Impeachment with Unadjudicated Perjury: Deadly Than the Witnesses Ever Had Said!”2 Weapon Or Imaginary Beast?

Litigation News November 2016

Volume XVII, Number IX December 2016 Few Perjurers Are Prosecuted Impeachment with Although lying under oath is endemic, perjury is Unadjudicated Perjury: rarely prosecuted. When it is, the defendant is usually a politician. The prosecution of Alger Hiss was Deadly Weapon or probably the most famous political perjury prosecution ever in the United States. It made a young anti- Imaginary Beast? communist California Congressman named Richard Nixon a household name.3 The recent perjury by Robert E. Scully, Jr. conviction of Kathleen Kane, the Attorney General Stites & Harbison, PLLC of Pennsylvania, for lying about her role in leaking grand jury testimony to embarrass a political oppo- Impeaching a witness at trial with his prior nent is a modern case in point.4 More memorable untruthfulness under oath is the epitome of cross for those of us of a certain age, President Bill Clinton examination. When you do it, the day is glorious. testified falsely under oath in a judicially supervised When someone does it to your witness, your month deposition in a federal civil case that he did not have is ruined. Yet, this impeachment method is seldom sexual relations with Monica Lewinsky. He was not successfully employed. It is very like Lewis Carroll’s prosecuted for perjury despite being impeached by imaginary Snark, which when hunted could not be the House of Representatives, fined $900,000.00 for 1 caught: “For the Snark was a Boojum, you see.” civil contempt by the presiding federal judge, and Only the unadjudicated perjurer can catch himself having had his Arkansas law license suspended for out on cross because “extrinsic evidence” of the act is five years for the falsehood.5 Absent some such prohibited. Indeed, the term “unadjudicated perjury” public notoriety, however, the ordinary lying wit- is oxymoronic. Perjury is a crime. A crime requires a ness is usually ignored by busy, underfunded, and conviction. A crime that is unadjudicated is no crime politically astute prosecutors. The Department of at all. So impeaching with unadjudicated perjury UNADJUDICATED PERJURY— cont’d on pages 2-9 requires extraordinary talent and more than a bit of luck. The advocate must be like the Snark himself, Table of Contents who when closing in defense of a pig who deserted his sty, “… summed it so well that it came to far more Impeachment with Unadjudicated Perjury: Deadly than the Witnesses ever had said!”2 Weapon or Imaginary Beast? ...... 1-9 by Robert E. Scully, Jr. Federal Rule of Evidence 609 and Virginia Supreme Court Rule 2:609 explain how criminal con- Letter from the Chair ...... 2 by Kristan B. Burch victions, including those for perjury or crimen falsi, can be used to impeach. But, since few competent Potential Liability for Repossession Companies, Creditors and State Actors for Unlawful Self-Help trial lawyers ever knowingly call a convicted perjurer Repossessions ...... 9 as a material trial witness, it is a rare forensic bird. by Jeremy P. White, Esq. and Heryka R. Knoespel, Esq. In 37 years of trial work I have not cross-examined a View from the Bench ...... 13 single convicted perjurer. by The Honorable Thomas D. Horne (Ret.)

Case Summaries ...... 16 by Robert E. Byrne, Jr. Robert E. Scully, Jr., has over 35 years of trial experience in federal and state courts, focusing his practice on business tort, cor- Litigation Section Board of Governors ...... 23 porate governance, trust and estates, construction and intellectual property litigation, and is a Member of Stites & Harbison PLLC, New Developments ...... 24 Alexandria, Va.

1 Litigation News December 2016 Letter from the Chair • Kristan B. Burch

This marks the third newsletter published by the Thanks again to Matthews Haynes who served as Litigation Section in 2016. Through the newsletters, co-editor with me for the two prior newsletters issued we attempt to address litigation topics which may be in 2016. of interest to our members, from changes in the proce- The Section is working on two CLE opportunities dural rules to substantive practice-specific issues. To for its members in 2017. First, in the spring 2017, the extent you are interested in submitting an article, the Section plans to sponsor a webinar with Virginia please let us know as we are always looking for addi- CLE which will be offered at a discounted rate to sec- tional articles. tion members. Second, the Section has been selected The Section is pleased to announce that it has to present one of the showcase CLEs at the Annual a new editor for the newsletter. This fall, Jennifer Meeting in June 2017 in Virginia Beach. R. Franklin joined the Board, and she has assumed This year’s Annual Meeting CLE is entitled the editorial duties for the newsletter. Jennifer is “Expert Witnesses: Who are they and what can they a Professor of the Practice at William & Mary Law say?” The Section will present the CLE with the School. Before joining the staff at W&M, Jennifer Construction and Public Contracts Law Section and worked in the Virginia Attorney General’s Office the Joint VSB/VBA ADR Committee. The CLE will as an Assistant Attorney General in the Criminal be on Friday, July 16, 2017 from 8:30 a.m. to 10:00 Law Section and worked as the Habeas Supervisor a.m. More information will be available on the CLE for the Supreme Court of Virginia in the Chief Staff in the coming weeks. Attorney’s Office. We are excited to have Jennifer If you are interested in the participating in the join the Board and take on this new role. Section, please contact one of the Board members for additional information. ✦ Kristan B. Burch is the 2015-17 Chair of the Litigation Section and is a litigation partner at Kaufman & Canoles, Norfolk, VA.

Unadjudicated Perjury cont’d from page 1 Virginia Supreme Court Rule 2:608(d): Unadjudicated Perjury Justice U.S. Attorney’s Manual standards for federal If the trial judge makes a threshold perjury prosecutions are high.6 The votes of perjury determination that a reasonable prob- victims do not determine who is elected as the local ability of falsehood exists, any witness Commonwealth’s Attorney. may be questioned about prior specific instances of unadjudicated perjury. Lying Under Oath Is Endemic Extrinsic proof of the unadjudicated There are lots of courtroom liars and false decla- perjury may not be shown.9 ration makers out there. And their lies leave lasting This subsection was designed to preserve the com- traces. Orders granting habeas corpus relief, civil mon law as announced in Lambert v. Commonwealth.10 sanctions, and new criminal trials based on trial wit- The case is instructive. Lee Lambert was con- ness perjury are a treasure trove of judicial findings of victed of threatening to burn down the home of unadjudicated witness perjury. Trial and appellate Karen Hamlette, his former girlfriend, during his judges frustrated by the increasing amounts of obvi- uninvited appearance at her home on Thanksgiving ously false testimony being given in courtrooms are Day 1985. Three dinner guests were present as wit- taking action themselves.7 Judges are entering orders nesses: Jimmy Humes, Luther Washington and Linda and writing opinions calling out lying witnesses, espe- Parks. Humes testified for the prosecution against cially repeat offenders, by name, and describing their Lambert, describing his drunken rage and verbal specific lies under oath, in an effort to shame them threat to torch Hamlette’s home. Linda Parks testi- and their superiors.8 fied in Lambert’s defense. Her testimony conflicted with Hume’s recollection “in various respects.”11 On cross examination the prosecutor “asked her whether

2 Litigation News December 2016 she had not at one time sworn out a warrant for the in a Virginia federal court today he probably could be arrest of Luther Washington for an assault that had asked to admit that he lied in a deposition in a prior never occurred.” She admitted she had sworn falsely; federal case. But it is a close question whether the that she had “turned herself in” to the magistrate cross examiner would be allowed to ask him if Judge who told her she could be charged with perjury; and Wright had issued a written opinion holding him in that she never was actually charged with perjury.12 contempt and sanctioning him $900,000 for lying, and On appeal Lambert argued: “…that unadjudicated if his law license has been suspended as a result.18 perjury, even when admitted by the witness, is not a Is extrinsic evidence of a reliable judicial finding proper method of impeachment” and thus his convic- that the witness lied under oath less probative (or tion should be reversed.13 The Court of Appeals dis- more likely to generate juror confusion) than extrinsic agreed, noting that the general rule prohibiting evi- evidence of prior false accusations by the complaining dence of prior specific acts of untruthfulness prevents witness in a sexual assault case? Virginia Supreme injecting collateral issues into the case and diverting Court Rule 2:608(e) allows extrinsic proof of prior the jury’s attention.14 But when the witness herself false accusations of sexual misconduct. Moreover, admits the prior untruthful act on cross, that policy extrinsic evidence is always admissible to impeach is not implicated and an exception should be made. a witness with her prior inconsistent statement, to “We hold that a witnesses’ credibility may be attacked demonstrate bias, to show motivation to lie, or to on cross examination by inquiry into prior specific demonstrate that a character witness is ignorant instances of unadjudicated acts of perjury. We further of specific acts of untruthfulness committed by the hold, however, that extrinsic proof of the perjury may defendant. Why is truthfulness impeachment the only not be adduced.”15 “stuff” that is deemed collateral? It appears to be sim- ply “a concession to the shortness of life.”19 Lying Witnesses Are Sophisticated Who is better at identifying a lying witness than a Few prior perjurers are as guileless as Linda hard-working trial judge who takes the time to make Parks. Most stick to their guns and deny, deny, deny. a specific finding of fact that a witness intentionally President Clinton behaved more typically in refusing lied under oath in her courtroom? Is it finally time to to admit to lying under oath to the bitter end. Indeed, loosen the rule on impeachment for prior untruthful- the true threats to the justice system are the repeat ness as applied to reliable judicial findings that the offenders. This class of witness includes the aptly witness previously lied under oath about a material nicknamed “Brady officers” who lied in multiple prior fact without any plausible excuse? Or is the con- hearings; experts who repeatedly prostituted their sensus that doing so will allow the solitary Snark of professional opinions for pay; and jail house snitches Unadjudicated Perjury to transform into the bother- who repeatedly lied about miraculously detailed cell- some Boojum of collateral prior bad act evidence? mate confessions. They are sophisticated liars. They know the rules of the road. They understand that if Holding the Line against All Extrinsic Evidence of they do not admit they lied the cross examiner has Unadjudicated Perjury to “take their answer” because “extrinsic proof of the The orthodox position is clearly reflected in the perjury may not be adduced.”16 As these scofflaws Advisory Committee Notes to the 2003 amendment become more numerous, their behavior increasingly to Federal Rule of Evidence 608, which cite the Third flagrant, and reliable records of judicial condemna- Circuit’s opinion in United States v Davis20 and tion of their conduct more prevalent, the wisdom of Steven A. Saltzberg’s article Impeaching the Witness: prohibiting use of all extrinsic evidence to impeach Prior Bad Acts and Extrinsic Evidence.21 In the cited them seems questionable. “The life of the law has not article, Professor Saltzberg made the case for the been logic; it has been experience…”17 Has recent strict no extrinsic evidence rule: experience taught us that the “no extrinsic evidence” Because acts that have not been rule should be loosened a bit in this area? proved beyond a reasonable doubt are Why can’t a cross examiner mention the writ- more problematic than those that have ten finding of a judicial officer in a prior case, as the been, the doubts about the probative predicate for asking the witness to admit that he lied value of past conduct increase when in that case? If Bill Clinton were called as a witness questions are asked about other bad

