The Court of Appeals started the month of May off strong with six published opinions, on of which was a rehearing en banc.
The rehearing was Pamela Kay Humphries v. Robert Brian Buchanan, et al. which was originally decided by an unpublished opinion in August of 2023 with a split decision in which Judge Chaney, joined by Senior Judge Haley, declined to review the appeal for lack of a necessary transcript, while Judge Ortiz dissented, finding that one issue was a pure question of law that could be decided without a transcript. The en banc was granted limited to this issue and results in a 10-6 which reverses the judgment of the trial court, with judge Ortiz writing for the majority joined by Chief Judge Decker and Judges Beales, Huff, O’Brien, AtLee, Malveaux, Fulton, Ortiz, Raphael, and White with Judge Callins, joined by Judges Athey, Causey, Friedman, Chaney and Lorish, dissenting. The argument took place after Judge Humphrey's retirement and prior to Judge Frucci taking office, so the Court was one shy for the en banc.
The issue is whether a circuit court should consider supplemental security income (SSI) received by a dependent child as an "independent financial resource" when calculating child support. The majority concludes that SSI benefits are a dependent resource which are not to be used in the support obligation.
SSI benefits are available to individuals with disabilities who have no source of income and assets that fall below a specific threshold. If the individual has income, the payments are reduced in ratio to the income received. Humphries and Buchanan have an adult disabled child who receives SSI. The Social Security Administration treats child support payments as income of the individual, calculating the income at 2/3's of the payment for purposes.
The majority reasons that because the receipt of child support reduced the SSI payments, SSI is not independent of child support, but is in fact determined by the amount of the support payments. Thus, SSI is not independent income of the child and cannot be used to calculate the non-custodial parent's support obligation.
The dissent views SSI has plainly income of the child from a source other than a parent, and thus, in that sense, independent income for purposes of calculating child support. Although SSI is a public assistance program, the dissent notes that such benefits are excluded from child support payments when received by the parent, not the child.
This case is almost certainly going to be appealed to the Supreme Court and I would be very surprised if the Court did not grant review.
Jamie Allen Harless v. Kenneth E. Nicely, et al. involves a complaint against four employees of a school division alleging defamation. The circuit court sustained a demurrer finding that the complaint failed to state a claim for defamation per se and further finding that statements made by three of the four defendants were subject to a qualified privilege.
The incident in question that resulted in the alleged defamation was a high school football game. Harless was the coach for the visiting team. When one of his players was injured during the game, Harless was alleged to have shouted obscenities at one or more players on the opposing team. The principal of the high school where the game took place, filed a report in which she repeated the alleged statements and further stated that "Harless acted in a racist manner unfit to coach when he intentionally targeted two WBHS players because they were Black," and that they had acted "like thugs" and were "big time drug dealers." SHe alleged that Harless had made this statements intentionally to bait the player and disrupt play.
Harless further alleged that at the game students and/or parents mocked him based on allegations that he had illegally recruited players to his team. He further alleged that a school board member had posted similar allegations on a social media page, while another made the allegation to the school superintendent, who then defamed Harless in a letter to the Virginia High School League.
The Court of Appeals, Judge Beales joined by Judges O'Brien and Raphael, affirm the dismissal of the complaint on demurrer. The Court finds that three of the four defendants were clearly within a qualified privilege as their communications were related to their involvement in the extramural sports program and were directed toward assuring its integrity, were not communicated outside the privileged group, and the allegation of malice in the complaint was not support by the facts asserted.
As to the fourth defendant, the Court assumed that the allegation of actual malice was sufficient to remove the privilege. However, the circuit court had also found that the statements alleged to made by this defendant were not sufficiently specific, and not objection was made to the alternate ruling. Similarly, the appeal failed to challenge the ruling on several of the statements generally in the appeal, so any objection to those statements was waived.
I will refrain from speculating on whether a high school football coach is a public figure -- though certainly the argument could be made in many communities that they are -- and thus the New York Times v. Sullivan standard might have applied here even if qualified privilege had not. I will, however, comment on the continuing trend of the Court to apply procedural bars where the appellant does not argue against every ruling of the circuit court on every issue challenged. Attorney's drafting their briefs need to take the blinders off when they are hyper-focused on a particular issue to make sure they are not leaving themselves open to a dismissal for failure to assign error to an alternate basis for the ruling.
