Insurance Defense Blog

Failure to order complete trial transcript results in dismissal of Virginia appeal of $8.3 million verdict

A simple clerical error -- failing to order the complete trial transcript -- resulted in the dismissal of the Virginia appeal of a $8.3 million verdict and also spawned two other lawsuits.  These events and their consequences are worth reviewing, as many lawyers will have to admit "there but for the grace of God . . . ."

A 17 year old girl sustained severe injuries, including brain injuries, when skiing in Virginia.  Essentially she collided with a snow grading machine that was being driven up the intermediate slope to reach a snow tubing run.  On July 16, 2004, after a week long trial, a jury returned a verdict in the amount of $8.3 million against the resort.  Read the plaintiff's counsel's closing argument: Download Grigg closing argument 

The defendant and its insurer certainly anticipated a possible bad result, as they retained  prominent appellate counsel shortly before the trial had even begun.

An appeal was noted to the Virginia Supreme Court.  Somehow, someway, at least one trial transcript was apparently not timely filed on the appellant's behalf.  For that reason, the Virginia Supreme Court ultimately dismissed the appeal in July 2005.

Subsequently, the insurer of the ski resort filed a legal malpractice suit against the trial defense counsel in the Circuit Court for the City of Richmond in July, 2007.  Shortly thereafter, the case took on political overtones, as it was revealed in a newspaper story that one of the attorneys involved in the failed appeal was under nomination to the U.S. Court of Appeals for the Fourth Circuit.

On September 10, 2008, one of the defendants in the legal malpractice case filed his own suit against the involved insurers and their counsel, for defamation, abuse of process, and conspiracy to injure the plaintiff in his business.  Essentially, he claimed that he had no involvement in the post-trial matters in the skiing accident case, since it was all turned over to appellate counsel.

The latter suit was recently dismissed on Jan. 6, 2009 by U.S. District Court Judge Norman K. Moon, in part due to the absolute litigation privilege and the statute of limitations.

An appeal was taken to the Fourth Circuit concerning the latter ruling.  Apparently while on appeal, a settlement was worked out, and as part of the settlement it was agreed that there would be a vacatur of Judge Moon's opinion.  Judge Moon, however, denied the request for vacatur.Download Spencer-denial of vacatur

Meanwhile, the legal malpractice suit arising from the failed appeal was non-suited on March 30, 2009.

 

 

Defamation per se in Virginia arising from summary of a judicial opinion

In Vaile v. Willick, 2008 U.S. Dist. LEXIS 53619 (W.D. Va. July 14, 2008), a law student's defamation action against two lawyers survived the defendants' motion for summary judgment.

The defendants practiced family law in Nevada, and represented the plaintiff law student's ex-wife.  The defendants represented the ex-wife and their children in a series of lawsuits in state and federal courts in Nevada to recover damages from Vaile's removal of the children from their mother's custody without her consent.

The plaintiff, who was in law school, decided to cease his defense to one of the civil actions in Nevada federal court, and as a result, the federal judge found against him and awarded compensatory damages of $688,500 and attorneys' fees and costs of $272, 255.

One of the defendants subsequently wrote to the plaintiff's law school to advise that had been found guilty of multiple violations of State and Federal law, including kidnapping, passport fraud, felony non-support of children and violation of RICO.  The letter requested the law school to reconsider the plaintiff's fitness for continued enrollment, and attached a copy of the federal court's decision.

When the law school seemingly took no action, the co-defendant, who was an attorney with the same firm, sent a letter to the ABA to inform it of the law school's recalcitrance, repeated the summary of the Nevada decision, and attached a copy of the Nevada opinion.  The letter called for the ABA to rescind the law school's accreditation as a result of the law school's failure to act.

The plaintiff filed an action for defamation, on the grounds that the letters were false and defamatory.

On cross-motions for summary judgment, the plaintiff argued that the letters were sent with malice and an intent to defame.  Plaintiff argued that he has never been convicted of criminal offenses under state or federal law, and the letters were false and defamatory because they suggested that he was.

Defendants argued that the letters were true or at worst, substantially true, do not necessarily suggest a criminal conviction, and that when read as a whole with the attached judicial opinion, cannot be construed as defamatory per se.

The Court found that the letters were defamatory per se, because they impute the commission of a crime upon the plaintiff that he did not commit.  Further, the letters were defamatory per se as a whole because they suggested that the plaintiff is unfit to continue at law school or lacks the integrity to continue in the study of the law or to perform the duties of a lawyer.

