The Court of Appeals of Virginia released its first published opinion of 2024 today and it comes with a very bad lesson that I implore my readers to ignore. While it will appear that the attorneys involved in Smith Development, Inc. v. Martin C. Conway, et al. were clever like an earth of foxes (more on that turn of phrase later), I would argue that they were just lucky and it was dumb luck at that.
The Conway of the case name is a name attorney of the firm Pesner Kawamoto Conway, P.C. Smith Development, Inc. (SDI) hired the firm in 2008 to represent it in a Chapter 11 Bankruptcy -- commonly known as a "reorganization." The firm provided a representation letter which was countersigned by the president of SDI. So far, so good.
Conway filed the chapter 11 proceeding in January 2009 and obtained approval from the
bankruptcy court to be employed as counsel to debtor-in-possession SDI and made efforts to collect on some debts owed to SDI. So far, so better. Then SDI in 2010 failed to pay the required fees to maintain a chapter 11 proceeding.
As will happen in such cases, the bankruptcy court "on its own motion" converted the case to a chapter 7 liquidation, which ousts the debtor's attorney as representative for the estate and substitutes the bankruptcy trustee. The trustee engaged Conway to litigate the pending collection actions. Eventually the bankruptcy was concluded in 2012.
Now while all this is interesting (to some) as a lesson in bankruptcy proceedings, this clearly isn't a bankruptcy case -- because bankruptcy is a federal matter. So let's get to what this case is really about -- legal malpractice. SDI sued Conway alleging that it received bad legal advice concerning the Chapter 7 proceeding. Whether that is true, we will never know, because, have some of the more astute among you may have already noticed, the bankruptcy happened a longish amount of time ago . . . 15 years to be precise from the filing, and 11 years from the conclusion, of the bankruptcy. And that means we are probably talking about a statute of limitations issue.
Just under five years after the bankruptcy was concluded, Conway is served with SDI's suit for malpractice. Now you are probably thinking that the issue before the trial court was when did Conway allegedly first breach the agreement set out in the representation letter that, given that malpractice, while it "sounds in tort," derives its limitations period based on contract law and the limitations for filing suit on a written contract is five years.
As it turns out, the issue wasn't when the breach occurred, but whether the five year statute of limitations even applied. Conway argued that the representation letter specified that the firm was retained for the Chapter 11 reorganization, but the suit alleged the malpractice arose during the Chapter 7 liquidation. This raised two issues -- first, since Conway was retained by the trustee, was there even a client-attorney relationship with SDI and second, if there was such a relationship, was it based on the written agreement from 2008 or on some unwritten agreement implied by the course of conduct in or after 2010.
The statute of limitations on a contract relationship not in writing is 3 years -- meaning that regardless of when the breach occurred, the suit file 4+ years after the conclusion of the bankruptcy was definitely too late, regardless of when the breach occurred. That is, assuming that there was a client-attorney relationship and the liquidation was a new matter.
The circuit court determined that the dispositive issue was whether the representation of SDI was based on the written agreement or was a new matter based on an "oral" agreement. It concluded that it was the latter and sustained a motion for summary judgment based on the statute of limitations having run.
Before getting to the Court of Appeals' opinion, let me take issue with the term "oral" in this context. The code does not use the term "oral," rather it describes "(i) any contract that is not otherwise specified and that is in writing and not signed by the party to be charged, or by his agent, or (ii) any unwritten contract, express or implied." So really, its not an "oral contract," but a contract "not enforceable in writing."
On the the Court of Appeals. We get a split decision with Judge Raphael joined by Sr. Judge Clements affirming the circuit court, and Judge Causey dissenting. The majority comprises 17 of the 21 pages of the opinion, in part because it addresses the ethical implications of Conway continuing to provide legal advice to SDI while the firm was working for the trustee as well as issues of not advising Conway that the representation for the reorganization had terminated. The majority concludes that while these issues are troubling, Conway did not necessarily violate the Code of Professional Responsibility; though I suspect SDI may be filing a complaint with the Bar if it has not already done so.