The term NIMBY has gain a pejorative connotation over the years, but this is undeserved in many cases. Changes in zoning can significantly impact property value and quality of life, and local governments are often more focused on economic development and the attendant increase in tax revenues than on the impact of rezoning on surrounding properties. Richard Rebh, et al. v. The County of Arlington County, Virginia involves a challenge to various amendments to the comprehensive plan for development conducted by Arlington County as part of the Amazon HQ project. The plaintiffs/appellants are residents of two condominiums adjoining rezoned property.
Rebh and the other neighbors filed a four count complaint against the County alleging that, among other errors, it had failed to provide adequate public notice of the rezoning hearing. The County demurred and the circuit court sustained that demurrer. The Court of Appeals, Judge Callins joined by Judges Causey and Athey, does something a bit unusual in that they not only reverse the dismissal of the complaint, they find that as a matter of law the record establishes that the County did fail to provide adequate notice and enter judgment for Rahb.
Normally, when the appellate court reverses a decision sustaining a demurrer, the case is remanded to the circuit court for further proceedings beginning with an answer from the defendant. In this case, however, the County craved oyer of the complete record of the process which adopted the changes, and this apparently gave the Court sufficient grounds for finding that the record established the failure of the County to abide by the notice requirements.
Specifically, the notice, while quite extensive, failed to include specific elements and descriptions of the proposed changes that directly impacted the neighboring property. while the notice need not be comprehensive, it must be sufficient to either (1) notify the public as to what specific geographic area would be affected, or (2) notify the public as to the manner in which this geographic area would be affected. Finding that the notice did neither, the Court concludes that the notice was inadequate and the subsequent adoption of the changes was void ab initio.
This may prove a hollow victory for the neighbors, as the County will likely simply provide an adequate notice and adopt the changes. Of course, it is possible that in the interim, with the down-scaling of the Amazon project, the changes may not even be needed.
The Court also decided three criminal appeal on May 7, 2023. Hunter Lee, III v. Commonwealth of Virginia arises from an Alford plea entered after the circuit court denied a motion to suppress the search of Lee's backpack. The search took place after law enforcement encountered Lee in a convenience store while responding to an anonymous phone call stating that an individual matching Lee's description was involved in a domestic altercation and was seen walking toward the convenience store. The caller was very specific and gave detailed information about the suspect including that he was armed and carrying a backpack with drug paraphernalia in it.
When asked by officers if he had been involved in a domestic incident, Lee admitted that he had. He denied being armed, volunteering that he was a convicted felon. Lee submitted to a pat-down and no weapon was found. The officers then asked to search the backpack. Lee handed it over, stating that he "had his pills" inside. Officers found plastic bags and a set of scales in one pocket of the backpack. The officers noticed that Lee also had plastic a bags protruding from his pants pocket.
Inside the backpack there were also dietary supplements and medication which Lee indicated was "for his heart." Finally, there were also five plastic bags with "a white power rocklike substance" inside a prescription bottle.
Rut Ro, indeed. Lee argued at trial that the search exceeded the scope of the permission given. The problem is that Lee did not give any limiting statement when handing over the backpack. While the officers had initially asked about weapons, after the pat-down, they then asked about any other contraband, specifically asking if there was anything that they "needed to know about." File this case under "Remind your clients to 'Just say No' whenever the police ask to conduct a search.
Michael Jason Drexel v. Commonwealth of Virginia arises from a conviction for "threatening to damage a building." This is an unusual charge in that it requires the Commonwealth to prove there was a true threat, that is that whether the defendant had an actual intent to carry through with the threat, there must also be a real potential for the threat to be carried out.
Drexel was undergoing therapy and regularly telephoned his therapist in an agitated state. During these calls he would express homicidal thoughts and threatened to "bomb city hall," referring to the City of Alexandria government building. He told the therapist that he intended to carry out this threat. The therapist was sufficiently concerned that she sought to have Drexel evaluated for an emergency mental health commitment and also contacted Alexandria police.