3 Litigation News December 2016 acts that were not proved in a criminal the line on the conventional “no extrinsic evidence” trial. In addition, if a prior criminal rule in federal trials. Prior judicial findings of fact, conviction is denied, the rebuttal evi- when offered to prove the truth of the matters assert- dence – the judgment - is available ed, are generally hearsay under the Federal Rules and can be offered easily. Once the of Evidence.28 Judicial findings may be “pedigreed judgment is admitted as evidence, the hearsay,” and very reliable hearsay, but they are still issue is likely to be put to rest. But hearsay. So far, no reported federal case supports the if an act that has not been subject admission of findings of fact made by a judge that of a conviction is denied, the only a witness lied in a prior case, under the Residual way to challenge the denial is to per- Exception in Federal Rule of Evidence 807.29 That mit introduction of rebuttal evidence, is a confounding fact. A prior judicial finding that which raises the possibility of a trial a witness lied under oath in her presence, about within a trial. The rule barring extrin- a material fact, without any plausible excuse, and sic evidence when the sole purpose of was sanctioned for it, would seem to meet all three questioning a witness about an act is elements of the exception created by Fed. R. Evid. to cast doubt on credibility represents 807(a). Surprisingly, hearsay objections have been a judgment that the effort of receiving rare in the decided federal appellate cases so the law evidence from both sides is usually not on the issue is sparse.30 justified in view of the minimal proba- The federal hearsay problem is obviated by statute tive value of the past act.22 in Virginia state courts. Virginia has a judicial records Professor Saltzberg restated the rule as follows: statute, Va. Code § 8.01-389, that has been interpret- Any time a questioner, whether the ed as providing an independent hearsay exception prosecutor or defense counsel, seeks to in state court trials. In Palmer v. Commonwealth, elicit the beliefs or actions of a person the Court of Appeals of Virginia held that a properly other than the witness being examined authenticated judicial order was admissible under to suggest that the other person has the hearsay exception provided by statute and its a different view from the witness, the admission did not violate the Confrontation Clause.31 questioner is seeking to inject extrinsic If Palmer is still good law, extrinsic evidence of prior evidence into the case.23 judicial findings of unadjudicated perjury is probably That rule is consistent with the holding in Lambert admissible over a hearsay objection in Virginia state v. Commonwealth.24 Recall that Linda Parks admit- courts. ted to swearing out a false warrant in a prior criminal Another Virginia statute, however, creates a case.25 The magistrate made no finding that she lied potential obstacle to impeachment using a prior on that prior occasion.26 So current Virginia law is judicial finding that a witness lied under oath. That consistent with the Saltzberg formulation of the rule. statute provides that: “No judge shall be competent The cross examiner apparently cannot embed any col- to testify in any criminal or civil proceeding as to any lateral evidence, even a recitation of reliable findings matter which came before him in the course of his made by a judge, in a question on cross about the wit- official duties.”32 The statute and Virginia Supreme nesses’ prior untruthfulness.27 Court Rule 2:605 mirror Federal Rule of Evidence The rule applies even when the extrinsic evidence 605 regarding a judge’s competency as witness.33 As is a written opinion by a state or federal judge specifi- the Advisory Committee Notes to the 1972 proposed cally finding that the witness on the stand lied under rules indicate, the Federal Rule was designed to oath about a material fact in a prior case. And it does protect trial judges against having to testify in cases not seem to matter that the finding of falsity resulted they are presiding over.34 But the Virginia statute in significant consequences, such as the imposition of goes considerably further than the Federal Rule. It a criminal or civil contempt sanction on the witness, applies to all subsequent cases – not just the one in or a new trial or habeas corpus relief for a criminal which the judge is currently presiding.35 If a Virginia defendant convicted as a result of that lie in the prior judge is “incompetent” to testify in a later unrelated case. criminal or civil case, might her judicial finding of There is another less obvious reason for holding deceit in that prior case be viewed as “testimony” from

4 Litigation News December 2016 an “incompetent” witness? That makes little sense Second, it makes a difference that the third person given the express permission granted in Va. Sup. who found the witness to be incredible is a judge Ct. R. 2:608(d) to impeach any witness for untruth- rather than some other public official. fulness. Counsel preparing to impeach with a prior The distinction may be important. judicial finding of untruthfulness should be aware of Rule 609 allows convictions to be used Va. Code § 19.2-271 and Va. Sup. Ct. R. 2:605 and be to impeach credibility, suggesting prepared to argue that the specific provisions of Rule that findings by judges and juries are 2:608(d) on impeachment for untruthfulness trump entitled to more weight than what the general provisions of Rule 2:605 and Va. Code § any old third party might happen to 19.2-271 rendering judicial officials incompetent as think about a witness’s credibility. witnesses.36 … Clearly [Rule 608(b)] would have allowed the judge to permit the defen- Allowing Reference to Judicial Findings of dant’s lawyer in this case to ask the Unadjudicated Perjury on Cross witnesses whether they had lied in Several federal appellate courts have ignored two previous suppression hearings. Professor Saltzberg’s rule when it comes to judicial And there is nothing to suggest that findings of witness deceit. Those Courts allow cross the “inquiry” could not have extended examiners to confront witnesses with reliable judicial to asking the witness whether a judge, findings of prior unadjudicated perjury while refusing say, had ever found him not to be a to allow admission of the judicial findings themselves credible witness.43 if the witness denies them.37 Third, nothing is more probative of a witness’s There is a clear split in the federal circuits character for truthfulness than reliable evidence that about what constitutes “extrinsic evidence” of prior the witness previously lied under oath. But are all untruthful conduct under Fed. R. Evid. 608(b).38 The judicial findings of dishonesty equally probative? In Seventh, Second, and Tenth Circuits hold that the United States v. Cedeno, the Second Circuit consid- content of a well-founded cross examination question ered how to gage the probative value of a judicial about a specific prior act of untruthfulness, based on finding of prior witness deceit.44 The court identified a reliable judicial finding that the witness previously several non-exhaustive factors pertinent to the Rule lied under oath, is not extrinsic evidence.39 608(b) analysis, including: (1) whether the prior judi- The Third, Sixth, and District of Columbia cial finding addressed the witnesses’ veracity in the Circuits hold the line set by the Advisory Committee specific case or generally; (2) whether the prior testi- Notes and Professor Saltzberg. They conclude that mony involved similar subject matter; (3) whether the any reference in the cross examiner’s question to any lie was under oath in a judicial proceeding or in a less other person’s opinion of the witness’ credibility, even formal context; (4) whether the lie was about a sig- if that other person is a reliable and fully informed nificant matter; (5) how long ago the lie was told and trial judge, injects inadmissible extrinsic evidence.40 whether any intervening credibility findings had been made about the witness; (6) the apparent motive for Posner and Imwinkelreid v. Saltzberg and the the lie and whether there was a similar motive to lie Advisory Committee in the pending case; (7) whether the witness offered Professor Edward J. Imwinkelreid of UC Davis an explanation for the lie; and (8) if so, whether the School of Law and Judge Posner of the Seventh explanation was plausible.45 Fourth, a complete Circuit mount a powerfully pragmatic argument for ban on extrinsic evidence is an obvious invitation to allowing reference to certain prior judicial findings of perjury by sophisticated witnesses. They know their unadjudicated perjury on cross examination. First, as denials cannot be challenged. Dirty police officers a general rule, testimony elicited under cross exami- and dishonest expert witnesses, can be expected to nation is not “extrinsic.”41 Therefore, Judge Posner lie again and again unless the consequences to their observed, cross examining a witness about a judicial sponsors are unacceptably severe. determination that he was not credible “is not barred by Rule 608(b), which … is a rule about presenting Prior Unadjudicated Perjury in Practice extrinsic evidence, not about asking questions.”42 The formidable MacCarthy family of Chicago,

5 Litigation News December 2016 Illinois, disagrees with Judge Posner and Professor examiner is bound by Virginia Rule of Professional Imwinkelreid.46 While acknowledging that the pro- Conduct 3.4(f), which prohibits “…stating or alluding hibition on admission of extrinsic evidence of untruth- to anything she does not reasonably believe is rel- fulness makes little sense, they contend that Judge evant or that will not be supported by admissible evi- Posner’s exegesis of Rule 608(b) in Dawson is uncon- dence.” So, before attempting the impeachment she vincing.47 should have documentary evidence meeting the pro- However, the MacCarthys lay out a practical bity standards described in United States v. Cedeno.49 guide for criminal defense counsel confronting a wit- In Virginia state courts, the cross examiner also must ness who is expected to deny his prior unadjudicated be prepared to argue for a modification of the law as perjury. First, announce to the judge, with the jury stated in Lambert v. Commonwealth, to allow specific present, that you are going to use Rule 608 to impeach reference to the prior judicial finding of witness fal- the witness to show he is a liar. Then give the judge sity in the final cross-examination question.50 and the prosecutor the material that creates the Counsel calling the witness also faces ethical “basis in fact” for that examination. The witness is issues. He has a duty to prepare his client to testify.51 thereby alerted that you have the impeachment mate- He also has a duty to prepare the other witnesses to rial and begins to worry about what is coming. This testify.52 But during pre-trial preparation counsel is colloquially referred to as “paper training” the wit- must not “…counsel or assist a witness to testify ness. Also, the judge and the prosecutor now know falsely….”53 you have the good faith basis to attempt to impeach. Ethical questions abound. Should competent Second, make the best possible use of the “persuasive defense counsel tell a criminal defendant, or other document.” While holding the document in your hand witness, that proof of specific acts of his prior untruth- and consulting it, slowly and deliberately establish fulness may not be proved by extrinsic evidence if he that the witness was called to testify in the prior denies them? Does defense counsel have a profes- case, was thoroughly prepared by the prosecutor, was sional duty of care to do so before the client decides examined under oath, understood the questions, was whether to testify in his own behalf? Can a prosecutor cross examined, and had the opportunity to recant tell a witness, like Linda Parks, who previously swore before leaving the stand. Then ask whether it isn’t out a false arrest warrant but was never charged true that the witness lied under oath in that case? If with perjury that defense counsel cannot introduce he denies it ask: “Didn’t Judge Jones find that you evidence of her prior lie if she denies it? Can counsel lied?” The prosecutor will object that you are improp- in a civil case tell an expert who previously lied about erly using extrinsic evidence and the objection likely his academic credentials about the limits of impeach- will be sustained. But if your personal standing with ment with extrinsic evidence under Rule 608(b)? The the jury is solid they will almost certainly believe the Virginia State Bar Counsel probably would take a witness lied in the prior case and that the prosecutor dim view of such aggressive forms of “witness educa- is protecting him in this case by objecting. If you have tion” as tantamount to encouraging perjury.54 But the temerity to press on, citing Imwinkelreid and some criminal defense lawyers argue that a thorough Posner as your authority, and the court allows it, you discussion of Federal Rule of Evidence 608(b) with might even be permitted to read to him the judge’s an accused client is a required duty. They claim it finding that he lied and ask whether he denies it. is helpful in explaining the trial process, the pros- Third, if he persists in denying the lie ask the trial ecutor’s cross examination strategy, that perjury is judge, “in fairness to the witness,” to allow him to morally wrong, and that it is not in the client’s best consult with counsel about his exposure to a poten- interest.55 tial perjury charge and the opportunity to avoid it by One thing is crystal clear. In Virginia, if the client recanting before his testimony is concluded.48 or other witness actually perjures himself at trial, and the lawyer “knows” it, the lawyer must disclose that The Ethics of Preparing for Impeachment with Prior fact to the tribunal.56 Untruthfulness The real world use of Federal Rule of Evidence Is Impeachment with Unadjudicated Perjury 608(b) and Virginia Supreme Court Rule 2:608(d) Different in Civil Cases? poses delicate ethical issues for trial counsel. The cross Finally, it is worth noting that at least one fed-