Suffice to say that is is the bad lesson I do not want attorneys to take from this case. Conway did the right think by getting the initial engagement in writing and specifically stating that it was for the Chapter 11 case, it should have followed up with a case closing letter when it ceased to represent SDI in the converted Chapter 7. Whether it was providing SDI with legal advice or representation in the Chapter 7 proceeding, and whether this was a conflict of interest with the firm's representing the trustee, is not a question the majority addresses. Like the trial court, it assumes that the statute of limitations period is dispositive to the motion for summary judgment.
Judge Causey dissents on this very point -- that the statute of limitations was raised in a motion for summary judgment, not a plea in bar. The difference is that a motion for summary judgment should be granted only if there are no material facts in dispute -- and Judge Causey believes that whether Conway was representing SDI in the Chapter 7 proceeding and, if so, whether it was under the representation agreement or some other agreement "not enforceable in writing" are material issues.
I find myself in agreement with the majority on the substantive law, but with Judge Causey on the procedure. Even though I think it will be difficult for SDI to prove that Conway was providing legal advice and representation to SDI in the Chapter 7 proceeding under the representation letter that specified it was for a Chapter 11 proceeding, this is a disputed fact that should not be decided on summary judgment (or, for that matter under a plea in bar -- but the designation of the pleading as one or the other is not dispositive, its the substance of the pleading).
I am less concerned about whether Conway was representing SDI in the Chapter 7 -- the opinion notes that the pleadings were signed “Counsel for chapter 7 Trustee, Richard A. Bartl, for Smith Development, Inc." -- than whether whether communications between Conway and SDI constituted legal advice. As the trustee said in requesting Conway represent the estate in the debt collection actions, this is a common process in bankruptcy proceedings, but I think maybe it creates some blurring of the lines when a debtor's former attorney is communicating with him about the bankruptcy proceedings.
Now, an "earth of foxes" . . . Earth is one of the lesser-known collective terms for a group of foxes. Other terms are "skulk of foxes," a "troop of foxes," a "lead of foxes," and a "pack of foxes." According to one source three foxes, no more no less, is a "leash." I would like to propose that a "cleverness of foxes" would be more appropriate than any of these pedestrian terms. A male fox is a "dog" or "tod," while a female is a "vixen" and their young are "pups," "kits," or "cubs."
And to answer the eternal question, "What to the fox say?" is:
The fox's vocal repertoire is vast, and includes:
Whine -- Made shortly after birth. Occurs at a high rate when kits are hungry and when their body temperatures are low. Whining stimulates the mother to care for her young; it also has been known to stimulate the male fox into caring for his mate and kits.
Yelp -- Made about 19 days later. The kits' whining turns into infantile barks, yelps, which occur heavily during play.
Explosive call -- At the age of about one month, the kits can emit an explosive call which is intended to be threatening to intruders or other cubs; a high-pitched howl.
Combative call -- In adults, the explosive call becomes an open-mouthed combative call during any conflict; a sharper bark.
Growl -- An adult fox's indication to their kits to feed or head to the adult's location.
Bark -- Adult foxes warn against intruders and in defense by barking
The Court of Appeals issued two more published opinions as 2023 closed out. Lisa G. Boxley v. Estel R. Crouse, et al. is about a prescriptive easement and comes from Judge Humphreys, joined by Judges Friedman and White. Judge Humphrey's retirement officially started on Sunday (if you are wondering why he would retire on the last day of the year and not sometime in 2024 after his successor was named, it is likely something to do with the requirement of having to wait 3 months before be can resume duties as a senior judge -- this requirement was introduced to comply with a provision of the ACA that is intended to keep employers from terminating employees and the immediately bringing them on as contractors who aren't entitled to health insurance). This is likely not the last opinion from Judge Humphreys as an active Judge, but future opinions will have the notation that he sat on the case "prior to his retirement on December 31, 2023."
