, 1985. Plaintiffs allege that due to negligent design and supervision by the architect and negligent construction work by the pool contractor, the pool, which was built on fill rather than on natural soils, settled, causing water pipes to break; that water effusing from the broken pipes has eroded the soil under the pool and under a part of the foundation of the house next to the pool; and that the bottom of the pool and a part of the foundation of the house have cracked as a result of the erosion. The plaintiffs filed separate civil actions against the architect and the pool contractor in the United States District Court for the Eastern District of Virginia, based entirely upon theories of negligence. Both defendants moved to dismiss under Fed. R. Civ. P. 12(b)(6) on the ground that the complaints had failed to state claims upon which relief could be granted. The defendants took the position that the plaintiffs claimed damages only for economic loss, for which there could be no recovery in tort in the absence of privity. The plaintiffs took the position that their claims were for property damage and, that under Virginia law, the defense of lack of privity had been abolished by Code § 8.01-223. The district court, relying on Bryant Elec. Co., Inc. v. City of Fredericksburg, 762 F.2d 1192 (4th Cir. 1985),16 agreed with the defendants and dismissed both complaints. The plaintiffs appealed and this certification followed. In Blake Construction Co. v. Alley, 233 Va. 31, 353 S.E.2d 724 (1987), we considered the economic loss rule in the context of a construction project. There, the Commonwealth, as owner, entered into one contract with a builder and another contract with an architect, both relating to the construction of an office building. The builder sued the architect for professional negligence resulting in economic losses to the builder. Although there was no privity between the builder and architect, the builder relied on Code § 8.01-223,17 which abolishes the lack-of-privity defense in

16 The district court's final order, denying reconsideration, was entered October 24, 1986, prior to our decision in Blake Construction Co. v. Alley, 233 Va. 31, 353 S.E.2d 724 (1987). 17 Code § 8.01-223 provides: In cases not provided for in § 8.2-318 where recovery of damages for injury to person, including death, or to property resulting from negligence is sought, lack of privity between the parties shall be no defense. Code § 8.2-318 provides: Lack of privity between plaintiff and defendant shall be no defense in any action brought against the manufacturer or seller of goods to recover damages for breach of warranty, express or 233 actions for the recovery of damages to persons or property resulting from negligence. We held that Code 8.01-223, being in derogation of the common-law requirement of privity in negligence actions, was to be strictly construed according to its terms. Because its language restricted its effect to cases involving injuries to persons or property, we held that it had no application to claims for purely economic losses. Thus, the builder's lack of privity with the architect was fatal to the builder's claim. Id. at 34, 353 S.E.2d at 727. Here, the plaintiffs contend that Blake is inapposite because they are claiming damages for injury to property, not purely economic losses. They argue that they are not seeking to recover for the loss of use and enjoyment of the pool or diminution in its value. Rather, they say, they seek to recover for the cost of repairing the damage done to their home caused by the pool "as well as the cost of placing the pool in a condition where it will cause no further damage to their home." The architect and the pool contractor contend that the plaintiffs seek to recover purely economic losses, notwithstanding the language they employ. The resolution of the dispute depends entirely upon the classification in which the plaintiffs' claim properly belongs. Many courts have been confronted with the problem of determining when a claim for damages crosses the line dividing purely economic losses from injuries to persons or property. Most jurisdictions equate economic losses, for which no action in tort will lie, with disappointed economic expectations. See, e.g., Redarowicz v. Ohlendorf, 92 Ill. 2d 171, 441 N.E.2d 324 (1982). This is clearly the prevailing rule where damage is claimed because goods purchased fail to meet some standard of quality. See Moorman Mfg. Co. v. National Tank Co., 91 Ill. 2d 69, 435 N.E.2d 443 (1982).18 In East River S.S. Corp. v. Transamerica Delaval, 476 U.S. 858 (1986), a unanimous Supreme Court, applying product-liability concepts in an admiralty case, held that when a product "injures itself" because one of its component parts is defective, a purely economic loss results to the owner for which no action in tort will lie. The Court rejected a rule adopted in some jurisdictions which would permit tort recovery where the defective product fails as a result of a sudden, calamitous event. Cf. Cloud v. Kit Mfg. Co., 563 P.2d 248 (Alaska 1977); East River, 476 U.S. at 870. In East River, the Supreme Court observed that if, in product-liability cases, no-privity concepts were "allowed to progress too far, contract law would drown in a sea of tort." 476 U.S. at 866. To similar effect, we observed in Kamlar Corp. v.

implied, or for negligence, although the plaintiff did not purchase the goods from the defendant, if the plaintiff was a person whom the manufacturer or seller might reasonably have expected to use, consume, or be affected by the goods . . . . 18 Moorman defined economic loss as: "damages for inadequate value, costs of repair and replacement of the defective product, or consequent loss of profits -- without any claim of personal injury or damage to other property . . . as well as the diminution in the value of the product because it is inferior in quality and does not work for the general purposes for which it was manufactured and sold." 91 Ill.2d at 82, 435 N.E.2d at 449 (citations omitted). 234 Haley, 224 Va. 699, 706, 299 S.E.2d 514, 517 (1983), that the limitations which apply to contract damages "have led to the 'more or less inevitable efforts of lawyers to turn every breach of contract into a tort'" (quoting W. Prosser, Handbook of the Law of Torts 92 at 614 (4th Ed. 1971)). Most jurisdictions have resisted such efforts by following the economic loss rule, limiting tort recovery against parties not in privity with the purchaser of a product to cases in which negligent manufacture or design has resulted in a product which constitutes a danger to the safety of persons or property other than the product itself. See Moorman, 91 Ill.2d at 77, 435 N.E.2d at 446.19 Although sales of real estate are not controlled by product-liability concepts in other respects, the rule limiting recovery for economic losses to the law of contracts does apply to sales of real property alleged to be qualitatively defective. See, e.g., Nastri v. Wood Bros. Homes, Inc., 142 Ariz. 439, 445, 690 P.2d 158, 163-64 (1984); Redarowicz, supra; Crowder v. Vandendeale, 564 S.W.2d 879, 882 (Mo. 1978), overruled on other grounds, Sharp Bros. v. American Hoist & Derrick Co., 703 S.W.2d 901 (Mo. 1986) (quoted with approval in Blake, 233 Va. at 34-35, 353 S.E.2d at 726). The law of torts is well equipped to offer redress for losses suffered by reason of a "breach of some duty imposed by law to protect the broad interests of social policy." Kamlar, 224 Va. at 706, 299 S.E.2d at 517. Tort law is not designed, however, to compensate parties for losses suffered as a result of a breach of duties assumed only by agreement. That type of compensation necessitates an analysis of the damages which were within the contemplation of the parties when framing their agreement. It remains the particular province of the law of contracts. See Id. The controlling policy consideration underlying tort law is the safety of persons and property -- the protection of persons and property from losses resulting from injury. The controlling policy consideration underlying the law of contracts is the protection of expectations bargained for. If that distinction is kept in mind, the damages claimed in a particular case may more readily be classified between claims for injuries to persons or property on one hand and economic losses on the other. The plaintiffs here allege nothing more than disappointed economic expectations. They contracted with a builder for the purchase of a package. The package included land, design services, and construction of a dwelling. The package also included a foundation for the dwelling, a pool, and a pool enclosure. The package is alleged to have been defective -- one or more of its component parts was sufficiently substandard as to cause damage to other parts. The effect of the failure of the substandard parts to meet the bargained-for level of quality was to cause a

19 Cf. Seely v. White Motor Co., 63 Cal.2d 9, 45 Cal. Rptr. 17, 403 P.2d 145 (1965). Chief Justice Traynor's opinion in Seely, and cases which follow it, are inapposite here insofar as they refer to strict liability. Virginia law has not adopted § 402A of the Restatement (Second) of Torts and does not permit tort recovery on a strict-liability theory in products-liability cases. 235 diminution in the value of the whole, measured by the cost of repair. This is a purely economic loss, for which the law of contracts provides the sole remedy. Recovery in tort is available only when there is a breach of a duty "to take care for the safety of the person or property of another." Blake, 233 Va. at 34, 353 S.E.2d at 726 (citations omitted) (emphasis added). The architect and the pool contractor assumed no such duty to the plaintiffs by contract, and the plaintiffs' complaint alleges no facts showing a breach of any such duty imposed by law. Accordingly, the first certified question is answered in the negative. The second certified question asks, in effect, whether the result would differ if the swimming pool were located elsewhere on the plaintiffs' lot. Under the analysis we adopt, a change of location would make no difference. Accordingly, The first certified question is answered in the negative. The second certified question is answered in the negative.

Bowman v. Bank of Keysville 229 Va. 534, 331 S.E.2d 797 (1985) Compton, J., delivered the opinion of the court. Virginia adheres to the common-law rule that when a contract calls for the rendition of services, but the period of its intended duration cannot be determined by a fair inference from its provisions, either party is ordinarily at liberty to terminate the contract at will upon giving reasonable notice of intention to terminate. Stonega Coal and Coke Co. v. Louisville and Nashville R. R. Co., 106 Va. 223, 226, 55 S.E. 551, 552 (1906). This appeal presents a unique situation under the foregoing employment-at-will doctrine. We have consolidated for review two damage suits brought by separate employees of a state bank who were also stockholders of the bank corporation. We awarded the plaintiffs appeals from orders entered in February 1982, in which the trial court sustained defendants' demurrers to virtually identical motions for judgment. A demurrer admits the truth of all material facts that are properly pleaded. Under this rule, the facts admitted are: "(1) facts expressly alleged, (2) facts which are by fair intendment impliedly alleged, and (3) facts which may be fairly and justly inferred from the facts alleged." Ames v. American National Bank, 163 Va. 1, 37, 176 S.E. 204, 215 (1934) (footnote omitted). We shall recite the facts in accordance with those principles. Plaintiffs Betty P. Bowman and Joyce T. Bridges sued the State Bank of Keysville as well as Reginald H. Pettus, William C. Ward, S.H. Brookes, John F. Lyle, Thomas S. McKenzie, Jr., Daniel G. Van Clief, and Ralph J. Davis, individually. Plaintiff Bowman had been employed by the Bank in various positions for eight years until her termination on July 13, 1979. At that time, she was a 236 bookkeeper for the Bank. Plaintiff Bridges was terminated on the same day and had been in the Bank's employ for 18 years. She was head bookkeeper for the Bank when terminated. At all times pertinent to this controversy, plaintiff Bowman and plaintiff Bridges owned five and six shares, respectively, of the Bank's common stock. The individual defendants, except defendant Davis, were members of the Bank's nine-person Board of Directors at times pertinent to this litigation. Pettus was chairman of the Board as well as the Bank's attorney. Ward was president of the Bank. Davis was a vice president of NB Corporation. Prior to February 8, 1979, the Bank's management commenced negotiations with officials of NB which culminated in the execution of an agreement providing for merger of the Bank into a subsidiary of NB and of each share of common stock of the Bank into 25 shares of common stock of NB. A special meeting of shareholders was scheduled for June 26, 1979. The Board had a proxy statement prepared and mailed to each stockholder of record. The plaintiffs alleged that the proxy statement was false and misleading, in violation of federal securities laws and laws of the Commonwealth. The plaintiffs also alleged that the Bank, through its Board and management, solicited proxies in a manner that violated state and federal securities laws. The plaintiffs assert that defendant Davis participated in the foregoing illegal activity. The defendants knew there was opposition to the merger and that the vote of stockholders on the merger would be extremely close. Several days before the special meeting, plaintiff Bowman was informed by Ward, in the presence of Davis, that Davis and the members of the Board were aware of her opposition to the merger. Bowman was told that if her shares were not voted in favor of the merger and the merger was not consummated her employment with the Bank would be terminated. She was also advised at the time that if the merger was approved, but her shares were not voted in favor of the merger, her vote against the merger would have "a definite adverse effect on her job." Shortly before the date of the special meeting, plaintiff Bridges was given essentially the same information by Ward, in the presence of Davis, that was conveyed to Bowman. Bridges was told that if she refused to vote for the merger she would not continue to be employed by the Bank, if the merger failed, or by the resultant entity, if the merger were consummated. The plaintiffs executed their proxy cards in favor of the merger against their will, under duress, and out of fear of losing their jobs. At the special meeting, 2008 shares of the Bank's common stock, including the plaintiffs' 11 shares, were voted in favor of the merger proposal. This was eight votes more than the number necessary to constitute the required two-thirds majority for approval of the plan. Two days after the special meeting, the plaintiffs wrote a joint letter to the Bank president. They stated that their proxies were invalid, illegally obtained, 237 "improper and null and void." Accordingly, they wrote, only 1997 votes were cast in favor of the merger, less than the votes necessary for approval. On July 6, 1979, the Bank Board voted to abandon the merger. The merger was aborted, according to the plaintiffs' allegations, because the defendants feared that the illegal activities involved in obtaining the proxies of stockholders, including the plaintiffs, would be discovered. Six days later, the Board, by a five to four vote, decided to discharge the plaintiffs from their employment with the Bank. Directors Pettus, Brookes, Lyle, McKenzie, and Van Clief voted for termination while Ward voted against discharge. On July 13, plaintiff Bowman was summoned to Ward's office. Pettus informed her of the Board's action and notified her that her employment was terminated. On the same day, Pettus called plaintiff Bridges by telephone, gave her the same information, and terminated her employment. These suits were filed five months later. In their respective motions for judgment, the plaintiffs seek compensatory and punitive damages. In one count, the plaintiffs seek recovery against the Bank and the named directors for improper discharge from employment. In another count, the plaintiffs seek damages against the named Board members and defendant Davis for tortious interference with contractual relations. On appeal, defendants assert that the trial court properly sustained the demurrers. The Bank and defendant directors, relying on the employment-at-will doctrine, assert that a contract of employment for an indefinite period is terminable at any time, after reasonable notice, by either party for any reason or no reason at all. These defendants contend that there is nothing in the contracts of employment from which an inference can be drawn that the plaintiffs were employed for a definite period of time. According to the argument, the employees agreed to furnish services as bookkeepers for a certain sum of money, not for a definite time, and the employer agreed to pay for the performance of the services, but not for a definite time. In addition, these defendants say that if any change is to be made in the common-law doctrine of employment at will to cover the facts of these cases, the change should be made by the General Assembly and not this Court. They point to exceptions to the doctrine already provided by the legislature for employees who are physically handicapped, Code Sec. 40.1-28.7, employees who file safety or health complaints, Code Sec. 40.1-51.2:1, and employees who exercise rights under the Workers' Compensation Act, Code Sec. 65.1-40.1. The plaintiffs, contending the trial court erred in sustaining the demurrers, say they recognize the force and validity of the employment-at-will doctrine in Virginia. Accordingly, they assert, they did not seek reinstatement in their positions with the Bank. Nevertheless, they argue, the employment-at-will rule has exceptions which temper its harsh application, and they urge the Court to invoke one of those exceptions in these suits for damages. 238 The plaintiffs note that it is not contested, for purposes of this proceeding, that they were performing their jobs in a satisfactory and capable manner. They point out that the reasons for their discharges had nothing to do with their job performance or their status as employees. The plaintiffs note their discharges were premised solely upon the proper exercise of their protected rights as shareholders. Thus, the plaintiffs assert, the question for decision is not whether the employment-at-will doctrine as it exists in Virginia should be altered, but whether this employer can, with absolute immunity, discharge these employees in retaliation for the proper exercise of rights as stockholders, a reason which has nothing to do with the employees' job performances. In sum, the plaintiffs assert that the Bank and the named Board members, by actions which violated securities and corporation laws, sought to influence the exercise of protected shareholder rights by bringing pressure to bear on the vulnerable employee relationship, and that the employment-at-will rule does not protect the defendants from such conduct. We agree. Virginia has not deviated from the common-law doctrine of employment-at-will set forth in the Stonega Coal case, supra. See, e.g., Wards Co. v. Lewis & Dobrow, Inc., 210 Va. 751, 756, 173 S.E.2d 861, 865 (1970); Plaskitt v. Black Diamond Trailer Co., 209 Va. 460, 164 S.E.2d 645 (1968); Title Ins. Co. v. Howell, 158 Va. 713, 718, 164 S.E. 387, 389 (1932).20 And we do not alter the traditional rule today. Nonetheless, the rule is not absolute. The unique facts of these cases require us to apply one of the recognized exceptions to the rule of terminability. The courts of at least 20 states have granted exceptions to the strict application of the doctrine in favor of at-will employees who claim to have been discharged in violation of an established public policy. See, e.g., Sheets v. Teddy's Frosted Foods, Inc., 179 Conn. 471, 427 A.2d 385 (1980) (at-will employee fired in retaliation for his insistence that his employer comply with state laws relating to food labeling); Nees v. Hocks, 272 Or. 210, 536 P.2d 512 (1979) (employee fired for refusing employer's request to ask for excuse from jury duty); Sabine Pilot Service, Inc. v. Hauck, 687 S.W.2d 733 (Tex.1985) (employee discharged for refusal to perform an illegal act); Harless v. First National Bank in Fairmont, 162 W.Va. 116, 246 S.E.2d

20 The development and modern status of the employment-at-will doctrine is discussed in: Murg & Scharman, Employment At Will, 23 B.C.L.Rev. 329 (1982); Note, Public Policy Limitations on the Retaliatory Discharge of At Will Employees in the Private Sector, 14 U.C.D.L.Rev. 811 (1981); Comment, Guidelines for a Public Policy Exception to the Employment At Will Rule: The Wrongful Discharge Tort, 13 Conn.L.Rev. 617 (1981); Annot., Modern Status of Rule That Employer May Discharge At-Will Employee for Any Reason, 12 A.L.R.4th 544 (1982); Annot., Liability for Discharging At-Will Employee for Refusing to Participate in, or for Disclosing, Unlawful or Unethical Acts of Employer or Coemployees, 9 A.L.R.4th 329 (1981); Annot., Right of Corporation to Discharge Employee Who Asserts Rights as Stockholder, 84 A.L.R.3d 1107 (1978); Special Report (BNA), The Employment-At-Will Issue (1982).

239 270 (1978) (bank employee discharged in retaliation for his efforts to require employer to comply with state and federal consumer credit protection laws). In the present cases, the retaliatory discharges were based on violations of public policy by the defendants. Code Sec. 13.1-32 conferred on these plaintiffs as stockholders the right to one vote, for each outstanding share of stock held, on each corporate matter submitted to a vote at a meeting of stockholders. This statutory provision contemplates that the right to vote shall be exercised free of duress and intimidation imposed on individual stockholders by corporate management. In order for the goal of the statute to be realized and the public policy fulfilled, the shareholder must be able to exercise this right without fear of reprisal from corporate management which happens also to be the employer. Because the right conferred by statute is in furtherance of established public policy, the employer may not lawfully use the threat of discharge of an at-will employee as a device to control the otherwise unfettered discretion of a shareholder to vote freely his or her stock in the corporation. Consequently, applying a narrow exception to the employment-at-will rule, we hold that the plaintiffs have stated a cause of action in tort against the Bank and the named directors for improper discharge from employment. In the second count of their motions for judgment, the plaintiffs alleged that the defendants, other than the Bank, engaged in conduct which "constituted a conspiracy to interfere with the Plaintiff's contractual relations with the Bank," and that such interference constituted a proximate cause of their discharges and alleged damages. On brief, the plaintiffs specifically assert tortious interference with their respective employment contracts, as opposed to interference with any of their contractual rights as shareholders. We conclude the trial court correctly sustained the demurrers to these claims. In Virginia, an action in tort lies against those who conspire to induce the breach of a contract. Worrie v. Boze, 198 Va. 533, 540, 95 S.E.2d 192, 198 (1956). The plaintiff must establish that there was a conspiracy to procure the breach of contract and that pursuant to such conspiracy the contract was breached. Id. at 541-42, 95 S.E.2d at 199. Of course, there must be two persons to comprise a conspiracy, and a corporation, like an individual, cannot conspire with itself. Nelson Radio & Supply Co. v. Motorola, 200 F.2d 911, 914 (5th Cir.1952); Griffith v. Electrolux Corp., 454 F.Supp. 29, 32 (E.D.Va.1978). See Cote v. Burroughs Wellcome Co., 558 F.Supp. 883, 889 (E.D. Pa. 1982) (applying Virginia law). Thus, a third party is necessary to create an actionable conspiracy to induce a breach of contract. The plaintiffs claim that Davis was the third party here. Articulating on brief the basis of their conspiracy claims, the plaintiffs say that they "alleged in their Motions for Judgment that the actions of the Officials and of Davis in instructing them how to vote their shares and in discharging or sanctioning their discharge from employment constituted a tortious interference with their contractual relations with the bank." This, of course, is a contention that the conspiring parties were (1) the 240 "Officials" as a group, acting for the corporation and not acting individually, and (2) Davis. Further on brief, the plaintiffs argue that "the actions of the Officials and of Davis in inducing the bank to discharge the Employees were illegal and tortious," and that they sufficiently alleged a conspiracy to procure the breach of their employment contracts. We disagree. The plaintiffs' motions for judgment are devoid of any factual allegations to support the idea that Davis induced the group of directors, "the Officials," to terminate the plaintiffs' employment. The conspiracy theory is asserted in mere conclusory language and the argument in support of the theory is based on inferences that are not fairly and justly drawn from the facts alleged. The plaintiffs assert that Davis and Ward threatened the plaintiffs several days before the June 26 special meeting. The plaintiffs also allege that Davis was present at the July 12 directors meeting when the decision was made to fire plaintiffs. Yet, Ward voted against discharging the plaintiffs and there is no allegation that Davis met or talked with any of the five directors who voted to terminate the plaintiffs. In sum, the allegations are insufficient to conclude that Davis was the third party necessary to form a conspiracy with the group of directors, the "Officials," or that any such conspiracy resulted in the breach of the plaintiffs' employment contracts with the Bank. Accordingly, the decision of the trial court will be affirmed, in part, and reversed, in part. The cases will be remanded for further proceedings against the Bank and the named bank directors on the first count of the motions for judgment. Final judgment will be entered here in favor of Davis in each case. Affirmed, in part, reversed, in part, and remanded.