Police interviewed Drexel by phone. During the conversation, Drexel told the officers he would "burn down city hall," saying that he "wanted to send a message" and that "he was going to be the next Timothy McVeigh." Based on these comments, police obtained an emergency custody order. A subsequent search of Drexel's vehicle found an ice pick, pother tools and a bottle of gasoline.
Drexel was convicted of making a threat to bomb, burn, or damage a place of assembly or building in violation of Code § 18.2-83. He was convicted in a jury trial and appealed the conviction assigning six errors. Chief Judge Decker, joined by Judges O'Brien and AtLee, affirm.
While the 23 page opinion addresses the six assignments of error, the principal issue of not in the case is whether Code § 18.2-83 includes a "true threat" requirement in addition to the mens rea element. The Court concludes that it does, but further concludes that there was sufficient evidence to show that Drexel not only had the requisite mes rea to carry out the threat, but had the actual capacity to do so. Admittedly, this determination is often based on circumstantial evidence and the subjective perception of the individuals to whom the threat is communicated.
My principal concern with this case is what is not mentioned in the opinion. The opinion makes no mention of whether Drexel was evaluated for competency to stand trial or whether any mental health/diminished capacity defense was offered. Drexel was upset about his wages being garnished to pay a tax debt, and this alone does not suggest that he was irrational -- almost everyone whose wages and assets are garnished is upset by the loss of resources this entails. But the opinion certainly implies that Drexel's agitation was more than usual.
The final decision of May 7, 2023 is Brian Edward Sheets v. Commonwealth of Virginia, which requires the disclaimer that you humble correspondent was counsel on appeal to the defendant. Because at this time the appeal remains subject to potential further appellate process, I will refrain from summarizing the case or making editorial comment, but merely refer the reader to the opinion.
The last day of April saw two new published opinions for the Court of Appeals. Dawn Lewis Williams v. Commonwealth of Virginia is not, despite its name, a criminal appeal. While Williams was at some point convicted of a crime and remanded to the Custody of the Virginia Department of Corrections, this is not an appeal of that conviction, but rather an appeal of a denial of her claim under the Virginia Tort Claims Act for an injury she suffered while in the custody for that conviction. The action was brought originally while she was still in prison, but was nonsuited and refiled after she was released. The issue in the circuit court and on appeal was whether Williams was required to "exaust administrative remedies" within the VDOC system before filing her claim.
Because this case is almost certainly headed for en banc review and then to the Supreme Court, I will not keep you in suspense by going through the, frankly, superfluous nature of Williams claim. This is a meat and potatoes issue of statutory construction and the circuit court and one judge of the Court of Appeals panel read that statute to require any person claiming an injury while a prisoner to exhaust administrative in the VDOC system before filing a claim with under the VTCA. Unfortunately for the Commonwealth, two other judges, Judge Lorish, who wrote the opinion joined by Judge Ortiz, read the statute as requiring a prisoner who is in the custody of the VDOC to exhaust administrative remedies before filing under the VTCA.
When Williams filed the original suit, she was in custody and the majority would have tossed her case. But, they point out that after nonsuiting that case, she was not in custody when she filed the new action, and as a "non-prisoner" she had no administrative remedies to exhaust.
Judge AtLee, the dissenter, sees it differently. He says that the duty to assert exhaustion of remedies arises not when the suit is file, but when the notice of claim is sent to the Commonwealth. In this case, Williams' notice of claim was filed prior to the first suit, while she was still a prisoner. Since her suit filed after her release relates back to that original notice of claim, the suit is barred even though she was no longer in a position to seek administrative remedies.
My sympathies are with the majority, but logic seems to favor the dissent. I fully expect the Commonwealth to seek a rehearing en banc and regardless of the outcome of that effort, I suspect an appeal to the Supreme Court is inevitable.
Michael R. Agnew, et al. v. United Leasing Corporation is notable mostly because it shows the extreme lengths that some people will go to avoid paying a debt. In 2000, the Agnews entered into a forbearance agreement with United Leasing; the opinion tells us very little about the debt that was at issue other than it involved several leases and a promissory note. As part of the agreement the Agnews consented to a confessed judgment that included a lien against property they owned in Virginia Beach, and from the looks of it, a very nice property on Linkhorn Bay.