The case itself is not uncommon for the area of prescriptive easement. Boxley owns the land in question and Crouse claimed a right of way by prescription. Boxley blocked that right of way with a fence and gate and off they went to court. The parties own adjoining parcels in Highland County, with Crouses' property being accessed by "Hawk Trail" from State Route 220 (Jackson River Road) via Whippoorwill Lane. As you can see from the tax map below, Crouse's property is landlocked and Hawk Trail runs through the back portion of Boxley's property, while Whippoorwill Lane runs along the border of that parcel and then diverts into a neighboring parcel before intersecting with Hawk Trail.
The previous owner of Crouse's property maintained, widened and improved the road beginning in 1976. The property changed hands in 1988, and the new owner held the land for just about a year before selling to Crouse. In 1995, the prior owner of Boxley's parcel erected gate, but provided Crouse with a key, though the evidence showed that the gate was never locked. In 2020, Boxley acquired the right to the property through a devise to a trust and replaced the existing gated with a new gate which she proceeded to lock, excluding Crouse from her property.
To prove a prescriptive easement, the party seeking the easement must show that the use "was adverse, under a claim of right, exclusive, continuous, uninterrupted, and with the knowledge and acquiescence of the owner of the land over which it passes, and that the use has continued for at least 20 years." The evidence certainly showed that this happened for at least 19 years (1976-1995) before the first gate was installed, but did the presence of the unlocked gate constitute some evidence that the use was no permissive? Boxley certainly though so, but the circuit court disagreed and the Court of Appeals affirms that decision.
The installation of the gate in 1995 did not convert the adverse use by the prior owner (or by Crouse) into a permissive use. Because the evidence was the gate was never locked, the mere presence of the gate was not sufficient to bar Crouse (or anyone really) from using the road.
Boxley had another issue -- it seems the gate merely blocked the right of way, but was not connected to a fence. She claimed that Code § 33.2-110(A) somehow permitted her to maintain a gate so long as it was not part of a fence-line because that statute permits the erection of gated fence-lines across private rights-of-way. Unfortunately, there was a 1997 case right on point that said the statute does not apply to gates that are not attached to fences. The purpose of Code § 33.2-110(A) is to allow owners of land subject to a dominant right of way to maintain fences to, for example, contain livestock or exclude wildlife. A gate without a fence does not do that.
Christopher Patrick Carter v. Commonwealth of Virginia involves whether Mr. Carter should have be allowed to withdraw conditional guilty pleas allowing him to appeal the circuit court's denial of his motion to suppress evidence obtained in a warrantless search of his person and vehicle. Carter was driving in an area of Fredericksburg "known to be frequented by drug users and dealers" when he caught the attention of a patrol officer. The officer stopped the vehicle for speeding (50 in a 45) and proceeded to engage Carter in conversation.
Noticing to plastic baggies on the car console, the officer inquired as to their contents. Carter stated that it was marijuana, and the officer conceded that it was legal for Carter to possess a small amount of that substance for person use. The officer called for a K-9 unit and then proceeded to write a "warning ticket."
Carter consented to a weapons pat-down and no weapons were found. During this search, the officer found $294 in cash. He also found a key-card for a room of the motel where Carter had pulled into when the stop occurred. Carter had told the officer he was staying at the motel.
The officer then asked to search Carter's vehicle, but Carter expressly refused to permit the search. As the K-9 unit had not arrived, Carter again radioed for a unit to be dispatched. Shortly thereafter a supervisor arrived and told the officer that he had "gone to far unless you get us something major." At this point the officer turned off his body camera. The officer and the supervisor continued speaking for several minutes, then the officer returned to Carter's vehicle and continued to question him. Another officer arrived and stood near Carter. During this time, the first officer remained in possession of Carter's room key.
More than 10 minutes after completing the "warning ticket," the officer told Carter that he was going to perform a "probable cause" search of the car. Of course, the search produced a firearm, cocaine, heroin and various items of use in the illegal drug trade.
We already know the circuit court denied the motion to suppress -- though how the judge reached the conclusion that there was probable cause to search is beyond my ken. It was beyond the ken of the Court of Appeals. Judge Chaney, joined by Judges Callins and White, reverse the denial of the suppression double quick. First, the Court finds that the evidence recovered in the pat-down was improperly obtained because the officer was specifically looking for weapons (well, we all know that he wasn't really, but he said he was), so reaching into Carter's pockets to remove the cash -- the only real evidence of possible drug dealing -- was not permitted. Second, there as simply no other basis for a "probable cause" search of the vehicle.