Doss v. JAMCO, Inc. 254 Va. 362, 492 S.E.2d 441 (1997) Carrico, J., delivered the opinion of the Court. By a "Stipulated Order of Certification" entered April 9, 1997, the United States District Court for the Western District of Virginia (Lynchburg Division) certified to this Court, pursuant to our Rule 42, the following question of law: Does Va. Code § 2.1-725(D) prohibit a common law cause of action based upon the public policies reflected in the Virginia Human Rights Act, Va. Code § 2.1-714 et seq.? By order dated April 28, 1997, we accepted the certified question of law. The question arose when, on December 23, 1996, Laura L. Doss (Doss) filed in the District Court a two-count complaint alleging that her former employer, Jamco, Inc. (Jamco), had unlawfully terminated her employment "because of her sex and because she was pregnant." In Count 1, which is not involved in this proceeding, Doss sought to recover damages for Jamco's alleged violation of Title VII of the Civil Rights Act of 1964 (42 U.S.C. § 2000e et seq.). In Count 2, which is implicated here, Doss sought to recover damages for Jamco's alleged violation of "the statutorily 241 expressed public policy of the Commonwealth of Virginia as embodied in the Virginia Human Rights Act (Va. Code § 2.1-714 et seq.) and as expressed in Title VII of the Civil Rights Act of 1964 (42 U.S.C. § 2000e et seq.) and elsewhere." The relevant facts are recited in the stipulated order of certification, as follows: [Doss] was hired by [Jamco] and agreed to begin work on March 11, 1996. . . . [P]rior to reporting to work for [Jamco] on March 11, 1996, [Doss] learned that she was pregnant. Upon reporting for work, [Doss] told [Jamco's] employees who were to be her supervisors about her pregnancy. . . . [O]n March 12, 1996, [Jamco's] supervisors informed [Doss] that her employment was being terminated because her maternity leave would cause her to be out during the Company's busy time which was unacceptable to [Jamco]. We note that Doss grounds her claim for unlawful discharge upon the public policy of Virginia as embodied in the Virginia Human Rights Act and "as expressed in Title VII of the Civil Rights Act of 1964 (42 U.S.C. § 2000e et seq.) and elsewhere." However, in answering the certified question, we are limited by the terms of the certification order to "the public policies reflected in the Virginia Human Rights Act." Therefore, we express no opinion concerning the public policy of Virginia as it might be articulated in sources other than the Virginia Human Rights Act. Ever since this Court decided Stonega Coal and Coke Co. v. Louisville and Nashville R.R., 106 Va. 223, 55 S.E. 551 (1906), Virginia has adhered to the rule that when an employment contract provides for the rendition of services but its intended duration cannot be determined from its provisions, "either party is ordinarily at liberty to terminate it at will on giving reasonable notice of his intention to do so." Id. at 226, 55 S.E. at 552. However, the rule is not absolute. Bowman v. State Bank of Keysville, 229 Va. 534, 539, 331 S.E.2d 797, 801 (1985). In Bowman, which predated the adoption of the Virginia Human Rights Act, we recognized a limited exception to the employment-at-will rule. This exception allowed two bank employees who were also stockholders of the bank corporation to maintain a common law action in tort against their employer. The employees were discharged after failing to heed a threat from the employer that their employment would be terminated if they failed to vote their stock according to the wishes of corporate management. Such action by the employer, we said, violated the public policy established by Va. Code § 13.1-32 (now Va. Code § 13.1-662), which contemplated "that the right to vote [shares of stock] shall be exercised free of duress and intimidation imposed on individual stockholders by corporate management." Id. at 540, 331 S.E.2d at 801. Bowman was followed by Miller v. SEVAMP, Inc., 234 Va. 462, 362 S.E.2d 915 (1987), where the events giving rise to the litigation predated the adoption of the Virginia Human Rights Act. There, the employee alleged that her termination was in retaliation of her appearance as a witness at a co-employee's grievance hearing. The 242 trial court sustained a demurrer to the employee's motion for judgment, and we affirmed. We noted the exception recognized in Bowman that allows recovery for "discharges which violate public policy, that is, the policy underlying existing laws designed to protect the property rights, personal freedoms, health, safety, or welfare of the people in general." Id. at 468, 362 S.E.2d at 918. We held, however, that the Bowman exception was not applicable because the "retaliatory act [of discharging the employee] would impinge only upon private rights established by the employer's internal regulations [and] would have no impact upon any public policy established by existing laws for the protection of the public generally." Id., 362 S.E.2d at 919. At its 1987 session, the General Assembly adopted the Virginia Human Rights Act (the Act). 1987 Va. Acts ch. 581 (Chapter 43 of Title 2.1 of the Code of Virginia, § 2.1-714 through -725). In 1996, when Doss's termination occurred, Va. Code § 2.1-715 provided that "[i]t is the policy of the Commonwealth of Virginia . . . [t]o safeguard all individuals within the Commonwealth from unlawful discrimination because of race, color, religion, national origin, sex, age, marital status or disability . . . in employment . . . ."21 Following adoption of the Act, this Court considered the case of Lockhart v. Commonwealth Educ. Sys. Corp., 247 Va. 98, 439 S.E.2d 328 (1994).22 Lockhart involved the claims of two female at-will employees who alleged they were wrongfully discharged from employment, one because of her race and the other because of her sex. The claims of both employees were dismissed on demurrer, and this Court reversed. After citing Va. Code § 2.1-715 as declarative of the "Commonwealth's strong public policy against employment discrimination based upon race or gender," 247 Va. at 105, 439 S.E.2d at 331, the Court stated as follows: We recognize that the Virginia Human Rights Act does not create any new causes of action. Code § 2.1-725. Here, we do not rely upon the Virginia Human Rights Act to create new causes of action. Rather, we rely solely on the narrow exception that we recognized in 1985 in Bowman, decided two years before the enactment of the Virginia Human Rights Act. Id. Accordingly, the Court held that the two employees had "pled viable causes of action." Id. at 104, 439 S.E.2d at 331.23

21 At its 1997 session, the General Assembly amended Va. Code § 2.1-715 by adding "pregnancy, childbirth or related medical conditions" to the list of unlawful bases for discrimination in employment. 22 Wright v. Donnelly & Co., Record No. 930205, was decided at the same time as Lockhart and by the same opinion. 23 Subsequent to Lockhart, this Court applied the original version of the Virginia Human Rights Act in deciding Bailey v. Scott-Gallaher, Inc., 253 Va. 121, 480 S.E.2d 502 (1997) (maintenance of common law action in tort allowed for wrongful discharge based upon gender), and Bradick v. Grumman Data Sys. Corp., 254 Va. 156, 486 S.E.2d 545 (1997) (maintenance of common law action in tort allowed for wrongful discharge based upon disability). We decided another wrongful discharge case post-Lockhart, but disallowed a common law recovery because the 243 Lockhart was decided in 1994. At the 1995 session of the General Assembly, a bill was introduced that would have had the effect of overruling Lockhart. (S. 1025.) Two versions submitted as amendments in the nature of substitutes expressly stated their purpose was the "nullification" of Lockhart. (S. 1025, Committee Amendment in the Nature of a Substitute; S. 1025, Floor Amendment in the Nature of a Substitute.) However, in its enacted form, the legislation did not employ the "nullification" language, but amended Va. Code § 2.1-725 in several respects. As originally enacted, Va. Code § 2.1-725 provided as follows: Nothing in this chapter creates, nor shall it be construed to create, an independent or private cause of action to enforce its provisions. Nor shall the policies or provisions of this chapter be construed to allow tort actions to be instituted instead of or in addition to the current statutory actions for unlawful discrimination. The 1995 amendments deleted the second sentence of Va. Code § 2.1-275, made the first sentence subsection A, and changed its language. The subsection reads as follows: "Nothing in this chapter creates, nor shall it be construed to create, an independent or private cause of action to enforce its provisions, except as specifically provided in subsections B and C of this section." Subsections B and C are new. They create a statutory cause of action against an employer of more than five but less than fifteen persons. Subsection B provides that no such employer shall discharge an employee "on the basis of race, color, religion, national origin or sex, or of age if the employee is forty years or older."24 Subsection C provides that "[t]he employee may bring an action in a general district or circuit court having jurisdiction over the employer who allegedly discharged the employee in violation of this section." A court may award up to twelve months back pay, with interest, and the award may be increased or decreased if either party engages in tactics to delay resolution of the complaint. A court may also award attorney's fees from the amount recovered, not to exceed twenty-five percent of the back pay awarded, but the court shall not award other damages, compensatory or punitive, nor shall it order reinstatement of the employee. Subsection D, upon which the certified question focuses, is also new. It provides in pertinent part as follows:

employee was unable to identify any Virginia statute establishing a public policy that was violated by the employer. Lawrence Chrysler Plymouth Corp. v. Brooks, 251 Va. 94, 465 S.E.2d 806 (1996). 24 The stipulated order of certification notes that, because Jamco employs more than fifteen persons, it is not subject to a claim under Va. Code § 2.1-725(B) and (C). At its 1997 session, the General Assembly added "pregnancy, childbirth or related medical conditions" to the prohibited bases for discharge listed in Va. Code § 2.1-725(B). 244 Causes of action based upon the public policies reflected in this chapter shall be exclusively limited to those actions, procedures and remedies, if any, afforded by applicable federal or state civil rights statutes or local ordinances. Doss maintains, in effect, that nothing has changed. She says that Lockhart remains the controlling law and that all the General Assembly accomplished with its 1995 amendments to the Act is the creation of a statutory cause of action against employers of more than five but less than fifteen persons. Doss points out that the cause of action recognized in Bowman and Lockhart "is a tort action arising solely under common law." She says that although the General Assembly may abrogate or alter the common law, its intent to do so must be plainly manifested, Peoples Sec. Life Ins. Co. v. Arrington, 243 Va. 89, 92, 412 S.E.2d 705, 707 (1992), and she insists that the 1995 amendments to the Act do not manifest an intent to alter the common law as articulated in Lockhart. Doss maintains that despite the language in the original version of Va. Code § 2.1-725 disavowing the creation of an independent or private cause of action, this Court had no trouble finding in Lockhart that the Act did not prohibit a Bowman-type action in tort for the unlawful termination of employment. And Doss says that nothing in new subsection D supports such a prohibition. Indeed, she opines, with the 1995 deletion of the language in the second sentence of Va. Code § 2.1-725 abjuring tort actions, "any alleged prohibition against Lockhart-type tort claims [is made] even less clear." Furthermore, Doss submits, if a statute is ambiguous, the court may resort to legislative history and the enactment process to ascertain legislative intent. Doss says that the language in the Act is ambiguous and that we should examine the enactment process involving the 1995 amendments to ascertain their meaning. Doss says such an examination would reveal that while the original 1995 bill and its subsequent substitute amendments all contained clear declarations of intent to nullify Lockhart, these declarations were not retained in the final enacted version of the bill. Hence, the fair inference to be drawn, Doss concludes, is that the General Assembly did not intend to nullify Lockhart. The issue, then, is whether, in the enactment of the 1995 amendments, the General Assembly plainly manifested an intent to abrogate or alter the common law with respect to causes of action for unlawful termination of employment. Settled principles guide our resolution of this issue. When the legislature has spoken plainly it is not the function of courts to change or amend its enactments under the guise of construing them. The province of construction lies wholly within the domain of ambiguity, and that which is plain needs no interpretation. Winston v. City of Richmond, 196 Va. 403, 407-08, 83 S.E.2d 728, 731 (1954). In the absence of ambiguity, a court may look only to the words of the statute to determine its meaning, and when the meaning is plain, resort to rules of 245 construction, legislative history, and extrinsic evidence is impermissible. Harrison & Bates, Inc. v. Featherstone Assoc., 253 Va. 364, 368, 484 S.E.2d 883, 885 (1997); Va. Dept. of Labor v. Westmoreland Coal Co., 233 Va. 97, 99, 353 S.E.2d 758, 760 (1987); Brown v. Lukhard, 229 Va. 316, 321, 330 S.E.2d 84, 87 (1985). We disagree with Doss that the Act as amended in 1995 is ambiguous. What we said of the statute involved in Harrison & Bates applies with equal force to the enactment involved here: Nothing in the language of this statute is inherently difficult to comprehend, of doubtful import, or lacking in clarity and definiteness. Accordingly, it is not necessary to look beyond the plain language of the statute to ascertain its underlying legislative intent. 253 Va. at 369, 484 S.E.2d at 886. In our opinion, in amending the Act by adding subsection D to Va. Code § 2.1-725 in 1995, the General Assembly plainly manifested its intention to alter the common law rule with respect to "[c]auses of action based upon the public policies reflected in [the Act]." (Emphasis added.) And, just as plainly, the General Assembly altered the common law rule by providing that such causes of action "shall be exclusively limited to those actions, procedures and remedies, if any, afforded by applicable federal or state civil rights statutes or local ordinances." (Emphasis added.) This is what the Act as amended says, and this is the meaning that must be given to the Act to carry out the clear intent of the General Assembly. To say, as Doss would have us say, that the 1995 amendments changed nothing would render meaningless the General Assembly's use of the words "exclusively limited" and reduce to an absurdity its creation of a statutory cause of action against employers of more than five but less than fifteen persons. The rules of statutory interpretation argue against reading any legislative enactment in a manner that will make a portion of it useless, repetitious, or absurd. On the contrary, it is well established that every act of the legislature should be read so as to give reasonable effect to every word . . . . Jones v. Conwell, 227 Va. 176, 181, 314 S.E.2d 61, 64 (1984). Finally, in her reply brief, Doss cites Va. Code § 2.1-717, a part of the Act, which provides in part as follows: The provisions of this chapter shall be construed liberally for the accomplishment of the policies herein. Nothing contained in this chapter shall be deemed to repeal, supersede or expand upon any of the provisions of any other state or federal law relating to discrimination 246 because of race, color, religion, national origin, sex, age, marital status or disability.25 Doss argues that, in this Code section, the Act creates "its own rule of statutory construction," and, under the rule, the Act "cannot be used as the basis for repealing or superseding the common-law expressed in Bowman and Lockhart." The Act, however, is not the basis for the General Assembly's authority to abrogate or alter the common law. The basis for the General Assembly's authority is found in Va. Code § 1-10, which provides as follows: The common law of England, insofar as it is not repugnant to the principles of the Bill of Rights and Constitution of this Commonwealth, shall continue in full force within the same, and be the rule of decision, except as altered by the General Assembly. (Emphasis added.) To adopt Doss's argument would lead to the conclusion that, in enacting Va. Code §2.1-717, the General Assembly effectively repealed or superseded Va. Code § 1-10 insofar as its authority to alter the common law with respect to a substantial class of cases is concerned, and that would be an unreasonable conclusion to reach. So we reject Doss's argument. Finding that, in enacting the 1995 amendments to Va. Code § 2.1-725, the General Assembly plainly manifested an intent to abrogate the common law with respect to causes of action for unlawful termination of employment based upon the public policies reflected in the Act, we will answer the certified question in the affirmative. Certified question answered in the affirmative.

Mitchem v. Counts 259 Va. 179, 523 S.E.2d 246 (2000) Keenan, J., delivered Opinion in this case. Former employee sued employer for wrongful discharge in violation of public policy as set forth in several criminal statutes. The Circuit Court, Allegheny County, Duncan M. Byrd, Jr., J., dismissed employee's claim, and she appealed. The Supreme Court, Keenan, J., held that: (1) Virginia Human Rights Act (VHRA) did not prohibit a common law cause of action for wrongful termination based on public policies against fornication and lewd and lascivious behavior; (2) allegations that employee was terminated for refusing to violate laws against fornication and lewd and lascivious behavior stated claim for wrongful discharge in violation of public policy; but (3) public policy embodied in criminal assault statute did not support employee's claim for wrongful

25 A 1997 amendment to Va. Code § 2.1-717 added "pregnancy, childbirth or related medical conditions" to the list of unlawful bases for discrimination in employment. 247 discharge based on allegation that she refused to consent to commission of battery upon her person. Affirmed in part, reversed in part, and remanded. Kinser, J., dissented in part and concurred in part in separate opinion, in which Carrico, C.J., and Compton, J., joined. In this appeal, we consider two issues: 1) whether Code § 2.1-725(D) of the Virginia Human Rights Act (VHRA), Code §§ 2.1-714 through -725, bars a common law action for wrongful termination of employment based on a violation of public policy not reflected in the VHRA, when the conduct alleged also violates a public policy reflected in the VHRA; and 2) whether a violation of the public policies embodied in two criminal statutes may support such a common law action. Vicki Lynn Mitchem a motion for judgment against her former employer Durwood L. Counts,26 alleging that he had wrongfully discharged her from her position as an insurance marketing representative after she refused to engage in a sexual relationship with him. Mitchem asserted that Counts repeatedly tried to persuade her to have a "sexual affair" with him and promised in return that she would receive money and "a lot of nice things." In her motion for judgment, Mitchem also asserted that, on many occasions, Counts "massaged her shoulders, patted her buttocks, touched her leg, rubbed her knee, and hugged her against her will." Mitchem further alleged that on another occasion, Counts "pulled Mitchem onto his lap, wrapped both arms around her, and tried to kiss her on the lips." Finally, Mitchem alleged that because she "steadfastly refused to enter into a sexual relationship with Count," he retaliated in several ways and ultimately fired her in May 1998. Relying on these allegations, Mitchem asserted in Count I of her motion for judgment that her discharge violated the Commonwealth's public policy "that all persons ... are entitled to pursue and maintain employment free of discrimination based upon gender." She also claimed, among other things, that the Commonwealth's public policy is violated when a female employee "must either consent to the commission of a crime against her person, or engage in a conspiracy to commit a crime, or both, to maintain her employment." Mitchem cited several sources of public policy in support of her claim, including the VHRA and Code §§ 18.2-57, -344, and -345.27

26 Counts was an insurance agent who, at all times pertinent to this action, employed no more than five persons. 27 In Count II of her motion for judgment, Mitchem asserted a claim of assault and battery against Count, which the trial court dismissed without prejudice on Mitchem’s request for a nonsuit.

248 Counts filed a demurrer to Count I, which the trial court sustained. The court concluded, in essence, that the 1995 amendments to the VHRA eliminated the VHRA as a source of public policy to support a common law cause of action for wrongful termination. The trial court also held that Code §§ 18.2-57, -344, and - 345 do not articulate public policies that will support a common law action for wrongful termination.28 The court entered an order dismissing Count I of Mitchem's action with prejudice, and Mitchem appeals from this judgment. Although Mitchem based her wrongful termination action in part on public policies found in the VHRA and sources of law other than criminal statutes, she withdrew this part of her claim during her oral argument before this Court. She argued that the criminal statutes identified in her motion for judgment embody a public policy against the commission of the stated acts of a sexual nature and, thus, that an employer is subject to a common law wrongful termination claim if he discharges an at-will employee because she refuses to commit those criminal acts. Mitchem contends on appeal that she was not discharged from her employment because of her gender, but because she rejected her employer's demands that she perform sexual acts in violation of Code § 18.2-344, which prohibits fornication, and Code § 18.2-345, which prohibits lewd and lascivious cohabitation. She also asserts that she was discharged because she would not "consent to commission of a battery upon her person," in violation of Code § 18.2- 57.29 In response, Counts (the employer) argues that Code § 2.1-725(D) abrogates Mitchem’s common law cause of action because the allegations of wrongful termination, if proved, would violate the public policies reflected in the VHRA. In support of this argument, the employer notes that the facts in this case are very similar to those alleged by a plaintiff in Lockhart v. Commonwealth Educ. Sys.

28 The trial court also held that Mitchem could not base a claim for wrongful discharge on Title VII of the 1964 Civil Rights Act, the Constitution of the United States, the Declaration of Independence, or the Constitution of Virginia. In addition, the trial court concluded that because Count’s business had fewer than five employees, Mitchem could not seek recovery under the limited statutory remedies provided by Code § 2.1-725(B) and (C) for workers whose employers have more than five but fewer than 15 employees. Mitchem does not contest these rulings in this appeal. 29 All these crimes are classified as misdemeanors. On brief, Mitchem also cited Code § 18.2-346, which prohibits acts of prostitution, and § 18.2-67.4, which prohibits sexual battery. However, since Mitchem did not cite these statutes in her motion for judgment, we will not consider these additional statutes in reviewing the trial court's action sustaining the demurrer to Count I. See Breeding v. Hensley, 258 Va. 207, 212, 519 S.E.2d 369, 371 (1999). 249 Corp., 247 Va. 98, 439 S.E.2d 328 (1994),30 in which we held that an employer's conduct and termination of that plaintiff violated the public policy against gender discrimination stated in the VHRA. The employer also asserts that our decision in Conner v. National Pest Control Ass'n., 257 Va. 286, 513 S.E.2d 398 (1999), requires dismissal of Mitchem's action based on our application in that case of the preclusive language of Code § 2.1-725(D). Finally, the employer contends that criminal statutes will not support Mitchem's common law action because they do not "announce public policies in their texts" and to use the statutes in this manner would eviscerate the employment-at-will doctrine. Although Mitchem has withdrawn her reliance on the VHRA as a source of public policy to support her wrongful termination action, we nevertheless begin our analysis with the VHRA because its limiting provision in Code § 2.1-725(D) is the controlling statute in this appeal. That provision, included in the 1995 amendments to the VHRA, states in relevant part: Causes of action based upon the public policies reflected in this chapter shall be exclusively limited to those actions, procedures and remedies, if any, afforded by applicable federal or state civil rights statutes or local ordinances. Code § 2.1-725(D). Citing Doss v. Jamco, 254 Va. 362, 492 S.E.2d 441 (1997), the trial court held that the 1995 amendments to the VHRA bar Mitchem from asserting a common law action for wrongful termination based on any of the sources of public policy set forth in her motion for judgment. In Doss, we held that "in amending the [VHRA] by adding subsection D to Code § 2.1-725 in 1995, the General Assembly plainly manifested its intention to alter the common law rule with respect to '[c]auses of action based upon the public policies reflected in [the VHRA].' " Id. at 371, 492 S.E.2d at 446. Following Doss, we next addressed the scope of Code § 2.1-725(D) in Conner. There, the plaintiff alleged that she had asserted a valid cause of action for wrongful termination because, in addition to the public policy against gender discrimination in the VHRA, her employer's conduct violated the same public policy embodied in sources other than the VHRA. 257 Va. at 288, 513 S.E.2d at 399. We disagreed, holding that "the General Assembly, in enacting the 1995 amendments to the VHRA, eliminated a common law cause of action for wrongful termination based on any public policy which is reflected in the VHRA, regardless of whether the policy is articulated elsewhere." Id. at 290, 513 S.E.2d at 400. Our holdings in Conner and Doss, however, do not address the issues before us. In those cases, unlike the present case, the plaintiffs did not identify any public policy different from those reflected in the VHRA as the basis for their common law claims. Thus, in those cases, we did not address the central issue in the present appeal, whether Code § 2.1-725(D) bars a common law action for wrongful termination based on public policies not reflected in the VHRA, when