The Court found that the absolute privilege to publish matters of public record applied to the letters.  The publication of public records to which everyone has a right of access is absolutely privileged in Virginia.  The privilege is not lost if the record is incorrect or if it contains falsehoods.  The privilege exists so long as the published account of the public record is a fair and substantially accurate account of the public record or proceeding.  If the publication substantially departs from the proceeding or record, then the privilege is lost.

The Court found that the issue whether the letters substantially departed from the Nevada opinion, such that the privilege was lost, is a question left for the jury, because reasonable people could disagree whether the letters are an impartial and accurate account of the opinion.

Virginia Supreme Court Reverses JNOV In Food Poisoning Case

In Bussey v. E.S.C. Restaurants, the Virginia Supreme Court reversed the trial court's award of JNOV to the defendant in a food poisoning case, and reinstated a jury verdict of $111,765.25.

The trial court granted the JNOV because it found that the testimony of the treating physician as to causation lacked sufficient factual basis because of “the non-contemporaneous medical examination, the lack of laboratory testing, and the discrepancy in the timeline.”

The Supreme Court rejected that, and among other things found that although the treating physician did not use laboratory testing to definitely identify food poisoning, Virginia law has never required such testing.  In this case, it was enough for the treating physician to have excluded other causes of the symptoms, and to have relied upon other factors.  The Court summarized the relevant Virginia law as follows:

In the context of unwholesome food, the proof necessary to sustain a cause of action based upon negligence or breach of warranty is the same. "[T]he burden requires the plaintiff to show ‘(1) that the goods were unreasonably dangerous either for the use to which they would ordinarily be put or for some other reasonably foreseeable purpose, and (2) that the unreasonably dangerous condition existed when the goods left the defendant’s hands.’ " Harris Teeter v. Burroughs, 241 Va. 1, 4, 399 S.E.2d 801, 802 (1991) (quoting Logan v. Montgomery Ward, 216 Va. 425, 428, 219 S.E.2d 685, 687 (1975)). The implied warranty of wholesomeness applies to the sale of food by restaurants. Levy v. Paul, 207 Va. 100, 106, 147 S.E.2d 722, 726 (1966). With regard to proximate causation where there is no direct proof, the circumstantial evidence must be sufficient to show that the causation alleged is "a probability rather than a mere possibility." Southern States Coop. v. Doggett, 223 Va. 650, 657, 292 S.E.2d 331, 335 (1982).

The Court concluded in this case that there was sufficient credible evidence of record to support the jury's verdict.

Virginia Bar Considering Inclusion of On-Line Research Capability As Benefit of Bar Membership

Steven Minor, author of the SW Virginia blog, recently mentioned that the Virginia bar is considering a proposal to include online legal research as a membership benefit.  Fastcase has submitted a bid to be the service provider.  There is an article about this in the most recent Virginia Lawyer's Weekly newspaper (subscription only). 

While I am not a member of the Virginia bar, I have an indirect interest.  If the Virginia bar provides online research capability as a membership benefit, the D.C. Bar and the Maryland State Bar Associations are more likely to follow suit.

As I've said before, I think it is a no-brainer for any state bar association to offer this as a benefit.  The Washington Lawyer has also recently run an article on this.  To me it is just common sense that a bar association would secure inexpensive access to online legal research for its members.  It can only raise the overall quality of service for all members of the bar to have unlimited, low fee or no fee access to online legal research.  It will potentially reduce costs and overhead for the bar membership, and will encourage pro bono services.  It ensures some competition in the market for online legal research.  Imagine what Lexis and Westlaw might cost if there is no other competition.  It also would be a great incentive to join a bar association, where membership is voluntary.  It seems like a natural extension of the traditional function of the bar association in providing law libraries for its members.

Virginia is considering Fastcase, which has fairly good national coverage and, last time I checked it out, had a clean, simple interface and offered boolean and natural language searching. 

Apparently Casemaker previously also submitted a bid to the Virginia Bar.  The bar associations of 22 states have now adopted Casemaker.  However, according to the Virginia Lawyers Weekly, the bar association withdrew its request for proposals after another legal publisher, Geronimo Development Corp. which publishes the CaseFinder CD/online legal research system, threatened to file suit.  Geronimo explains its position on its website -- it is concerned that as a Virginia-specific product, its business will be destroyed if the Virginia State Bar Association offers a competing product as a zero cost benefit of membership.  The Virginia Attorney General's Office disagrees, and among other things cites the market experience where other state bar associations offer similar programs. 

To me it looks like CaseFinder has greater Virginia coverage than FastCase, since it includes selected Circuit Court opinions and workers compensation commission decisions, and perhaps more.  Plus a CD based service would be available when a firm's internet access is down. 