I would add that Carter was seized the moment the officer took his hotel room key card and certainly he would not have felt free to leave once the additional officers arrived. But what really seals the deal for me is the text I highlighted -- the officer turned off his body camera while discussing whether he had probable case with his supervisor (who had just told him he didn't have it). There is no excuse for an officer turning off his body camera, and judges should start taking that circumstance into account when the camera is turned off (or "accidentally" left in the cruiser. The purpose of the body camera is to protect the officer from false claims of abuse, but also to protect the public from police misconduct.
The Court of Appeals released five published decisions today, but only two are from "new" cases. The other three are rehearings en banc, so if you are a regular reader of this space, you will likely recall the details.
Telegraph Square II, A Condominium Unit Owners v. 7205 Telegraph Square, LLC was first decided by a panel of the Court in late April of this year. When I summarized the opinion, I said that I found some aspects of the case "troubling enough to foresee a petition for rehearing en banc and/or an appeal to the Supreme Court," and as there was dissent from the original panel case, the disappointed appellant sought the former route and was granted a review by the en banc Court.
As was explained in the original summary, which you may want to read if you don't recall the case and have an interest in "corporate condos" or similar multi-ownership properties, this case is about parking spaces and how they were assgined to the various phases of the develoment of an industrial business park. The reason I am not recounting the decision by the en banc court is becuase we don't know what it was, or rather we know only that "[i]n accordance with the unpublished order of this Court entered on December 19, 2023, the stay of this Court’s April 25, 2023 mandate is lifted and the judgment of the trial court remains affirmed." This statement appears in a published order, which is necessary because the original opinion was published, so now the published record shows that the case has been affirmed, and also starts the clock running on a petition for appeal to the Supreme Court.
Why was the order affirming the case unpublished? Good question. I could speculate that perhaps there was some procedural sanfu that kept the full Court from reaching the merits, or possibly that the Court could not reach a majority decision and did not want to publish a palimpsest of pluarality opinions. I will attempt to obtain a copy of the unpublished order to resolve the mystery and will update this post if and when I have the answer.
We get an acutal opinion in Arun Rashid Turay v. Commonwealth of Virginia. I cannot refer you to a prior post becuase Turay was originally unpublished. A panel had initially affirmed Turay's convictions based on an Alford plea that was entered to challenge the constitutionality of a Terry stop of Turay and another man in aneighborhood where a home invaision robbery had occurred. We don't have that opinion, because it was withdrawn and a panel rehearing was granted. The revised opinion reversed the convictions, with Judge Chaney, joined by Judge Callins, in the majority and Senior Judge Petty dissenting. Today's en banc decision affirms the judgment and is by Judge Lorish, who is joined by Chief Judge Decker and Judges Humphreys, Beales, Huff, O’Brien, AtLee, Malveaux, Athey, Fulton, Ortiz, Causey, Friedman, Raphael and White. Judges Chaney and Callins write separate dissents.
The facts are straight forward. Occupants of the home reported that three men had entered the home and stolen some property was allegedly taken -- though the specific property mentioned, a gun, was actually recovered from the home having been moved to another room by a resident "while waiting for officers to arrive. A "be on the lookout" was issued for "three black males, dressed in black." An officer observed Turay and the other man, only one of whom was wearing black (the opinions do not say which), about "six to ten" blocks from the home that was robbed. The two mean were detained "about one and half to two minutes" before additional law enforcement personnel arrived "with additional information learned from watching home security footage," which allowed them to identify the men as perpetrators of the crime.