30 This Court's opinion in Lockhart addressed two separate cases. Nancy L. Wright was the plaintiff in one of the cases. She alleged employment discrimination based on gender, while the other plaintiff, Lawanda Lockhart, alleged employment discrimination based on race. 250 the conduct alleged in the motion for judgment also violates a public policy reflected in the VHRA. This issue of first impression is raised by Mitchem's allegations in her motion for judgment that the employer's conduct violated the Commonwealth's public policies against fornication and lewd and lascivious behavior embodied in Code §§ 18.2-344 and -345. Code § 18.2-344 provides that an unmarried person who voluntarily has sexual intercourse with any other person is guilty of fornication. Code § 18.2-345, in relevant part, prohibits persons not married to each other from lewdly and lasciviously associating and cohabiting together. In considering whether Code § 2.1-725(D) defeats Mitchem's reliance on these public policies as a basis for her wrongful termination action, we first observe that the preclusive language of Code § 2.1-725(D) was enacted by the legislature in derogation of the common law. Statutes in derogation of the common law must be strictly construed and not enlarged by construction beyond their express terms. Chesapeake & O. Ry. Co. v. Kinzer, 206 Va. 175, 181, 142 S.E.2d 514, 518 (1965); see Williams v. Matthews, 248 Va. 277, 282-83, 448 S.E.2d 625, 628 (1994); Wackwitz v. Roy, 244 Va. 60, 65, 418 S.E.2d 861, 864 (1992). A statutory change in the common law is limited to that which is expressly stated in the statute or necessarily implied by its language because there is a presumption that no change was intended. Boyd v. Commonwealth, 236 Va. 346, 349, 374 S.E.2d 301, 302 (1988); Strother v. Lynchburg Trust & Savings Bank, 155 Va. 826, 833, 156 S.E. 426, 428 (1931). Thus, "[w]hen an enactment does not encompass the entire subject covered by the common law, it abrogates the common-law rule only to the extent that its terms are directly and irreconcilably opposed to the rule." Boyd, 236 Va. at 349, 374 S.E.2d at 302; Newport News v. Commonwealth, 165 Va. 635, 650, 183 S.E. 514, 520 (1936). We must construe Code § 2.1-725(D) narrowly under these principles because the VHRA does not encompass the entire subject of common law causes of action for wrongful termination of employment. The relevant language of Code § 2.1-725(D) provides that "[c]auses of action based upon the public policies reflected in this chapter shall be exclusively limited to those actions, procedures and remedies, if any, afforded by applicable federal or state civil rights statutes or local ordinances." (Emphasis added.) This provision, by its plain terms, abrogates only common law causes of action for wrongful termination that are based on the public policies reflected in the VHRA. Thus, we conclude that Code § 2.1-725(D) does not prohibit a common law cause of action for wrongful termination based on the public policies against fornication and lewd and lascivious behavior, because those policies are not reflected in the VHRA. We find no merit in the employer's contention that since his alleged conduct also violated the public policy in the VHRA against gender discrimination, he cannot be subject to a wrongful termination action for firing an employee who refused to commit the crimes at issue. First, as shown above, the plain language of Code § 2.1-725(D) does not contain such a prohibition. 251 Second, the same conduct or occurrence can support more than one theory of recovery. Balzer and Assoc. v. The Lakes on 360, 250 Va. 527, 531, 463 S.E.2d 453, 456 (1995); see Code § 8.01-272; Rule 1:4(k); Fox v. Deese, 234 Va. 412, 422-23, 362 S.E.2d 699, 705 (1987). Moreover, when a plaintiff has alleged facts supporting more than one theory of recovery, the pleading of one theory is not rendered insufficient by the insufficiency of the other theory. Balzer, 250 Va. at 531, 463 S.E.2d at 456. Thus, the legal insufficiency of Mitchem's allegations of wrongful termination based on the public policies set forth in the VHRA does not invalidate her claim founded on the public policies embodied in Code §§ 18.2-344 and -345. Third, the employer's argument is untenable because, when extended to its logical conclusion, the argument would permit an employer to discharge any employee who refuses to commit a crime at the employer's direction, as long as the employer's conduct also violates a public policy reflected in the VHRA. The public policy stated in the VHRA "safeguard[s] all individuals within the Commonwealth from unlawful discrimination because of race, color, [and] religion." Code § 2.1-715 (emphasis added). Thus, under the employer's view, an African-American employee could not pursue a common law action for wrongful termination if she were discharged for refusing to burn a cross on the property of another African-American with the intent to intimidate that person. The African- American employee would be a member of the class of persons protected by the VHRA public policy because she would have been fired based on "unlawful discrimination because of race." Id.; see City of Virginia Beach v. Harris, 259 Va. 220, ----, 523 S.E.2d 239, 245 (2000), decided today; Dray v. New Market Poultry Prod., Inc., 258 Va. 187, 191, 518 S.E.2d 312, 313 (1999). The burning of a cross is a felony under Code § 18.2-423. Under the employer's theory, the language of Code § 2.1-725(D) would shield the employer from a common law action for wrongful termination for violation of the public policy underlying Code § 18.2-423, because the conduct also would violate the public policy against racial discrimination expressed in the VHRA. Similarly, under the employer's view, a Jewish employee could not maintain a common law action for wrongful termination if he were discharged for refusing to paint a swastika on a synagogue with the intent to intimidate worshipers. This employee would be a member of the class of persons protected by the public policy stated in the VHRA because he would have been fired based on "unlawful discrimination because of ... religion." Code § 2.1-715; see Harris, 259 Va. at ----, 523 S.E.2d at 245; Dray, 258 Va. at 191, 518 S.E.2d at 313. The placement of a swastika on a synagogue is a felony under Code § 18.2-423.1. Under the employer's theory, the language of Code § 2.1-725(D) would shield the employer from a common law wrongful termination action for violation of the public policy underlying Code § 18.2-423.1, because the employer's conduct also would violate the VHRA public policy against religious discrimination. 252 Accordingly, we reject the employer's argument because it would require us effectively to amend Code § 2.1-725(D) by adding a provision prohibiting causes of action based on public policies not reflected in the VHRA. Such a holding would usurp the function of the General Assembly, violate the proper construction of a statute in derogation of common law, and allow repugnant consequences that were never intended by the General Assembly when it enacted Code § 2.1-725(D). The employer argues, however, that the public policies embodied in Code §§ 18.2-344 and -345 cannot support a common law action for wrongful termination because those statutes do not expressly state such public policies. We find no merit in this contention. Laws that do not expressly state a public policy, but were enacted to protect the property rights, personal freedoms, health, safety, or welfare of the general public, may support a wrongful discharge claim if they further an underlying, established public policy that is violated by the discharge from employment. Harris, 259 Va. at ----, 523 S.E.2d at 245; see Miller v. SEVAMP, Inc., 234 Va. 462, 468, 362 S.E.2d 915, 918 (1987); Bowman v. State Bank of Keysville, 229 Va. 534, 540, 331 S.E.2d 797, 801 (1985). Further, as indicated above, to rely on such a statute in support of a common law action for wrongful termination, an employee must be a member of the class of persons that the specific public policy was designed to protect. Harris, 259 Va. at ----, 523 S.E.2d at 245; Dray, 258 Va. at 191, 518 S.E.2d at 313. For example, in Bowman, we recognized a common law cause of action for wrongful termination based on the public policy underlying former Code § 13.1- 32. That statute conferred on stockholders the right to one vote for each outstanding share of stock held. Although former Code § 13.1-32 did not expressly state a public policy, we held that the statute provided a basis for a common law action for wrongful termination brought by two employee stockholders of a bank. We concluded that the statute embodied the public policy that a stockholder's right to vote shall be exercised free of duress and intimidation by corporate management. 229 Va. at 540, 331 S.E.2d at 801. In the present case, the absence of an express statement of public policy in Code §§ 18.2-344 and -345 does not preclude their use as a basis for a common law action for wrongful termination. These criminal statutes were enacted for the protection of the general public, and Mitchem is a member of that class of persons whom these statutes were designed to protect. See Harris, 259 Va. at ----, 523 S.E.2d at 245; Miller, 234 Va. at 468, 362 S.E.2d at 918; Dray, 258 Va. at 191, 518 S.E.2d at 313. Further, the public policies inherent in Code §§ 18.2-344 and - 345 are equally, if not more, compelling than the public policy in Bowman that provided the basis for our recognition of a narrow exception to the employment- at-will rule. We do not share the employer's concern that recognition of a common law cause of action for violation of these public policies should be rejected as an incursion into the employment-at-will doctrine. We have narrowly construed the public policy exception to that doctrine, and we have applied that exception in few instances. Certainly, the General Assembly did not intend that the employment-at-will doctrine or the provisions of Code § 2.1-725(D) serve as a 253 shield for employers who seek to force their employees, under the threat of discharge, to engage in criminal activity. Thus, we conclude that since Mitchem's common law action based on the public policies embodied in Code §§ 18.2-344 and -345 is not abrogated by Code § 2.1- 725(D), her action based on those policies falls within the scope of the narrow public policy exception to the employment-at-will rule recognized in Bowman. We disagree with the employer's assertion that our holding in Lockhart requires a different result. There, we approved a wrongful termination action involving conduct very similar to that alleged by Mitchem based on the public policy against gender discrimination in the VHRA. 247 Va. at 101-02, 439 S.E.2d at 329-30. However, the fact that this type of conduct will no longer support a theory of recovery based on the VHRA, or other sources of law reflecting this same public policy, does not affect Mitchem's alternate theory of recovery based on the different public policies embodied in Code §§ 18.2- 344 and -345. Unlike the VHRA provision against gender discrimination relied on in Lockhart, Mitchem's theory of recovery based on Code §§ 18.2-344 and -345 does not rely on any public policy reflected in the VHRA and, thus, is not precluded by Code § 2.1-725(D). Also, although the conduct Mitchem alleges would be an "unlawful discriminatory practice" within the meaning of Code § 2.1-716,31 this conduct may still form the factual basis of a common law cause of action for wrongful termination when that action is not based on a public policy reflected in the VHRA. See Code § 2.1-725(D). Finally, we conclude that the trial court did not err in dismissing the part of Count I in which Mitchem alleged that the employer wrongfully discharged her in violation of the public policy embodied in Code § 18.2-57, which establishes the crime of simple assault as a Class 1 misdemeanor. The trial court properly dismissed this claim because Mitchem did not allege that her employer discharged her for refusing to commit this crime. Instead, she alleged that she was fired for refusing to "consent to commission of a battery upon her person." However, had she consented to having the employer touch her, there would have been no crime of battery. Gnadt v. Commonwealth, 27 Va.App. 148, 151, 497 S.E.2d 887, 888 (1998); see Banovitch v. Commonwealth, 196 Va. 210, 219, 83 S.E.2d 369, 375 (1954). Thus, the public policy embodied in Code § 18.2-57 does not support a wrongful termination action based on this allegation. When the trial court has reached the correct result for the wrong reason, we will assign the correct reason and affirm that result. Hartzell Fan, Inc. v. Waco, Inc., 256 Va. 294, 303, 505 S.E.2d 196, 202 (1998); Ridgwell v. Brasco Bay Corp., 254 Va. 458, 462, 493 S.E.2d 123, 125 (1997); Harrison & Bates, Inc. v. Featherstone Assoc. Ltd. Partnership, 253 Va. 364, 369, 484 S.E.2d 883, 886 (1997).

31 Code § 2.1-716 provides: "Conduct which violates any Virginia or federal statute or regulation governing discrimination on the basis of race, color, religion, national origin, sex, pregnancy, childbirth or related medical conditions, age, marital status or disability shall be an 'unlawful discriminatory practice' for the purposes of this chapter." 254 For these reasons, we will affirm the trial court's judgment dismissing the part of Mitchem's action for wrongful termination that is based on the public policy embodied in Code § 18.2-57.32 We will reverse the trial court's judgment dismissing the part of Mitchem's action for wrongful termination that is based on the public policy embodied in Code §§ 18.2-344 and -345, and remand this remaining part of her action for trial.33 Affirmed in part, reversed in part, and remanded. KINSER, Justice, with whom Chief Justice CARRICO and Justice COMPTON join, dissenting in part and concurring in part. I dissent in part from the majority's decision because I conclude that the employee in this case has not stated a viable cause of action. Thus, I would affirm the circuit court's judgment sustaining the employer's demurrer. The majority states the issue in this case as "whether Code § 2.1-725(D) bars a common law action for wrongful termination based on public policies not reflected in the VHRA, when the conduct alleged in the motion for judgment also violates a public policy reflected in the VHRA." By accepting Vicki Lynn Mitchem's purported distinction between being fired because of "sex" discrimination and being fired because she refused to engage in sexual conduct that would have allegedly violated certain criminal laws, the majority concludes that Code § 2.1-725(D) does not bar Mitchem's claim. To understand why I do not accept this distinction, it is important to first explain why the conduct in which Durwood L. Counts allegedly engaged constitutes "sex" discrimination in violation of a public policy reflected in the Virginia Human Rights Act (VHRA). Mitchem’s allegations that Counts fired her because she rebuffed his alleged sexual advances and refused to engage in a sexual relationship with him are

32 Since Mitchem has withdrawn from her motion for judgment any reliance on public policies not based on criminal statutes, we do not consider the trial court's rulings with regard to those other sources of law. 33 We distinguish our present holding from City of Virginia Beach v. Harris, 259 Va. 220, 523 S.E.2d 239 (2000), decided today. In that case, a police officer was discharged from his employment for obtaining criminal warrants charging a superior officer with obstruction of justice and a related offense, because the superior officer had directed the police officer not to serve certain warrants on a criminal suspect. We held, among other things, that the officer did not state a valid cause of action for wrongful termination in reliance on the public policy expressed in Code § 18.2-460, which prohibits the obstruction of a law enforcement officer in the performance of his duties. We concluded that the police officer was attempting to use the statute as a shield to protect himself against the consequences of his decision to charge his superior officer with crimes. Unlike Mitchem in the case before us, the officer in Harris was not a member of the public for whose benefit the statute was enacted and, thus, could not state a claim for wrongful discharge based on the public policy embodied in that statute. See also, Dray, 258 Va. at 191, 518 S.E.2d at 313. 255 remarkably similar to the facts alleged by plaintiff Wright in Lockhart v. Commonwealth Educ. Sys. Corp., 247 Va. 98, 439 S.E.2d 328 (1994). In that case, Wright alleged that her employer "approached her from behind, kissed her cheek" and " 'physically seized her, grabb[ed] her and hugg[ed] her without her consent.' " Id. at 101-02, 439 S.E.2d at 329. She also alleged that her employer repeatedly made abusive, inappropriate, and harassing remarks to her, and ultimately told her to "get out" after she advised her employer that she did not intend to be subjected to that kind of treatment at work. Id. at 102, 439 S.E.2d at 330. Even though she was an at-will employee, plaintiff Wright alleged that her termination was unlawful, and therefore actionable, because it violated the public policy of Virginia as enunciated in the VHRA. The trial court disagreed and sustained the employer's demurrer, but this Court reversed that judgment. Id. at 106, 439 S.E.2d at 332. We concluded that Wright had pled a viable cause of action based upon "sex" discrimination. Id. at 104, 439 S.E.2d at 331. While not "retreat[ing] from our strong adherence to the employment-at- will doctrine[,]" the Court held that the narrow exception to that doctrine, which we recognized in Bowman, includes instances where, as here, [an] employee[ ] [is] terminated because of discrimination based upon gender.... The discharge [ ] of ... Ms. Wright [is] allegedly tortious not because [she has] a vested right to continued employment, but because [her] employer[ ] misused the freedom to terminate the services of [an] at-will employee[ ] on the basis of ... gender. Id. at 106, 439 S.E.2d at 332. In reaching its decision in Lockhart, the Court concluded that the nature of the alleged discriminatory conduct of Wright's employer fell within the scope of the public policy enunciated in the VHRA, "[t]o safeguard all individuals ... from unlawful discrimination [in employment] because of ... sex" Code § 2.1-715. In order to hold that Wright had pled a cause of action for wrongful discharge based on the public policy enunciated in the VHRA, we necessarily had to find that the alleged actions of her employer fell within the scope of the phrase "discrimination because of ... sex" in Code § 2.1- 715.34 Otherwise, Wright could not have utilized the VHRA as the source of public policy upon which to base her common law action for wrongful termination. Since the decision in Lockhart, we have continued to categorize the type of discrimination alleged by Wright as "gender discrimination." See Lawrence Chrysler Plymouth Corp. v. Brooks, 251 Va. 94, 98, 465 S.E.2d 806, 809 (1996); Bailey v. Scott-Gallaher, Inc., 253 Va. 121, 126, 480 S.E.2d 502, 505 (1997). Accordingly, even though Mitchem disavows any reliance on the VHRA, the sexual harassment that she allegedly endured prior to discharge, as well as Count’ termination of her employment because she refused to have a sexual

34 None of the other types of discrimination included in Code § 2.1-715 was implicated by the facts plaintiff Wright alleged.

256 relationship with him, if proven true, would violate a public policy reflected in the VHRA. The distinction that Mitchem attempts to make and which the majority accepts, that she was fired, not because of "sex," but because she refused to engage in conduct that would have violated certain criminal statutes, merely places a different label on "sex" discrimination and thus exalts form over substance. The re-labeling of her claim does nothing to alter the facts alleged by Mitchem or the law governing those allegations. Thus, I do not accept that proffered distinction.35 Nevertheless, Mitchem insists that Counts discharged her because she refused to commit the crimes of fornication, and lewd and lascivious cohabitation, and would not consent to the commission of a battery upon her person.36 Thus, according to Mitchem, her termination violated the public policies contained in the criminal statutes making these acts unlawful, and the public policy that an employer cannot fire an employee for refusing to commit a crime. I need not, as the majority does, decide whether those criminal statutes sufficiently enunciate public policies to support a Bowman-type cause of action by an at-will employee for unlawful termination because, even if they do, I conclude that Mitchem nonetheless is barred from maintaining her action against Counts.37 After this Court's decision in Lockhart, the General Assembly amended the VHRA. One of the changes was the addition of subsection D to Code § 2.1- 725, which prohibits a common law cause of action based upon the public policies reflected in the VHRA. Doss v. Jamco, Inc., 254 Va. 362, 372, 492 S.E.2d 441, 447 (1997). In Conner v. National Pest Control, Ass'n, 257 Va. 286, 513 S.E.2d 398 (1999), we expanded upon the impact of subsection D, stating that "the General Assembly, in enacting the 1995 amendments to the VHRA, eliminated a common law cause of action for wrongful termination based on any public policy which is reflected in the VHRA, regardless of whether the policy is articulated elsewhere." Id. at 290, 513 S.E.2d at 400. Thus, after Conner, an at- will employee in Virginia cannot maintain a cause of action based on the public policy exception to the at-will employment doctrine if the public policy is one that is "reflected" in

35 Likewise, I do not believe that Mitchem stated alternative theories of recovery just because she alleged that her termination violated several public policies. 36 I concur in the result the majority reaches with respect to Mitchem's reliance on Code § 18.2-57 proscribing assault and battery, but reach that conclusion for the reasons stated in this dissent. 37 The majority's statement that the public policies behind the prohibitions against fornication, a class 4 misdemeanor punishable by a maximum $250 fine, and lewd and lascivious cohabitation, a class 3 misdemeanor punishable by a maximum $500 fine, are "equally, if not more compelling than the public policy in Bowman," which supported a stockholder's right to vote free of duress and intimidation by corporate management, does not support the majority's conclusion that these criminal statutes have a sufficient public policy underlying them to support a Bowman-type cause of action.

257 the VHRA, even when the employee does not rely on or cite the VHRA because the policy is found in other statutes. Even if the majority is correct in concluding that Virginia's public policy protects an at-will employee from being terminated as a result of refusing to violate the Commonwealth's criminal laws, the facts alleged in this case, if proven, would contravene not only that public policy, but also the public policy of safeguarding individuals from sex discrimination in employment, as reflected in the VHRA. Thus, I believe that Mitchem cannot maintain this cause of action. See Conner, 257 Va. at 290, 513 S.E.2d at 400. I recognize that the present case is slightly different from Conner to the extent that, in support of her claim that she was discharged in contravention of a public policy, Mitchem cites a policy not contained in the VHRA, specifically her right to refuse to commit a crime. Conner, on the other hand, asserted that her discharge from employment violated the public policy against discrimination based on gender, which is a policy reflected in the VHRA, but she cited statutes other than the VHRA as the source of that public policy. Id. at 288, 513 S.E.2d at 399. I believe that this is another distinction without a difference, and that this Court's decision in Conner is controlling because, as I have already noted, Counts' alleged conduct, if proven, would violate the public policies reflected in the VHRA. Thus, I conclude that Mitchem's "[c]ause[ ] of action [is one] based upon the public policies reflected in [the VHRA]," Code § 2.1-725(D), despite her attempt to place a different label on it. By permitting her cause of action to proceed, the majority creates an avenue through which virtually all employees asserting allegations similar to Mitchem's can bypass the General Assembly's clear intent, as expressed in Code § 2.1- 725(D), to "abrogate the common law with respect to causes of action for unlawful termination of employment based upon the public policies reflected in the [VHRA]." Doss, 254 Va. at 372, 492 S.E.2d at 447. The General Assembly's purpose in enacting subsection D was to bar claims such as the one brought by Wright in Lockhart, yet the majority today ignores that clear intent by allowing allegations similar to those alleged by Wright to go forward despite the language of Code § 2.1-725(D). Contrary to the majority's argument that Counts' position would bar a common law wrongful termination action by an employee discharged for refusing to engage in intimidatory conduct such as burning a cross on the lawn of an African-American, or painting a swastika on a synagogue, those causes of action would not be barred by Code § 2.1-725(D). In the examples utilized by the majority, the discharges would not be in violation of the policies reflected in the VHRA because the employer's act of discrimination based on race or religion would not be directed toward the employee, but instead would be directed toward a third party. The public policies reflected in the VHRA are intended to prohibit discrimination in, inter alia, employment, on the basis of the employee's "race, color, religion, national origin, sex, pregnancy, childbirth or related medical conditions, age, marital status, or disability." Code § 2.1-715. Those public policies protect an employee, not a third party, from being the subject or object of 258 a discriminatory act. In the majority's hypotheticals, the employee would not be the object of the discrimination but would be the person who refuses to engage in the discriminatory conduct. In other words, Code § 2.1-725(D) abrogates causes of action based on policies reflected in the VHRA, but before those policies are implicated, the person against whom discriminatory conduct is directed must be a member of the class of persons protected by those policies. Dray v. New Market Poultry Prod., Inc., 258 Va. 187, 191, 518 S.E.2d 312, 313 (1999). See also Brown v. McLean, 159 F.3d 898, 902 (4th Cir. 1998), cert. denied sub nom. Brown v. Mayor and City Council of Baltimore, --- U.S. ----, 119 S.Ct. 1577, 143 L.Ed.2d 672 (1999) (under Title VII, proof that plaintiff is a member of a protected group is required to establish a prima facie case); Childress v. City of Richmond, 134 F.3d 1205, 1209 (4th Cir.) (Luttig, J., concurring), cert. denied, 524 U.S. 927, 118 S.Ct. 2322 (1998) ("in order to qualify as a 'person aggrieved' ... [under Title VII], a plaintiff must be a member of the class of direct victims of conduct prohibited ... and allege that he, not someone else, has been 'discriminated against.' ") (Emphasis added); Drake v. Minnesota Mining & Manuf. Co., 134 F.3d 878, 884 (7th Cir. 1998) (in a Title VII associational discrimination case, "the key inquiries should be whether the employee has been discriminated against and whether that discrimination was 'because of' the employee's race.") (Emphasis added); Code § 2.1-725(B) (the plaintiff's age, not that of any other person, makes age discrimination contrary to the Commonwealth's public policy).38 Thus, under my view, employees terminated because they rightly refused to participate in such illegal and improper actions would not be barred by Code § 2.1-725(D) from pursuing common law wrongful termination claims. Conclusion My dissent may be viewed by some as sanctioning "sex" discrimination in the workplace. In order to dispel any such misconception, I reiterate the thoughts expressed in the concurring opinion in Conner: Gender discrimination should not be countenanced in any manner and victims of such discrimination should be accorded a tort remedy that fully and fairly compensates them for injuries caused by an employer's repugnant conduct. However, the General Assembly of this Commonwealth has chosen to impose limitations on the right of a[n employee] to recover damages against an employer who discriminates ... because of [the employee's] gender.... And, this Court, which does not, and constitutionally cannot, act as a super-legislative body, is required to apply these restrictions as expressed by the General Assembly. Conner, 257 Va. at 290-91, 513 S.E.2d at 400 (Hassell, J., concurring).

38 "Associational discrimination cases," where, for example, a Caucasian claims he or she was discriminated against due to his or her relationship with an African-American, are permitted, Drake, 134 F.3d at 884; Fiedler v. Marumsco Christian School, 631 F.2d 1144, 1149-50 (4th Cir.1980), but the hypotheticals presented by the majority do not fulfill the criteria for such an action. 259 Unlike the majority, I continue to believe that the proper role of this Court is to interpret the law as enacted by the General Assembly, and not to function as a "super-legislative body." For these reasons, I respectfully dissent in part and concur in part.

Packett v. Herbert 237 Va. 422 (1989) Whiting, J., delivered the opinion of the Court. Averring that the operation of a self-service car wash facility adjacent to her home constituted a , Frances D. Packett filed this suit in equity against William C. Herbert, II, Marianne Herbert, and Warsaw Super Wash, Inc. (the Herberts) for an injunction and damages. On Packett's motion, she was permitted to file an amended bill of complaint. In Count One, she made a claim for damages arising out of the alleged nuisance, and in Count Two she prayed for an injunction against its continued operation. The Herberts filed a motion to require a severance of the two counts, and, thereafter, to require Packett to elect "whether to pursue a remedy at law for damages, as stated in Count One, or to pursue an equitable remedy such as an injunction, as stated in Count Two." According to the order39 entered in this suit, Packett advised the chancellor that she had no objection to the motion to sever40, and she elected to "proceed first with the action at law set forth in Count One, for which a jury trial was demanded." The chancellor denied Packett's "election to proceed first at law" and her request for a jury trial because he "must first find, in a Chancery action, whether a nuisance exists before an action at law can be maintainable." Relying on the provisions of Code § 8.01-28141 and of Rule 1:4(k)42, Packett contends that she can join what she calls her action at law with this suit in equity.

39 For two reasons, we take no notice of Packett's unilateral statement of facts and "other incidents of the case," or of the reference in both parties' briefs to what happened before the chancellor. Because: (1) in ruling on a demurrer, we consider only the facts set forth in the complaint and the reasonable inferences drawn therefrom, The Ryland Group v. Wills, 229 Va. 459, 461, 331 S.E.2d 399, 401 (1985); and (2) unilateral assertions of fact by counsel are not considered a part of the record on review. See Rule 5:10. 40 Because Packett did not object to the severance of her "law action" for trial, we cannot review that decision. Rule 5:25. 41 Code § 8.01-281 provides in pertinent part: A. A party asserting. . .a claim. . .may plead alternative facts and theories of recovery . . . . B. The court may, upon motion of any party, order a separate trial of any claim . . . and of any separate issue . . . . 260 Neither the Code section nor the Rule support Packett's contention. Both provide for the assertion of alternative theories of recovery in an equity suit or in an action at law, whether based on legal or equitable grounds, but neither authorizes the assertion of different rights of action, with varying procedural rights43, in the same proceeding. If we adopted Packett's contention, we would be abolishing the traditional and marked distinction between law and chancery. We declined an invitation to do so in Wright v. Castles, 232 Va. 218, 222, 349 S.E.2d 125, 128 (1986). Because this is a suit in equity and there was no motion for an issue out of chancery, we hold that the chancellor correctly held that he must first determine whether the activities complained of constituted a nuisance. Packett also complains that the chancellor erred in sustaining each ground of the Herberts' demurrer and in dismissing the suit with prejudice. Count One of the amended bill of complaint claims damages for: (1) an averred impairment to Packett's health; (2) interference with her use of the property; and (3) impairment of the value of the property. Count Two prays for a permanent injunction against the averred nuisance. The amended bill of complaint also avers that those who patronize the car wash, which is automated and unattended at all times, talk, yell and curse in a loud and unseemly way . . . consume alcoholic beverages . . . use and sell illegal drugs . . . play stereos in their cars at loud and unreasonable volumes, engage in offensive conduct such as urinating in sight of plaintiff's residence, and throwing cans, bottles, wrappers and other trash onto plaintiff's property; moreover, the car wash facilities themselves generate loud noises which are clearly audible in plaintiff's home . . . 24 hours a day, seven days a week. The grounds of the Herberts' demurrer are: (1) they could not be held responsible for the acts of their customers; and (2) the damages demanded were uncertain in origin and amount, and any damage award would subject the Herberts to danger of future litigation for the same or similar damages. Neither ground has merit.