This Google Streetview picture really does not do the property justice. The see just how nice (and expensive) the property listing is, check out its listing on Zillow.
Here is a bonus fact not recounted in the opinion, but which you might find interesting. In 2007 the Agnews sought an injunction in the Circuit Court of Virginia Beach, which was refused as was their appeal of this decision to the Surpeme Court. This was the first of five appeals filed in the Supreme Court, the others following in 2010, 2020, 2021, and 2022. The last of these is the present case, which was transferred to the Court of Appeals because, it would seem, the Agnews and the counsel were not aware of the change in appellate jurisdiction for civil appeals. However, that puts us well ahead of the timeline.
By April 2008, the Agnews had "not paid the full amount they owed under the confessed judgment." United Leasing filed suit to enforce the lien on the property and the court order the property sold by a commissioner. In an effort to stop the sale, the Agnews tried to have the judgment set aside. It was October of 2010 before the court disposed of that effort.
For reasons not revealed in the opinion it took until 2013 for the commissioner to determine that the property should be sold at public auction. It took another year for the court to approve that. The Agnews, however, then filed for bankruptcy, which automatically stayed the sale three days prior to the auction.
In the bankruptcy proceeding, the Agnews raised "the same challenges to the confessed judgment they had raised in the circuit court in 2009. This effort was dismissed and on appeal to the 4th Circuit Court of Appeals their claims were described as "simply meritless." The bankruptcy was concluded in 2017 and the state court ordered the sale by auction to proceed.
The Agnews tried to stop the sale by filing a motion for reconsideration of the order or sale, raising the issues already rejected by the court earlier and by the federal court as "simply meritless." United Leasing responded with a plea in bar of res judicata. The court, naturally, agreed.
The property was final put under the gavel on March 9, 2021. I will do the math for you. this was 11 years and 11 months since United Leasing first sought to enforce its lien. And, of course, that was the end of the story. The Agnews realized that they could not avoid paying their just debts and accepted the sale with grace.
Nah, I just fooling. The sought to challenge the confirmation of the sale. The circuit court issued a letter opinion and order which likely explained in detail just how wrong the Agnews were and approved the sale. And the Agnews . . . wait for it . . . filed a "Motions to Set Aside Sale and Dismiss." This was based on the alleged failure of the purchaser to complete the sale within 21 days after it was confirmed. The court again by a letter opinion and order -- and again we can hope that this letter contained some choice language about how wrong the Agnews were -- overruling the motion.
Which brings us to the Court of Appeals opinion written by Judge Malveaux in which she is joined by Judge Raphael and Senior Judge Petty, because the Agnews appealed. The opinion is 19 pages long, 15 pages of which are a detailed explanation of why the Agnews' arguments are, to borrow a phrase for the federal court, "simply meritless."
To be fair, the arguments were not so much meritless as merely wholly inapplicable to the facts of this particular case. The Agnews were using good laws that are intended to be a shield against unduly hasty judicial sales as a sword to attack a creditor who was fully entitled to enforce a lien of a debt that was incurred a quarter of a century ago.
I would love to be able to end this summary by telling you that, apart from the likely petition for rehearing/rehearing en banc and petition for appeal the the Supreme Court (which will be refused -- I guarantee it), the Agnews are done clogging the courts with their childish effort to avoid paying their debts and trying to regain either their bayfront house or money damages. Unfortunately, I cannot tell you that. There is already another appeal pending in the Court of Appeals and there are at least two, and I suspect more, cases still pending in the circuit court one of which appears to be a malpractice action against one of their former attorneys.
There is a final, sad coda to this tale. The attorney who represented the Agnews in much of the proceedings outlined above was suspended by the Virginia State Bar for impairment earlier this year. The attorney in question practiced law in the Commonwealth for over 30 years, during which time he enjoyed success in the trial and appellate courts of both the Commonwealth and the Federal jurisdictions. However, in recent years his involvement with increasingly controversial cases involving allegations of conspiracies in the media, and his attention to his practice became lax. This resulted in several contempt sanctions and a bar investigation which resulted in a public reprimand with terms in 2022. For over a decade, the Virginia Supreme Court's Attorney Wellness issue has stressed the need for greater attention to the mental health of members of the bench and bar. It is a lesson that still needs to be repeated and taken to heart.