The issue is, as in anyTerry stop case, whether the first officer had reasonable articulable suspicison sufficient to warrant the temporary detention. But before we get to that topic, can we pause for a moment to consider the unusual circumstances of the "gun that wasn't stolen"? This is purely speculation on my part -- but I like to think it is informed speculations -- that a home that is the object of a three man invaison robbery where there is security camera footage of sufficient quality to identify the suspects and a gun is secreted prior to the expected arrival of the po-po is not the residence of Ozzie and Harriett Nelson (for you kids under the age of, well, me, "Ozzie and Harriett" was a sitcom during the "Golden Age of Television"). However, regardless of what may or may not have been going on in that residence, the occupants were entitled to the protection of the law and law enforcement.
The majority, stating that they are "[a]pplying binding precedent here [and] mak[ing] no new law," finds that the description of the suspects and the proximinity in time and place was sufficient to give the officer a reasonable basis for the temporary stop. I agree that the majority is applying no new law, especially as it does so by deferring to the factual findings of the trial court.
But it is those findings with which Judges Chaney and Callins take issue. In Judge Chaney's view, the evidence, even viewed in the light favorable to to Commonwealth, was not correctly interpreted by the circuit court. She goes further, however, in stating that even if the evidence was as the court found, the majority "grants police license to seize a Black man at gunpoint for merely walking late at night within the wide general area of a recent crime and “matching” the race and gender of the suspects." Judge Callins writes separately and with less strident language, but agrees that a stop based primarily on the circumstance of the two men being of the same race as the suspects in the BOLO and one of them being dressed "in black" was insufficient to support even an invetigatory stop.
There is no question that Turay and the other man were "detained" as the officer confronted them with his service weapon drawn. This show of force clearly acted as a restriction of their liberty. My concern with the facts, similar to Judge Callins, is whether the temporal and physical proximity to the crime was sufficiently close to add weight to the officer's suspicions. While I am not unsympathetic to the views expressed by the dissents, I do not believe that there views will find much sympathy with the Justices of either the Supreme Court of Virginia or the US Supreme Court should Turay choose to pursue his appeal further.
The last of the three en banc decisions is Michael Brown v. Timothy L. Kirkpatrick. When I summarized that case last July, I was even more emphatic that the case was headed for an en banc review. That was hardly a difficult call to make, as this issue is a novel argument regarding "tender" of UIM coverage with a waiver of subrogation in an automobile accident case in return for the defendant's carrier agreeing to defend (thus, saving the UIM carrier the expense of providing an attorney to represent its interests). Brown's UIM carrier did just that and Brown received $50000 of a $286,000 judgment from Kirkpartrick;s liability coverage and the balance from his UIM coverage. Normally, that would result in Kirkpartick being let off the hook for the $236,000 since the UIM carrier waived subrogation, but Brown contended that his carrier's waiver of subrogation simply meant that he, Brown, could pursue Kirkpatrick for the $236,000, reasoning that Kirkpartick should not benefit from Brown's contact with his UIM carrier.
If you are good at math, you can see that Brown is trying to turn a $286,000 judgment into a $522,000 judgment. Setting aside the issue of whether the UIM carrier might somehow have a lien on any recover Brown made, which is an issue for another day, the original panel split on whether Brown was trying for a double recovery or merely assuring that Kirkpatrick not reap the benefit of a field he did not sow.
The seminal case on this issue is Llewellyn v. White, 297 Va. 588, 599 (2019), which ruled where a UIM carrier tenders payment to the insured (that is, the plaintiff) and waives subrogation, the collateral source rule applies and the tortfeasor remains liable for the full judgment. But here, the agreement was between the UIM carrier and the defendant's carrier. The majority held that made a difference and Brown could pursue Kirkpatrick for the $236,000; the dissent saw it as a distinction without a difference
Today, Judge Huff, who was the dissent in the original panel, authors the majority finding that Brown is not entitled to a double recovery. He is joined by Chief Judge Decker and Judges Beales, Huff, O’Brien, AtLee, Malveaux, Athey, Fulton, Ortiz, Causey, Friedman, Raphael, Lorish and White. Judge Humphreys, joined by Judge Lorish (the two being original majority) and Judge Chaney, dissents. Expect a petition for appeal the the Supreme Court on this one -- and given the paucity of cases on the Court's docket, I would hope for a grant.