The Herberts cannot avoid responsibility for the maintenance of a nuisance upon or near their property because the activities complained of were their

42 Rule 1:4(k) provides in pertinent part: A party asserting . . . a claim . . . may plead alternative facts and theories of recovery . . . . A party may also state as many separate claims . . . as he has regardless of consistency and whether based on legal or equitable grounds. 43 The important difference in procedural rights in this case is that in this suit in equity Packett does not have an absolute right to a jury trial on her claim that the activities were a nuisance or on the issue of damages. If she had filed an action at law, the judge would have been required to order a jury trial upon her request. See Stanardsville Vol. Fire Co. v. Berry, 229 Va. 578, 583, 331 S.E.2d 466, 469-70 (1985). In her suit in equity, the matter is discretionary, unless a plea is filed. Wright v. Castles, 232 Va. 218, 222, 349 S.E.2d 125, 128 (1986). 261 customers', not their own. In our opinion, the Herberts could be responsible for their patrons' offensive actions amounting to a nuisance, if those activities occur on or near the premises, and are reasonably related to the operation of the car wash. Courts of other states have indicated that one conducting a business or other activity on his premises may be liable for a nuisance if his patrons' objectionable conduct is shown to have some reasonable relation to the conduct of the business or activity, even though the acts complained of occurred off the premises. Armory Park v. Episcopal Community Services, 148 Ariz. 1, 6-7, 712 P.2d 914, 920 (1985); Barrett v. Lopez, 57 N.M. 697, 701, 262 P.2d 981, 983 (1953); Wade v. Fuller, 12 Utah 2d 299, 302, 365 P.2d 802, 804-05 (1961). At least two jurisdictions have indicated that a self-service facility's owner may be held responsible for permitting a nuisance on the property arising out of the acts of the facility's customers. Guillot v. Town of Lutcher, 373 So. 2d 1385 (La. Ct. App.), cert. denied, 377 So. 2d 119 (La. 1979); cf. People v. Raub, 9 Mich. App. 114, 155 N.W.2d 878 (1967) (facility owner liable for criminal nuisance). Although we have not passed on the precise issue, we have decided two cases in which the activities of third parties, using a public park conducted on the defendant's premises, were claimed to contribute to the alleged nuisance. In neither case did we distinguish between the owners' acts and those of the facilities' users. Newport News v. Hertzler, 216 Va. 587, 221 S.E.2d 146 (1976); City of Lynchburg v. Peters, 145 Va. 1, 133 S.E. 674 (1926). Accordingly, in our opinion, the averments of the bill of complaint are sufficient to create an issue of fact as to whether the Herberts were responsible for the conduct of a nuisance upon their property. The next ground of the demurrer is "[t]hat the damages are uncertain in origin and amount and that any award of damages . . . would subject Defendants to the [danger] of future litigation for the same or similar damages." The Herberts argue that "[t]o allow Packett to pursue an award of damages through an equity claim for an injunction would be to render the amount of damages awarded uncertain and speculative." The Herberts cite no authority for this proposition, and we find none. Both parties recognize that we have sustained jury damage awards in law actions predicated on nuisance, despite claims that they were speculative. Nat. Energy Corp. v. O'Quinn, 223 Va. 83, 90, 286 S.E.2d 181, 185 (1982); Southern Railway Co. v. McMenamin, 113 Va. 121, 129, 73 S.E. 980, 982 (1912). We discern no reason for requiring a different level of proof of damages arising from the maintenance of a nuisance in an equity suit seeking an injunction and damages, as distinguished from an action at law to recover damages for the same wrong. If Packett recovers damages for the permanent diminution in the value of her property, she may not recover those damages again in any later proceeding. Nor may she be awarded such damages and obtain an injunction against the continued operation of the nuisance. See Miller v. Trueheart and Others, 31 Va. (4 Leigh) 569 (1833) (injunction awarded against reconstruction of a mill dam destroyed by flood, although moving party previously was awarded damages arising out of maintenance of earlier mill pond, drained when mill dam destroyed). Any such injunction would 262 give her a double recovery in that she would have recovered for future loss of value of her property in the award of damages and then had that value restored upon the defendant's compliance with the injunction. Cf. Norfolk & W.R. Co. v. Allen, 118 Va. 428, 438, 87 S.E. 558, 561 (1916). Arguing that because they would be subjected to future litigation for similar damages if an initial award of damages should be made in the equity suit in the absence of an injunction, the Herberts contend that no damages can be awarded absent an injunction. Once having assumed jurisdiction of the cause, a chancellor can make an award of all damages to the adjoining owner arising out of the maintenance of a permanent nuisance if no injunction is awarded. See Hampton Roads Sanitation District v. McDonnell, 234 Va. 235, 239, 360 S.E.2d 841, 842 (1987) (successive awards proper where nuisance not of permanent nature and damage from nuisance occurs at intervals). On the other hand, if the nuisance can be abated, the adjoining owner is only entitled to such damages as he may have sustained up to the time of the abatement of the nuisance, not including damages for the permanent diminution in the value of his property. Therefore, to the extent that the chancellor denied any of Packett's claims for damages if she should seek an injunction, his ruling was also in error. For the reasons assigned, we conclude that the chancellor erred in sustaining the demurrer, and we will reverse and remand the case for further proceedings consistent with this opinion. Reversed and remanded.