6 Litigation News December 2016 eral magistrate judge thinks Rule 608(b) should jurisprudense/2016/04/alex_kosinski_and_the_ninth_ be applied differently in criminal and civil cases. circuit_s_crusade_against_prosecutorial_misconduct. She argued that criminal defendants must be given html (last visited August 8, 2016)(noting Judge Alex Kosinski’s threat at oral argument to make an express more leeway to cross examine prosecution witnesses finding in a 9th Circuit opinion that a prosecution under the Confrontation clause and that trial judges witness and a deputy prosecutor committed perjury need not give civil litigants the same “wide latitude” and should be referred for prosecution and bar disci- to impeach with judicial findings of prior witness pline); Samson Freundlich and Eric Turkewitz, Judge deception.57 In the only other recent reported civil Rips Doc for “Huge Lie”; Perjury Prosecution Pos- case no such distinction was even mentioned.58 It sible; Victims May Number in the Thousands (July 8, 2013) http://www.newyorkpersonalinjuryattorneyblog. remains to be seen whether a distinction will develop com/2013/07/judge-rips-doc-for-huge-lie perjury-prose- under Federal Rule of Evidence 608(b) and Virginia cution-possible-victims-may-number-in-thousands.html Supreme Court Rule 2:608(d) between civil and crimi- (last visited August 8, 2016)( prolific defense orthopedic nal cases. It seems the distinction made in Spenser expert found by trial judge in New York City to have is a temporary anomaly rather than a permanent lied about duration of an IME and the physical find- feature of this area of the law of evidence. There is ings he supposedly made during the exam); Wade God- win, Silicosis Ruling Could Revamp Legal Landscape no good reason to indulge lying parties, or other wit- (March 6, 2006) http://www.npr.org/templates/story/ nesses, in civil or criminal cases. story.php?storyId=5244935 (describing United States In any event, well prepared advocates, familiar District Judge Janis Jack’s written opinion that Plain- with the case law on impeaching a witness with prior tiffs’ silicosis experts fabricated their lung x-ray diag- judicial findings of his untruthfulness, and conver- nosis reports in a mass tort case in Mississippi). sant with the MacCarthys’ sound practical plan of 9. Va. Sup. Ct. R. 2:608(d) (emphasis added). 10. Lambert v. Commonwealth, 9 Va. App. 67, 383 S.E. 2d action, will wield unadjudicated perjury as a deadly 752 (1989). forensic weapon. But those unfamiliar with this pecu- 11. Id. at 70, 383 S.E.2d at 753-54. liar backwater of evidence law, and unprepared for 12. Id. the objections to its use, may instead find impeach- 13. Id. ment with unadjudicated perjury to be as confounding 14. Id. an imaginary beast as Lewis Carroll’s Snark. 15. Id. at 71, 383 S.E.2d at 755. 16. See Id. 17. OLIVER WENDELL HOLMES, JR., THE COMMON LAW 1 (Endnotes) (Little Brown & Co. 1881). 1. LEWIS CARROLL, THE HUNTING OF THE SNARK, AN AGONY 18. Compare United States v Whitehead, 618 F.2d 523, 528 IN EIGHT FITS 31 (The Macmillan Co. 1898). (4th Cir. 1980)(lawyer defendant could be cross exam- 2. Id. at 26. ined about his suspension from practice for conduct 3. ALLEN WEINSTEIN, PERJURY: THE HISS-CHAMBERS CASE involving deceit or misrepresentation but the “suspen- (Random House 1998). sion document” could not be admitted) with United 4. Jess Bidgood, Pennsylvania’s Attorney General is Con- States v. Whiting, 311 F.2d 191, 196 (4th Cir. 1962) victed on All Counts, NEW YORK TIMES (August 15, (reference to prior trial transcript reflecting a judges’ 2016) http://www.nytimes.com/2016/08/16/us/trial-kath- statement that the police officer’s testimony was “unac- leen-kane-pennsylvania-attorney-general.html (last ceptable” was inadmissible extrinsic evidence when visited August 31, 2016). offered to impeach the officer). 5. Final Report of the Independent Counsel In re: Madison 19. Reeve v Dennett, 145 Mass. 23, 28, 11 N.E. 938, 944 Guaranty Savings and Loan Association Regarding (1887) (Holmes, J.)(explaining why collateral evidence Monica Lewinsky and Others at 41-49 (March 6, 2002) generally is not allowed). (explaining the decision not to prosecute). 20. United States v Davis, 183 F.3d. 231, 257 n.12 (3d Cir. 6. Id. 1999). 7. See e.g., Amos v Commonwealth, 287 Va. 301, 754 21. Steven A. Saltzberg, Impeaching the Witness: Prior Bad S.E.2d 304 (2014)(witness/ex-wife held in contempt for Acts and Extrinsic Evidence, 7 CRIM. JUST. 28, 31 (Win- lying under oath in ex-husband’s probation violation ter 1993). hearing); United States v. King, 232 F. Supp. 2d 636 (E. 22. Id. at 30. D. Va. 2002)(new trial granted based on key witnesses’ 23. Id. (emphasis in original). admission to his fellow prisoners that he lied about 24. Lambert v. Commonwealth, 9 Va. App. 67, 383 S.E. 2d police defendants involvement in drug dealing in Meck- 752 (1989). lenburg County). 25. See Id. 8. Lara Bazelon, For Shame, SLATE (April 7, 2016) 26. Id. http://www.slate.com/articles/news_and_politics/

7 Litigation News December 2016

27. Charles E. Friend and Kent Sinclair, The Law of Evi- 1195 (10th Cir. 2012)(same). dence in Virginia § 12-5 [b], 686 (Matthew Bender & 40. United States v Davis, 183 F.3d. 231, 257 n.12 (3d Cir. Company, Inc., 7th ed. 2012)(matters that are collat- 1999)(mention of suspension or Internal Affairs finding eral to the issues in the case are not admissible even that an officer had lied about an incident was hearsay if they bear on the veracity of a witness and extrinsic and was extrinsic evidence bared by Rule 608(b)); Unit- evidence to impeach the witnesses is not allowed). ed States v. Richardson, 793 F.3d 612, 627-29 (6th Cir. 28. Nipper v. Snipes, 7 F.3d 415, 417 (4th Cir. 1993) (find- 2015)( a judicial opinion making a credibility finding is ings of fact in a judicial order are not within the public the kind of extrinsic evidence excluded by Rule 608 (b)), records exception in Fed. R. Evid. 803 (8)(C)). cert. granted, vacated and remanded, by __U. S.__, 136 29. 4 Weinstein’s Federal Evidence § 807.03 (Matthew S. Ct. 1157 (2016); United States v. Whitmore, 384 F.3d Bender & Company, Inc. 2016). 836 (D.C. Cir. 2004)(per curium)(following Davis). 30. See Peter Walkingshaw, Prior Judicial Findings of 41. United States v. Boulerice, 325 F.3d 75, 82 n.5 (1st Cir. Police Perjury: When Hearsay Presented as Character 2003)(citing 4 Jack B. Weinstein & Margaret A. Berger, Evidence Might Not be Such a Bad Thing, 47 COLUM. Weinstein’s Federal Evidence, § 608.20[1] (Joseph M. J. L. & SOC. PROBS. 1,*22-30 (Fall 2013)(summarizing McLaughlin, ed., Matthew Bender 2d ed. (2003))(“Evi- recent federal appellate cases addressing Fed. R. Evid. dence is ‘extrinsic’ if offered through documents or 608 (b) in which a hearsay objection was not preserved other witnesses, rather than through cross examination by the prosecutor); United States v Jones, 728 F.3d of the witness himself or herself.”)). 763, 767 (8th Cir. 2013)(declining to decide the hearsay 42. United States v Dawson, 434 F.3d at 959. issue because the witness never testified at the prior 43. Id. at 958. hearing during which a magistrate judge found his 44. Cedeno, 644 F.3d at 82-83. counsel’s proffer of what he would say to be “incred- 45. Id. ible”). 46. Professors Michael Graham and Professor Kenneth S. 31. Palmer v. Commonwealth, 3265-01-1, 2003 WL Broun also side with the MacCarthy clan, Saltzberg 1907847, *5 (Va. App. 2003). and the Advisory Committee. They argue in support 32. Va. Code Ann. § 19.2-271 (West 2016); Va. Sup. Ct. R. of holding the line on all references on cross examina- 2:605. Competency of Court Personnel as Witnesses. tion to collateral findings of unadjudicated perjury. 4 33. Va. Code § 19.2-271; Va. Sup. Ct. R. 2:605; Fed. R. Michael H. Graham, Handbook of Federal Evidence § Evid. 605. 608:4 (7th ed. 2012)(criticizing United States v Daw- 34. Fed. R. Evid. 605 (Advisory Committee Notes). son); 1 Kenneth S. Broun et al., McCormick on Evi- 35. Commonwealth v. Epps, 273 Va. 410, 414, 641 S.E.2d dence § 41 (7th ed. 2013)(supporting the Advisory Com- 77, 79-80 (2007)(error to allow Circuit Court judge to mittee Note). testify as the “victim” of contempt by the local Sheriff 47. TERENCE F. MACCARTHY, SEAN MACCARTHY, HON. who removed a court order from the courthouse door). TERRENCE F. MACCARTHY, MACCARTHY ON IMPEACH- 36. See ANTONIN SCALIA AND BRYAN A. GARNER, READING MENT, HOW TO FIND AND USE THESE WEAPONS OF MASS LAW: THE INTERPRETATION OF LEGAL TEXTS 183 (Thomp- DESTRUCTION 83-84 (American Bar Association 2016). son/West 2012)(“Cannon 28. General/Specific Cannon. (“Obviously the defense attorney could not try to If there is a conflict between a general provision and a impeach by asking the witness … if another judge had specific provision, the specific provision prevails (gen- found he had falsified his testimony. This approach erali specialibus non derogant”)). would have improperly used ‘extrinsic evidence.’”). 37. Edward J. Imwinkelreid, Formalism Versus Pragma- 48. See Id. at 76-79 (describing impeachment for untruth- tism In Evidence: Reconsidering The Absolute Ban on fulness with a prior false job application). The Use of Extrinsic Evidence To Prove Impeaching, 49. See Paul R. Rice, The Evidence Project: Proposed Revi- Untruthful Acts That Have Not Resulted In A Convic- sions to the Federal Rules of Evidence with Supporting tion, 48 CREIGHTON L. REV. 213, 228-29 (2015). Commentary, 171 F.R.D. 330, 548-49, 551-52 (2003) 38. 4 Jack B. Weinstein & Margaret A. Berger, Weinstein’s (“[R]ather than codifying the ‘good faith’ standard being Federal Evidence §608.20 [3][b] n. 25.1- 25.5 (Matthew read into Current Rule 608 before inquiries may be Bender & Company, Inc. 2016). made into prior conduct of a witness, Revised Rule 608 39. United States v Dvorkin, 799 F.3d 867, 883 (7th Cir. imposes a requirement that ‘the proponent [have] evi- 2015)(questions about punishment for prior untruthful- dence that is reasonably believed to be admissible.’”). ness are permitted); United States v Holt, 486 F.3d 997, 50. See Lambert v. Commonwealth, 9 Va. App. 67, 383 S.E. 1001-02 (7th Cir. 2007)(Rule 608 (b) does not prohibit 2d 752 (1989). lines of cross examination); United States v Dawson, 51. Va. Rule of Prof. Conduct 1.1. (“a lawyer shall provide 434 F.3d 956, 958-59 (7th Cir. 2006)(same); United competent representation to a client”); 2 Ronald E. States v Cedeno, 644 F. 3d. 79, 81-83 (2d Cir. 2011) Mallen and Jeffrey M. Smith, Legal Malpractice § 20:2- (error to prevent cross examination regarding reliable 20:3 (2008)(standard of care and competence includes prior judicial finding that witness was not credible in preparation to testify). that case); United States v Woodard, 699 F.3d 1188, 52. W. William Hodes, The Professional Duty to Horseshed