The first of the two "new" cases is Donald Rosson v. Erie Insurance Exchange. Rosson was a passenger in a commerical truck that was involed in an accident; Eire was the carrier on the vehcile's laibility coverage. Eire sought a declaratory judgment contending that its policy exlcude liability for injuries that were subject to Workers' Compensation coverage Rosson, who had filed an action against the owner, his employer, and the driver, a fellow employee, was a party to the declaratory judgment action, but despite being given two extensions, never responded with an answer or other defensive pleading challenging the declaratory judgment action -- nor did the employer or the driver (who were also defendants).
Eire filed a motion for default judgment. Rosson filed an objection to the motion, requesting additional time to file an answer. He also conteded that he had nonsuited his civil action, so there was no justicible controversy, which was necessary for a declaratory judgement action, so the court could not grant default judgment. The circuit court ruled that it had jurisdiction, denied the thrid extension, and granted default judgment. Rosson appealed.
The Court of Appeals affirms. Judge Athey, joined by Chief Judge Decker and Judge White, find that the circuit court correctly determined that it had jurisdiction. The Court further found that the circuit court was within its discretion to deny Rosson a thrid extension to file his answer, and since no answer was filed, the fact that Rosson had in fact nonsuited his case was not relevant to deciding that issue Eire's potential obligations under the policy.
If you find the Court's disregarding of the nonsuit as troubling, you aren't looking at the procedural posture of the case. Had Rosson responded to the declaratory judgment action with an answer, demurrer or plea in bar alleging that he had nonsuited the tort action and, thus, there was no pendy controvery, he would have been right. But he didn't do that.
Instead, he wanted a chance to respond to the suit by asking for a third extension to file his answer (or demurrer or plea in bar), but first he needed to defeat the default judgment motion. In effect he was arguing that "if I am permitted to answer, I could allege the court had lost jurisdiction, and then the suit would be dismissed without prejudice -- to either party." But the circuit court, exercising its jurisidcition based on the unrebutted allegation of the complaint, replied, "perhaps, but I am not going to allow you to answer, so I still have jurisdiction to adjudicate the controvery as alleged in the complaint."
Now, you may be wondering if Rosson should be angry with his counsel for not filing an answer (or demurrer or plea in bar) despite being given ample time to do so. Perhaps, but my guess is the reason that no answer was filed is simply because there was no reasonable answer to be filed. Eire was absolutely right that it had no duty to defend or provide indemnity for an accident caused by a fellow employee in the course of Rosson's employment. So whether by default judgment or one on the merits. Rosson was going to lose either way.
Today's final case is Anne Filosa Creekmore v. Commonwealth of Virginia, and it comes from the same panel as Rosson, but with Judge White taking the honors for the opinion. Creekmore, a licensed psychologist, began treating a juvenile patient at the age of 15. Creekmore learned that the patient had been abused by her mother since she was in elementary school. She advised the child to "defend herself" and also sought to have the parents participate in group counseling. Althought the father participated, the mother did not and both the child and the father stated that forcing the mother to attend counseling woult be "disruptive" and "potentiall dangerous."
After the child stopped going to Creekmore for counseling, an anonymous report was made to child protective services resulting in a case being opened. Creekmore later claimed that she had been the anonymoust caller.
Creekmore was charged under Code § 18.2-371 for contributing to the delinqunecy of a minor based upon her alleged failed to comply with the mandatory reporting requirement of Code § 63.2-1509. At trial, in a motion to strike the Commonwealth's evidence, Creekmore asserted that she did not make a report as required until after the child stopped coming to therapy, becuase it was only after the last session that she formed a firm belief that the child was being truthful about the abuse. She further conteded that even if she should have reported the abuse earlier, her failure to do so did not result in the abuse, which had already occurred. The circuit court overruled Creekmore's motion to strike and she was convicted.
The Court of Appeals affirms that conviction finding that Creekmore's failure to report the alleged abuse was an "omission" that cause the child to remain in an abusive and dangerous environment. Because the circuit court rejected Creekmore's self-serving claim that she did not have sufficent basis for reporting the abuse until after the child ceased coming to therapy, the facts supported the conviciton.