Court Finds §8.01-271.1 Sanctions Appropriate, Decides Three Other Appeals in Published Opinions

The Court of Appeals decided five cases in four published opinions today. We start with the related appeals of Tiziano M. Scarabelli, M.D. v. Kenneth Ellenbogen, M.D., et al. and John E. Nestler, M.D., et al. v. Tiziano Scarabelli, M.D., et al. decided in a combined opinion by Judge Ortiz joined by Judges O’Brien and Raphael. This appeal is about a topic of much interest to attorneys, Code § 8.01-271.1, the statute that makes it a sanctionable event to file a pleading that is not well-grounded in fact or warranted by existing law or a good faith argument for the extension, modification or reversal of existing law, and also is not interposed for any improper purpose, such as to harass or to cause unnecessary delay or needless increase in the cost of litigation. This statute, which used to be very short, got a massive expansion in 2020, and this opinion is apparently the first to deal with the topic in a serious manner since those changes.

The underlying cause of action stemmed from a workplace brouhaha which resulted in Scarabelli being placed on administrative leave from his position as Director of Cardio-Oncology at MCV. Believing himself the victim of false complaints, Scarabelli brought a defamation action against MCV and several of its employees. In a novel turn, MCV brought a counterclaim alleging that Scarabelli “fraudulently induced his hiring” by padding his resume and concealing the true circumstances of his departure from his last employment. The jury found in favor of MCV and the employees on the defamation claims and awarded MCV $102,500 in actual damages and $143,500 in punitives.

Two of the employees filed § 8.01-271.1 motions, both of which were denied, while Scarabelli sought to have the fraud judgment set aside. The circuit court denied all the motions.

Today, the Court of Appeals gives succor to one, but not both of the employees, and in doing so gives a master class in what constitute a colorable claim for defamation. Because the claims against one of the employees were “a valid, non-conclusory defamation claim,” they could not have been made in bad faith or an improper purpose. But the other employee’s allegedly defamatory statement was objectively true and lacked any defamatory sting, so were not well grounded in fact, and, thus, sactionable. The Court goes on to quickly dispose of Scarabelli’s cross-appeal and remand to the circuit court for an award of damages to the one employee.

As the case style implies, Eleanor A. Hunter, Individually and as a Trustee, etc. v. Charles M. Hunter, Jr. involves family members, in this case siblings, squabbling over property and money. This is an interlocutory appeal to review a ruling by the circuit court that Charles Hunter’s suit against his sister Eleanor for alleged undue influence in procuring gifts for herself from trusts established by their parents of which Eleanor was the trustee. If this fact pattern sounds familiar, it is because this is the second case involving these parties. The first time around, the case went directly to the Supreme Court (“Hunter”), which ruled in Charles favor after the circuit court dismissed his suit as being in violation of a “no contest” clause in each trust without considering the “alternative-pleading model” which allows a plaintiff to avoid dismissal for a no contest clause by, in effect, having the court determine whether the suit would violate the clause as a separate controversy not actually challenging the will or trust, thus avoiding loss of the benefit as an heir or beneficiary.

On remand, the circuit court found that the “no contest” clauses were not breached, thus ruling in favor of permitting the suit to go forward, but authorized the interlocutory appeal by Eleanor, now going to the Court of Appeals due to the realignment of appellant jurisdiction. Today, Judge Raphael, joined by Judges Humphreys and AtLee, affirm. The opinion effectively adopts the view expressed in Hunter I by the Supreme Court that a party cannot be barred from having a court determine whether a suit will strip the party of their rights to an inheritance or trust benefit by a no contest clause without first being allowed to show there is sufficient basis to allege malfeasance by an executor or trustee. The reason is obvious. If such were the case, then a no contest clause would effectively shield an executor or trustee from any court oversite based on a challenge by an heir or beneficiary. The case will now go back to the trial court for a trial on the merits.

Margaret Williams v. Pamela Legere, et al. involves a review of a challenge to the constitutionality of the initiative petition witness circulator residency requirement found in Code § 24.2-684.1(5). In case you are not familiar with this particular statute (and Lord knows I wasn’t), it prescribes the “Requirements for voter petitions to call for referendum elections.” Williams wanted to have a referendum in Williamsburg on whether the city’s appointed school board members should be directly elected. She filed her petition in a timely manner with sufficient registered voters signatures, but most of those signatures were witnessed by someone who was not a resident of Williamsburg as required by the initiative petition witness circulator residency requirement, and accordingly the petitions were registered.

Williams sought relief from the circuit court alleging that the requirement that the witnesses to the petition be from the jurisdiction in which the referendum was sought was unduly burdensome on political speech and therefore unconstitutional. The circuit court, applying rational basis, found that it was not violative of the first amendment. Today, the Court of Appeals, Judge White, joined by Judges Huff and Fulton, finds that an alleged undue burden on political speech is subject to strict scrutiny review and remands to the circuit court for consideration under the appropriate standard.

The only criminal appeal published today is Keith Elwood Hargrove v. Commonwealth of Virginia. Hargrove was tried jointly with a co-defendant on charges of first-degree murder, attempted robbery, armed burglary, discharging a firearm in an occupied building, conspiracy to commit burglary, conspiracy to commit robbery, and three counts of using a firearm in the commission of a felony. The victim was an eight-year-old boy, whose father unwisely posted on social media that he had won a lottery prize of “thousands” of dollars. Unfortunately, this attracted the notice of Hargrove and Charles Coleman, who committed a home invasion in an attempt to rob the father. Hargrove was tied to the crimes when he was arrested on an unrelated drug charge and found to be in possession of the murder weapon.

Although Hargrove challenged some evidentiary rulings and the sufficiency of the evidence, the issue that warranted publishing this case is the motion for separate trials. Hargrove alleged that statements by Coleman to third parties and admissible against him under the “statements against interest” exception to the hearsay rule tended to implicate him and, thus, violated his right to confront Coleman at trial if Coleman refused to testify. The Court of Appeals, however, found that these statement were not “testimonial” and did not trigger the right of confrontation. This decision, while in line with the Fourth Circuit (and all other circuits that have considered it), appears to be one of first impression in a Virginia state appellate court, and thus worthy of publication. Expect an appeal to the Supreme Court of Virginia, and conceivably to the US Supreme Court (though with there being no split in the circuits, it’s a doubtful case for certiorari).