8 Litigation News December 2016

Witnesses Zealously-Within the Bounds of the Law, 30 when, why, and how he discusses Rule 608(b) with a TEX. TECH. L. REV. 1334, 1350 (1999) (failure to horse- criminal defendant). shed witnesses would be “unethical and unprofessional, 56. Virginia Legal Ethics Opinion, 506 (March 1983). bordering on legal malpractice to boot.”). 57. Spenser v. Int’l Shoppes, Inc., CV-06-2637, 2013 WL 53. Va. Rule of Prof. Conduct 3.4(c). 685453, *14 (E.D.N.Y. 2013) (Tomlinson, M.J.)(declin- 54. Va. Rule of Prof. Conduct 3.3, cmt. [10](“A criminal ing to allow reference to a state judge’s finding that accused has a right to the assistance of an advocate, a plaintiff Spenser had submitted a false resume, lied to right to testify and a right of confidential communica- get money and lied about what he did with prior settle- tion with counsel. However, an accused does not have a ment funds). right to assistance of counsel in committing perjury.”); 58. Kirkland v. O’Brien, No. 12–cv–2083, 2014 WL Stephen Gillers, Monroe Freedman’s Solution to the 4799531, *3 (D. Col. 2014)(allowing cross-examination Criminal Defense Lawyer’s Trilema is Wrong as a Mat- of Detective O’Brien, testifying as a defendant in a civil ter of Policy and Constitutional Law, 34 HOFSTRA L. rights case, with a prior judicial finding that he lied REV. 821, 826-831 (2006)(describing the ethical obliga- about another defendant’s failure to invoke his right to tions of criminal defense counsel in dealing with “antic- counsel and about the length of his interrogation, and ipated perjury”). that the prior lie was “egregious”). ✦ 55. See Gerald L. Shargel, Federal Evidence Rule 608(b): Gateway to the Minefield of Witness Preparation, 76 FORDHAM L. REV. 1263, 1274-78 (2007)(describing * * *

Potential Liability for Repossession Companies, Creditors and State Actors for Unlawful Self-Help Repossessions

by Jeremy P. White and Heryka R. Knoespel

Article 9 of the Uniform Commercial Code (“UCC”) facts to determine whether there was a breach of the governs repossession by secured creditors.1 A secured peace. Over 70 years ago, the Virginia Supreme Court party may take possession after default pursuant to announced that when a debtor resists repossession, judicial process or without judicial process, if it pro- the other party must use the civil justice system to ceeds without breach of the peace.2 The debtor and enforce its rights.4 The case law in various states creditor may not waive or vary this rule by contract.3 affirms that repossession after the debtor’s oral pro- Proceeding without judicial process is the most com- test to the repossession is a breach of the peace.5 Also, mon method used by secured creditors to obtain pos- facts such as noise disturbance, violence,6 use of force, session. Self-help repossessions open the door for pos- threats, and fear,7 trespass in order to gain access to sible liability under the UCC, the Fair Debt Collection the collateral and violation of criminal law,8 as well Practices Act (“FDCPA”), and Section 1983 for state as police involvement have been found to give rise to actors. breach of the peace.9 If such facts exist, independent The UCC does not define the phrase “breach of of whether there was a default, claims against the the peace.” As a result, guidance comes from the secured creditor may arise. courts. Not surprisingly, the issue of what constitutes Where a lender’s repossession agent breaches a breach of the peace has been the subject of much the peace, the lender is liable for damages.10 This litigation. includes statutory damages under the UCC11 and damages for other state law claims.12 Under Virginia Liability as to Creditors and Repossession law, where the collateral is a consumer good, recovery Agents would be an amount not less than the credit service In evaluating cases, attorneys should assess the charge plus ten percent of the principal amount of Jeremy P. White is the managing attorney of the Lynchburg office of the obligation or the time-price differential plus ten Virginia Legal Aid Society. percent of the cash price.13 Debtors can also raise tort Heryka R. Knoespel is a staff attorney at the Lynchburg office of Virginia Legal Aid Society. LIABILITY FOR REPOSSESSION COMP.— cont’d on pages 10-12-

9 Litigation News December 2016 claims, such as conversion, if the vehicle is unlawfully Liability as to State Actors repossessed, and seek punitive damages under such Section 1983 liability can arise where a lender or a claim. the lender’s repossession agent seeks assistance of Further, the FDCPA and Section 1983 provide law enforcement.26 Under 42 U.S.C. § 1983 “two— federal court jurisdiction to debtors where there is a and only two—allegations are required in order to breach of the peace in self-help repossessions. state a cause of action under that statute. First, the The FDCPA aims to prevent abusive, deceptive, plaintiff must allege that some person has deprived and unfair collection practices by debt collectors. The him of a federal right. Second, he must allege that definition of debt collector includes “any person who the person who has deprived him of that right acted uses any instrumentality of interstate commerce or under color of state or territorial law.”27 the mails in any business the principal purpose of Several courts have analyzed the deprivation of a which is the enforcement of security interests.”14 federal right, the first prong of a 1983 claim, in cases Therefore, under the FDCPA, liability may arise only involving personal property. The Supreme Court as to the repossession agent. Substantively, the claim of the United States has held that the Fourth and arises if there is “no present right to possession of Fourteenth Amendments protect against “meaningful the property claimed as collateral.”15 To determine interference with an individual’s possessory interest whether there is a present right to possession, courts in that property.”28 In Soldal, the removal of a mobile will look to state law self-help repossession stat- home took place and law enforcement arrived to pre- utes.16 Thus, the factual inquiry of whether there was vent resistance and interference with the seizure by breach of the peace becomes relevant.17 A debtor’s the tenant.29 The Supreme Court, in its unanimous objection eliminates present right to possession.18 ruling, found state action by law enforcement that Under the FDCPA, an aggrieved party may violated the Fourth and Fourteenth Amendments.30 recover actual damages,19 statutory damages,20 and The U.S. Court of Appeals for the Third Circuit costs and reasonable attorney fees.21 Actual damages had occasion to analyze Constitutional rights in the can include physical and emotional distress, and out taking of a vehicle with assistance of law enforce- of pocket losses. Depending on the facts surrounding ment.31 The court held that “it is . . . well established the breach of peace, a debtor can have significant that possessory interests in property invoke proce- actual damages, for example medical bills due to dural due process protections” and “procedures must physical or mental anguish, and loss of wages if the guarantee protection against erroneous or arbitrary debtor’s job was lost as a result of lack of transporta- seizures.”32 The officer in Abbott played a principal tion. In the rare case where there are no actual dam- role in the seizure of the vehicle by threatening to ages, however, a debtor can still recover the statutory arrest the individual possessing the vehicle.33 The damages of up to $1,000.00.22 Finally, the FDCPA Third Circuit held the case sufficient to be tried on provides attorney fees to the prevailing debtor.23 the issue of a deprivation of a Constitutional right.34 A creditor can avoid liability by proceeding Within the Fourth Circuit, a federal district through judicial action as a primary remedy. After court in Maryland permitted plaintiff’s Section 1983 default, a secured creditor may take possession of claim for deprivations of rights under the Fourth and the collateral through judicial action.24 A party may Fourteenth Amendment to survive a motion to dis- bring a proceeding in detinue to recover unlawfully miss.35 In Morozov, the vehicle owner objected to the withheld personal property.25 Depending on the bal- repossession and the repossession company called the ance owed, a Warrant in Detinue should be filed in police.36 The officer arrived and threatened to arrest the General District Court or in the Circuit Court. By the individual.37 Ultimately, the police detained the first seeking judicial process in state court, secured owner and he gave the officers the keys to the vehi- creditors can prevent litigation, potentially in federal cle.38 Because the “possessory interest in a vehicle is court, if the repossession goes wrong and liability sufficient to invoke the protection of the Fourth and arises. Fourteenth Amendments,” the plaintiff’s claims sur- Alternatively, the secured creditor may want to vived the motion to dismiss.39 vet the repossession agents for practices and knowl- Also, the Western District of Virginia denied a edge of the law. defendant’s motion to dismiss a Section 1983 claim arising from an unlawful repossession where police

10 Litigation News December 2016 officers arrived on the scene of the repossession, to safeguard a person’s rights, freedoms, and liberties. threatened to arrest the debtor, and ultimately facili- tated the turnover of possession to the repossession (Endnotes) agent.40 The court found there was sufficient factual 1. See U.C.C. § 9–609. detail to state a plausible claim for relief of a vio- 2. See id. 3. See Va. Code Ann. § 8.9A–602(6) (West 2016). lated constitutional right and that the police acted 4. See Universal Credit Co. v. Taylor, 164 Va. 624, 630–31 41 under color of state law. Citing Morozov, the court (1935) (“The right to possession of chattels may be exer- found that a possessory interest in the vehicle was cised without recourse to the courts, provided this can be sufficient to invoke the protection of the Fourth and done peaceably. It is only when a right of one is denied or Fourteenth Amendments.42 Citing to the Chrysler resisted by another, that such party must resort to appro- Credit Corporation,43 Lugar,44 and Abbott,45 the priate legal proceedings to enforce that right.”); Wallace v. Chrysler Credit Corp., 743 F. Supp. 1228, 1232 (W.D. court also found that there was state action as the Va. 1990). officers participated in the removal of the debtor’s 5. See Fulton v. Anchor Sav. Bank, 452 S.E.2d 208, 213 property while on-duty.46 (Ga. Ct. App. 1994) (a breach of the peace is created The second prong analysis, action under color of by an unequivocal oral protest); see also Census Fed. state, focuses on factual details; for example, when Credit Union v. Wann, 403 N.E.2d 348, 352 (Ind. Ct. on-duty police officers are present at or participat- App. 1980) (in the face of an oral protest the repossessing creditor must desist); Hollibush v. Ford Motor ing in a creditor’s repossession then “the officers are Credit Co., 508 N.W.2d 449, 453 (Wis. Ct. App. 1993); In participating in the removal of the debtor’s prop- re MacLeod, 118 B.R. 1 (Bankr. D.N.H. 1990) (discuss- erty while cloaked in the mantle of their authority as ing that the intent of statute is to require that the civil agents of the state.”47 Still, unusual situations arise; justice system be used if the debtor objects); Manhattan a private party could also be found a state actor for Credit Co. v. Brewer, 341 S.W.2d 765 (Ark. 1961) (hold- Section 1983 liability when acting in concert with a ing that a breach of peace occurred when the debtor and 48 her husband confronted the creditor’s agent during the state actor. act of repossession and clearly objected to the reposses- Counsel for police officers may raise the doctrine sion). of qualified immunity in attempts to shield the offi- 6. See Watson v. Hernandez, 374 S.W.2d 326 (Tex. Civ. cers from liability. This may be raised in a motion to App. 1964) (finding use of force is a breach of the peace). dismiss under Rule 12(b)(6) or in a motion for sum- 7. See Pryor v. Universal C.I.T. Credit Corp., 253 S.W.2d mary judgment. Qualified immunity is an affirmative 493 (Tex. Civ. App. 1952) (finding use of force, threats, or fear will almost certainly be a breach of the peace). defense and the burden of pleading it “rests with the 8. See A.B. Lewis Co. v. Robinson, 339 S.W.2d 731, 735 49 defendant.” Qualified immunity protects “govern- (Tex. Civ. App. 1960) (breaking into debtor’s garage, ment officials performing discretionary functions . when debtor was not present, was not a peaceable . . insofar as their conduct does not violate clearly repossession). established statutory or constitutional rights of which 9. See Walker v. Walthall, 588 P.2d 863 (Ariz. Ct. App. 1978); Waisner v. Jones, 755 P.2d 598, 602 (N.M. 1988) a reasonable person would have known.”50 (“mere presence of the [law enforcement] official, with- Courts have routinely denied qualified immunity out more, is sufficient to chill the legitimate exercise of 51 in the context of repossession cases. This is because the defaulting party’s rights.”); First & Farmers Bank defendants often cannot carry their burden. The v. Henderson, 763 S.W.2d 137, 141 (Ky. Ct. App. 1988) unlawful self-help repossession is a constitutional vio- (“the deputy sheriff acting under color of office, without lation under the Fourth and Fourteenth Amendments any legal process, enabled the Bank to repossess over and reasonable officers should know from Supreme the debtor’s objection. There was, thus, an actual breach of the peace.”). Court precedents and Virginia law that their role is 10. See Va. Code Ann. § 8.9A–609, cmt. 3 (West 2016) (“. . . not to assist in property deprivations without notice courts should hold the secured party responsible for the and an opportunity to be heard.52 actions of others taken on the secured party’s behalf, Often state actors, especially law enforcement, including independent contractors engaged by the must act swiftly and strongly to ensure a person’s secured party to take possession of collateral.”). rights, freedoms, and liberties are not violated. In the 11. See U.C.C. § 9–625. 12. See Va. Code Ann. § 8.9A–625 (West 2016). context of self-help repossessions, however, inaction 13. See id. § 8.9A–625(c)(2). and de-escalation of the repossession agent to cease 14. 15 U.S.C. § 1692a(6) (2012). and seek judicial process may be the appropriate way 15. Id. § 1692f(6)(A).