Davis v. Marshall Homes 265 Va. 159, 576 S.E.2d 504 Hassell, C.J., delivered Opinion I. In this appeal, we consider whether the doctrine of res judicata bars a plaintiff's action to recover damages because of the defendants' alleged failure to pay deed of trust notes when the plaintiff had unsuccessfully filed a prior motion for judgment for actual fraud against the defendants. II. In 1999, plaintiff, Anita Lee Davis, filed a motion for judgment against Marshall Meredith, Inc., Marshall Homes, Inc., Marshall Meredith, individually, Perpetual Homes, Inc., and John M. Scott. Plaintiff pled in her motion for judgment that these defendants committed acts of actual fraud against her. Plaintiff alleged that on several occasions in 1995 she loaned money to defendants for the purpose of purchasing various real properties that defendants 263 agreed to refurbish and sell for a profit. Plaintiff alleged that defendants intentionally misrepresented to her the value of the real properties and deceived her because even though they told her that they would "refurbish" each property, defendants never intended to do so. Plaintiff stated in her motion for judgment that "[a]t the time of each request [by defendants] for a loan and representation as to the value of each real estate, the defendants knew that the actual value of the real estate was less than what they represented to the plaintiff, and as a result of this misrepresentation, the plaintiff lent them money for the purpose of the defendants purchasing the property, with additional funds available for refurbishing the property, at a 10% rate of interest. Further, not only did the defendants know that the value of the property was substantially less than what they had represented, they also knew at the time of the purchase that they were not going to refurbish the property and/or sell it for profit resulting in the plaintiff being left with the property and an outstanding Note based on an inflated property value." Plaintiff stated in her motion for judgment that she sought "judgment against the defendants, jointly and severally, in the amount of $528,486.00 representing the amount of the inflated price of the real estate, $250,000.00 in punitive damages, attorney's fees, pre and post judgment interest and any and all other costs expended herein." Subsequently, plaintiff's motion for judgment for actual fraud was dismissed with prejudice against defendants Marshall Meredith, Inc., Marshall Homes, Inc., and Marshall Meredith, individually. In 2001, plaintiff filed her present action. She alleged in her amended motion for judgment that Marshall Homes, Inc., and Marshall Meredith, individually, executed four separate deed of trust notes and that these defendants "failed and refused to make any payments on the [notes]" and that the defendants "surrendered" the properties that secured the deed of trust notes to plaintiff. Plaintiff alleged that she "spent money to improve the properties for sale and incurred net losses ... after the sale of each property." Plaintiff requested a "judgment against the defendants, jointly and severally, in the amount of One Hundred Sixty Four Thousand, Two Hundred Twenty Dollars and Seventy Six Cents ($164,220.76), plus interest at 10% per annum through date of sale, as well as interest accruing thereafter on the loss at 9% per annum, attorney's fees, and any and all other costs expended herein." Defendants filed a plea of res judicata and asserted that plaintiff's action was barred because the circuit court had entered an order that dismissed with prejudice her prior action for actual fraud. Defendants argued that the factual allegations and damages claimed in the fraud action were based upon the same facts and damages described in the breach of contract action. The circuit court agreed with the defendants and entered an order that sustained the plea of res judicata and dismissed plaintiff's action with prejudice. Plaintiff appeals. III. A. 264 The principles that this Court must apply to our resolution of this appeal are well established and familiar. We have repeatedly stated that "[t]he bar of res judicata precludes relitigation of the same cause of action, or any part thereof, which could have been litigated between the same parties and their privies." Smith v. Ware, 244 Va. 374, 376, 421 S.E.2d 444, 445 (1992). Accord Scales v. Lewis, 261 Va. 379, 382, 541 S.E.2d 899, 901 (2001); Flora, Flora & Montague, Inc. v. Saunders, 235 Va. 306, 310, 367 S.E.2d 493, 495 (1988); Bates v. Devers, 214 Va. 667, 670-71, 202 S.E.2d 917, 920-21 (1974). We have consistently held that a litigant who seeks to bar a claim based upon the defense of res judicata must establish four elements: identity of the remedy sought; identity of the cause of action; identity of the parties; and identity of the quality of the persons for or against whom the claim is made. State Water Control Bd. v. Smithfield Foods, Inc., 261 Va. 209, 214, 542 S.E.2d 766, 769 (2001); Balbir Brar Assoc., Inc. v. Consolidated Trading and Serv. Corp., 252 Va. 341, 346, 477 S.E.2d 743, 746 (1996); Wright v. Castles, 232 Va. 218, 222, 349 S.E.2d 125, 128 (1986). We have also stated that: "The judicially created doctrine of res judicata rests upon public policy considerations which favor certainty in the establishment of legal relations, demand an end to litigation, and seek to prevent the harassment of parties.... The doctrine prevents 'relitigation of the same cause of action, or any part thereof which could have been litigated, between the same parties and their privies.' ... A claim which 'could have been litigated' is one which 'if tried separately, would constitute claim-splitting.' " 'Claim-splitting' is bringing successive suits on the same cause of action where each suit addresses only a part of the claim. Jones v. Morris Plan Bank of Portsmouth, 168 Va. 284, 291, 191 S.E. 608, 610 (1937). Courts have imposed a rule prohibiting claim-splitting based on public policy considerations similar to those underlying the doctrine of res judicata: avoiding a multiplicity of suits, protecting against vexatious litigation, and avoiding the costs and expenses associated with numerous suits on the same cause of action." Bill Greever Corp. v. Tazewell Nat'l Bank, 256 Va. 250, 254, 504 S.E.2d 854, 856-57 (1998). The doctrine of res judicata only applies if the cause of action a plaintiff asserts in the pending proceeding is the same as the cause of action asserted in the former proceeding. City of Virginia Beach v. Harris, 259 Va. 220, 229, 523 S.E.2d 239, 243 (2000). And, the litigant who asserts the defense of res judicata has the burden of proving by a preponderance of the evidence that the claim is precluded by a prior judgment. Scales, 261 Va. at 383, 541 S.E.2d at 901. Applying these well-established principles, we hold that the circuit court erred in concluding that plaintiff's cause of action for breach of contract is barred 265 by the doctrine of res judicata. As we have already stated, the litigant who asserts the doctrine of res judicata as a bar to the plaintiff's claim must show, among other things, the "identity of the cause of action." In this case, defendants cannot satisfy this requirement. In her first cause of action, plaintiff alleged acts of actual fraud on the part of the defendants. The basis of plaintiff's actual fraud claim was that she was damaged because of her reliance upon defendants' misrepresentations of the values of collateral that secured the deed of trust notes. We have held "that a 'litigant who prosecutes a cause of action for actual fraud must prove by clear and convincing evidence: (1) a false representation, (2) of a material fact, (3) made intentionally and knowingly, (4) with intent to mislead, (5) reliance by the party misled, and (6) resulting damage to the party misled.' " Prospect Dev. Co., Inc. v. Bershader, 258 Va. 75, 85, 515 S.E.2d 291, 297 (1999) (quoting Bryant v. Peckinpaugh, 241 Va. 172, 175, 400 S.E.2d 201, 203 (1991)); accord Richmond Metro. Auth. v. McDevitt Street Bovis, Inc., 256 Va. 553, 557-58, 507 S.E.2d 344, 346 (1998); Evaluation Research Corp. v. Alequin, 247 Va. 143, 148, 439 S.E.2d 387, 390 (1994); Winn v. Aleda Constr. Co., Inc., 227 Va. 304, 308, 315 S.E.2d 193, 195 (1984). A review of the motion for judgment in the fraud action reveals that plaintiff would have been required to establish by clear and convincing evidence that defendants approached her and requested loans for the purpose of refurbishing and selling the real properties for a profit, defendants misrepresented the values of the real properties, plaintiff relied upon defendants' misrepresentations and loaned funds to defendants for the purchases of the real properties, defendants purchased the properties at their actual values, defendants never intended to honor their promises to plaintiff that they would "refurbish and sell the properties," and plaintiff incurred damages related to the misrepresentations. In her later contract action to recover for losses sustained because of defendants' failure to pay the deed of trust notes, plaintiff would have been required to prove, by a preponderance of the evidence, the existence of the notes, the defendants' failure to pay the notes, and damages. We reject defendants' contention that plaintiff only had one cause of action, and that plaintiff improperly split her single cause of action because the "same evidence" was necessary to prove plaintiff's fraud and breach of contract claims. Defendants are incorrect for numerous reasons. This Court held in Brown v. Haley, 233 Va. 210, 216, 355 S.E.2d 563, 567 (1987), that "[t]he test to determine whether claims are part of a single cause of action is whether the same evidence is necessary to prove each claim." Application of this test compels us to conclude that plaintiff did not split her causes of action. In her fraud action, plaintiff would have had to present evidence of the deed of trust notes and defendants' failure to satisfy those notes to show that she was damaged as a result of the misrepresentations. However, this evidence does not 266 satisfy the remaining elements that plaintiff would have had to prove to establish a prima facie case of actual fraud by clear and convincing evidence. The mere fact that some evidence relevant in plaintiff's action for fraud may be relevant to prove her distinct and separate contract claim for nonpayment of the deed of trust notes does not, for purposes of res judicata, mean that plaintiff only has one cause of action. Evidence of defendants' failure to satisfy the deed of trust notes does not prove that defendants made false representations of the values of the real properties intentionally and knowingly, with the intent to mislead plaintiff. Evidence of defendants' failure to satisfy the deed of trust notes does not establish plaintiff's reliance upon defendants' alleged misrepresentations. It is a fundamental principle of jurisprudence that evidence which is not relevant is not admissible. Most of the evidence necessary to prove plaintiff's fraud action would have been inadmissible at a trial of plaintiff's contract action because of the lack of relevance. Surely, the circuit court would have committed error during a jury trial of plaintiff's contract action had the court permitted plaintiff to present evidence of defendants' acts of actual fraud. Additionally, much of the evidence that plaintiff would have to present to establish damages in her breach of contract action is different from and not relevant to the damages she alleged in her fraud case. In her fraud action, plaintiff sought to recover damages based upon defendants' alleged misrepresentations of the values of the collateral that secured the deed of trust notes, and she sought punitive damages. In contrast, in plaintiff's breach of contract case, she sought to recover money spent to improve the real properties and net losses she incurred after she sold the properties that she received from defendants in lieu of foreclosure. Our prior decisions plainly illustrate the principle that a plaintiff's assertion of separate and distinct causes of action will defeat a defense of res judicata. For example, in Brown v. Haley, supra, we considered whether the doctrine of res judicata barred the plaintiffs' suit to enforce an implied easement. 233 Va. at 212, 355 S.E.2d at 565. In that case, Rufus R. Brown and Sallie W. Brown filed an action at law for ejectment against the defendants and/or their privies. The Browns alleged in the ejectment action that Dayton A. Haley and Lucy S. Haley had no interest in certain land. The circuit court ruled that the Browns were entitled to "sole possession" of the land. Subsequently, the Haleys filed an amended motion for declaratory judgment and bill of complaint against the Browns and requested that the circuit court declare that the Haleys possessed an easement to cross the Browns' land. The circuit court held that the Haleys had an implied easement over the Browns' land. The Browns argued before this Court that the doctrine of res judicata barred the maintenance of the Haleys' suit for the declaration of an implied easement because of the prior ejectment action. Id. at 213- 15, 355 S.E.2d at 566-67. We observed in Haley that a judgment in favor of a litigant bars relitigation of the same cause of action and any part thereof that could have been litigated 267 between the same parties and their privies, but we explained that "[t]he barring of a cause of action 'which could have been litigated' is not directed to an unrelated claim which might permissibly have been joined, but, to a claim which, if tried separately, would constitute claim- splitting." Id. at 215-16, 355 S.E.2d at 567 (quoting Bates, 214 Va. at 670-71 n. 4, 202 S.E.2d at 920-21 n. 4). We stated that "[t]he test to determine whether claims are part of a single cause of action is whether the same evidence is necessary to prove each claim." Haley, 233 Va. at 216, 355 S.E.2d at 567. Applying this test, we held that the doctrine of res judicata did not bar the Haleys from prosecuting their suit to establish an implied easement. We emphasized that ejectment is an action at law to determine title and the right of possession of real property, whereas an easement is a privilege to use the land of another in a particular manner and for a particular purpose. We held that the existence of an easement is not relevant to the issue of title. We observed that ejectment involves ownership rights and the proof necessary to establish this action generally consists of documents that vest title, whereas the proof necessary to establish the existence of an implied easement generally consists of facts that gave rise to the easement. Id. at 215-17, 355 S.E.2d at 567-68. We noted that the elements that the Haleys were required to prove to establish their claim of an implied easement could not be proven by the facts presented in the ejectment action that showed that the Browns were the owners of the disputed land. Id. at 217, 355 S.E.2d at 568. We held that the ejectment action and the proceeding to establish an implied easement "were not part of the same cause of action because there was no identity of facts necessary to prove each claim." Id. In the present case, just as in Haley, the doctrine of res judicata is simply not applicable. The facts necessary to prove plaintiff's action for actual fraud are different from the facts she must prove for her action based upon nonpayment of the deed of trust notes. In the present appeal, as in Haley, there is "no identity of facts necessary to prove each claim." Id. We also observe that our holding today is consistent with our decision in Smith v. Ware, supra. In Ware, we considered whether the doctrine of res judicata barred a claim to recover dower and damages asserted by a litigant who had unsuccessfully filed a motion for judgment for unlawful detainer. 244 Va. at 375, 421 S.E.2d at 445. Presley M. Smith and Pauline A. Smith were husband and wife. Mr. Smith, sole record owner of the real estate where the couple resided, died testate and his will and codicil were probated in November 1982. The will devised the residence to Mr. Smith's sister, Ellen Smith Ware. A codicil contained a provision which devised to Mrs. Smith the balance of a debt owed to Mr. Smith if any money remained after the estate's expenses were paid. The expenses exceeded the balance of the debt, and Mrs. Smith received nothing from her husband's estate. Id. at 375-76, 421 S.E.2d at 445. 268 Ware notified Mrs. Smith that she had to vacate the residence. Mrs. Smith left the premises and filed a motion for judgment for unlawful detainer. The circuit court ruled that the unlawful detainer action was barred by the applicable statute of limitations, and the case was dismissed. Subsequently, Mrs. Smith filed a bill of complaint against Ware seeking commutation of her dower interest in the residence and damages for withholding of her dower interest. Ware argued that the doctrine of res judicata barred any recovery. The circuit court agreed and dismissed the suit. Id. at 376, 421 S.E.2d at 445. We disagreed with the circuit court's holding that the doctrine of res judicata precluded re-litigation of the same cause of action or any part thereof, which could have been litigated between the same parties and their privies. We held, among other things, that the doctrine of res judicata did not bar Mrs. Smith's second suit because the cause of action in the second suit differed from the cause of action in the first proceeding. We stated: "The causes of action are ... different. Mrs. Smith asserted a right to occupy the property in her motion for judgment for unlawful detainer. There, she relied upon former Code § 64.1-33 ... which permitted a surviving spouse to reside in the marital residence without charge for rent, repairs, taxes, or insurance until dower or curtesy was assigned. Mrs. Smith, in her bill of complaint, seeks a commutation of her dower interest. She pled a different cause of action, relying upon former Code § 64.1-37...." Id. at 377, 421 S.E.2d at 446. Just like the plaintiff in Ware, the plaintiff in this case filed separate causes of action and thus the doctrine of res judicata does not bar her subsequent cause of action. We recognize that in Flora, Flora & Montague, Inc. v. Saunders, supra, we held that the doctrine of res judicata barred a plaintiff from prosecuting a subsequent cause of action for breach of contract. 235 Va. at 311, 367 S.E.2d at 496. However, our decision in Saunders is clearly distinguishable from the present appeal. In 1961, Willis E. Board owned a tract of land that contained about 200 acres located in Franklin County near the waters of the Roanoke River. Board and his wife, Annie L. Board, Saunders' predecessors in title, executed an option agreement with John Hatcher Ferguson and John Hatcher Ferguson, Jr., who were Flora, Flora & Montague, Inc.'s (Flora's) predecessors in title. Pursuant to the agreement, the Boards granted the Fergusons a 10-year option to purchase a portion of the Boards' land, containing about 100 acres, subject to certain conditions. The Fergusons notified Saunders that they intended to exercise the option, but he refused to convey the real estate as provided in the option agreement. Id. at 307-08, 367 S.E.2d at 493-94. In July 1971, the Fergusons filed a suit against Saunders for specific performance of the agreement. While the specific performance suit was pending, the Fergusons assigned the option agreement to Flora and others, who were added as complainants. The amended bill of complaint in this suit (the first suit) 269 contained a general recitation about the option agreement and stated that "[a] copy of [the] Option is attached hereto and made a part hereof." Id. at 308-09, 367 S.E.2d at 494. The circuit court entered an order that Flora and the Fergusons were entitled to specific performance of the contract and the option agreement. Id. at 309, 367 S.E.2d at 494. In 1984, Flora filed a suit in chancery against Saunders and requested that the court enforce certain terms of the option agreement that was the basis of the first suit and enter a decree that would require Saunders to convey to Flora certain land and easements. Saunders filed a plea of res judicata, and the circuit court, after an ore tenus hearing, sustained the plea and dismissed the cause. Id. at 307, 367 S.E.2d at 493. We held that the circuit court properly sustained the plea of res judicata because "Flora could maintain only one suit to compel specific performance of the option agreement. The agreement's subject matter related solely to the sale of a tract of land and necessary appurtenances thereto. Indeed, the first suit was instituted to have the court 'grant specific performance of [the] Contract,' not a part thereof. Moreover, the option agreement was attached to and made a part of the bill of complaint." Id. at 311, 367 S.E.2d at 496. We held that Flora sought "to make severable an indivisible contract. Flora had but one cause of action; thus, Flora's claim had to be determined in one suit." Id. Unlike the circumstances in Saunders, the present case does not involve an attempt by a plaintiff to file two separate lawsuits based upon the breach of one indivisible contract. Rather, as we have already stated, plaintiff's two lawsuits involved two separate and distinct causes of action. B. Our decision today also is supported by our holding in Allstar Towing, Inc. v. City of Alexandria, 231 Va. 421, 344 S.E.2d 903 (1986). In Allstar, for purposes of res judicata, we adopted a definition of the term "cause of action" as "an assertion of particular legal rights which have arisen out of a definable factual transaction." Id. at 425, 344 S.E.2d at 906 (quoting Bates v. Devers, 214 Va. 667, 672 n. 8, 202 S.E.2d 917, 921 n. 8 (1974)). We concluded in Allstar that the doctrine of res judicata did not bar a second action involving a challenge to the award of a contract by a municipality. In support of our holding, we emphasized that the two actions did not involve the same "definable factual transaction," noting that "the facts giving rise to the second cause of action were not even in existence when the first action was heard and decided on the merits." Allstar, 231 Va. at 425, 344 S.E.2d at 906. In Allstar, we did not adopt a transactional analysis test when we decided whether the claims at issue were barred by the doctrine of res judicata. We were not even required to consider whether to use such a test because, as we just stated, the facts that gave rise to the second cause of action in Allstar were not in existence when the first cause of action arose. Moreover, just one year after this 270 Court decided Allstar, we implicitly rejected the transactional analysis test in Brown v. Haley, supra, when we stated that "[t]he test to determine whether claims are part of a single cause of action is whether the same evidence is necessary to prove each claim." 233 Va. at 216, 355 S.E.2d at 567. Therefore, in accordance with our precedent, we explicitly reject the application of the transactional analysis test when deciding whether a claim is barred by res judicata. See, e.g., Smithfield Foods, 261 Va. at 214, 542 S.E.2d at 769; Ware, 244 Va. at 376, 421 S.E.2d at 445; Saunders, 235 Va. at 310-11, 367 S.E.2d at 495; Haley, 233 Va. at 216, 355 S.E.2d at 567. In the present appeal, while the facts supporting both the fraud and contract actions arose from defendants' efforts to procure financing of the properties, we nevertheless conclude that those facts did not arise out of the same "definable factual transaction." The alleged misrepresentations by defendants constituted a separate definable factual transaction. This separate definable factual transaction consisted of alleged misrepresentations of the values of the properties and future development plans designed to obscure the actual values of the properties as collateral in order to obtain the money later secured by the notes. The contract action arose from a distinct and separate definable factual transaction limited to breach of the terms and conditions appearing on the face of the notes as well as the damages related to the failure to satisfy the notes. Thus, the contract claim before us is not defeated by the doctrine of res judicata on the grounds that it arose from the same "definable factual transaction" as the fraud claim. Rather, the existence of separate "definable factual transactions" supporting the two claims before us requires rejection of the doctrine of res judicata. Additionally, for purposes of res judicata, a "cause of action" involves an assertion of particular legal rights arising out of a definable factual transaction. In this case, plaintiff's fraud and contract actions arose from different definable factual transactions and, just as important, these actions constituted assertions of different particular legal rights. Clearly, the right to enforce a contract is a separate and distinct particular legal right from the right to enforce an action for fraud. IV. Accordingly, we will reverse the judgment of the circuit court and remand this case for a trial on the merits. Reversed and remanded. Justice LEMONS, files a dissenting opinion. Justice KINSER, with whom Justice LACY and Justice LEMONS join, dissenting. The sole issue in this appeal is whether the breach of contract claim is part of the "same cause of action" as the fraud claim and thus "could have been litigated" with the motion for judgment alleging fraud. Because I conclude that both claims assert legal rights that arose out of the same "definable factual 271 transaction," I respectfully dissent and would affirm the circuit court's judgment sustaining the plea of res judicata. The majority first holds that the doctrine of res judicata does not bar Davis' breach of contract claim because the defendants did not show "identity of the cause of action." The majority next holds that this Court's decision in Allstar Towing v. City of Alexandria, 231 Va. 421, 344 S.E.2d 903 (1986), supports its conclusion that Davis did not split her cause of action because the breach of contract claim did not arise out of the same "definable factual transaction" as the fraud claim. In reaching these two conclusions, the majority cites numerous cases to support the "principle that a plaintiff's assertion of separate and distinct causes of action will defeat a defense of res judicata." The majority does not, however, consider the impact of Virginia's separation of law and equity upon the application of the res judicata bar. In my view, the principles of res judicata cannot be properly applied in this case without addressing that issue. Res judicata is a judicially-created doctrine premised upon public policies favoring certainty in legal relations, an end to litigation, and the prevention of harassment of parties. Bates v. Devers, 214 Va. 667, 670, 202 S.E.2d 917, 920 (1974). However, as I will demonstrate, these policies cannot be fully realized in Virginia because of certain procedural barriers that restrict the application of the doctrine of res judicata. Those barriers include the separation of law and equity and the absence of a compulsory counterclaim rule. Prior to 1977, the inability to join tort and contract claims in the same proceeding also limited the use of the res judicata bar. When such barriers are not implicated in a particular situation, such as the present one, our decision in Allstar Towing provides the analytical framework for deciding whether the res judicata bar applies. I will now review the relevant cases that lead me to these conclusions and, in doing so, will explain why I respectfully dissent. "The doctrine [of res judicata] is firmly established in our jurisprudence and should be maintained where applicable." Ward v. Charlton, 177 Va. 101, 115, 12 S.E.2d 791, 796 (1941); accord Bates, 214 Va. at 670, 202 S.E.2d at 920. This Court has explained the effect of the doctrine: When the second suit is between the same parties as the first, and on the same cause of action, the judgment in the former is conclusive of the latter not only as to every question which was decided, but also as to every other matter which the parties might have litigated and had determined, within the issues as they were made or tendered by the pleadings or as incident to or essentially connected with the subject matter of the litigation, whether the same, as a matter of fact, were or were not considered. As to such matters a new suit on the same cause of action cannot be maintained between the same parties. Gimbert v. Norfolk Southern R.R. Co., 152 Va. 684, 689-90, 148 S.E. 680, 682 (1929), quoted in Allstar Towing, 231 Va. at 424, 344 S.E.2d at 905. Stated differently, the doctrine "bars the relitigation of the same cause of action, or any part thereof which could have been litigated, between the same parties and their 272 privies." Bates, 214 Va. at 670-71, 202 S.E.2d at 920-21. A claim that " 'could have been litigated' " is one that, if tried separately, would amount to " 'claim- splitting.' " Id. at 670 n. 4, 202 S.E.2d at 920 n. 4; accord Bill Greever Corp. v. Tazewell Nat'l Bank, 256 Va. 250, 254, 504 S.E.2d 854, 856 (1998). For many years, this Court has held that a party asserting the res judicata bar must establish identity of the cause of action as well as identity of the remedy sought, identity of the parties, and identity of the quality of the persons for or against whom the claim is made. See Ferebee v. Hungate, 192 Va. 32, 36, 63 S.E.2d 761, 764 (1951); Mowry v. City of Virginia Beach, 198 Va. 205, 211, 93 S.E.2d 323, 327 (1956); Wright v. Castles, 232 Va. 218, 222, 349 S.E.2d 125, 128 (1986); Smith v. Ware, 244, Va. 374, 376, 421 S.E.2d 444, 445 (1992). However, it was not until our decisions in Bates v. Devers and Allstar Towing that we defined the term "cause of action." In Bates, we explained that the scope of the term "cause of action" may vary depending on the context but that, for purposes of res judicata, it is the "assertion of particular legal rights which have arisen out of a definable factual transaction." 214 Va. at 672 n. 8, 202 S.E.2d at 921 n. 8. Thus, we held in Bates that a claim alleging breach of a 1968 instrument and claims based on earlier, separate instruments were " 'distinct divisible claims, depending on separate contracts, made at different times and upon different principles; and the evidence to support one [was] not necessary to support the other, but much of it that would be material to sustain the one would be irrelevant to the other.' " Id. at 672, 202 S.E.2d at 922 (quoting Kelly v. Board of Public Works, 66 Va. (25 Gratt.) 755, 762-63 (1875)). In that holding, we implicitly recognized that the legal rights asserted by the plaintiff did not arise out of a single "definable factual transaction." The definition of the term "cause of action" enunciated in Bates was central to our subsequent decision in Allstar Towing. In its first case, Allstar challenged a determination by the City of Alexandria that Allstar was a " 'non-responsible' bidder." 231 Va. at 425, 344 S.E.2d at 906. In a subsequent case filed by Allstar after the City had issued a second invitation to bid, Allstar sought relief on the basis that the City had awarded the contract to a bidder that allegedly did not satisfy certain specifications. Id. Because the facts underlying the second cause of action were not even in existence when the first case was decided, we concluded that "the legal rights asserted in the second action arose from a factual transaction that was different from the factual transaction giving rise to the assertion of legal rights in the first action." Id. One year after Allstar Towing, we decided Brown v. Haley, 233 Va. 210, 355 S.E.2d 563 (1987). There, the plaintiffs, Dayton A. and Lucy S. Haley and others, asked the court to, among other things, declare that they had an easement to cross the property of Rufus R. Brown to reach the waters of a lake and to enjoin the defendants from impeding access to the lake. 233 Va. at 214, 355 S.E.2d at 566. However, invoking the principles of res judicata, Brown asserted 273 that a prior ejectment action at law filed by him and Sallie W. Brown against the Haleys barred the second litigation concerning the easement. Id. We disagreed with Brown, finding that the "proof necessary to support the [ejectment] action consist[ed] of the documents which vest title in the owner and any other evidence related to the issue of title[;]" whereas, "[t]he existence of an easement is not relevant to the issue of title." Id. at 217, 355 S.E.2d at 568. The easement claimed in the second action could not have been established by the facts that proved ownership of the property in the ejectment action. Id. "The two claims ... were not part of the same cause of action because there was no identity of facts necessary to prove each claim." Id. Nor was there an identity of remedies because the two claims could not have been brought in one proceeding. If the Haleys had asserted what would have been a counterclaim in the ejectment action, the court could not have granted the requested relief regarding the easement in that action since the relief was equitable in nature and the ejectment action was at law. Id. at 218, 355 S.E.2d at 568. Therefore, the plaintiffs' recourse was to file the separate suit in equity. Id. If we had accepted Brown's position, the practical effect would have been to implement, albeit implicitly, a compulsory counterclaim rule. The holding in Brown did not mention the definition of the term "cause of action" adopted the year before in Allstar Towing for good reasons. That definition was not relevant in Brown because of our distinction between law and equity and its impact upon the application of the res judicata bar. That impact is exemplified by our decision in Wright v. Castles, decided after Allstar Towing and before Brown. The issue in Wright was the effect of a chancery suit for injunctive relief upon a subsequent action at law seeking compensatory and punitive damages. 232 Va. at 220, 349 S.E.2d at 127. In the chancery suit, the plaintiff sought to enjoin the defendant from interfering with the plaintiff's use of a certain road. Id. The bill of complaint contained no prayer for an award of damages. Id. In the subsequent action at law, the plaintiff alleged that the defendant had falsely and maliciously slandered his title by interfering with the use of the same road, and that the defendant had tortiously interfered with the consummation of a contract to sell the plaintiff's land. Id. Although we acknowledged that the same events gave rise to both proceedings, id., meaning that both claims arose out of a single "definable factual transaction," we, nevertheless, refused to apply the res judicata bar. Declining the defendant's invitation to abrogate Virginia's distinction between law and equity, we pointed out that a party seeking monetary damages in a tort case must bring the action on the law side of the court. Id. at 222, 349 S.E.2d at 128. However, a party asking for injunctive relief must sue in equity. Id. Thus, we concluded that "a chancery suit is not res judicata to a subsequent law action unless the very matter in controversy in the pending action was decided in the prior suit." Id. 274 The decision in Wright, rather than that in Allstar Towing, also provided the foundation for our refusal to apply the res judicata bar in Smith v. Ware. There, the plaintiff initially filed a motion for judgment for unlawful detainer, seeking not only possession of the residence in which she had resided after her husband's death but also damages. 244 Va. at 375, 421 S.E.2d at 445. The trial court ruled that the statute of limitations barred the unlawful detainer action. Id. at 376, 421 S.E.2d at 445. The plaintiff then filed a bill of complaint seeking commutation of her dower interest in the residence and also damages for withholding that interest. Id. We reversed the trial court's judgment that res judicata barred litigation of the second suit. Id. Citing Wright but not Allstar Towing, we held that there was neither an identity of remedies nor an identity of causes of action as between the motion for judgment for unlawful detainer and the bill of complaint for commutation of the plaintiff's dower interest. Id. In the unlawful detainer action, the plaintiff sought possession of the property based on the provisions of former Code § 64.1-33; whereas, in the chancery suit, she asked for a commutation of her dower interest, relying upon former Code § 64.1-37. Id. at 377, 421 S.E.2d at 446. In contrast, the decision in Allstar Towing had a bearing on our application of the res judicata bar in Flora, Flora & Montague, Inc. v. Saunders, 235 Va. 306, 367 S.E.2d 493 (1988), because the law-equity distinction was not a factor. There, a vendee first sought specific performance of an option agreement to purchase real estate and asked the court to convey the property at issue. Id. at 309, 367 S.E.2d at 494. The second suit, also filed in chancery, involved the vendee's claim that, among other things, it was entitled to use certain rights-of- way, pursuant to the option agreement, over the residual land owned by the vendor. Id. at 310, 367 S.E.2d at 495. We held that the second suit was barred by the doctrine of res judicata. Id. The vendee had but one cause of action to compel specific performance of the option agreement because the agreement's subject matter concerned the sale of the land and the necessary appurtenances thereto. Id. at 311-12, 367 S.E.2d at 496. In other words, there was a single "definable factual transaction" out of which both claims arose. We did not apply the doctrine of res judicata in Brown, Wright, and Smith because the respective plaintiff in each of those cases sought a remedy that was not available in a prior proceeding due to the separation of law and equity. These cases unquestionably demonstrate that the distinction between law and equity limits the application of the res judicata bar in Virginia. Indeed, that distinction was the essence of the Wright decision. However, the separation of law and equity did not play a role in Bates or Flora, nor is it a factor in the case before us. Like the plaintiffs in Bates and Flora, Davis sought relief on the same side of the court in both of her cases. 275 A jurisdiction's separation of law from equity is recognized in the Restatement of Judgments (Second) § 26(1)(c) (1982), as an exception to the general rule concerning claim-splitting. The rule that "a valid and final judgment rendered in an action extinguishes the plaintiff's claim ..., includ[ing] all rights of the plaintiff to remedies against the defendant with respect to all or any part of the transaction ... out of which the action arose," id. at § 24, does not apply when: [t]he plaintiff was unable to rely on a certain theory of the case or to seek a certain remedy or form of relief in the first action because of the limitations on the subject matter jurisdiction of the courts or restrictions on their authority to entertain multiple theories or demands for multiple remedies or forms of relief in a single action, and the plaintiff desires in the second action to rely on that theory or to seek that remedy or form of relief[.] Id. at § 26(c). Instead, the rule against claim-splitting is predicated on the assumption that the jurisdiction in which the first judgment was rendered was one which put no formal barriers in the way of a litigant's presenting to a court in one action the entire claim including any theories of recovery or demands for relief that might have been available to him under applicable law. Id. at § 26(1)(c) cmt. c. One of the formal barriers referenced in the Restatement is the separation of law and equity. Id.; see also id. at § 25 cmt. i. That such formal barriers affect the rule against claim-splitting is not a new concept in Virginia. In Bates, where we first defined the term "cause of action" for res judicata purposes, this Court acknowledged that procedural barriers can restrict the application of res judicata principles. There, we cited the Restatement of Judgments § § 47, 62, 83 (1942), in our discussion of a claim that "could have been litigated." 214 Va. at 671, 202 S.E.2d at 921. Comment c to § 62 provided that "[a]s a result of one tortious act or breach of contract there may be a number of invasions of a single interest or of different interests." Restatement of Judgments § 62 cmt. c (1942). To decide whether there is a single cause of action arising from the tortious act or breach of contract, the first question, being one of procedure, was whether a plaintiff "can recover in one action for all of the harms or breaches of contract[.]" Id. "[I]f because of procedural rules separate actions must be brought," a judgment for one invasion would not prevent an action for others wrongs. Id. However, if all claims could have been brought in one proceeding, the next question concerned the effect of a judgment for one invasion or breach on other claims not included in that action. Id. "This [was] a question of substantive law. The answer depend[ed] upon whether the events or series of events [were] regarded as constituting one inseparable cause of action at the time of the judgment." Id. In addition to the separation of law and equity, another procedural barrier affected the application of the res judicata bar in the past when tort and contract claims could not be joined in the same proceeding in Virginia. See, e.g., Standard 276 Products Co. v. Wooldridge & Co., Ltd., 214 Va. 476, 481, 201 S.E.2d 801, 805 (1974); Kavanaugh v. Donovan, 186 Va. 85, 93, 41 S.E.2d 489, 493 (1947). However, in 1977, the General Assembly eliminated that barrier with the enactment of § 8.01-272. In pertinent part, that statute provides that "[a] party may join a claim in tort with one in contract provided that all claims so joined arise out of the same transaction or occurrence." In Code § 8.01-281, the General Assembly also authorized the pleading of alternative facts and theories of recovery "provided that such claims, defenses, or demands for relief so joined arise out of the same transaction or occurrence." As we stated in Fox v. Deese, 234 Va. 412, 423, 362 S.E.2d 699, 705 (1987), those statutes "represented a radical departure from the common-law pleading rule[.]" Similarly, our implementation in Allstar Towing of the concept that a cause of action, for purposes of res judicata, must be viewed in terms of a "definable factual transaction" was a shift in our res judicata jurisprudence to the approach employed by a majority of jurisdictions: The present trend is to see [a] claim in factual terms and to make it coterminous with the transaction regardless of the number of substantive theories, or variant forms of relief flowing from those theories, that may be available to the plaintiff; regardless of the number of primary rights that may have been invaded; and regardless of the variations in the evidence needed to support the theories or rights. The transaction is the basis of the litigative unit or entity which may not be split. Restatement of Judgments (Second) § 24(1) cmt. a. See also, Williamson v. Columbia Gas & Electric Corp., 186 F.2d 464, 469-70 (3rd Cir.1950); Ramseyer v. Ramseyer, 98 Idaho 554, 569 P.2d 358, 360 (1977); Kent County Bd. of Educ. v. Bilbrough, 309 Md. 487, 525 A.2d 232, 236 (1987); Eastern Marine Constr. Corp. v. First Southern Leasing, Ltd., 129 N.H. 270, 525 A.2d 709, 712 (1987). Our shift was consistent with the General Assembly's transactional approach employed in Code §§ 8.01-272 and -281, as evidenced by its use of the language "same transaction or occurrence." Both concepts, "definable factual transaction" and "same transaction or occurrence," advance public policies embracing judicial economy, ending litigation, providing certainty in legal relationships, and preventing party harassment. However, a transactional approach must "strike a delicate balance between, on one hand, the interests of the defendant and the courts in bringing litigation to a close and, on the other hand, the interests of the plaintiff in the vindication of a just claim." Restatement of Judgments (Second) § 24 cmt. b. The transactional analysis utilized in Allstar Towing is limited by the distinction between law and equity. In determining whether the principles of res judicata bar a particular proceeding, the Allstar Towing definition of the term "cause of action" becomes relevant only when the law-equity distinction is not in play. In other words, legal rights asserted in two separate cases could arise out of a single "identifiable factual transaction," as they clearly did in Wright, but the 277 second proceeding would not be barred if the relief sought therein was not available in the prior proceeding due to the separation of law and equity. See Wright, 232 Va. at 222, 349 S.E.2d at 128. I believe that is the reason Allstar Towing was not mentioned in the Brown, Wright, and Smith decisions. The majority, however, states that this Court did not adopt a transactional approach in Allstar Towing. I disagree. The definition of the term "cause of action," first introduced in Bates and then explicitly relied upon in Allstar Towing and Waterfront Marine Constr., Inc. v. North End 49ers Sandbridge Bulkhead Groups, A, B and C, 251 Va. 417, 434, 468 S.E.2d 894, 904 (1996), employs the phrase "definable factual transaction." I find no analytical difference between that phrase and the phrase "same transaction or occurrence," which is the language used by the General Assembly in Code § § 8.01-272 and 281 and characterized by this Court as "so plain and unambiguous that it requires no interpretation." Powers v. Cherin, 249 Va. 33, 37, 452 S.E.2d 666, 669 (1995). If use of the language "definable factual transaction" in the definition of the term "cause of action" was not indicative of this Court's decision to use a transactional analysis when deciding whether to apply the res judicata bar, then what was the intent of the Court? In truth, the effect of the majority's explicit rejection of a transactional approach is to overrule our decision in Allstar Towing. However, the majority does not explain why this precedent should be cast aside. Despite rejecting a transactional approach and overruling Allstar Towing, the majority, nevertheless, utilizes the Allstar Towing definition of the term "cause of action," and the majority states that its decision is supported by the holding in that case. I find no reason to overrule the precedent established in Allstar Towing. Thus, I conclude that the dispositive inquiry in this case, since the separation of law and equity is not a factor, is whether Davis' claim alleging breach of contract and the former claim alleging fraud arose out of a single "definable factual transaction." In my opinion, they did. The "definable factual transaction" was the events surrounding Anita Lee Davis' loans to Marshall Homes, Inc. and others for the purpose of purchasing certain parcels of real estate. In the present motion for judgment, Davis alleged breach of contract for failure to pay four deed of trust notes. Those notes, signed by Marshall Homes, evidenced the loans made by Davis to purchase four parcels of real estate that previously had been deeded to her in lieu of foreclosure and were executed in conjunction with Davis' loans to purchase those properties. Although the majority asserts that Marshall's alleged misrepresentations constituted one "definable factual transaction" and the terms and conditions of the notes arose from a separate "definable factual transaction," those notes did not come into existence at some later point in time or as a result of different negotiations between the parties. Even the majority acknowledges that "the facts supporting both the fraud and contract actions arose from defendants' efforts to procure financing of the properties[.]" 278 The majority also calls Davis' claims different legal rights and emphasizes that the elements of a claim for fraud are different from the elements of a claim for breach of contract. However, the determination whether a particular claim "could have been litigated" in a prior action and is, thus, barred by the doctrine of res judicata does not depend on whether the elements of the prior claim and the present claim are identical. In Jones v. Morris Plan Bank of Portsmouth, 168 Va. 284, 191 S.E. 608 (1937), this Court stated: If suit is brought for a part of a claim, a judgment obtained in that action precludes the plaintiff from bringing a second action for the residue of the claim, notwithstanding [that] the second form of action is not identical with the first, or different grounds for relief are set forth in the second suit. Id. at 291, 191 S.E. at 610 (emphasis added); accord Saunders, 235 Va. at 311, 367 S.E.2d at 495; Snyder v. Exum, 227 Va. 373, 377, 315 S.E.2d 216, 218 (1984); see also Restatement of Judgments (Second) § 25 and § 24 cmt. c.44 If the application of res judicata turned on whether the elements of the legal rights asserted were the same in both cases, the doctrine would bar only those legal rights based on the same legal theory and asserting the same grounds for relief. A claim that "could have been litigated" would seldom, if ever, be barred. For example, under the majority's holding today, a plaintiff could assert claims alleging intentional interference with contract and business expectancies, and conspiracy to injure another in trade or business in separate proceedings without fear of the second proceeding being barred by the principles of res judicata even though the same events gave rise to both claims. Davis' "second form of action" as well as the "grounds for relief" were obviously not identical with the form of action and grounds of relief set forth in the first case. Jones, 168 Va. at 291, 191 S.E. at 610. The second case alleged breach of contract while the first alleged fraud. Those differences, however, do not change the fact that the legal rights asserted by Davis arose out of a single "definable factual transaction." Allstar Towing, 231 Va. at 425, 344 S.E.2d at 906. My conclusion is consistent with this Court's decision in Waterfront Marine Constr., Inc. v. North End 49ers Sandbridge Bulkhead Groups A, B and C. Applying the Allstar Towing definition of the term "cause of action," we held that a second arbitration demand was barred by a prior arbitration award under the principles of res judicata. 251 Va. at 435, 468 S.E.2d at 905. In the first

44 The Restatement of Judgments (Second) § 24 cmt. c. states: That a number of different legal theories casting liability on an actor may apply to a given episode does not create multiple transactions and hence multiple claims. This remains true although the several legal theories depend on different shadings of the facts, or would emphasize different elements of the facts, or would call for different measures of liability or different kinds of relief. 279 arbitration proceeding, the landowners asserted a breach of contract based on alleged design and construction defects in a bulkhead. Id. at 434, 468 S.E.2d at 904. The landowners argued that the second arbitration demand claiming breach of warranty was not identical to the first because the bulkhead had not failed at the time of the first demand. Id. We disagreed and specifically stated that "[l]abeling the claim a breach of warranty rather than a breach of contract [did] not alter the nature of the claim." Id. at 435, 468 S.E.2d at 904. Similarly, different labeling does not alter the fact that both of Davis' claims arose out of a " definable factual transaction." By analyzing identity of the cause of action in terms of the elements of the legal rights asserted and addressing that issue apart from the Allstar Towing definition of the term "cause of action," the majority is also able to say that the facts necessary to prove Davis' claim for fraud were different from the facts required to establish her breach of contract claim. In Brown, we stated that "[t]he test to determine whether claims are part of a single cause of action is whether the same evidence is necessary to prove each claim." 233 Va. at 216, 355 S.E.2d at 567. However, unlike the majority, I do not believe that the "same evidence test" should be construed in terms of the elements of the legal rights asserted, nor should it be applied so narrowly as to require each piece of evidence to be exactly the same in both cases. See Restatement of Judgments (Second) § 25 cmt. b. Otherwise, as I have already stated, a claim that "could have been litigated" in a prior proceeding would never be barred. The doctrine of res judicata would apply only when an unsuccessful plaintiff re-files the identical claim based on the same legal theory. Thus, I conclude that the focus must be on the evidence that is "necessary" to successfully prove both claims. Here, in order to prevail on her fraud claim, Davis had to establish the existence of the loans, the nonpayment of the notes evidencing those loans, and the amounts due and owing. Although that evidence, without more, would not have established fraud, it did prove the breach of contract. In proving fraud, Davis at the same time proved breach of contract. Under the particular facts of this case, the fraud claim subsumed the breach of contract claim. For that reason, I conclude that the same evidence was necessary to prove both claims. Finally, I would be remiss if I failed to discuss the impact of my analysis and conclusions on this Court's decision in Carter v. Hinkle, 189 Va. 1, 52 S.E.2d 135 (1949). The issue presented there was whether a person who had sustained both property damage and personal injury as the result of a single negligent act of a defendant could maintain two separate actions for the injuries or was a judgment obtained in an action for the property damage a bar to a subsequent action to recover for the personal injury. Id. at 3, 52 S.E.2d at 136. Aligning ourselves with the minority view, this Court held that the common law rule allowing two 280 actions in this situation still applied because the General Assembly had not changed or altered the common law in that respect. Id. at 12, 52 S.E.2d at 140. I acknowledge that the separation of law and equity played no role in that decision. However, I conclude that the rationale for the holding in Carter remains sound in the particular situation presented there. In 1977, the General Assembly abrogated the common law with regard to pleading tort and contract claims in the same proceeding by enacting Code § § 8.01-272 and 281. But, it did not alter the particular common law rule discussed in Carter even though the enactment of those statutes promotes judicial economy and an end to litigation while the common law rule in Carter does not. Similarly, the General Assembly enacted Code § 8.01-6.1 in 1996. That statute states that an amendment of a pleading changing or adding a claim or defense relates back to the original pleading for purposes of the statute of limitations if, among other things, "the claim or defense asserted in the amended pleading arose of the conduct, transaction or occurrence set forth in the original pleading." The statute altered the limited definition of the term "cause of action" employed by this Court in Vines v. Branch, 244 Va. 185, 418 S.E.2d 890 (1992).45 As with the enactment of Code § § 8.01-272 and -281, the passage of Code § 8.01-6.1 reflected the General Assembly's shift to a transactional approach, but again the General Assembly left intact the common law rule followed in Carter. See Weathers v. Commonwealth, 262 Va. 803, 805, 553 S.E.2d 729, 730 (2001) (General Assembly, when acting in an area, is presumed to know the applicable law as stated by an appellate court). And, I believe that it did so for good reasons. After an automobile accident causing injury to person and property, "[q]uestions involving the rights of automobile insurance carriers, both liability and collision, rights of assignees, receivers, trustees in bankruptcy, and subrogees, render it essential in certain cases to allow one action for personal injury and another for property damage." Carter, 189 Va. at 12, 52 S.E.2d at 140.