The Court of Appeals issued just four published opinion over the last three weeks -- as many as were released on April 2 of this year. During that same period, the Court released 47 unpublished opinions. Taken this admittedly unscientific sample, that means the Court is published only about 8% of its opinion. Your Humble Correspondent has been remiss in collecting data on the Court's opinions, and promises to do better in the future. However, this particular statistic has a personal meaning for YHC, because one of those unpublished opinions happened to be a case in which he represented the appellant and received a positive result.
The case involved a claim that a personal injury suit had been settled because the plaintiff had entered into a settlement with a secondary insurer that had tendered policy limits. As proof of the settlement, the defendant offered a document which an "illegible document." This is the document:
I think you will agree that "illegible" is a charitable description. In fairness to the defendant, a very close examination of the physical document showed gray-ish streaks that were once text. In an effort to prove the content of the document, the defendant sought to introduce a document that was "in the same format" as the illegible document. The plaintiff objected that this was improper parol evidence. The circuit court admitted the document and used it to interpret the terms of the "settlement." In doing so, the court found that despite repeated statements made to by the plaintiff's attorney that there was no intent to release the defendant and that plaintiff would not agree to the settlement if it did so, the plaintiff either agreed to the settlement or his attorney had the apparent authority to do so.
On appeal, the principal argument was that the circuit court erred in permitting parol evidence to prove the content of a document that was illegible. It is perhaps important to note that while the document was obviously a copy (indeed, it was likely a copy of a fax that had been copied and then faxed or scanned and emailed as it went from carrier to plaintiff's attorney, to the plaintiff, back to the attorney, back to the carrier, and eventually to the defendant's counsel), for the purposes of this case it was an "original" document. The objection was not that the copy was not the best evidence, but rather that its content was not provable by parol evidence. Thus, while the case might be analogized to a "lost document" case, the exhibit had not been offered to prove the content of the original but as the actual release of the claim. Whether an illegible document can be proved by parol evidence was an issue of first impression in Virginia.
The Court of Appeals, Judge O'Brien joined by Judges Fulton and Callins, held that like a lost document case, proof of an illegible writing was subject to a higher standard, with that standard being based on the value of the writing to be proved. The Court concluded that despite being an issue of first impression, the case did not warrant announcing a new standard because it found that the evidence failed to establish that the appellee (the movant for dismissal on a plea in bar) had met its burden of proof by even a preponderance, so while a future case might requiring finding that the appellee had a higher burden, it was not necessary to determine what that standard would be, thus the opinion was not worthy of publication.
On April 9, the Court of Appeals released its opinion in Doris Williams v. Carl Boggess, Esquire In this Capacity as Agent for Margarett Ward. Whenever an attorney is a party to a lawsuit, especially and appeal, members of the bar take note because these cases are often instructive on issues that can arise in the practice of law (and, hopefully how to avoid them). The attorney in this case was names as agent in a durable power of attorney for Ward. Williams, Ward's niece, filed a suit alleging that the attorney had mismanaged Ward's estate and sought an accounting. The attorney opposed the accounting on the ground that Williams lacked standing and that Ward was a very private person who did not wish others to know about her dealings.
Now I will interject here that although he practices in relatively close proximity to the Virginia Appellate Lawyer's secret lair in Roanoke, I do not know the attorney in question personally. But I do know that he is a prominent figure in his community, having served as Bedford County attorney and the County Administrator for 16 years prior to his retirement in 2018. He continues to serve the community as attorney for the Board of Zoning Appeals and serves on the board of Directors of the Lynchburg Community Foundation among other civic activities. He is an attorney in good standing with the state bar and has no disciplinary record. None of these facts, of course, excludes the possibility that he might have mismanaged Ward's estate, but when such an accusation is made, the character of the attorney against whom it is made is a factor to consider before jumping to any conclusions.