11 Litigation News December 2016

16. See Vantu v. Echo Recovery, LLC, 85 F. Supp. 3d 939, 146 (finding police officers to be a set of state actors). 943 (N.D. Ohio 2015); see also Aviles v. Wayside Auto 48. See Adickes v. S. H. Kress & Co., 398 U.S. 144, 152 Body, Inc., 49 F. Supp. 3d 216, 225-26 (D. Conn. 2014); (1970); see also Hinkle v. City of Clarksburg, 81 F.3d Alexander v. Blackhawk Recovery & Investigation, LLC, 416, 421 (4th Cir. 1996) (establishing a conspiracy 731 F. Supp. 2d 674, 679 (E.D. Mich. 2010). under § 1983); Davis v. Wal-Mart Stores E., L.P., __ F. 17. See Va. Code Ann. § 8.9A-609(b)(2) (West 2016). Supp. 3d __, No. 3:15CV387-HEH, 2016 WL 1464563 18. See Fulton v. Anchor Sav. Bank, 452 S.E.2d 208, 213 (E.D. Va. Apr. 13, 2016), appeal docketed, No. 16-1677 (Ga. Ct. App. 1994); see also Census Fed. Credit Union (4th Cir. June 15, 2016) (“Private parties can be liable v. Wann, 403 N.E.2d 348, 352 (Ind. Ct. App. 1980); Hol- under 42 U.S.C. § 1983 if they conspire to commit, or libush v. Ford Motor Credit Co., 508 N.W.2d 449, 453 are jointly engaged in, prohibited actions with state offi- (Wis. Ct. App. 1993); In re MacLeod, 118 B.R. 1 (Bankr. cials.”). D.N.H. 1990); Manhattan Credit Co. v. Brewer, 341 49. Ridpath v. Bd. of Governors Marshall Univ., 447 F.3d S.W.2d 765 (Ark. 1961). 292, 305 (4th Cir. 2006) (quoting Gomez v. Toledo, 446 19. 15 U.S.C. § 1692(k)(a)(1) (2012). U.S. 635, 640 (1980)). 20. Id. § 1692(k)(a)(2). 50. Harlow v. Fitzgerald, 457 U.S. 800, 818 (1982). 21. Id. § 1692(k)(a)(3). 52. See Goard, 170 F. Supp. 3d 915; see also Marcus v. 22. Id. § 1692(k)(a)(2)(A). McCollum, 394 F.3d 813, 816–17 (10th Cir. 2004) (find- 23. Id. ing factual allegations to survive summary judgment 24. See Va. Code Ann. § 8.9A–609 (West 2016). where police threatened property owner with jail); 25. See Va. Code Ann. § 8.01–114 (West 2016). Abbott v. Latshaw, 164 F.3d 141, 141 (3rd Cir. 1998) 26. See Va. Code Ann. § 8.9A–602 cmt. 3 (West 2016) (“This (discussed above); Hensley v. Gassman, 693 F.3d 681 section does not authorize a secured party who repos- (6th Cir. 2012) (reversing grant of qualified immunity sesses without judicial process to utilize the assistance because self-help repossession became unlawful after of a law-enforcement officer. A number of cases have breach of the peace); Brees v. Courtesy Ford, Inc., 45 held that a repossessing secured party’s use of a law- F. App’x 711 (9th Cir. 2002) (no qualified immunity for enforcement officer without benefit of judicial process police who assisted in unlawful repossession); Harris v. constituted a failure to comply with former section City of Roseburg, 664 F.2d 1121, 1127 (9th Cir. 1981) 9-503.”) (denying summary judgment were the “officer assist[ed] 27. Gomez v. Toledo, 446 U.S. 635, 640 (1980). in effectuating a repossession over the objection of a 28. See Soldal v. Cook County, 506 U.S. 56, 61 (1992). debtor or so intimidate[d] a debtor as to cause him to 29. Id. at 58. refrain from exercising his legal right to resist a repos- 30. Id. at 72. session”); see also Morozov v. Howard Cty. Md., No. 31. Abbott v. Latshaw, 164 F.3d 141, 146 (3d Cir. 1998). MJG-10-1515, 2012 WL 2048296, at *4–5 (D. Md. June 32. Id. (citing Fuentes v. Shevin, 407 U.S. 67, 87 (1972) 5, 2012) (discussed above); Woynar v. City of Daytona and Mitchell v. W.T. Grant Co., 416 U.S. 600, 605–06 Beach, No. 6:10-cv-1458, 2012 WL 1110064, at *5–11 (1974)). (M.D. Fla. Apr. 3, 2012) (denying qualified immunity 33. Abbott, 164 F.3d at 145. because active participation in self-help repossession 34. Id. at 147. can be an unreasonable seizure); Steibel v. Vill. of Prai- 35. Morozov v. Howard Cty. Md., No. MJG-10-1515, 2012 rie Du Rocher, No. 07-0197, 2007 WL 2819292, at *3–4 WL 2048296 (D. Md. June 5, 2012). (S.D. Ill. Sept. 26, 2007) (holding no qualified immunity 36. Id. at *1. for police who ordered individual to turn over keys). 37. Id. 53. Abbott, 164 F.3d at 149; Soldal v. Cook County, 506 38. Id. U.S. 56, 61 (1992); see also Brian S. Batterton, Self-Help 39. Id. at *3–*4. Repossession Versus the Fourth Amendment, LEGAL 40. Goard v. Crown Auto, Inc., 170 F. Supp. 3d 915 (W.D. & LIABILITY RISK MANAGEMENT INSTITUTE (Dec. 2012), Va. 2016). http://www.llrmi.com/articles/legal_update/2012_6th_ 41. Morozov, 2012 WL 2048296. hensley_gassman.shtml (discussing how to follow the 42. See id. law in self-help repossession cases after Soldal); Va. 43. Wallace v. Chrysler Credit Corp., 743 F. Supp. 1228, Code Ann. § 8.9A-609; Universal Credit Co. v. Taylor, 1234 (W.D. Va. 1990). 164 Va. 624, 630–31 (1935)(discussed above). ✦ 44. Lugar v. Edmonson Oil Co., 457 U.S. 922, 935 n.18 (1982). * * * 45. Abbott v. Latshaw, 164 F.3d 141, 146 (3rd Cir. 1998). 46. Goard v. Crown Auto, Inc., 170 F. Supp. 3d 915 (W.D. Va. 2016). 47. Wallace, 743 F. Supp. at 1234; see also Lugar, 457 U.S. at 935 n.18 (state employment is generally sufficient to render the defendant a state actor); Abbott, 164 F.3d at

12 Litigation News December 2016

A VIEW FROM THE BENCH • Hon. Thomas D. Horne (Ret.) The Art of Managing Dispute Resolution: Tips on Good Time Management in Affecting Fair Outcomes

Managing case flow remains a constant topic of In pursuit of arbitrary forms of case management, conversation both in scholarly articles and informal many docketing decisions are left to a method which discussions among lawyers and judges. Thoughtful does not take into consideration the importance control of scheduling is indispensable to ensuring of creativity and individuality in the scheduling that dispute resolution resources are allocated in a process. This article will attempt to demonstrate way that will be effective, efficient, and fair, as well that case management is at its best when attention as cost sensitive to the parties and to the taxpayer. to detail is mixed with creativity in application. The scheduling decision is one that is shared by both the scheduler and those who desire to be heard. Scheduling as an Art Form In making that decision, all parties are challenged to Art, in juxtaposition of science, is a fluid concept. be objective despite inherent differences of opinion Perfection in art is measured not by scientific fostered by an adversarial system. observation and experimentation but by the It is a truism that most cases settle. Developing application of creativity and skill to a landscape strategies that drive parties to a fair agreement, or that reflects both imagination and past experience. provide adequate time for hearings with a modicum Creativity channels emotions in a way that defines of inconvenience to all involved, should be the goal a myriad of thoughts and emotions. Scheduling, of both the decision maker and those who wish to be in part, is such an art form. While the variables heard. Conversely, some disputes do not settle and a inherent in the scheduling of cases may suggest prompt resolution of the controversy by an impartial application of exacting principles, the impressions third party should be an aspirational goal. necessary to the job are inherently driven by human All too often it is thought that merely filling experience. In scheduling, often we are asked to in blanks in a calendar or data sheet will achieve “think outside the box”. responsible case flow management. This paper would suggest that it does not. Such a system takes into Understanding the Case consideration only time and resource availability, A template for good scheduling practices begins but fails to adequately address the individuality to take shape with an understanding of the nature of the underlying controversy and of the parties of the underlying issues to be decided. Cases that participating in the forum. will present novel issues of law or fact may be A fascination with the digital age in the scheduling ones that will demand an initial screening such as confounds this process. Computers are essential to the a preliminary conference, and may also demand tracking and recovery of case data, but should not be briefing, or argument. While historical and empirical put in the position of controlling when and how long data applicable to the issues under consideration are the case should be scheduled for hearing. At present, most helpful in fashioning an efficient and effective a computer solution only reflects the schematic input time management tool, it is the creative skill of the of the programmer and data supplied by the user. scheduler, gained from an understanding of those Lost is the discrete creativity of parties in affecting issues and of the method by which those issues will outcomes. Furthermore, arbitrarily overbooking of be presented, that will control the most desirable cases will lead to disappointed expectations that scheduling outcomes. Because one size does not follow having the matters routinely removed by the fit all, the creativity of the scheduler is measured forum to some future date. Arbitrary scheduling by intuition and the application of procedural undermines faith in the system of adjudication. requirements necessary to conclude the proceedings. The Honorable Thomas D. Horne (Ret.) served as a Circuit Court There is no substitute for experience in scheduling. judge from 1982 to 2013. He currently is a mediator for the McCammon Group.