45 In Vines, we concluded that an amendment alleging breach of contract to a plaintiff's original motion for judgment in tort for the recovery of property stated a new cause of cause, and was thus barred by the applicable statute of limitations, because different elements needed to be proved and a different measure of recovery would apply. 244 Va. at 189, 418 S.E.2d at 893. Notably, both the original motion for judgment and the amendment arose out of the same transaction, specifically the events surrounding the plaintiff's purchase of an automobile and the defendant's placing the title of the vehicle in her name and retaining possession of it. The majority's analysis regarding identity of the cause of action is not consistent with the General Assembly's enactment of Code § 8.01-6.1 in response to the decision in Vines.

281 For these reasons, I conclude that the doctrine of res judicata bars litigation of the present case alleging breach of contract. Therefore, I respectfully dissent and would affirm the judgment of the circuit court. Justice LEMONS, dissenting. I join Justice Kinser's dissent in every respect and write separately only to emphasize the potential consequences of the majority opinion. In essence, the majority pretends that the Court never decided Bates or Allstar Towing and ignores the special definition of "cause of action" adopted for the express purpose of res judicata analysis. In Bates, 214 Va. at 672 n. 8, 202 S.E.2d at 921 n. 8, we clearly stated that "[a] 'cause of action', for purposes of res judicata, may be broadly characterized as an assertion of particular legal rights which have arisen out of a definable factual transaction." In Allstar Towing, we quoted the passage above from Bates, and in determining that res judicata did not bar the successive action, we stated the following: "In sum, the legal rights asserted in the second action arose from a factual transaction that was different from the factual transaction giving rise to the assertion of legal rights in the first action." Allstar Towing, 231 Va. at 425, 344 S.E.2d at 906. It is unmistakable that the Court embraced a transactional analysis for the purpose of res judicata. In doing so Virginia joined the majority of states. Today, without acknowledging its reversal, the majority ignores the special definition of "cause of action" for res judicata purposes and reverts to the national minority on this issue of great importance to individuals and businesses alike. It is commonplace for a single transactional event to provide the foundation for multiple lawsuits. See, e.g., Simmons v. Miller, 261 Va. 561, 544 S.E.2d 666 (2001); Feddeman & Co. v. Langan Assocs., 260 Va. 35, 530 S.E.2d 668 (2000). In the hypothetical case of a business dispute that spawns multiple theories of recovery, the majority opinion would permit separate and successive lawsuits between the same parties on theories of breach of contract, breach of fiduciary duty, common law conspiracy, statutory conspiracy, common law fraud, constructive fraud, and conversion. Under the majority opinion, unless all of the elements are identical, res judicata would not prohibit successive suits between the same parties. Of course, the reason there are separate legal theories is precisely because there are differences in the elements of the causes of action. While the extent of potential harassment of litigants and misuse of judicial resources may be affected by the application of collateral estoppel to narrow the matters subject to proof, and the expiration of the statute of limitations may preclude a particular cause of action, the reality of successive suits, even in different venues, remains a potential consequence of the majority opinion. As these causes of action have proliferated in American law, a restraining concept designed to promote judicial efficiency and avoid harassment of litigants developed. That concept was the transactional analysis approach to the 282 application of the doctrine of res judicata. While a litigant could pursue multiple theories of recovery, the transactional approach would permit such multiplicity, but only if the courts and litigants were required to meet such challenges in one proceeding. With a transactional analysis, the correct balance is achieved between access to the courts for remediation of wrongs and freedom from successive harassment, while husbanding judicial resources. Perhaps that is why the majority of jurisdictions have taken such an approach. Perhaps that is why Virginia did as well in Bates and Allstar Towing. Perhaps that is why the General Assembly adopted a transactional analysis as a predicate for Code §§ 8.01-272 and 281. Perhaps that is why it is so perplexing to witness this inexplicable retreat in the face of such overwhelming justification for transactional analysis in the application of res judicata. I dissent.

Gary Steel v. Kitchin 197 Va. 471, 90 S.E.2d 120 Smith, J., delivered the opinion of the court. This is an appeal by Gary Steel Products Corporation, herein referred to as Gary, from an order of the trial court dismissing its motion for judgment against J. F. Kitchin, trading as Norfolk Contracting Company, herein referred to as Kitchin. In its order the trial court held that Gary was precluded from prosecuting the claim asserted in its motion for judgment on the ground that Gary had 'attempted to split its cause of action.' The correctness of this action of the trial court is the sole issue presented for our determination. The facts are not disputed. In December, 1949, Monsanto Chemical Corporation, herein referred to as Monsanto, entered into a contract with Gary in which Gary agreed to manufacture and install a steel smokestack on a boiler of Monsanto at its plant located on Cottage Toll Road in the city and county of Norfolk. Gary did not possess the necessary equipment with which to erect the smokestack and thereafter it entered into a contract with Kitchin, under which Kitchin agreed to erect the smokestack. It was further agreed that if in the course of erection there should be any failure on the part of the smokestack, the liability for the resulting damages should be upon Gary, and if there should be any failure on the part of the crane or in its operation, the liability for the resulting damages should be upon Kitchin. On June 22, 1950, while Kitchin was engaged in the erection of the smokestack the boom of the crane collapsed causing a section of the smokestack then being lifted to fall into Monsanto's boiler house, resulting in great damage to the property of Gary as well as to the property of Monsanto. On February 28, 1951, Gary instituted this action in the Circuit Court of Norfolk County against Kitchin to recover damages in the sum of $3,506.49, the cost incident to rebuilding its smokestack, which Gary claims it suffered as a result of 283 Kitchin's failure properly to perform his contract. In his answer Kitchin denied liability and filed a counterclaim against Gary for the use of his crane in the erection of the smokestack. Subsequently, on April 6, 1951, Monsanto sued Gary in the Circuit Court of the City of Norfolk for damages to its building caused by the falling of the smokestack. Gary gave Kitchin notice of this action; informed him that he would be expected to pay any judgment entered against it, and offered to turn over to him the defense of the case. Upon Kitchin's refusal to defend the case, Gary's insurer, General Accident Fire and Life Assurance Corporation, Limited, herein referred to as General Accident, defended the action, which resulted in a verdict and judgment in favor of Monsanto against Gary for $11,611.02. General Accident paid this judgment on October 8, 1951. On January 19, 1952, an action was brought in the name of Gary, by and for the benefit of General Accident, against Kitchin for reimbursement of the amount of the judgment paid Monsanto by General Accident. As in the action instituted by Gary on February 18, 1951, Kitchin denied liability and again filed a counterclaim against Gary for the rental of his crane. This action resulted in a verdict and judgment against Kitchin for $11,611.02, and verdict and judgment against Gary for $640 on Kitchin's counterclaim. Kitchin appealed and on September 8, 1954 we affirmed. Kitchin v. Gary, 196 Va. 259, 83 S.E. (2d) 348. In the mandate of this court it was ordered that Gary recover from Kitchin 'for the benefit and sole property' of General Accident. Thereafter, on October 6, 1954, Kitchin filed a motion to dismiss both the action now before us and his counterclaim therein. The basis of this motion was that Gary had recovered a judgment in Kitchin v. Gary on the same cause of action alleged in this case and that in the previous case he had secured a judgment against Gary on the same cause of action alleged in his counterclaim. Gary then filed a motion to dismiss the counterclaim and to strike out the part of Kitchin's grounds of defense that denied liability. After hearing arguments of counsel the trial court in its order dated December 1, 1954, held that the case of Kitchin v. Gary was res judicata both as to Kitchin's counterclaim and as to the issue of liability on the merits of the case, to which holding of the court both parties assented. The court further held that the claim asserted by Gary was an attempt to split its cause of action and therefore dismissed its motion for judgment, to which action of the court Gary excepted and we granted an appeal. Notwithstanding the fact that the instant case was pending at the time of the institution of Kitchin v. Gary, at no time prior to judgment in the latter case did Kitchin claim that the two cases were based upon a single cause of action. Gary contends that it has neither split nor attempted to split its cause of action; that as a result of the collapse of the boom of Kitchin's crane there arose two separate causes of action against Kitchin, one for damages suffered by it and the second for damages suffered by Monsanto. Kitchin, on the other hand, contends that Gary had 284 attempted to split its cause of action on the grounds that the present action and the case of Kitchin v. Gary arose out of the same contract, the existence of which he denied in both actions, the same evidence proves liability in both cases, and subrogation does not create two causes of action where without subrogation there would only be one. Hence, the question presented is whether Gary's present claim constitutes a separate and distinct cause of action from that asserted in Kitchin v. Gary. In view of our conclusions on this question it will not be necessary to discuss the issue raised in the briefs as to the effect of General Accident's right of subrogation by reason of its having paid the judgment recovered by Monsanto against Gary. The courts generally hold that a single or entire cause of action may not be divided or split so as to make it the subject of several actions, without the express or implied consent of the person against whom the cause of action exists. If an action is brought for a part of a cause of action, a judgment obtained in that proceeding precludes the plaintiff from recovering a second judgment for the residue of that cause of action. Carter v. Hinkle, 189 Va. 1, 52 S.E.(2d) 135; Hamilton v. Goodridge, 164 Va. 123, 178 S.E. 874; Hancock v. White Hall etc. Co., 102 Va. 239, 46 S.E. 288; 1 Am. Jur., Actions, § 96; 1 C.J.S., Actions, § 102; 87 A.L.R. 778. This rule prohibiting the splitting of causes of action is a rule of justice based on principles of public policy. It exists for the benefit and protection of the defendant, is intended to prevent vexatious litigation, and to avoid the costs and expenses incident to numerous suits on the same cause of action. Hence, it is not altogether a rule of legal right but rather an equitable interposition of the courts to prevent a multiplicity of actions. Consequently, the defendant may waive or renounce the benefits of the rule by either expressly or impliedly consenting to separate suits on a single cause of action. Furthermore, such a waiver will be presumed unless timely and proper objection is made. Fentress v. Pruden, 185 Va. 461, 39 S.E.2d 240; Shepherd v. Engineering Co., 184 Va. 802, 36 S.E.(2d) 531; Jones v. Morris Plan Bank, 168 Va. 284, 191 S.E. 608. Since the controversy here involves only the application of the rule prohibiting the splitting of a cause of action, our first and primary inquiry is to determine the legal meaning of the term 'cause of action.' In Black's Law Dictionary (4th ed.) it is said that this term 'may mean one thing for one purpose and something different for another,' citing illustrative cases. See also, 1 C.J.S., Actions, § 8; 1 Am. Jur., Actions, § 2. However, without attempting to reconcile the definitions and refinements of the term as used in the numerous authorities, we hold for the purposes of this case that a 'cause of action' accrues to any person when that person is first entitled to institute a proceeding for the enforcement of his legal rights. See Seymour and Burford Corp. v. Richardson, 194 Va. 709, 75 S.E.(2d) 77, and cases there cited. The case of Jones v. Morris Plan Bank, supra, relied on by Gary and Kitchin, is not decisive of the issue now before us. In this case a finance company sued for and 285 recovered a judgment for two installment payments which were due and payable on a note containing an acceleration clause, and secured by a conditional sales contract for an automobile. Upon a subsequent default the car was repossessed and sold. The vendee then sued for conversion of the car, and on appeal this court held that all installments having matured at the time the action was instituted to recover for the two installments, those not embraced in that action were barred. In the instant case it is not disputed that in the contract between Gary and Kitchin, the latter agreed that he would be liable and responsible for the damages sued for in both this case and the case of Kitchin v. Gary. It is also undisputed that the liability for damages was in both cases predicated upon the contract between Gary and Kitchin and that the damage arose out of a single event, the falling of the smokestack. However, the resulting injuries were inflicted upon two separate corporate claimants, Gary and Monsanto, which claimants were not in the same legal relationship to Kitchin. Immediately upon the happening of the accident a cause of action arose in favor of Gary against Kitchin for damages to its smokestack and at the same time a cause of action arose in favor of Monsanto against either Kitchin or Gary for damages to its property. As to the rights of a third party beneficiary, see Code, § 55- 22; Horney v. Mason, 184 Va. 253, 35 S.E.(2d) 78; 1 Michie's Jur., Contracts, § 81. Kitchin was primarily liable for Monsanto's damages and Gary was secondarily liable therefor. If, therefore, Monsanto had proceeded against Kitchin rather than Gary and had recovered its damages from him, Gary would not have had the right to recover from Kitchin the amount of Monsanto's damages. But Monsanto elected to sue Gary and recovered a judgment for its damages. Upon the payment of that judgment -- and not until payment of that judgment -- a second cause of action arose in favor of Gary for reimbursement against Kitchin. Thompson v. Miller, 195 Va. 513, 79 S.E.(2d) 643, and authorities there cited. We hold, therefore, that Gary's present claim constitutes a separate and distinct cause of action from that asserted in Kitchin v. Gary. Accordingly, the judgment is reversed, and since liability has been admitted, the case is remanded for a new trial on the issue of damages. Reversed and remanded.

Graves v. Associated Transport 344 F.2d 894 Bell, C.J., delivered opinion of the court. This action, originally filed in the Circuit Court of Botetourt County, Virginia, and removed to the District Court for the Western District of Virginia on the ground of the diversity of the citizenship of the parties, presents a single question: Did the district court err in refusing to treat as res judicata the judgment in a former action (to 286 which only one of the parties in the instant case was a party) arising from the same highway collision? On November 19, 1962, a collision occurred near Fincastle, Virginia, between a passenger automobile owned and operated by the plaintiff, Walter B. Graves, and a tractor-trailer transport owned by the defendant, Associated Transport, Inc. [hereinafter Associated], and operated by its employee, Thomas S. Flowers. In the present action Graves seeks damages from Associated for personal injuries suffered in the collision, which he alleges was caused by negligence on the part of the defendant's driver, Flowers. On July 14, 1964, the jury returned a verdict for Graves in the amount of $4,000.00 after the district judge in several distinct rulings had refused Associated's plea of res judicata. There can be no doubt that the defendant effectively presented its defense of res judicata to the court below and preserved that issue for the purpose of this appeal. It affirmatively pleaded the former judgment; it orally moved for summary judgment at the close of the plaintiff's evidence; it moved for summary judgment at the close of all the evidence; and it moved to set aside the verdict and for summary judgment after verdict. The plea, the motions for summary judgment, and the motion to set aside the verdict were all based upon the theory that the former judgment was conclusive of the issues in this case. The former judgment in question was rendered by the Law and Chancery Court of the City of Roanoke, Virginia, on July 10, 1964, in an action brought by Flowers, the driver of the tractor-trailer combination owned by Associated, the present defendant, against Graves, the owner-operator of the passenger car and the plaintiff in the case at bar. Flowers alleged in the state court action that personal injuries suffered by him in the collision were the proximate result of the negligence of Graves; Graves denied any negligence and contended that the sole proximate cause of the collision was the negligence of Flowers. The issues of negligence and contributory negligence as causal factors in the collision were thus clearly joined and litigated. The jury in the case of Flowers v. Graves46 returned a verdict in favor of Flowers, awarding him damages in the amount of $2,000.00. We must take it, then, that the jury found Graves guilty of negligence and Flowers free from contributory fault. If this were a case in which Graves were seeking to re-litigate the issues decided in the state court personal injury suit against his adversary in that action, Flowers, we would hold without discussion that, the issues, the causes of action, and the parties being the same in both suits, the former judgment operated as res judicata to bar the second action. Here, however, the plea is asserted not by Flowers, Graves' adversary in the former action, but by the employer of Flowers, Associated, who was not a party to the prior action. It is clear beyond question that we must decide this case in accordance with the substantive law of Virginia. The case is in the federal courts solely by reason of the

46 A writ of error and supersedeas in this case was refused by the Supreme Court of Appeals on January 18, 1965. 287 diversity of the citizenship of the parties, and their rights and obligations are concededly governed by Virginia law. Hence the doctrine of Erie R.R. Co. v. Tompkins, 304 U.S. 64, 58 S.Ct. 817, 82 L.Ed. 1188 (1938), applies. The parties seem agreed that no Virginia authority squarely in point is to be found. In that situation it is our duty, as we see it, to decide the case as we believe it would be decided by the highest court of Virginia, taking into account not merely the generalizations and the dicta in cases from years past but also trends in modern legal thought which we think would be accepted by the Supreme Court of Appeals of Virginia today. Had this case been presented to a Virginia court a generation or more ago, we have little doubt that the plea of res judicata would have been summarily denied. At that time the ruling notion, viable despite the cogent criticism of Jeremy Bentham47 and others since the early part of the nineteenth century, was that before it could be invoked, the estoppel of a judgment must be mutual, i.e., no one could plead as conclusive a judgment in a former action unless, had the judgment gone the other way, it would have been binding on him. It seems clear that had the judgment in Flowers v. Graves gone against Flowers instead of for him, elementary principles of due process would prevent its being held binding upon Associated because it was not a party to that action and had no right to control its conduct. Makariw v. Rinard, 336 F.2d 333, 336 (3 Cir. 1964); Rice v. Ringsby Truck Lines, 302 F.2d 550, 552 (7 Cir. 1962); Restatement, Judgments § 96, comment (j) (1942). The thrust of the mutuality rule was that since one not a party to the former action could not be bound by the judgment therein, it necessarily followed that neither could he take advantage of it. The Virginia courts, like many others, subscribed to this view. See, e.g., Ferebee v. Hungate, 192 Va. 32, 63 S.E.2d 761, 764 (1951); Pittston Co. v. O'Hara, 191 Va. 886, 63 S.E.2d 34, 42, appeal dismissed sub nom. Winn v. Pittston Co., 342 U.S. 803, 72 S.Ct. 38, 96 L.Ed. 608 (1951).48

47 See Bentham, Rationale of Judicial Evidence, in 7 Works of Jeremy Bentham 171 (Bowring ed. 1843), a relevant extract from which is quoted in Currie, Mutuality of Collateral Estoppel: Limits of the Bernhard Doctrine, 9 Stan.L.Rev. 281, 284 n.6 (1957). 48 Nonetheless, the position represented by these decisions was not free from criticism and challenge. Witness the following statements from a Note, The Mutuality Requirement of Res Judicata in Virginia, 41 Va.L.Rev. 404, 418 (1955): "It is obvious that one should not and cannot be bound by a judgment to which he is a complete stranger. But why is the converse of this necessarily true? Is there any substantial injustice in allowing one to assert a claim or defend himself on the basis of what a 'stranger' has previously established? Likewise, is there any real unfairness in limiting a party to one day in court on an issue? It should be remembered that the fundamental policy of the general doctrine of res judicata is to put an end to litigation. Thus, it seems that the Court should seize upon this opportunity to discourage the re-litigation of cases." See also Developments in the Law - Res Judicata, 65 Harv.L.Rev. 818, 861-865 (1952). 288 Virginia decisions involving a plea of res judicata subsequent to the Ferebee and O'Hara opinions have turned upon their individual factual circumstances, with little or no discussion of the mutuality rule. Compare Petrus v. Robbins, 196 Va. 322, 83 S.E.2d 408 (1954) (plea allowed, citing the Eagle decision as authority) and Patterson v. Saunders, 194 Va. 607, 74 S.E.2d 204, cert. denied, 345 U.S. 998, 73 S.Ct. 1132, 97 L.Ed. 1405 (1953) (plea by some persons not parties to prior action allowed on identity of interest rationale; emphasis upon fact that party against whom plea asserted had already been heard on same subject matter) with Eller v. Blackwelder, 204 Va. 292, 130 S.E.2d 426 (1963) (plea refused; party against whom plea asserted had not had an opportunity to litigate her claim, since there was no evidence that she knew of or ratified actions by her insurance carrier) and Cooper v. Pickett, 202 Va. 65, 116 S.E.2d 52 (1960) (plea not allowed, and error assigned for this action abandoned on appeal; party against whom plea asserted had not had his day in court on negligence issue). Likewise in Heaton v. Southern Ry. Co., 119 F.Supp. 658, 661 (W.D.S.C. 1954), the court observed that "[the] plaintiff has had no previous opportunity to prove his case" and rejected a plea of res judicata. In Carter v. Hinkle, 189 Va. 1, 52 S.E.2d 135 (1949), a case relied upon heavily by the appellee, the court did refer on several occasions to the doctrine of res judicata, but the principal inquiry was whether an automobile collision resulting in both personal injury and property damage to one of those involved gave rise to one cause of action or two. The assertion that the satisfaction of the property damage claim merged the injured party's cause of action for negligently inflicted personal injuries into the property damage judgment was rejected by a holding that the injured party had two causes of action in these circumstances. The mutuality rule was probably never a solid wall; exceptions were created under the pressure of the public interest in an end to litigation. The thought was that under certain circumstances once the party against whom the former judgment was asserted had been afforded a full and fair day in court and a reasonable opportunity to be heard on all the relevant issues, even though against a different adversary, a plea of estoppel by judgment ought to be recognized.49 Thus where a judgment has been rendered in favor of an indemnitor, it may be pleaded against the adversary party in the former action by the indemnitee, even though the indemnitee was not a party to the prior action. Pickeral v. Federal Land Bank, 177 Va. 743, 15 S.E.2d 82 (1941); City of Richmond v. Davis, 135 Va. 319, 116 S.E. 492 (1923); Restatement, Judgments § 96 (1942). So here, Virginia might well hold that Associated would be entitled to plead the former judgment in favor of its employee because, if required to respond in damages in the present case for the fault of its employee, it would have, at

49 Exceptions to the mutuality rule have been justified with language like this: "The rule of mutuality is itself based upon policy and practical necessity and justice, as is the whole doctrine of res judicata, and on the same grounds of policy and justice there would seem to be no objection to departing from it where the party affected has been given one adequate opportunity to be heard either personally or by representation." 1 Freeman, Judgments § 429 (5th ed. 1925). 289 least in theory, a cause of action for indemnity against the employee; and it would be anomalous if that cause of action should be allowed to prevail against an employee who had already recovered a judgment himself against the third party. In addition, an exception to the rule of mutuality has been recognized where the liability of the person invoking the former judgment is only derivative, i.e., based solely upon the fault of another who has been exonerated. Ward v. Charlton,50 177 Va. 101, 12 S.E.2d 791 (1941); Restatement, Judgments § 99 (1942); cf. Kinsley v. Markovic, 333 F.2d 684 (4 Cir. 1964). Here Virginia might well allow this plea by Associated on the ground that any liability on its part must be predicated solely upon the fault of its driver, Flowers, who was exonerated of fault by the state court decision.51 In reaching our decision in this case, however, we do not rest upon these exceptions because there is some question as to their applicability as the strategic positions of the parties in the respective actions vary and because we believe the Virginia courts would base their allowance of the plea on a broader ground. As one judicial writer has asserted, perhaps the "widest breach in the citadel of mutuality was rammed"52 by the decision of the Supreme Court of California in

