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Annual Review of Civil Supreme Court of Virginia

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Annual Review of Civil Supreme Court of Virginia Annual Review of Civil Supreme Court of Virginia Friday, July 19 2019 | The Omni Homestead Resort | Hot Springs, VA CONTINUING Written Materials LEGAL EDUCATION A presentation of The Virginia Bar Association’s Appellate Practice, Judicial, and Civil Litigation Sections Annual Review of Civil Supreme Court of Virginia PRESENTERS The Honorable Everette A. Martin, Jr. Judge Martin attended Washington & Lee University where he received a B.A. in 1974 and a J.D. in 1977. Served as a law clerk to Judge Richard B. Kellam of the U. S. District Court in Norfolk from 1977 to 1978. Received an LL.M. (in Taxation) from New York University in 1980, a degree which is of little use in his present position. Private practice from 1980 to 1987, mostly with the former firm of Seawell, Dalton, Hughes & Timms. Assistant Commonwealth’s Attorney for the City of Norfolk from 1988 to 1990. Judge of the Norfolk Juvenile and Domestic Relations District Court from 1990 to 1995. Judge of the Circuit Court of Norfolk since 1995. Served on the Supreme Court’s Ad Hoc Committee on Local Rules that produced the uniform scheduling order and Rule 4:15, the Circuit Court Forms Committee, the Law Council of Washington and Lee University, the Board of Governors of the Virginia Bar Association, and the Boyd-Graves Conference. Hon. Daniel E. Ortiz Judge Ortiz completed his undergraduate studies at the University of Virginia and received his law degree from the George Washington University Law School. Judge Ortiz was elected to serve an eight year term as a Circuit Court Judge beginning January 1, 2015. He began his legal career at the Fairfax County Circuit Court clerking for the Honorable M. Langhorne Keith. At the conclusion of his clerkship, Judge Ortiz joined Blankingship & Keith, P.C. where he became a shareholder and principal at the firm. Prior to his service at the Court, Judge Ortiz was an active member in numerous bar related organizations. These include serving as a member of the Board of Directors of the Fairfax Bar Association and the Board of Governors of the Virginia Bar Association. He was selected by his peers to chair both the Young Lawyer’s Section of the Fairfax Bar Association and the Young Lawyer’s Division of the VBA. He previously served as a Substitute Judge in the General District Court and Juvenile Domestic Relations District Court for five years. Judge Ortiz was selected by the Chief Justice Lemons to serve on the Virginia Access to Justice Commission. He is a member of the faculty of the Harry L. Carrico Professionalism Course. Judge Ortiz is a former board member and President of Legal Services of Northern Virginia. The biographical information is provided by the speakers or collected from their websites. Significant Civil Supreme Court Cases from the Past Year Judge Everett A. Martin, Jr. – Circuit Court of Norfolk Judge Daniel Ortiz – Circuit Court of Fairfax Monica T. Monday, Esq. Maria Teresa Salido Gusi, Esq. Kristin M. Godsey, Esq. ARBITRATION Brush Arbor Home Constr. v. Alexander, 297 Va. __, 823 S.E.2d 249 (2019) The Court found that an arbitrator needed to resolve the question of whether the parties’ disagreement over the interpretation of the arbitration clause was a controversy arising out of or relating to the contract, or the breach thereof. The Alexanders sued Brush Arbor alleging that the home it constructed for them suffered from a variety of defects. Brush Arbor moved to compel arbitration based on Article 12 of the parties’ contract, which stated that “any controversy or claim arising out of or relating to this contract, or the breach thereof, shall be settled by arbitration administered by the Better Business Bureau under its construction Industry Arbitration Rules.” The circuit court denied the motion because the Better Business Bureau did not have any construction industry arbitration rules, and hence, it would be impossible to execute that term of the agreement. The Court agreed with Brush Arbor in that “under the broad scope of the arbitration clause at issue, the question of which rules were required by the arbitration clause was an issue for the arbitrator chosen by the parties, not the court, to decide.” The Court explained that “the extent of the duty to arbitrate, just as the initial duty to arbitrate at all, arises from contractual undertakings.” “It is a court’s duty in the first instance to construe the contract to determine what questions the parties agreed to submit to arbitration.” For this, the Court only needed to answer whether the parties’ disagreement over the interpretation of Article 12, as well as the application of the doctrine of impossibility, were “controvers[ies] arising out of or relating to this contract, or the breach