13 Litigation News December 2016 Understanding the Forum finding on the ultimate issue. All forums for deciding issues are not alike. Discrete customs and procedures peculiar to that Theory Put into Practice, An Approach to forum need to be carefully considered. The availability Scheduling of resources will affect the time necessary to conclude the matter. Such resources might include enhanced Paramount Concerns: Knowing your Case technology, clerks, court reporters, security, parking, and Appreciating the Availability of Resources jury needs, interpretive requirements, and facility 1. When scheduling a case, the parties scheduling management. A good scheduling decision is made the case should have a familiarity with the issues to only after all such applicable factors are considered. be litigated. A collateral benefit to such an approach is that the party is, prior to scheduling, required to Understanding the Procedures “pick up the file.” The more a case is moved from While a trial or settlement conference will reflect the file drawer, shelf, or electronic data storage, the individualized approach of the advocate and the greater the momentum is stimulated towards decision maker, it is possible to develop a base a hearing or settlement. Furthermore, the day of line for a timing decision based upon the required the scheduling conference offers another unique procedures necessary to a determination of the opportunity for the lawyers to discuss the case and, matter. Primary among these is a strict adherence to in doing so, identify issues, consider timing of the court rules. Contrariwise, where possible, the waiver hearing, and begin settlement discussions. of rules of procedure or evidence may be considered, 2. Engage in the intelligent overbooking of cases. when agreed to by the parties and when helpful to a In the process of dispute resolution it is necessary more expedient outcome. to overbook appointed times for hearings. Thus, multiple cases are set on the calendar to commence Understanding the Litigants at the same time. There should always be more cases Dispute resolution is dependent in large measure than time in the day to hear them should they go to upon the manner in which the case is presented. trial. Judges should not be left with large blocks of There is no, “one size fits all,” in the battery of time with nothing to do. The result of such a system lawyers and litigants. Cost may be a factor that will undermines a swift and fair resolution of disputes. enter the equation depending upon the nature of A system that fails to do this is blind to the the case and the financial resources of the parties. reality of one of the cardinal principles of case-flow The greater the availability of funds to sustain an management -- most cases settle. Nothing paints adversarial position will, in many cases, be the the judicial system into a corner faster than a lack harbinger of protracted litigation. Similarly, the of sensitivity to time management. It is the function practice of some attorneys will, unless circumscribed of the scheduler to analyze the cases to be scheduled by the decision maker, naturally add additional time and come up with a schedule that, while not perfect, to the litigation. The scheduler must be sensitive is best able to ensure that those charged with to these peculiarities of the litigation and of the decision making do not arrive for work only to be told litigators and be prepared to address them. that they will be without work when there are other cases that could have commanded their attention. Understanding the Decision Maker Litigants help the process by giving their intelligent Just as lawyers and litigants are not carbon copies assessment of the time it will take to resolve the of each other, so to, there is no identity to decision matter, by simplifying issues, and by identifying how makers. Human experience as applied to the practice those issues may be easily ruled upon. of law dictates that, within certain boundaries, decision makers will deal with issues differently. Some tips on Scheduling Experience with the process is paramount, but it is not the only factor to be considered. How and when 1. Treat the scheduling decision with the same decisions are made may vary considerably, from deference as the trial of the matter. those that demand a contemporaneous response, 2. Review the file and be prepared to make an such as a ruling on an evidentiary objection, to the intelligent estimate of time.

14 Litigation News December 2016 3. The decision maker or facilitator and the Often parties will seek to arrive at stipulations, advocates should attempt to evaluate the waive evidentiary objections, and submit written resources needed or available to effect outcomes. materials in lieu of appearance in person in order to 4. Seek to prioritize cases according to both not infringe on the availability of resources to others. procedural and equitable need. Be mindful Failing such, depending upon the nature of the of statutes of limitation, speedy trial, and harm controversy, the ensuing scheduling decision should to others, both in law and in fact, as they not only respect those inherent in the initial decision effect delay. but take into consideration the historical backdrop 5. Attempt to identify historic patterns in the already developed during the unfinished trial. disposition of like cases and apply them to the Scheduling under such circumstances should scheduling decision. be, as with the initial scheduling decision, made by 6. Apply an honest evaluation of the time that will the person familiar with the issues and with the be required to hear the matter, and manner in which the litigation has progressed. The convey that honest assessment to the person scheduler should be vigilant to maintain objectivity calendaring the case. To do otherwise in in the process. hopes of an earlier date or a forced postponement undermines credibility. Conclusion 7. Don’t schedule a matter for adjudication until Treat the scheduling decision with deference you are ready to do so. to its importance in dispute resolution. As the tide 8. Be fair and respectful of the rights of others in of litigation increases, and budget restraints limit the process. It is a misuse of resources the availability of resources to stem the tide, the to pursue litigation for litigation’s sake. identification of how long it will take to determine 9. Like anticipating the next shot in billiards, the outcome becomes more important. always be mindful of the next step if the matter Several years ago, the undersigned was involved does not go as anticipated. Should a case not in a state-wide assessment of judicial resources in settle, be prepared to address when the matter order to fashion a plan for the allocation of such that is “bumped” should be reset for hearing. resources and for future spending on the judiciary. 10. Seek out assistance in scheduling from published One of the most often heard criticisms voiced was rules, and unpublished opinions of t h o s e that of the allocation of judicial time. who “have been there before.” A system fails to provide adequate resources 11. Continually be ready to seek solutions that will when it encourages either a lack of work because a shape the course of litigation in a way that will case has settled and there is nothing to fill the void facilitate fair and equitable case management. or the frequent “bumping” of cases to a later date 12. Periodically review the docket or the calendar to because of arbitrary overbooking. identify potential cases for The best outcomes for case management are settlement and availability of resources for use created by the attention given to the scheduling by others. process. Litigators and decision makers should assuage the temptation to treat scheduling as a Beyond the Initial Hearing routine matter left to those unfamiliar with either As noted above, the scheduling decision is critical the issues or the law applicable to the case. To do to how a case is presented and issues are heard. otherwise is to be blind to the arbitrary and costly However, it is not uncommon for cases to not results of merely filling in blanks on a calendar. conclude within the window provided or for cases Principled scheduling decisions are essential to fair to take less time than provided. While the initial and equitable outcomes. ✦ scheduling decision may have provided for this, as with the “next shot in pool,” this is not always the * * * case. Should this happen, the litigants and the decision maker will be placed in the position of evaluating the additional time needed to conclude the matter.

15 Litigation News December 2016 Case Summaries • Robert E. Byrne, Jr. SEPTEMBER SESSION 2016 of 1994 (“USERRA”), claiming that the Sheriff failed to reemploy her and make reasonable efforts to accom- Case: Property Damage Specialists, Inc. v. Rechichar, modate her disability, and that the Sheriff violated her __ Va. __, 790 S.E.2d 237 (2016). right to have a two-year convalescence period before her employment could be terminated. The trial court Author: S. Bernard Goodwyn, J. granted defendant’s motion for summary judgment on Date Decided: September 8, 2016 these claims and plaintiff appealed. Lower Ct.: Hupp, Dennis L. (Shenandoah County) Analysis: USERRA contains certain regulations obli- Facts: Employee whistleblower brought retaliatory dis- gating employers to rehire employees who are called to charge claim after he was terminated for complaining active military duty and return, and provisions allow an about unsafe practices at his employer’s facility. The employee up to two years to return to work if convalesc- jury found for the plaintiff and awarded punitive dam- ing from a service-related injury. The provisions do not ages. Defendant appealed, contending retaliatory dis- affect the duration of employment once the employee charge statute, which permitted the plaintiff to recover is rehired, as subsection (e) does not affect the terms of “appropriate relief,” did not permit an award of punitive employment once the service member has been rehired. damages. Similarly, the Deputy’s claim for employment in an “escalator” position is properly subject to summary Analysis: The Court examined the statutory language judgment because there was no evidence presented that in light of “appropriate relief” in other statutes, namely the employer found the employee unqualified for her the wrongful death statute, which did not provide for position, which would trigger the employer’s duty to punitive damages. Here, if the General Assembly want- make reasonable efforts to accommodate the employee’s ed punitive damages to be an available remedy, the disability. General Assembly would have so indicated. That so, there is no legal basis for awarding punitive damages. Result: Affirmed. ✦ ✦ ✦ Result: Affirmed in part, reversed in part, and final judgment. Case: Holiday Motor Corp. v. Walters, __ Va. __, 790 ✦ ✦ ✦ S.E.2d 447 (2016).

Case: Huff v. Winston, Sheriff, __ Va. __, 790 S.E.2d Author: Elizabeth A. McClanahan, J. 226 (2016). Date Decided: September 8, 2016 Lower Ct.: Broadhurst, William D. (City of Roanoke) Author: William C. Mims, J. Date Decided: September 8, 2016 Facts: A jury awarded $20 million in a product liabil- Lower Ct.: Carson, David B. (Roanoke County) ity action for the driver of a convertible paralyzed following a rollover crash. The plaintiff alleged that the Facts: A sheriff deputy was called to active military windshield header was defectively designed and had duty, suffered injuries while on duty, and returned to disconnected from the convertible’s soft top roof latching employment as a deputy after military duty ended. system, causing her injury. The defendant contended Deputy had health problems, was given leave, and it had no duty to design a soft top that provided rollover went on light duty status. The Deputy’s employer protection, and that plaintiff’s expert testimony lacked terminated the Deputy because she was unable to a proper factual foundation. Defendant appealed. work full time. Deputy filed suit under the Uniformed Services Employment and Reemployment Rights Act Analysis: Virginia does not recognize the crashworthi- ness doctrine for automotive products liability actions. Robert E. Byrne, Jr. practices at Martin Wren, P.C. in Charlottesville, Instead, a manufacturer is required to provide a prod- Virginia and focuses on personal injury litigation, medical malprac- uct that is reasonably safe for its intended purpose. tice, employment law and litigation, and business and commercial To state a claim for defective design, a plaintiff must litigation. He is a member of the Board of Governors for the Litigation Section of the Virginia State Bar. show that the manufacturer failed to satisfy objec-

16 Litigation News December 2016 tive safety standards that existed when the product JUNE SESSION 2016 was made. Such standards could include industry standards, government standards, or reasonable cus- Case: Bank of Hampton Roads v. Powell, 292 Va. 10, tomer expectations. Here, there were no government 785 S.E.2d 788 (2016). or industry standards in place when the car was built requiring that soft top vehicles provide rollover protec- Author: Donald W. Lemons, C.J. tion. Because there are no government or industry Date Decided: June 2, 2016 standards for rollover protection with soft top cars, it Lower Ct.: Arrington, Marjorie T. (City of Chesapeake) defies common sense and good policy to impose such a requirement. Facts: Plaintiff sold property to a real estate development company partially in exchange for cash and also Also, the expert’s opinion was inadmissible because for a parcel of property from the resulting development. it was predicated upon unfounded assumptions. The Real estate development company failed to convey the expert performed no testing or analysis to determine identified lot as promised, so plaintiff filed suit against whether his proposed theory was correct. development company, its managers, a third-party builder, defendant bank, and others for breach of con- Result: Reversed and final judgment. tract and fraudulent conveyance. Having settled with ✦ ✦ ✦ the builder who owned the lot that was the subject of the dispute, plaintiff sought a constructive trust upon a Case: Cherrie v. Virginia Health Services, __ Va. __, different parcel of property that was part of the devel- 787 S.E.2d 855 (2016). opment. The trial court imposed a constructive trust upon the different parcel that was not the subject of the Author: D. Arthur Kelsey, J. breached contract. Defendant bank appealed, contend- Date Decided: July 14, 2016 ing that there was no legal basis to impose a construc- Lower Ct.: Fisher, Timothy S. (City of Newport News) tive trust.