The circuit court denied Williams' petition as insufficient to state a cause for granting a petition for an accounting but allowing her to amend. While the amended petition was pending, Ward died. The opinion does not state whether Williams was a legatee, intestate heir or otherwise had some role in her Aunt's estate, whereas the attorney had qualified as administrator of the estate.
The circuit court ultimately concluded that Williams had standing to seek the accounting, but ruled that her basis for doing so amounted to a "fishing expedition" as there were not allegations beyond mere assertions of mismanagement to give rise to a need for an accounting.
On Appeal, the Court of Appeals, Judge Lorish joined by Judges Friedman and Chaney, affirm. The decision to grant or deny a request for an accounting from an agent-in-fact is committed to the sound discretion of the trial court and the Court finds no abuse of that discretion.
There are two aspects of this appeal that give me pause. First, is the assumption that Williams had standing merely because of a blood relationship. I do not question that Williams was a dutiful niece, through the opinion gives no information about the nature of her relationship with Ward, but I question whether in every case a cross-lineal relationship without more would be sufficient to provide standing to seek an accounting.
Second, it is troubling in a generic sense, rather than specifically in this case, that as the Court noted, an administrator of an estate who was also the agent-in-fact of the decedent in life, is the only party with standing to demand an accounting on behalf of the estate. Certainly, this is not an unexpected situation, but it does create the specter of a conflict of interest. A check of the VCCI database revealed that (at least as of yet) Williams has not filed an action to remove the attorney as administrator of the estate.
Cenk Sidar v. Jane Doe, the only published opinion released on April 9, is of particular interest to appellate procedure geeks such as YHC as it involves the little used Rule 1:1A, which permits an appellee to seek attorney fees and costs if the “final appellate judgment [is] favorable to [the] appellee" provided that the "prevailing appellee . . . has recovered attorney fees, costs or both in the circuit court pursuant to a contract, statute or other applicable law." This is an exception to the American Rule that the parties are responsible for their costs on appeal as well as in the trial court, and therefore is strictly construed. The request for fees must be filed within 30 days of the appellate judgment.
The original suit was filed by Doe alleging "several egregious torts" by Sidar. In the coruse of those proceedings, Sidar sought a dismissal for lack of personal jurisdiction, which the trial court found to be lacking any "legitimate basis in either fact or law." The court imposed a significant sanction under Code § 8.01-271.1 which it characterized as an award of attorney's fees. Doe then nonsuited the case.
Sidar appealed the sanction award to the Supreme Court (the case pre-dates the shift in appellate jurisdiction for civil cases), which refused the petition. When Doe tried to file her request for attorney's fees under Rule 1:1A shortly before the 30 days for doing so would run, the clerk of the trial court refused it, asserting that because the clerk had not received the order refusing the appeal from the Supreme Court, the petition was not proper. Doe subsequently filed the request after the order was received by the clerk of the trial court, which was well outside to the 30 days. Over Sidar's objection that the request was not timely, the court awarded additional fees to Doe.
The Court of Appeals, senior Judge Haley joined by Chief Judge Decker and Judge AtLee, reverse and dismiss. This case involves the distinction between a case decided on appeal by order and one decided by an opinion. In the latter case, the court's opinion is not actually the judgment of the court, which comes later in the form of a "mandate," an order enforcing the opinion. Here, because the petition was refused by an order, there was no need for a mandate.
When a case is complete in the Supreme Court or the Court of Appeals, the record is not immediately returned because there remains the possibility of a petition for rehearing or further appeal. This does not mean that the judgment of the Court is not final. Here the order disposed of the appeal and, thus, left nothing for the Court to do, making it a final order. The returning of the record was merely an administrative function of the Clerk of the Supreme Court.
The Court recognizes that the real problem here was the clerk's refusal to accept the request for fees. The clerk, or almost certainly a deputy clerk, who did that was clearly in the wrong. The job of the clerk is to accept filings, not to determine their validity or ripeness. Doe's attorney should have insisted that the clerk accept the filing, however, as it was the attorney's duty to preserve his client's right to the potential award of attorney's fees.
This is a harsh result, and I would expect Doe to seek review by the Supreme Court.