50 This case appears to us to be the Virginia decision which involves a factual situation most similar to that of the case at bar. In the Ward case, however, the defendant in the first suit filed a cross- claim seeking recovery for his personal injuries and property damage. In our case the issue of the fault of the plaintiff in the first action was also raised, but it was done by a plea of contributory negligence rather than by a counterclaim. Also in Ward the jury in the first action returned a verdict that neither party was entitled to recover of the other, whereas in our case the jury in the state court action determined by its verdict that the conduct of Graves was solely responsible for the injuries suffered by Flowers. In sustaining the action of the trial judge in Ward in setting aside a jury verdict for the plaintiff in the second action and entering judgment for the defendant (who was not a party to the first action), Justice, now Chief Justice, Eggleston declared: "Here it has been brought to our attention by undisputed evidence that since the trial below another court of competent jurisdiction has finally adjudicated that the plaintiff in error, Ward, is not entitled to a judgment against Charlton, the defendant in error. Hence, the plaintiff in error is estopped to ask this court to review the record before it and to enter in his favor a judgment which admittedly will be in conflict with one which has already been entered on the same cause of action." 12 S.E.2d at 796. 51 Allowance of the plea of the former judgment on this basis would likely find the court characterizing Associated as being in privity with Flowers, since under the doctrine of res judicata, a final judgment by a court of competent jurisdiction is conclusive upon both the parties involved and those in privity with them. Restatement, Judgments 83 (1942). For a case involving Virginia law in which the doctrine of res judicata was held applicable because of the operation of the privity concept, see Taylor v. Anderson, 303 F.2d 546 (4 Cir. 1962). 52 Judge Friendly, writing for the Second Circuit, in Zdanok v. Glidden Co., 327 F.2d 944, 954 (1964). 290 Bernhard v. Bank of America Nat'l Trust & Sav. Ass'n, 19 Cal.2d 807, 122 P.2d 892 (1942). In this historic decision Justice, now Chief Justice, Traynor, writing for a unanimous court, stated: "The criteria for determining who may assert a plea of res judicata differ fundamentally from the criteria for determining against whom a plea of res judicata may be asserted. The requirements of due process of law forbid the assertion of a plea of res judicata against a party unless he was bound by the earlier litigation in which the matter was decided. * * * He is bound by that litigation only if he has been a party thereto or in privity with a party thereto. * * * There is no compelling reason, however, for requiring that the party asserting the plea of res judicata must have been a party, or in privity with a party, to the earlier litigation. For the California courts, at least, this decision abolished the requirement of mutuality of estoppel and limited the requirement of privity to cases in which an attempt is made to plead the former judgment against one not a party to the action in which it was rendered. Other states and several United States courts of appeals have followed suit. Among the cases relied upon in Bernhard was Eagle, Star & British Dominions Ins. Co. v. Heller, 149 Va. 82, 140 S.E. 314, 57 A.L.R. 490 (1927). In that case, the opinion of the Virginia Supreme Court of Appeals opens with the following statement: "This is a case in which a rigid adherence to a general rule and to some judicial expressions would be a reproach to the administration of justice. Max Heller has recovered under a fire insurance policy upon a stock of goods, after he had been convicted under the Virginia statute (Code, § 4436) of willfully burning the same stock of goods with intent to injure the insurer." 140 S.E. at 315. President Prentis, writing for a unanimous court, went on to rule that the trial court had erred in excluding evidence of the prior judgment of conviction (although the defendant insurance company in the civil action, which was asserting the former judgment in defense, was obviously not a party to the criminal proceeding resulting

"No satisfactory rationalization has been advanced for the requirement of mutuality. Just why a party who was not bound by a previous action should be precluded from asserting it as res judicata against a party who was bound by it is difficult to comprehend. * * * "In determining the validity of a plea of res judicata three questions are pertinent: Was the issue decided in the prior adjudication identical with the one presented in the action in question? Was there a final judgment on the merits? Was the party against whom the plea is asserted a party or in privity with a party to the prior adjudication? * * * "In the present case, therefore, the defendant is not precluded by lack of privity or of mutuality of estoppel from asserting the plea of res judicata against the plaintiff." 122 P.2d at 894-895. 291 in that judgment). In so ruling, the Virginia court, responding to considerations of public policy, rejected the mutuality rule and departed from a long line of cases holding such criminal convictions inadmissible in civil cases at the instance of persons not parties to the criminal proceeding. In the course of his opinion, President Prentis stated: "It is certainly clear in such cases that the plaintiff who is seeking redress in the civil case for the injury, not having been a party to the criminal prosecution, is not bound by its result [when the criminal judgment is one of not guilty]. We confess our inability to perceive, however, why the accused person himself should not be held either as bound or affected by the result of the prosecution, if adverse to him. He has had his day in court, with the opportunity to produce his witnesses, to examine and cross-examine the witnesses for the prosecution, and to appeal from the judgment." 140 S.E. at 316. The criminal judgment was held conclusive: "Therefore he [the convicted plaintiff] should not be permitted again to raise that question by this collateral attack upon that judgment, and thus to avoid its legal and logical consequences." 140 S.E. at 321. The lower court judgment in favor of the plaintiff was reversed, and judgment was entered in favor of the defendant insurance company.53 While the reasoning of the Eagle case was based in part upon the fact that in a criminal case guilt must be proved beyond a reasonable doubt, thus giving added credit to the criminal judgment as decisive of the issue in the civil case, the Virginia court in its opinion did not limit the rationale to that circumstance. Indeed, it cited with approval a number of cases in which former judgments in civil actions had been held res judicata at the instance of one not a party to the former action. It was thus appropriate that Justice Traynor should rely upon the Eagle case as one of the foundations for the Bernhard decision.54 One commentator, welcoming the Bernhard decision, suggested that it be accepted subject to two reservations, only one of which is relevant here. Because the first action might be one in which the party having the initiative might use his advantage unfairly, subjecting his adversary to trial under conditions which, while

53 For a discussion of the Heller case and decisions from other jurisdictions in which it has been followed, see Note, Admissibility and Weight of a Criminal Conviction in a Subsequent Civil Action, 39 Va.L.Rev. 995 (1953). See also, on this general point, Farm Bureau Mut. Auto Ins. Co. v. Hammer, 177 F.2d 793 (4 Cir. 1949), cert. denied sub nom. Beverage v. Farm Bureau Mut. Auto. Ins. Co., 339 U.S. 914, 70 S.Ct. 575, 94 L.Ed. 1339 (1950). 54 Even prior to the Eagle decision, several Virginia courts had viewed rigid adherence to the mutuality doctrine with disfavor. See Cox, Res Adjudicata: Who Entitled to Plead, Va.L.Reg.(n.s.) 241 (1923), and Virginia cases cited therein. But see Note, supra note 8, at 1001 n.36. 292 meeting the minimum requirements of due process, in fact deprived the adversary of a full and fair opportunity to litigate the issues involved, he suggested that ideally the court in each case should inquire whether the former judgment was in fact rendered under such conditions that the party against whom it is pleaded realistically had a full and fair opportunity to present his case. However, doubting the willingness and ability of courts to make such an inquiry into the circumstances on a case-by-case basis, he suggested as an alternative that a plea of the former judgment by one not a party to the prior action should be allowed only if the party against whom the judgment was invoked had the initiative in the prior action. Currie, Mutuality of Collateral Estoppel: Limits of the Bernhard Doctrine, 9 Stan.L.Rev. 281, 303 (1957). The courts have not justified this pessimistic view of their duty and function; instead they have willingly inquired into the circumstances of the actual case, and time and again they have allowed the plea against a party not having the initiative in the former action whenever they have been satisfied that the party against whom the former judgment was invoked in fact had a realistically full and fair opportunity to litigate the issues in the former action. See, e.g., Zdanok v. Glidden Co., 327 F.2d 944, 955-956 (2 Cir. 1964); United States v. United Air Lines, 216 F.Supp. 709, 728-729 (E.D.Wash., D.Nev.1962), 1964 Duke L.J. 402, aff'd as to this point, 335 F.2d 379, 404 (2 Cir.), cert. dismissed, 379 U.S. 951, 85 S.Ct. 452, 13 L.Ed.2d 549 (1964); Teitelbaum Furs, Inc. v. Dominion Ins. Co., 58 Cal.2d 601, 25 Cal. Rptr. 559, 561, 375 P.2d 439, 441 (1962). The commentator has now withdrawn his reservation and welcomes the decisions treating the fairness of the party's opportunity to litigate the issues in the former action on an ad hoc basis. See Currie, The Contributions of Roger J. Traynor - Civil Procedure: The Tempest Brews, 53 Calif.L.Rev. 25 (1965). No suggestion has been made and no basis appears for any suggestion to the effect that Graves had less than an ample opportunity to fully litigate the issue of fault in the former action, although it was his adversary, Flowers, who had the initiative. Similarly, in the Eagle case, the defendant in the criminal case did not have the initiative; but, faced with a felony charge, he had a strong motive to put forward his best defense, and he thus was not allowed another day in court in the civil action. So here, the plaintiff, having had one full and fair day in court, ought not to be permitted to re-litigate the issues decided in the personal injury action in the state court. Graves earnestly insists that it is arbitrary to allow the fate of this action to turn not upon its merits but upon the happenstance of calendar conditions, that our disposition of this appeal will preclude any recovery by him simply because the case in the state court went to judgment while the present lawsuit was pending in the district court. It must be conceded that there is here an element of the arbitrary and fortuitous; but the concept of priority in time is necessarily inherent in the basic idea of res judicata, which, after all, simply means that, the issue having already been decided once by a court of competent jurisdiction, it should not be litigated a second time. Perhaps the law might have chosen the alternative of giving conclusive effect to the judgment in the action first filed instead of to the first judgment rendered; but a 293 choice had to be made, and it was made long ago. Reflection should convince the plaintiff that, whatever the faults of the rule giving effect to the judgment first rendered, such a rule is preferable to the only alternative which readily suggests itself, a situation which would almost certainly tend to precipitate a "race of diligence" to the courthouse and encourage the hasty and ill considered filing of actions. Finally, the plaintiff states that Associated was represented at the trial below by the same counsel who represented the driver, Flowers, in the former action but that he has not had the benefit of this continuity of legal representation. He advises us that in the initial suit he was represented by counsel for his insurance carrier, whereas in this action he presumably has been represented by counsel entirely of his own choosing. Even taking note of this circumstance, however, we are at a loss to understand in what manner it strengthens the plaintiff's case. To our knowledge, Graves has never claimed, and we do not understand him to claim now, that his counsel in the state court proceeding was anything other than a competent and conscientious advocate of his interests. As we observed earlier, there is no basis for even speculating that the plaintiff had anything other than a full and fair chance to introduce all the relevant evidence and be heard on all points of law before the Law and Chancery Court of the City of Roanoke. All this being so, clearly the mere fact that Graves has changed lawyers ought not to increase his substantive rights and provide him with a chance to dispute anew factual matters already once resolved against him. If the matter of different counsel has any bearing upon the disposition of this appeal, it would seem to operate to the plaintiff's disadvantage , since his essential contention is that because Associated was not a party to the prior action, it may not claim the benefit of the judgment which was rendered therein. The natural inference to be drawn from the common counsel situation (which at least suggests a common underwriter), however, is that there is some identity of the interests of Associated and Flowers, the very thing which Graves strenuously maintains does not exist. This is all the more reason why the plea of the former judgment by Associated should be allowed. If Associated or its insurer actually controlled the litigation in Flowers v. Graves, a situation which Graves contends and we have assumed did not exist, it is at least arguable that the judgment in that action, even had it gone against Flowers, would have been binding upon Associated; and then there would be no mutuality problem. Restatement, Judgments § 84 (1942). As we understand the law of the Commonwealth of Virginia, it is designed to insure that every litigant has an opportunity to be heard on any appropriate issue in a court of law. However, the decisions of the highest court of Virginia convince us that the state also is anxious to insure that once a party has been afforded a chance to assert his claim, further litigation involving that claim is not to be permitted. The state has a legitimate interest in the final adjudication of legal disputes, and it is incumbent upon us in this case to give effect to that state policy. We think that if this case were presented to the Virginia courts, they would hold that Graves has already had his day in court on the question of who is responsible for the personal injuries which resulted from the collision on November 19, 1962. Accordingly, the district 294 judge was in error in rejecting the plea of res judicata tendered below by Associated. The judgment of the district court must, therefore, be reversed and the case remanded for the entry of final judgment in favor of the defendant. Reversed and remanded.

Willard v. Moneta Supply 262 VA 473, 551 S.E.2d 596 (2001) Lemons, J., delivered opinion in this case. In this appeal, we consider whether Ronald L. Willard's ("Willard") cause of action against Moneta Building Supply, Inc. ("Moneta") is governed by the five- year statute of limitations set forth in Code § 8.01-243(B) or by the two-year statute of limitations set forth in Code § 8.01-248. Specifically, we must decide whether a loss of dissenters' rights to demand payment for shares of stock constitutes an injury to property. I. Facts and Proceedings Below Willard previously filed a derivative action pursuant to Code § 13.1-672.1 on behalf of Moneta and all its stockholders against Moneta, A.S. Cappellari ("A.S."), Rose Mary Cappellari ("Rose Mary"), and David Cappellari ("David"), the son of A.S. and Rose Mary. Willard sought to void the sale of Moneta's assets to Capps Home and Building Center, Inc. ("Capps") on the grounds that the transaction involved a conflict of interest in violation of Code § 13.1-691. Following a bench trial, the trial court held that Willard failed to present sufficient evidence to support his claims and dismissed his bill of complaint. In Willard v. Moneta Building Supply, Inc., 258 Va. 140, 515 S.E.2d 277 (1999), we affirmed the judgment of the trial court. Willard subsequently filed the current motion for judgment against Moneta seeking monetary damages for Moneta's alleged injury to Willard's property. Since the factual background of this case is virtually identical to that of our prior decision, we provide only a brief recitation of the relevant facts. In his motion for judgment, Willard alleges that the shareholders of Moneta and their respective percentages of share ownership of common stock were, A.S. (49.8%), Rose Mary (25.4%), Willard (19.7%), and David (5.1%). On November 15, 1996, A.S. and Rose Mary, who were officers, directors, and shareholders, caused Moneta to enter into a contract to sell substantially all of Moneta's assets to Capps. Capps is a Virginia corporation engaged in the building supply business and David is its controlling shareholder. By letter dated November 22, 1996, all shareholders were notified of the proposed sale. Included with the letter was a "Notice of Special Meeting of the Stockholders of Moneta Building Supply, Inc. on Proposed Sale of Substantially All of Its Assets to Capps Home and Building Center, Inc.," which contained a description of the proposed transaction. Significantly, the notice did not contain any notice of dissenters' rights. 295 The special meeting took place on December 20, 1996. A.S. and Rose Mary voted in favor of the proposed sale to Capps, while Willard voted against the sale and made a competing offer at a price greater than Capps' offer. Nevertheless, the votes of A.S. and Rose Mary were sufficient to approve the sale to Capps. The transaction closed in early January 1997 and Moneta ceased doing business. Willard filed his current motion for judgment against Moneta in the Circuit Court of Bedford County on January 12, 2000. In response, on February 25, 2000, Moneta filed a demurrer, a plea of the statute of limitations, an amended plea of res judicata, and an amended plea of collateral estoppel. After a hearing and upon consideration of argument and memoranda, the trial court issued a letter opinion on April 18, 2000 sustaining Moneta's plea of the statute of limitations and dismissing Willard's motion for judgment. Specifically, the trial court ruled that Willard's motion for judgment was not an action for injury to property that entitled him to the benefit of the five- year limitation period set forth in Code § 8.01-243(B). Instead, the trial court held that deprivation of his rights as a dissenting shareholder was personal to Willard and, accordingly, his motion for judgment was barred by the two-year limitation contained in the catch-all provisions of Code § 8.01- 248. Willard appeals the adverse ruling of the trial court. II. Standard of Review Upon Moneta's plea of the statute of limitations there are no material facts in dispute. The sole issue on appeal, determination of the correct statute of limitations applicable to Willard's claim, presents a question of law. Carwile v. Richmond Newspapers, Inc., 196 Va. 1, 6, 82 S.E.2d 588, 591 (1954) (discussing Richmond Redev. and Housing Auth. v. Laburnum Constr. Corp., 195 Va. 827, 80 S.E.2d 574 (1954)). Accordingly, the trial court's ruling that Willard's claim was time-barred by the two-year limitation period contained in Code § 8.01-248 is subject to de novo review. See Donnelly v. Donatelli & Klein, Inc., 258 Va. 171, 180, 519 S.E.2d 133, 138 (1999). III. Analysis On appeal, Willard contends that the trial court erred in ruling that the two- year limitation period set forth in Code § 8.01-248 governed his claim against Moneta. Willard asserts that the lack of notice of his dissenters' rights caused an injury to property and his claim is governed by the five-year limitation period of Code § 8.01-243(B). Therefore, Willard argues, his motion for judgment was timely filed. Moneta assigns no cross-error and urges affirmation of the trial court's holding regarding the applicability of Code § 8.01-248 to Willard's claim. Further, Moneta asserts an additional ground upon which to affirm the trial court's judgment. Moneta claims that its transaction with Capps did not trigger dissenters' rights because, according to Code § 13.1-730(A)(3)(ii), there are no 296 dissenters' rights in the case of a cash sale pursuant to a plan to disburse all or substantially all of the proceeds to stockholders within one year. However, we do not consider Moneta's alternative justification for affirming the trial court's judgment. Moneta raised this argument before the trial court on demurrer, but the trial court made no ruling on the demurrer, nor did the trial court rule on the plea of res judicata or plea of collateral estoppel. The trial court only ruled on Moneta's plea of the statute of limitations. The sole issue in this appeal is whether Willard's motion for judgment alleges an "action for injury to property," under Code § 8.01-243(B). If so, the five-year limitation governs and his suit is timely filed. If not, the catch- all provisions of Code § 8.01-248 apply and Willard's action is time-barred by the two-year limitation. See Pigott v. Moran, 231 Va. 76, 79, 341 S.E.2d 179, 181 (1986). The trial court based its decision that Willard did not allege an injury to property upon application of three factors set forth in the United States Court of Appeals' opinion in Brown v. American Broad. Co., 704 F.2d 1296 (4th Cir. 1983).55 On appeal, Willard claims that the trial court's application of these factors was erroneous, while Moneta asserts that these factors compel the conclusion that Moneta's failure to give notice did not constitute an injury to Willard's property. In Keepe v. Shell Oil Co., 220 Va. 587, 260 S.E.2d 722 (1979), decided four years prior to Brown, we reviewed prior Virginia case law in order to address whether certain claims were barred by the catch-all period of limitations then embodied in Code § 8-24. The trial court in Keepe ruled that certain damages were direct damages to property subject to the five-year limitation period, but the remainder of the damages were consequential to the wrong and not direct

55 In Brown, the court stated: [T]he Virginia Supreme Court has been extremely technical in its determination of whether the damage for which a plaintiff seeks to recover is a direct injury to property and thereby qualifies for the benefit of the five year statute of limitations. In order for the five year statute to apply, the following facts, among other things, must be found: (1) the injury must be against and affect directly the plaintiff's property; (2) the plaintiff must sue only for the direct injury; and (3) the injury, to qualify as a direct injury, must be the very first injury which results from the wrongful act. Id. 704 F.2d at 1303-04 (internal citations and quotation marks omitted). The court identified these factors based on the United States District Court for the Western District of Virginia's opinion in Holdford v. Leonard, 355 F.Supp. 261 (W.D.Va.1973). Although the court noted that Holdford was decided under Virginia's former scheme for statutes of limitation, the court stated that the analysis in that case was nevertheless applicable to the current statutes of limitations. Brown, 704 F.2d at 1303.

297 damages to property and were barred by the prevailing catch-all limitation period. Id. at 590, 260 S.E.2d at 723-24. We reversed, holding that the five-year limitation period applied to the entire motion for judgment because "all the damages claimed flowed from injury to property interests, and no cause of action is based on injury to the person." Id. at 594, 260 S.E.2d at 727. See also First Virginia Bank-Colonial v. Baker, 225 Va. 72, 84, 301 S.E.2d 8, 15 (1983) (stating that Keepe implicitly overruled prior inconsistent decisions in which undue emphasis was placed on direct versus consequential damage). Significantly, pursuant to the statutory changes adopted in 1977, "survivability no longer is germane in determining which statute of limitations applies. Code § 8.01-25 provides that all causes of action survive the death of the plaintiff or defendant. Moreover, the problem of determining direct or indirect injury has been eliminated." Pigott, 231 Va. at 80, 341 S.E.2d at 181. Accordingly, we hold that the trial court erred in basing its ruling in the present case upon the test in Brown. The interest represented by a stock certificate is an intangible personal property right. Ward v. Ernst & Young, 246 Va. 317, 327, 435 S.E.2d 628, 633 (1993). See also Virginia Pub. Serv. Co. v. Steindler, 166 Va. 686, 695, 187 S.E. 353, 356 (1936) (stating that stock is "property ... subject to depreciation as well as appreciation in value"); Iron City Sav. Bank v. Isaacsen, 158 Va. 609, 628, 164 S.E. 520, 526 (1932) (noting that "[a] share of stock of a corporation is intangible personal property partaking of the nature of a chose in action"). However, we have not, until today, had occasion to consider whether stockholders' dissenters' rights are property rights for the purpose of the statute of limitations. It is well-established by our cases that actions for trespass or conversion constitute claims of injury to property because they involve allegations of wrongful exercise or control over the property of another. See Bader v. Central Fidelity Bank, 245 Va. 286, 427 S.E.2d 184 (1993); Vines v. Branch, 244 Va. 185, 418 S.E.2d 890 (1992). We based our decisions in these cases on the rationale that "conduct ... directed at [another's] property, ... constitutes an injury to property." Id. at 190, 418 S.E.2d at 894. Additionally, we held in Lavery v. Automation Mgmt. Consultants, Inc., 234 Va. 145, 360 S.E.2d 336 (1987), that a suit for the unauthorized use of a person's name, portrait, or picture was an injury to property. In reaching this conclusion we noted: Property is not necessarily a taxable thing any more than it is always a tangible thing. It may consist of things incorporeal, and things incorporeal may consist of rights common in every man. One is not compelled to show that he used, or intended to use any right which he has, in order to determine whether it is a valuable right of which he cannot be deprived, and in which the law will protect him. The privilege and capacity to exercise a right, though unexercised, is a thing of value--is property--of which one cannot be despoiled. 298 Id. at 152-53, 360 S.E.2d at 341 (quoting Munden v. Harris, 153 Mo.App. 652, 134 S.W. 1076, 1078 (1911)). We have previously held that an allegation of nothing more than disappointed economic expectations does not amount to an injury to property. Rather, the law of contracts provides the sole remedy for such a loss. Sensenbrenner v. Rust, Orling & Neale, Architects, Inc., 236 Va. 419, 425, 374 S.E.2d 55, 58 (1988). Moreover, we stated in Pigott, that if the property is in the same condition and available for the same use after the defendant's actions as before, the alleged wrongs were directed at the plaintiffs personally rather than at their property. 231 Va. at 81, 341 S.E.2d at 182. With these principles in mind, we consider whether Willard's motion for judgment alleged an "injury to property" within the meaning of Code § 8.01-243(B). Article 15 of the Virginia Stock Corporation Act ("Act") governs the rights of a shareholder to dissent from corporate action and the circumstances under which a shareholder is entitled to assert those rights. Code § 13.1- 729 et seq. Code § 13.1-730 addresses the circumstances giving rise to a shareholder's right to dissent and receive fair value for his stock, and Code § 13.1-732 requires the corporation to give notice of these dissenters' rights. A service of notice and demand by the dissenter must be given to the corporation in order to exercise dissenters' rights. (§ 13.1-733--Notice of intent to demand payment; § 13.1-734- -Notice of corporate action; § 13.1- 735--Shareholder duty to demand payment.) The remainder of Article 15 of the Act addresses the situation where the shareholder is dissatisfied with the payment received from the corporation. We hold that dissenters' rights are property interests and that allegations of loss of dissenters' rights constitute an allegation of "injury to property" within the meaning of Code § 8.01-243(B). Ownership of stock provides the shareholder with a bundle of rights, some of which are provided by contract while others are provided by the Code. Some rights may be unique to certain classes of stock, while other rights exist in all stock, independent of class. We have previously stated, for example, that the right to vote shares of stock at a corporate meeting is an incident of ownership; it is a part of the stockholder's property interest. Carnegie Trust Co. v. Security Life Ins. Co., 111 Va. 1, 27, 68 S.E. 412, 421 (1910). In Fein v. Lanston Monotype Mach. Co., 196 Va. 753, 767, 85 S.E.2d 353, 361 (1955), we held that "[t]he right to vote for directors is a right to protect property from loss, and to make its possession beneficial. To deprive a stockholder of his right to vote is to deprive him of an essential attribute of his property." Similarly, Code § 13.1-730(A)(3) gives a shareholder a right incident to ownership of stock, the right to dissent from certain corporate actions. A share of stock with such rights may be more valuable than one without such rights. The presence of dissenters' rights triggers a series of rights and obligations under the Code that ultimately provides the shareholder the opportunity to demand the fair 299 value of his shares. Consequently, the loss of such rights, regardless of how effectuated, injures the stock. In the present case, Willard alleges that he was denied dissenters' rights because Moneta failed to give him proper notice pursuant to Code § 13.1-732(A). Accordingly, Moneta's alleged failure to provide such notice is properly characterized as conduct directed at Willard's property. Just as the loss of the right to vote for directors constitutes an injury to property, so is the loss of the right to demand fair value as a dissenting shareholder. Commentators and other courts agree. As one commentator has noted: Essentially, an appraisal is the method of paying shareholders for taking their property; it is the statutory means whereby shareholders can avoid the conversion of their property into other property not of their choosing and is given to shareholders as compensation for the abrogation of the common-law rule that a single shareholder could block a merger. The purpose of these statutes is to protect the property rights of dissenting shareholders from actions by majority shareholders which alter the character of their investment. 12B William M. Fletcher, Cyclopedia of the Law of Private Corporations § 5906.10, at 340-41 (perm. ed.2000 rev. vol.) (emphasis added) (internal footnotes omitted). See also Breniman v. Agricultural Consultants, Inc., 829 P.2d 493, 496 (Colo.Ct.App.1992); Settles v. Leslie, 701 N.E.2d 849, 856 (Ind.Ct.App.1998); In re Watt & Shand, 444 Pa. 206, 283 A.2d 279, 281 (1971) (noting that the statutory protection of dissenting shareholders through the appraisal provision is designed to safeguard property rights). Finally, Moneta argues that Willard's motion for judgment does not allege an injury to property because Willard did not lose his dissenters' rights as a result of alleged lack of notice. According to Moneta, Willard's stock was not injured on November 22, 1996, the date Willard claims he was due notice of dissenters' rights, because Willard still had dissenters' rights after that date. Moneta claims that Willard retained dissenters' rights up until the sale of Moneta's assets to Capps, regardless of whether Willard was aware of those rights. Without commenting on the merits of Moneta's position, we conclude that it has no impact on our decision today. Moneta blurs the concepts of causation and injury. The failure to give notice is not the injury alleged; the loss of dissenters' rights, an incident of stock ownership, is the injury alleged. The applicable statute of limitations is determined by the type of injury alleged. Whether the alleged failure to give Willard notice of dissenter's rights in accordance with Code § 13.1-732 caused injury or loss is a different question. IV. Conclusion For the foregoing reasons, we hold that the trial court erred in determining that Willard's motion for judgment was subject to the two-year catch-all limitation 300 provided by Code § 8.01-248 and in dismissing his claim. We further hold that Willard alleged an "injury to property" and his claim was thus subject to the five- year limitation in Code § 8.01-243(B). Reversed and remanded.