Facts: Personal representatives of estates of deceased Analysis: The trial court erred when it imposed a con- former nursing home residents filed declaratory judg- structive trust based on the facts of this case. To obtain ment actions to compel production of nursing home a constructive trust, a plaintiff must distinctively trace documents and policies, pursuant to 12 VAC § 5-371- the funds utilized in the transfer. Here, plaintiff failed 140(G). The trial court dismissed the actions on the to do that as the parcel that was subject to the con- grounds that the Virginia Board of Health Regulations structive trust was altogether different than the parcel did not provide a private right of action for regulatory that was the subject of the contract. enforcement, at least insofar as compelling document production is concerned. Personal representatives Ruling: Reversed and final judgment. appealed. ✦ ✦ ✦

Analysis: While there is a cause of action available Case: Parrish v. Federal National Mortgage to enforce the regulations, the right of actions does not Association, 292 Va. 44, 787 S.E.2d 116 (2016). belong to the personal representatives. Private parties can file administrative complaints but cannot file Author: William C. Mims, J. civil actions in circuit court, as the regulations permit Date Decided: June 16, 2016 only the Commissioner to pursue violations in circuit Lower Ct.: Harris, J. Overton (Hanover County) court. In addition, the Declaratory Judgment Act does not grant authority to pursue an action in circuit court Facts: The defendants’ house was foreclosed upon, without an underlying statute granting the right to and the plaintiff, the trustee of the deed of trust for pursue the claim. the house, sent a notice to vacate and filed an unlawful detainer in general district court. The defendant home- Result: Affirmed. owners challenged the validity of the foreclosure due to ✦ ✦ ✦ their submission of a completed loss mitigation application before the foreclosure. The general district court awarded possession to plaintiff.

17 Litigation News December 2016 On appeal at the circuit court, the plaintiff contended Authority failed to show any such applicable law in its that the general district court lacked jurisdiction to appeal to the circuit court, so the circuit court lacked hear an objection to the alleged invalidity of the foreclo- jurisdiction. sure and that the circuit court accordingly lacked jurisdiction to consider that issue. The circuit court granted Result: Reversed and dismissed. plaintiff’s motion for summary judgment and awarded ✦ ✦ ✦ possession to plaintiff. The defendant homeowners appealed, contending that the general district court and Case: Virginia Electric and Power Co. v. Hylton, 292 the circuit court lacked jurisdiction due to the home- Va. 92, 787 S.E.2d 106 (2016). owners’ defense challenging the plaintiff’s title. Author: Cleo E. Powell, J. Analysis: General district courts are courts not of Date Decided: June 16, 2016 record and are creations of the General Assembly. On Lower Ct.: Kilgore, John C. (Wise County) appeal, a circuit court’s jurisdiction on appeal from general district court is derivative of the subject matter Facts: Dominion Power sought to condemn property jurisdiction of the original court not of record. General for the construction of an electric transmission line. district courts can hear unlawful detainer actions but Hylton owned approximately 65 acres that would be lack authority to try title. subject to the take, and Dominion filed a petition to Here, the plaintiff acquired title after the defendants take the surface rights of the land without taking the had asserted lawful possession, and the defendants mineral rights. Hylton did not challenge the value raised a bona fide question of title in the unlawful of the surface land taken, but he claimed the taking detainer proceeding, which divested the general district would impair his ability to extract coal and he sought court – and, subsequently, the circuit court – of juris- an award based on that aspect of the taking. Hylton diction to hear the matter. The general district court filed a motion to dismiss Dominion’s petition on the should have dismissed the case without prejudice. grounds that Dominion failed to make a bona fide offer as required by Va. Code § 25.1-204. The trial court Result: Vacated and dismissed. granted the motion to dismiss and awarded more than ✦ ✦ ✦ $300,000 in attorneys’ fees even though Hylton’s attor- Case: Andrews v. Richmond Redevelopment and neys’ fees were to be paid on a contingency-fee basis. Housing Authority, 292 Va. 79, 787 S.E.2d 96 (2016). Dominion appealed the decision to award fees, and also appealed the trial court’s denial of its motion to limit Author: Elizabeth A. McClanahan, J. evidence regarding the value of the coal on the property Date Decided: June 2, 2016 and the value of a non-existent surface mine on the Lower Ct.: Hughes, Melvin R. (City of Richmond) property.

Facts: Employee was terminated from her posi- Analysis: Va. Code § 25.1-213(ii) requires a landowner tion with the Richmond Redevelopment and Housing who objects to jurisdiction to indicate that objection to Authority (“Authority”) and, as part of grievance pro- the petition within 21 days. An insufficient offer from cedure, a hearing officer ordered that the employee the condemner is not a non-bona fide offer, and there be reinstated to employment with the Authority. The was nothing in response to Dominion’s petition whereby Authority appealed to the circuit court, and the circuit Hylton indicated his objection to the petition on the court reversed the hearing officer’s decision. On appeal, grounds that the offer was not bona fide. As such, the employee contended that the trial court lacked the trial court’s decision on the motion to dismiss was jurisdiction for its ruling. reversed and remanded. Also, the trial court erred by calculating the value of the property not as a whole but Analysis: The employee raised the jurisdictional chal- by its component parts. Finally, the trial court erred lenge for the first time on appeal, but this failure to by denying the motion in limine regarding the potential object at the trial court level did not waive the jurisdic- surface mine on the property, which was speculative tional challenge as such a challenge cannot be waived. and inadmissible because there were no permits for The grievance procedure in question was controlled such a mine, nor were such permits pending. by the State Grievance Procedure. Because of that, the circuit court only had jurisdiction to examine if a Ruling: Affirmed in part, reversed in part, and hearing officer’s determination is contrary to law. The remanded.

18 Litigation News December 2016 ✦ ✦ ✦ The Court next examined whether the jury instruction on superseding causation misstated the law or was not Case: Dorman v. State Industries, Inc., 292 Va. 111, supported by defendant’s evidence. The Court deter- 787 S.E.2d 132 (2016). mined the instruction was “substantively the exact language” previously approved for this instruction. As Author: Cleo E. Powell, J. such, the instruction was therefore a correct statement Date Decided: June 16, 2016 of the law and there was more than a scintilla of evi- Lower Ct.: Stout, Walter W. (City of Richmond) dence supporting it. Facts: Plaintiffs suffered carbon monoxide poisoning Finally, the Court determined there was no error due to in their apartment and brought breach of warranty and the instruction not stating that the defendant had the negligence claims against manufacturer of atmospheric burden of proof, as the plaintiffs had not tendered an hot water heater. Plaintiffs claimed the atmospheric instruction with their desired language. This point was heater was unreasonably dangerous and unfit for its accordingly waived for appeal. intended purpose. This was because of its design defect due to its draft hood and its susceptibility to both inte- Result: Affirmed. rior and exterior atmospheric conditions that prevented ✦ ✦ ✦ it from venting properly, which caused it to circulate carbon monoxide. Defendant manufacturer claimed that the heater was defectively installed by the non- Case: Babcock & Wilcox Company v. Areva NP, Inc., party property owners and their management company. 292 Va. 165, 788 S.E.2d 237 (2016). At trial, the defendant’s expert testified that there were more than 60 million atmospheric gas heaters used in Author: D. Arthur Kelsey, J. the United States. Plaintiffs filed a motion to strike Date Decided: June 3, 2016 defendant’s empty-chair evidence, which the trial court Lower Ct.: Perrow, Mosby G. (City of Lynchburg) overruled. The trial court also granted defendant’s superseding cause jury instruction. The jury ruled for Facts: Areva sued Babcock & Wilcox (B&W) for breach defendant on all counts. of contract and misappropriation of trade secrets. In Plaintiff appealed, contending that the trial court erred the breach claim, Areva contended that B&W breached by: (1) admitting evidence of the number of heaters a sublicense agreement by failing to provide notice of sold, which was tantamount of evidence of the absence agreements and failing to pay a royalty. In the misap- of other injuries; (2) allowing superseding cause evi- propriation count, Areva alleged that B&W’s use of dence; and (3) granting a jury instruction on supersed- Areva’s technology without providing royalty payments ing cause. constituted misappropriation of trade secrets. B&W filed a motion for summary judgment before trial con- Analysis: On the first point regarding evidence of the tending that the agreement in question was unambigu- number of heaters sold, the Court determined that this ous and that it precluded royalty liability for contracts evidence was relevant to the question of whether the involving offsite work involving certain equipment. heater breached the implied warranty of merchantabil- ity and whether it was unreasonably dangerous. At trial, Areva contended that the case was a contract case and that B&W was required to pay a 4% royalty. Regarding the superseding cause evidence, the Court B&W defended by claiming that the customer contracts explained that a negligent defendant could avoid liabil- in question were contracts where the royalty liability if the action that caused an injury was “so highly ity was excluded or that B&W’s use did not create a extraordinary as to be unforeseeable” that it serves to duty to pay royalties. B&W moved to strike Areva’s “cut off legal causation.” This superseding cause must evidence, the trial court denied the motion to strike, “so entirely supersede the operation of the defendant’s and the jury awarded more than $16 million to Areva. negligence that it alone, without any contributing neg- B&W appealed. ligence by the defendant in the slightest degree, causes the injury.” The jury was presented with evidence by Analysis: The Supreme Court applied settled prin- which it could conclude that other causes – such as neg- ciples of contractual interpretation to find the meaning ligent installation by the owner or its agents – super- of the sublicense agreement, particularly in light of seded the defendant’s negligence. the agreement’s scope, its requirement that royalties

19 Litigation News December 2016 be paid, and its exemption from the royalty payment Case: Johnston v. William E. Wood & Associates, Inc., requirement. The Court determined the scope of the 292 Va. 222, 787 S.E.2d 103 (2016). agreement applied only to the supply of commercial civil nuclear services to certain plants; the royalty obli- Author: Stephen R. McCullough, J. gation applied only in narrow circumstances; and no Date Decided: June 2, 2016 royalty payment was required for the first customer Lower Ct.: (City of Virginia Beach) contract that was procured. The Court analyzed each of the customer contracts in Facts: Plaintiff was an at-will employee who was light of the ascribed meaning and determined that the terminated from employment without any advance royalty obligation had not arisen. Given that the trial notice. Plaintiff claimed that the lack of advance notice court had determined the correct meaning of the agree- breached the employer’s implied duty to provide “rea- ment in the summary judgment ruling, the Court did sonable notice.” The circuit court granted the employ- not understand why the case was permitted to proceed er’s demurrer and dismissed the complaint. Plaintiff to trial. appealed.