thereof.” This case clearly arose out of the contract between the Alexanders and Brush Arbor, and thus, an arbitrator had to resolve the issues. The Court further opined that “the fact that the controversy or claim deals with the interpretation of the arbitration clause of the contract does not change the outcome.” ATTORNEYS Roberts v. Virginia State Bar, 296 Va. 105, 818 S.E.2d 45 (2018) Roberts represented a plaintiff in a personal injury action. The retainer agreement required the client to pay the firm’s costs and expenses, and to maintain a balance of $150 in the firm’s escrow account. The client became dissatisfied with the representation and terminated the firm’s representation. The firm claimed a lien of over $5,000 and transferred the client’s $150 to its operating account. The client filed a bar complaint and Roberts received a public reprimand. Roberts appealed. The Supreme Court affirmed. An attorney claiming an interest in trust funds cannot unilaterally determine whether a dispute over the funds exists and how to resolve it. The decision also contains a good discussion of quantum meruit and terminated contingency fee agreements. CIVIL PROCEDURE McCulley v. Brooks & Co. General Contractors, Inc., 295 Va. 583, 816 S.E.2d 270 (2018) Brooks & Co., in an unpaid rent and late fees dispute, served process on McCulley by posting pursuant to Code § 8.01-296(2)(b). However, Brooks & Co. failed to follow the additional requirements established in the statute; namely, it failed to mail a copy of the process to McCulley 10 days before obtaining a default judgment and it failed to file a certificate of mailing in the court’s clerk’s office. After McCulley’s failure to file responsive pleadings, Brooks & Co. was able to obtain a default judgment against him and the other defendant. McCulley then received a summons from the circuit court clerk commanding him to appear before a commissioner in chancery to answer debtor's interrogatories. In response, McCulley filed a motion to vacate the default judgment in the circuit court, “making a special appearance for the sole purpose of contesting [the] court’s exercise of personal jurisdiction” over him given the irregularities in the service of process. Such irregularities, McCulley argued, made the default judgment void. In spite of this, the debtor’s interrogatory proceeding continued for several months. After conducting a hearing on McCulley’s motion to vacate, the circuit court held that, despite service of process being defective, McCulley had waived any objection to such defect “by making a general appearance … through his post-judgment participation in Debtor’s interrogatories.” Hence, the trial court found that such general appearance during enforcement proceedings on a final judgment effectively waived any claim that the judgment was void ab initio, and denied McCulley’s motion to vacate the default judgment. “A judgment against a party not before the court in any way will be as utterly void as though the court had undertaken to act when the subject-matter was not within its cognizance … and may be so treated in any proceeding, direct or collateral.” Failure to satisfy the mailing and certificate requirement of Code § 8.01-296(2)(b) renders a default judgment void for lack of personal jurisdiction. Because of this, the Court opined that the trial court’s default judgment was void ab initio. “A mere general appearance after the entry of a void judgment is too little, too late to save the judgment.” In a lengthy dictum, the Court held a defendant would forfeit his right to challenge the judgment when (1) the challenger had “had actual notice of the judgment” and ratified it by manifesting “an intention to treat the judgment as valid and (2) granting relief from the judgment ‘would impair another person’s substantial interest of reliance on the judgment.”’ In this case, McCulley had never manifested an intention to treat the judgment as valid and the Court opined that his initial silence could not be equated to assent. In fact, McCulley’s motion to vacate specifically stated that he was only making a special appearance to challenge the validity of the judgment. Furthermore, the Court explained that there was nothing in the record, such as a partial enforcement of the void judgment or a sale of the debtor’s assets to others, indicating that granting the motion “would impair another person’s substantial interest of reliance on the judgment.” Catjen, LLC. v. Hunter Mill West, 295 Va. 625, 817 S.E.2d 139 (2018) Hunter Mill West (“HMW”) executed a deed of trust note with a high compound interest rate and a confession of judgement clause. HMW defaulted under the note and filed for bankruptcy. The bankruptcy court fixed the amount of Catjen’s claim. The bankruptcy petition was dismissed. Catjen foreclosed on the real estate and confessed judgement for the deficiency.
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