Eagles Court v. Heatilator 239 Va. 325, 389 S.E.2d 304 Russell, J., delivered opinion in this case. This appeal presents the question whether a claim for damages, resulting from an allegedly defective product incorporated into the construction of a condominium, is barred by the statute of limitations and the . Because the case was decided upon pleas in bar and demurrers without an evidentiary hearing, we will summarize the facts as stated in the pleadings and as stipulated for the purpose of the pleas in bar. The Eagles Court Condominium is a 42-unit complex in Nelson County. Wintergreen, a Virginia limited partnership, was the developer and original declarant of the condominium. The first unit was sold in 1975, the last unit was sold in 1976, and all construction on the project was completed by January 1977. Heatilator, Inc., manufactured steel fireplace systems which were designed by, and components of which were supplied by, Acorn Structures, Inc. Nielson Construction Company, Inc., assembled and installed the systems and incorporated them into the construction of the units. On October 12, 1986, a fire occurred in apartment 101, Eagles Court, which spread to apartments 102 and 103 and also damaged the common elements of the condominium complex. The alleged cause was a defect in the design and assembly of the Heatilator systems. The defect permitted embers to escape from the firebox into combustible materials. A county fire official determined that the fireplace systems were hazardous because of the lack of metal fire-stop spacers in the chases of the flues. The official imposed a ban on further use of the systems. The Eagles Court Condominium Unit Owners Association and its Board of Directors (collectively, the plaintiffs) brought this action by a motion for judgment filed in the Circuit Court of Fairfax County on October 9, 1987. The plaintiffs alleged that the fire resulted from the negligence of Heatilator, Acorn, and Nielson in the design, manufacture, sale, and installation of the fireplace systems.56 On motion of the defendants, the court transferred the case to the Circuit Court of Nelson County.

56 The plaintiffs also joined the developer, its successors in interest, and other parties, as defendants. The plaintiffs nonsuited some defendants and the court dismissed others. The court sustained demurrers filed by the developers and sellers, ruling that those parties were protected by the doctrine of caveat emptor. Those rulings are not before us in this appeal.

301 The defendants pleaded the statute of limitations and the statute of repose, Code Sec. 8.01-250. After reviewing briefs, the arguments of counsel, and certain stipulations of fact, the court sustained the pleas in bar by a written opinion followed by a final order, entered October 12, 1988. We granted the plaintiffs an appeal limited to the question whether the court erred in ruling that the claims against Heatilator, Acorn, and Nielson were time-barred. The trial court observed, at the conclusion of the hearing on the pleas, that the record was insufficient to permit a finding of fact on the issue whether the Heatilator systems constituted "equipment or machinery" within the meaning of the last sentence of the statute of repose, Code Sec. 8.01-250. That statute provides as follows: No action to recover for any injury to property, real or personal, or for bodily injury or wrongful death, arising out of the defective and unsafe condition of an improvement to real property, nor any action for contribution or indemnity for damages sustained as a result of such injury, shall be brought against any person performing or furnishing the design, planning, surveying, supervision of construction, or construction of such improvement to real property more than five years after the performance of furnishing of such services and construction. The limitation prescribed in this section shall not apply to the manufacturer or supplier of any equipment or machinery or other articles installed in a structure upon real property, nor to any person in actual possession and in control of the improvement as owner, tenant or otherwise at the time the defective or unsafe condition of such improvement constitutes the proximate cause of the injury or damage for which the action is brought; rather each such action shall be brought within the time next after such injury occurs as provided in Secs. 8.01-243 and 8.01-246. The last sentence, in substance, was added to the statutory predecessor of Sec. 8.01-250 in 1973.57 Acts 1973, c. 247. That provision was, therefore, in effect at all times pertinent to this case. In Cape Henry v. Natl. Gypsum, 229 Va. 596, 602, 331 S.E.2d 476, 480 (1985), we construed the last sentence of the statute to apply to manufacturers and suppliers of machinery and equipment, but not to those who furnish ordinary building materials. Therefore, if the Heatilator systems are deemed to be ordinary building materials, all rights of action against those who furnished their design or construction were extinguished in 1982, five years after the performance of the construction. This action, brought in 1987, would, in that event, be time-barred. On the other hand, if the Heatilator systems are deemed to be machinery or equipment, the last sentence of Sec. 8.01-250 applies. In that event, the statute of

57 Minor revisions were made in the language when former Title 8 was recodified as Title 8.01 in 1977. Acts 1977, c. 617.

302 repose is inapplicable, rights of action accrued to the plaintiffs on October 12, 1986, the date of the fire, and the five-year statute of limitations prescribed by Code Sec. 8.01-243(B), for actions for injury to property, governs the case. Upon that theory, the action would be timely. The factual determination whether the Heatilator systems are machinery or equipment, is therefore crucial. The last sentence of Sec. 8.01-250 exempts from the operation of the statute of repose only the "manufacturer" and "supplier" of machinery or equipment. The designer and the installer of such machinery or equipment are entitled to the protection of the first sentence of the statute. The trial court correctly perceived this distinction by ruling that regardless of how the Heatilator systems were to be categorized, those allegations of the motion for judgment charging the defendants with negligent design are barred by Code Sec. 8.01-250. We add that Nielson, the installer, is entitled to the protection of the statute of repose for the same reason. The question remains whether the plaintiffs' claims against Heatilator, as manufacturer, and Acorn, as supplier, are time-barred. The trial court took the view that it was immaterial whether the last sentence of Sec. 8.01-250 applies, because all the plaintiffs' rights of action were barred by the five-year limitation of former Code Sec. 8-24, however the Heatilator systems may be categorized. The court reasoned that the plaintiffs suffered some injury or damage when the defective installations were made, and, applying Virginia Military Institute v. King, 217 Va. 751, 232 S.E.2d 895 (1977), and Housing Authority v. Laburnum Corp., 195 Va. 827, 80 S.E.2d 574 (1954), ruled that the plaintiffs' rights of action accrued and the statute of limitations began to run in 1977, at the latest. We do not agree with that analysis. Former Code Sec. 8-24 was a general statute of limitations which did not specify when the limitation period began to run. It provided merely that actions shall be brought within the prescribed number of years "next after the right to bring the same shall have accrued." Id. It remained for the case law to determine when, in varying circumstances, such rights of action accrued. See, e.g., First Va. Bank-Colonial v. Baker, 225 Va. 72, 301 S.E.2d 8 (1983); Locke v. Johns-Manville Corp., 221 Va. 951, 275 S.E.2d 900 (1981); King, supra; Caudill v. Wise Rambler, 210 Va. 11, 168 S.E.2d 257 (1969); Hawks v. DeHart, 206 Va. 810, 146 S.E.2d 187 (1966); Laburnum Corp., supra. Where a general statute and a special statute concern the same subject matter and are in apparent conflict, the special statute supersedes the general statute. Fonticello Co. v. Richmond, 147 Va. 355, 359-60, 137 S.E. 458, 459 (1927). It is sometimes said that in those circumstances, the special act should be construed as an exception to the general law, to the extent of the conflict. Id.; see also, Kirkpatrick v. Bd. of Supervisors, 146 Va. 113, 125, 136 S.E. 186, 190 (1926). The last sentence of present Code Sec. 8.01-250 was enacted while former Code Sec. 8-24 was still in effect. The new enactment contained a specific provision for the commencement of the running of the statute of limitations: 303 "such action shall be brought within the time next after such injury occurs." Code Sec. 8.01-250. The term "such injury" refers to the preceding words: "at the time the defective or unsafe condition of such improvement constitutes the proximate cause of the injury or damage." Id. We conclude that this specific language constituted an exception to the general language of former Code Sec. 8-24, and superseded Sec. 8-24 in the limited circumstances to which the new language applied: actions against "the manufacturer or supplier of any equipment or machinery ... installed in a structure upon real property." Id. Accordingly, if the Heatilator systems are machinery or equipment, the last sentence of Code Sec. 8.01-250 applies, and former Code Sec. 8-24 does not. For that reason, the trial court erred in holding the plaintiffs' claims against Heatilator, as manufacturer, and Acorn, as supplier, time-barred without first making the dispositive factual determination whether the Heatilator systems were "machinery" or "equipment" within the meaning of Code Sec. 8.01-250. Because the court correctly sustained Nielson's plea in bar, we will affirm the judgment to the extent that defendant was dismissed. We will reverse the judgment in other respects and remand the case for further proceedings with regard to the plaintiffs' claims against the defendants Heatilator, as manufacturer, and Acorn, as supplier, consistent with this opinion. Affirmed in part, reversed in part, and remanded. Newman v. Walker 270 Va. 291; 618 S.E.2d 336 (2005) Kinser, C., delivered the opinion of the court. Pursuant to Code § 8.01-229(D), a statute of limitations is tolled when a defendant uses any direct or indirect means to obstruct the filing of an action. In this case, we conclude that a defendant's affirmative misrepresentation about his identity at the scene of an automobile accident invokes this statute and tolls the running of the statute of limitations for the ensuing personal injury action if the defendant designed or intended his misrepresentation to obstruct the filing of the action. Thus, we will reverse the judgment of the circuit court sustaining a plea of the statute of limitations.

Relevant Facts and Proceedings Sharon M. Newman allegedly sustained personal injuries on June 17, 2000 when a truck owned by Hastings Village, Inc. struck the motor vehicle she was operating. At the scene of the accident, the driver of the Hastings Village truck identified himself to a police officer as Kareem A. Brooks. Relying on that information, Newman filed a motion for judgment on June 11, 2002 against Brooks and Hastings Village. Both defendants filed grounds of defense, admitting that there was an incident involving the specified vehicles but denying that Brooks was the driver of the Hastings Village truck. 304 About a month after the accident, the liability insurance carrier for Hastings Village contacted Hastings Village about the accident and reported that Brooks was driving the company's vehicle. Hastings Village advised the insurance carrier that it did not employ anyone by the name of Kareem A. Brooks. Hastings Village then confronted one of its employees named William Walker, Jr., and Walker admitted that he had been driving the Hastings Village truck at the time of the accident. In September 2003, soon after Newman had answered interrogatories and asked to depose Brooks, she learned for the first time that Brooks was not the driver of the Hastings Village truck. On October 1, 2003, the attorney for the defendants advised Newman's attorney that an investigator had found out that Walker had stolen Brooks' identification, had taken the Hastings Village truck without permission, and was driving it at the time of the accident. With this new information, Newman moved to file an amended motion for judgment naming William Walker, Jr., as a defendant and as the driver of the Hastings Village truck. Brooks and Hastings Village admitted in their grounds of defense to the amended motion for judgment that Walker had identified himself as Brooks at the scene of the accident. After attempting unsuccessfully to serve process on Walker, Newman discovered that Walker's name was actually Leonard Walker, Jr. On February 26, 2004, the circuit court permitted Newman to change the name of the defendant-driver from William Walker, Jr., to Leonard Walker, Jr.58 Nationwide Mutual Insurance Company, Newman's uninsured motorist carrier, then moved to dismiss the action pursuant to the applicable two-year statute of limitations. See Code § 8.01-243(A). Nationwide asserted that Walker was not named as a defendant in the action until January 12, 2004, more than two years after the date of the accident. Newman responded that, pursuant to the provisions of Code § 8.01-229(D), the statute of limitations was tolled during the period when Walker "falsely and fraudulently identified himself to both the plaintiff and the . . . police officer as Kareem Brooks." Walker's use of false identification in violation of Code § 18.2-204.1(B), according to Newman, obstructed her ability to file this action against the proper defendant. Relying on Grimes v. Suzukawa, 262 Va. 330, 551 S.E.2d 644 (2001), the circuit court, in a letter opinion, concluded that Newman "failed [to] present any evidence to establish that Mr. Walker's conduct constituted a direct or indirect means to obstruct the filing of [Newman's] tort action[] within the meaning of Code § 8.01-229(D)." Thus, the circuit court granted Nationwide's motion to dismiss. Newman appealed to this Court. Analysis

58 On June 4, 2004, the circuit court granted Newman's request to nonsuit Brooks and Hastings Village, leaving Leonard Walker, Jr. as the sole defendant. 305 The sole issue on appeal is whether Walker's misrepresentation by using stolen identification at the scene of the accident was a "direct or indirect means [used] to obstruct the filing of [this] action," thereby tolling the statute of limitations.59 Code § 8.01-229(D). The provisions of Code § 8.01-229(D) state that "when the filing of an action is obstructed by a defendant's . . . using any other direct or indirect means to obstruct the filing of an action, then the time that such obstruction has continued shall not be counted as any part of the period within which the action must be brought."

Newman argues that she should receive the benefit of the tolling provision in Code § 8.01-229(D) because she was the victim of Walker's fraudulent misrepresentations about his identity upon which she relied in filing this action. Citing Hawks v. Dehart, 206 Va. 810, 146 S.E.2d 187 (1966), Newman contends that Walker's concealment of relevant facts was the sort of fraud involving moral turpitude sufficient to toll the running of the statute of limitations. Finally, Newman distinguishes this Court's decision in Grimes by arguing, among other things, that Walker's giving false information to the police officer at the scene of the accident, unlike the defendant's wearing a mask in Grimes, was an affirmative misrepresentation about his identity. In response, Walker contends that our decision in Grimes is controlling. Citing Hawks and Culpeper National Bank v. Tidewater Improvement Co., Inc., 119 Va. 73, 89 S.E. 118 (1916), Walker argues that, under provisions of Code § 8.01-229(D), a statute of limitations is tolled when a defendant conceals the existence of a cause of action. According to Walker, Newman knew at the time of the accident that she had a cause of action just as the plaintiff in Grimes did when the defendant sexually assaulted her. Like the defendant in Grimes, Walker contends that, although he concealed his identity, he did not do so in order to obstruct Newman's filing of this action. Thus, in Walker's view, the statute of limitations was not tolled. We do not agree with Walker's argument implying that a statute of limitations is tolled under Code § 8.01-229(D) only when a defendant acts to conceal the existence of a cause of action. See Baker v. Zirkle, 226 Va. 7, 12, 307 S.E.2d 234, 236 (1983) (suggesting that the provisions of Code § 8.01-229(D) apply when a defendant prevents service of process). In Culpeper National Bank, one of the cases cited by Walker, the plaintiff brought an action of assumpsit

59 Amicus curiae in support of Newman urges this Court to reverse the judgment of the circuit court on the theory that there was an equitable tolling of the statute of limitations due to Walker's actions and that Walker is therefore estopped from asserting the bar of the statute of limitations. Newman relied only on the provisions of Code § 8.01-229(D) before the circuit court. Thus, we will not address the issue of estoppel. In her opposition to the plea of the statute of limitations filed in the circuit court, Newman did, however, characterize Walker's conduct at the scene of the accident as fraudulent.

306 against a bank and its president to recover the proceeds of a note that had been delivered to the bank to be discounted by it. 119 Va. at 74, 89 S.E. at 118. The bank pled two statutes of limitations. Id. at 75, 89 S.E. at 119. The issue with regard to the plea was whether the bank, "by any indirect way or means, obstructed the prosecution of [the] suit" by participating in some fraudulent act "which kept the plaintiff in ignorance of its rights."60 Id. at 82-83, 89 S.E. at 121. Quoting Foster v. Rison, 58 Va. (17 Gratt.) 321, 345 (1867), we stated that ignorance of the existence of a debt was not sufficient to toll a statute of limitations unless that ignorance came about from the fraud of the defendant. Culpeper Nat'l Bank, 119 Va. at 83, 89 S.E. at 121; accord Jones v. United States Fidelity & Guaranty Co., 165 Va. 349, 360-61, 182 S.E. 560, 564-65 (1935). In that context, we then explained the kind of concealment that would toll the statute of limitations: "Mere silence by the person liable is not concealment, but there must be some affirmative act or representation designed to prevent, and which does prevent, the discovery of the cause of action. Concealment of a cause of action preventing the running of limitations must consist of some trick or artifice preventing inquiry, or calculated to hinder a discovery of the cause of action by the use of ordinary diligence, and mere silence is insufficient. There must be something actually said or done which is directly intended to prevent discovery. Mere silence or concealment by a debtor may not, without affirmative misrepresentation, toll the running of the statute. Where, however, a debtor by actual fraud keeps his creditor in ignorance of the cause of action, the statute does not begin to run until the creditor had knowledge, or was put upon inquiry with means of knowledge that such cause of action had accrued. Fraudulent concealment must consist of affirmative acts of misrepresentation, mere silence being insufficient. The fraud which will relieve the bar of the statute must be of that character which involves moral turpitude, and must have the effect of debarring or deterring the plaintiff from his action." Culpeper Nat'l Bank, 119 Va. at 83-84, 89 S.E. at 121 (quoting 2 H.G. Wood, Wood on Limitations 1422 (4th ed. 1916)). Subsequent to Culpeper National Bank, we decided several more cases involving the question whether a statute of limitations had been tolled because a defendant had concealed a cause of action. For example, in Hawks, the other case

60 The relevant portion of the tolling provision in effect at that time, Code § 2933 (1904), which is a predecessor to Code § 8.01-229(D), stated that "where any such right . . . shall accrue against a person who . . . by any other indirect way or means shall obstruct the prosecution of such right the time that such obstruction may have continued shall not be computed as any part of the time in which the said right might or ought to have been prosecuted."

307 cited by Walker, the plaintiff filed an action against a doctor for damages allegedly caused by the doctor's negligence in leaving a surgical needle in the plaintiff's neck during an operation. 206 Va. at 811, 146 S.E.2d at 187. The plaintiff alleged that the doctor had "knowingly, actively and negligently concealed from the plaintiff the fact of the presence of such needle in her neck." Id. at 814, 146 S.E.2d at 190. Again explaining the character of fraud necessary to toll the statute of limitations, we stated that it must involve moral turpitude and the "defendant must intend to conceal the discovery of the cause of action by trick or artifice."61 Id. (quoting Richmond Redevelopment & Hous. Auth. v. Laburnum Constr. Corp., 195 Va. 827, 840, 80 S.E.2d 574, 582 (1954)). We concluded that the plaintiff had not established "such trick or artifice or purpose" by the doctor. Id.; accord Horn v. Abernathy, 231 Va. 228, 234, 343 S.E.2d 318, 321 (1986); Morriss v. White, 146 Va. 553, 570-71, 131 S.E. 835, 840 (1926); see also Mid-Atlantic Bus. Communications, Inc. v. Virginia Dep't of Motor Vehicles, 269 Va. 51, 58, 606 S.E.2d 835, 839 (2005) (defendant's continuing to consider plaintiff's claim and failing to respond to certain letters was not "an affirmative act . . . designed to thwart" the plaintiff's ability to file a lawsuit within the six-month limitations period). In all these cases, the focus was whether the defendant had used any direct or indirect means to conceal the cause of action, thereby tolling the statute of limitations. We had no occasion to address Code § 8.01-229(D) or its ancestor statutes in regard to what other direct or indirect means would obstruct the filing of an action and thus toll a statute of limitations. However, we did so in Grimes. There, the issue was not whether the defendant had concealed the cause of action but whether, by wearing a mask when he committed the crimes, he had obstructed the plaintiff's filing an action against him. 262 Va. at 332, 551 S.E.2d at 646. We concluded that the defendant had not done so because the "use of the mask was intended to conceal his identity and not to obstruct [the plaintiff's] filing of an action." Id. Thus, the applicable statute of limitations was not tolled under the provisions of Code § 8.01-229(D). Id. In reaching this decision, we stated that "[a] plaintiff who seeks to rely upon the tolling provision in Code § 8.01-229(D) must establish that the defendant undertook an affirmative act designed or intended, directly or indirectly, to obstruct the plaintiff's right to file her action." Id. While it is true that Walker's use of stolen identification at the scene of the accident concealed his identity as the wearing of a mask did in Grimes, there is nevertheless an important distinction between the two cases. When Walker gave the police officer stolen identification, he affirmatively misrepresented his

61 When we decided Hawks, the relevant tolling provision was set forth in Code § 8-33 (1957), a predecessor to Code § 8.01-229(D). In pertinent part, that former section tolled a statute of limitations when a defendant used "any other indirect way or means [to] obstruct the prosecution" of an action. 308 identity. The defendant in Grimes never misrepresented anything about his identity; he merely concealed it with the mask. In other words, Walker " undertook an affirmative act." Id. Although our earlier cases dealt with concealment of the existence of a cause of action, the principles enunciated there are applicable in this case. Fraudulent concealment, whether of a cause of action or of a defendant's true identity, " 'must consist of affirmative acts of misrepresentation. . . . The fraud which will relieve the bar of the statute must be of that character which involves moral turpitude, and must have the effect of debarring or deterring the plaintiff from his action.' " Culpeper Nat'l Bank, 119 Va. at 83, 89 S.E. at 121 (quoting Wood, supra, 101 U.S. 135, 25 L. Ed. 807 at 1422). Walker's actions at the scene of the accident involved this type of fraud. Thus, we conclude that the circuit court erred in holding that Walker's conduct did not constitute a direct or indirect means to obstruct Newman's filing of this action. However, before a final resolution can be made as to whether the applicable statute of limitations barred Newman's action against Walker, the circuit court must make two factual determinations that were not previously necessary to its judgment sustaining the plea of the statute of limitations: (1) whether Walker's use of stolen identification was "designed or intended, directly or indirectly, to obstruct" Newman's filing of this action, Grimes, 262 Va. at 332, 551 S.E.2d at 646; and (2) if so, the period of time such obstruction continued, see Code § 8.01-229(D). Conclusion For these reasons, we will reverse the judgment of the circuit court and remand this case for further proceedings. Reversed and remanded.