Areva’s inconsistent positions regarding whether B&W Analysis: Although Virginia states that at-will was a grantee constituted approbate and reprobate, employment can be terminated with “reasonable which prevents the use of inconsistent factual or legal notice,” the reasonableness requirement does not positions in the course of litigation. include a temporal component. Therefore, requiring Turning to the trade secrets claim, the Court deter- advance notice is not required as employment at will is mined that it is not misappropriation if a party has a flexible, and all that is required for reasonableness is contractual right to use a trade secret. In this case, “effective notice.” B&W had the right to use the trade secrets pursuant to the licensing agreement. Result: Affirmed. ✦ ✦ ✦ Ruling: Reversed and final judgment. ✦ ✦ ✦ Case: Thorsen v. Richmond Society for the Prevention of Cruelty to Animals, 292 Va. 257, 786 S.E.2d 453 (2016). Case: Pike v. Hagaman, 292 Va. 209, 787 S.E.2d 89 (2016). Author: Leroy F. Millette, Jr., S.J. Date Decided: June 2, 2016 Author: Stephen R. McCullough, J. Lower Ct.: (City of Richmond) Date Decided: June 2, 2016 Lower Ct.: Rupe, Gregory L. (City of Richmond) Facts: An attorney drafted a will whereby the decedent’s property was to be conveyed to plaintiff, Facts: In a medical malpractice claim where a nurse Richmond Society for the Prevention of Cruelty to at Virginia Commonwealth University Hospital failed Animals (RSPCA). The will contained an error and to follow post-surgical procedures, the trial court only the tangible property of the estate, and not the applied the four-factor test in James v. Jane to grant real property, was transferred to RSPCA. RSPCA filed the Commonwealth’s plea of sovereign immunity. a legal malpractice claim against the attorney who drafted the will. Court examined whether an intended Analysis: The trial court properly applied the James third-party beneficiary could sue an attorney for legal v. Jane factors to grant the plea in bar. This is based malpractice. on facts that: the procedure in question had limited availability in Central Virginia, thus indicating that Analysis: An intended third party beneficiary to a will the hospital was performing an essential governmental has standing to sue the drafting attorney if they were function; the care provided by the hospital involved the an intended third-party beneficiary of a contract to draft exercise of discretion; and the hospital had a high level the testamentary documents between the client and the of discretion and control over the nurse in question. attorney. This is true even if the beneficiary in question is a contingent residuary beneficiary. Plaintiff’s com- Result: Affirmed. plaint sufficiently stated a claim for relief. ✦ ✦ ✦ Result: Affirmed.

20 Litigation News December 2016 ✦ ✦ ✦ Case: Haynes v. Haggerty, 291 Va. 301, 784 S.E.2d 293 (2016). Case: Ragland v. Soggin, 784 Va. 282, 784 S.E.2d 698 (2016). Author: S. Bernard Goodwyn, J. Date Decided: April 21, 2016 Author: Donald W. Lemons, C.J. Lower Ct.: Ellis, Joseph J. (Spotsylvania County) Date Decided: April 14, 2016 Lower Ct.: Carroll, Grace Burke. (Fairfax County) Facts: Plaintiff filed suit against defendant for sexual abuse that occurred between 1971 and 1975 when Facts: Trial court imposed monetary sanctions on two plaintiff was a minor. Defendant filed a plea in bar defense attorneys in the amount of $200 each for sub- contending that the suit was barred by the statute of mitting erroneous jury instructions even though the limitations. Plaintiff, in response, contended that the trial court had found that the attorneys’ mistake was statute of limitations was tolled by the physician dis- inadvertent. The defense attorneys appealed, claiming closure provision contained in Va. Code § 8.01-249(6), that the trial court lacked authority to impose a mon- a provision that causes an action for child sexual abuse etary sanction for an inadvertent mistake. to accrue when the fact of the injury and its causal con- nection to the abuse is first communicated to the victim Analysis: The court’s inherent power to sanction does by a licensed physician, psychologist, or clinical psy- not include monetary sanctions. Because, here, the chologist. trial court found that the defense attorneys did not intend to submit a false instruction, the trial court had The trial court granted the plea in bar on the basis that no authority to award sanctions under the contempt the claims of abuse accrued under a former limitations statute. And, while Va. Code § 8.01-271.1 can act as regime that existed before the statutory enactment of the legal authority for sanctions due to the fact that the physician disclosure provision became operative. the defense attorneys made an oral motion to the court, Plaintiff appealed the trial court’s ruling on the plea in here there is no legal authority to impose sanctions bar. under that provision because the error in question was inadvertent. Analysis: The plaintiff’s cause of action for sexual abuse accrued at the time of the abuse, by 1975 at Result: Reversed and final judgment. the latest. That so, Code § 8.01-256, which dealt with ✦ ✦ ✦ causes of action that existed before October 1, 1977, governs this matter and the appropriate statute of limitations for this action is the one that existed in 1975. Case: Lopez-Rosario v. Habib, 291 Va. 293, 785 S.E.2d Plaintiff therefore cannot avail herself of the physician 214 (2016). disclosure provision. Author: S. Bernard Goodwyn, J. Ruling: Affirmed. Date Decided: April 14, 2016 ✦ ✦ ✦ Lower Ct.: Tran, John M. (Fairfax County)

Facts: Trial court dismissed the medical malpractice Case: Dye v. CNX Gas Co., LLC, 291 Va. 319, 784 action brought in the plaintiff’s name instead of in the S.E.2d 703 (2016). name of plaintiff’s guardians. Plaintiff appealed, contending that, though she was incapacitated, she had Author: Elizabeth A. McClanahan, J. standing to sue in her own name. Date Decided: April 21, 2016 Lower Ct.: Moore, Michael L. (Russell County) Holding: Statutorily, an appointed fiduciary shall prosecute or defend actions. Here, the guardians were Facts: Plaintiff claimed she owned the rights to natu- full guardians and were accordingly appointed fiducia- ral gas and coal bed methane because deeds in question ries. Under Virginia law, a ward lacks standing to file granted mineral interests, which did not include natu- suit in his or her own name and must file suit through ral gas. The trial court held that “minerals” included their guardian. natural gas. Plaintiff appealed.

Result: Affirmed. Analysis: A conveyance of mineral rights under ✦ ✦ ✦

21 Litigation News December 2016 Virginia law includes oil and gas rights unless a con- order in a civil assault case. Plaintiff’s expert designa- trary intention is indicated in the deed. Here, no con- tion did not mention plaintiff’s need for future medi- trary indication dispelled this rule. cal treatment, nor was such discussed in the expert’s deposition. The trial court allowed plaintiff to present Result: Affirmed. expert testimony regarding plaintiff’s need for future ✦ ✦ ✦ medical care at trial. Defendant appealed, contending the trial court abused its discretion in allowing into evidence an opinion not disclosed in accordance with the Case: Navar, Inc. v. Federal Business Council, 291 Va. pretrial scheduling order. 338, 784 S.E.2d 296 (2016). Analysis: The trial court abused its discretion in Author: Cleo E. Powell, J. allowing an undisclosed expert opinion to be admitted Date Decided: April 28, 2016 into evidence. The plaintiff had an obligation to dis- Lower Ct.: Kassabian, Brett A. (Fairfax County) close this opinion in accordance with the pretrial scheduling order, and plaintiff’s failure to do so violated the Facts: A large government contractor entered into a pretrial scheduling order. teaming agreement with a smaller contractor that was eligible for a small-business set aside contract. The Result: Reversed and remanded. teaming agreement provided that the parties would negotiate in good faith and would enter subcontracts ✦ ✦ ✦ to perform the set aside contract. The small business won the set aside contract, negotiations with the large government contractor broke down, and the large gov- Case: JSR Mechanical, Inc. v. Aireco Supply, Inc., 291 ernment contractor (plaintiffs) filed suit against the Va. 377, 786 S.E.2d 144 (2016). small business for breach of a non-disclosure agreement and misappropriation of trade secrets. A jury ruled in Author: Leroy F. Millette, Jr., S.J. plaintiffs’ favor and awarded plaintiffs a judgment in Date Decided: April 21, 2016 the amount of $1.25 million. Defendant appealed, con- Lower Ct.: Farris, Lon E. (Prince William County) tending that the teaming agreement was not a legally enforceable contract. Facts: Plaintiff filed a complaint, defendant answered, but then no pleadings were filed by either party for the Analysis: Under the non-disclosure agreement entered next four years. The clerk entered an order dismissing by the parties, the plaintiffs failed to show how the the case pursuant to Va. Code § 8.01-335(B). Almost defendant misused their confidential information under one year later, plaintiff filed a motion to reinstate the the terms of the non-disclosure agreement. In addi- case. The trial court denied the motion and plaintiff tion, the plaintiffs failed to show that defendant misap- appealed, contending the trial court did not have discre- propriated trade secrets under the Trade Secrets Act. tion to deny a motion to reinstate that was timely filed Finally, the teaming agreement was not an enforceable and noticed. contract but was merely an agreement to agree to negotiate at a later date. Analysis: The statute does not contain a “good cause” requirement, and the fact that “good cause” appears 46 Ruling: Reversed in part, affirmed in part, and final times in Title 8.01 indicates the General Assembly’s judgment. ability to invoke this standard when desired. In addi- ✦ ✦ ✦ tion, the General Assembly’s removal of a good cause requirement in a previous iteration of this provision suggests it was not intended here. As such, the trial Case: Mikhaylov v. Sales, 291 Va. 349, 784 S.E.2d 286 court did not have authority to dismiss the case based (2016). on a good cause requirement. Author: D. Arthur Kelsey, J. Result: Reversed and remanded. Date Decided: April 21, 2016 Lower Ct.: Nordlund, Lorraine and Schell, David S. ✦ ✦ ✦ (Fairfax County)

Facts: The trial court entered a pretrial scheduling

22 Litigation News December 2016 Virginia State Bar Litigation Section 2016 - 2017 Board of Governors

Kristan B. Burch E. Kyle McNew Monica T. Monday Chair MichieHamlett Chair, Appellate Committee Kaufman & Canoles 500 Court Square, Suite 300 Gentry Locke 150 W Main St Ste 2100 Charlottesville, VA 22902 10 Franklin Road, SE PO Box 3037 434-951-7234 P.O. Box 40013 Norfolk, VA 23514 Roanoke, VA 24022-0013 757-624-3000 Jane M. Reynolds 540-983-9405 Law Offi ces of J.M. Reynolds, PLLC James C. Martin 3102 Golansky Blvd Ste 202 Alexander H. Slaughter Vice Chair Woodbridge, VA 22192 SLC Liaison - Litigation Martin & Martin Law Firm 703-680-2358 McGuireWoods LLP 410 Patton Street Suite A 800 East Canal St. P.O. Box 514 William B. Stallard Richmond, VA 23219 Danville, VA 24543-0514 Penn, Stuart & Eskridge, P.C. 804-775-4346 434-792-1861 208 East Main Street P.O. Box 2288 Melissa Y. York Nathan J. D. Veldhuis Abingdon, VA 24212-2288 YLC Liason Secretary 276-628-5151 Harmon Claytor Corrigan & Well- disAbility Law Center of Virginia man, P.C. 1512 Willow Lawn Drive Jeffrey L. Stredler PO Box 70280 Richmond, Virginia 23230 AMERIGROUP Corporation Richmond, Va 23255-0280 804-225-2042 4425 Corporation Lane 804-622-1131 Virginia Beach, VA 23462 J. Matthew Haynes, Jr. 757-769-7832 Karen A. Gould Treasurer Ex-Offi cio McCandlish Holton Marie E. Washington Virginia State Bar P.O. Box 796 Law Offi ce of Marie Washington, PLC 1111 E Main St Ste 700 Richmond, VA 23218 67 West Lee Street, Unit 102 Richmond, VA 23219-0026 804-775-3809 Warrenton, VA 20186 804-775-0550 540-347-4172 Board of Governors Ms. Elizabeth L. Keller Robert E. Byrne, Jr. Hon. James G. Ashwell Liaison Virginia State Bar MartinWren, P.C. Ex-Offi cio Judicial 1111 E Main St Ste 700 400 Locust Ave Ste 1 PO Box 592 Richmond, VA 23219-0026 Charlottesville, VA 22902 Warrenton, VA 20188 804-775-0516 434-817-3100 540-422-8035 Jennifer R. Franklin Hon. Thomas D. Horne Hon. Cleo E. Powell Newsletter Editor 604 Diskin PL SW Ex-Offi cio Judicial William and Mary Law School Leesburg, VA 20175 Supreme Court of Virginia 613 S. Henry St. 703-777-3430 100 North Ninth Street Williamsburg, Virginia 23187 PO Box 1315 757-221-2488 Heryka R. Knoespel Richmond, VA 23218 513 Church Street 804-786-2023 Lynchburg, VA 24505 434-846-1326

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