J&R Enterprises, et al. v. Ware Creek Real Estate Corp., et al. is one of two opinions released on April 23, 2024. It's also the shortest opinion of the ones discussed in this post and starts with a very exact statement of law, "An adverse witness’s testimony may not bind a calling party if it is inherently incredible." Like Sidar, the procedural history of this case involves a prior suit that was appealed to the Supreme Court back in the days when that court was the proper place to file a civil appeal. That underlying suit involved an award of contract damages which the Supreme Court reversed and, because the contact had a fee shifting clause, the case was remanded for a determination of attorney's fees.
The circuit court awarded fees against the plaintiffs, which were corporate entities with insufficient assets to pay the award. The defendants then filed the present action in an effort to pierce the corporate veils and recover the award from the principal of the corporations. The defendants, who were now the plaintiffs in the present action, called principal as their only witness and the court permitted them treat him as adverse.
The issue was whether the principal had used corporate assets for personal expenses. The plaintiffs had credit card statements for cards issued to the corporations which showed purchases that most people would consider personal expenditure -- restaurants, medical procedures, jewelry, taxes on personal and real property of the principal, etc. In his testimony, however, the principal "struggled to recall most details about the purchases, though he often maintained that they were indeed legitimate business expenses. He insisted that—although WCRE and WCBC had not earned profits since 2017 and 2018 respectively, had no other employees, nor performed work for any customers at the time—any and all expenses were business related and not personal."
The circuit court found this testimony hard to swallow, calling it inherently incredible. Nonetheless, the court found that the plaintiffs were bound by the testimony and the documentary evidence was not sufficient to rebut the claim that the expenses were not personal.
The Court of Appeals, Judge Ortiz joined by Chief Judge Decker and Judge Fulton. reverses and remands the case for a reexamination of the evidence. The Court holds that while a party who calls an adverse witness is bound by that witness' testimony, a court cannot rely on inherently incredible testimony to reach its judgment in favor of that evidence. However, because the court also should not reject testimony "globally," the court on remand will need to specify what elements of the testimony are incredible and, assuming any testimony remains to be considered, determine whether there is sufficient ground to find that the corporate veil can be pierced.
One notable point of this opinion is that when testimony is rejected as incredible, it cannot be used discredit other evidence. In effect, the rule is that such testimony is struck from the record as if it had never been received by the court. The court must base its judgment on whatever remains. This being the case, it is by no means certain that on remand the trial court will determine that the plaintiffs have met their burden, as the court already found that the documentary evidence was not sufficient.
The other case decided April 23, 2024 is Arturo Barnes v. Commonwealth of Virginia, a criminal case that involves the unusual circumstance of a jury returning verdicts that seem at odds with the evidence in that they acquitted Barnes of two serious felonies by convicted him of four lesser crimes based on the same evidence. If you familiar with the assertion on inconsistent jury verdicts being grounds for reversal, you know that the usual response from the appellate court is, "we don't piece the veil of the jury room to determine how the jury reached its verdict."
The fact is that a jury can nullify in a case where there are multiple charges arising from the same conduct. It can do so for many reasons including wanting to show mercy to the defendant, seeking a compromise to get a unanimous verdict, or, yes, sheer incompetence of not understanding the judge's instructions as to the elements of the offense or the burden of proof.
Before reaching the merits of the case, the Court of Appeals, Judge Callins joined by Judges Athey and Causey, must first explain why Barnes' first assignment of error is barred. Barnes assigned error to the "jury" reaching inconsistent verdicts. Jury's do not issue the orders in the trial courts, that's the judge's job. Thus, on appeal, where the assignment of error must be directed to an action of the court -- in this case the court's confirming of the jury's verdict -- an assignment of error alleging that the jury erred is not cognizable.
If this seems picayune, consider whether the Court would be able to consider an assignment of error in a direct appeal that alleged error by a bailiff for failing to provide copies of the jury instructions to the jury or answering a jury inquiry rather than bringing it to the judge. If the discovered during the deliberations, the defendant would need to ask the court to rule on whether this was grounds for a mistrial, rather than waiting until the appeal.
In any case, Barnes did assign error to the trial court's failure to set aside the verdict, so the merits can be reached. And then the Court naturally said that inconsistency in jury verdicts is not grounds for reversal.