After this dispute arose, according to the Virginia Lawyers Weekly, the Virginia Supreme Court passed a rule directing the state bar association to provide online research services to its members, which apparently was designed to provide a state-action exemption to any antitrust claim. 

Then the bar association reissued its RFP, and Fastcase submitted the only bid.  It isn't clear whether Casemaker and Versuslaw were scared off by the threatened antitrust suit.  It remains to be seen what the Virginia State Bar will do.

Courts in most jurisdictions are not only publishing their opinions electronically, but are incorporating powerful search engines into their websites.  Likewise, administrative agencies like the Virginia Workers Compensation Commission are offering that service.  With each passing year, the body of law that is available online and searchable at zero cost is increasing.  Given that, it is hard to imagine that Geronimo's threatened antitrust suit will go anywhere, but I have no doubt it would be hideously expensive. 

   

Blog on Virginia Home Owners Association Law

Interesting blog on Virginia Homeowner's Association Law, a subject near (but probably not dear) to the hearts of most people in the Virginia suburbs, which might also be called The Land of the Restrictive Covenants.

Virginia Supreme Court Requires New Trial Where Plaintiff's Damages Expert Based Opinion on Fictional Assumptions

In Vasquez v. Mabini, the Virginia Supreme Court reversed a $2 million judgment in favor of the plaintiffs in a wrongful death case, and remanded for a new trial limited to the issue of damages.  The sole issue on appeal was whether the verdict had to be overturned because it was based on speculative opinions of plaintiff's damages expert, Richard B. Edelman, a Professor Emeritus at American University.  The assumptions made by the expert included an assumption that the decedent's dependent adult son would have continued to live 24 years into the future even though the witness knew that he had died before trial. 

The Court found that the following assumptions made the Edelman opinion inadmissible:

The economic value of the decedent’s lost income was projected from a base of $16,000 per year, beginning the day after the accident and continuing until retirement, based upon an assumption of full-time clerical work with added annual increases and fringe benefits. On cross-examination, however, the expert admitted that Mrs. Mabini had little experience as a clerical worker, had earned less than $1000 the previous year and that her annual earnings for the preceding several years had never exceeded $7000. She had been seeking full-time clerical employment since  moving to Virginia, but had been unable to find anything but part-time work. The record does not show that she had ever held fulltime employment or received any fringe benefits.. . .

. . . .

The expert’s assumption that the decedent would have received a 3.7% retirement benefit in addition to her salary was premised on his further assumption that she would have found full-time clerical employment the day after the accident. He testified: “most full-time employees get that.” His conclusion, however, was based only upon a statistic applied to facts entirely unrelated to the personal circumstances of the decedent. Similarly, his assumption that her income would have increased 4.25% each year until retirement was based upon a statistical projection of wage rate increases applied to the unfounded assumption of fulltime employment.

In calculating the value of Mrs. Mabini’s lost services, protection, care and assistance, the expert made the assumption that her son, Pomeroy, would have lived throughout his mother’s remaining life expectancy, an additional 24 years, and that he would continue as an adult dependent throughout that time. In fact, the expert was aware that Pomeroy had died before trial, less than six months after his mother’s death.

Copyright Infringement Suit Against Police Dismissed

In a bizarre case, Shell v. City of Radford, the U.S. District Court for the Western District of Virginia has dismissed a photographer's copyright infringement suit brought against the City of Radford police department, which had seized a collection of his photographs pursuant to a criminal investigation related to the death of the photographer's assistant. 

In his copyright infringement suit, the photographer contended that he was unable to earn a living because he was unable to access his own work.  He claimed he was unable to complete a book in progress without his work.

The police argued for a blanket rule that copyrighted photographs seized in a criminal investigation may be copied and distributed for use in the investigation.

The Court declined to adopt a blanket rule as to the fair use by the police, but found after balancing the statutory factors governing fair use, that the fair use doctrine applies to the police department's use of the photographs in its investigation.

Untimely Notice to Insured of Breach of Policy Condition Can Result In Waiver of the Policy Defense in Virginia

Under Va. Code § 38.2-2226, in order to disclaim coverage based on an insured’s breach of a policy condition, an insurer has to give notice to the claimant or claimant’s counsel within 45 days after discovery by the insurer of the breach of the condition. Failure to give such notice within 45 days will result in a waiver of the defense. Virginia courts have been strict in applying such waiver. See, e.g., Aetna Casualty & Surety Co. v. Compass & Anchor Club, Inc., 33 Va. Cir. 235 (Feb. 24, 1994).

In other words, under Va. Code § 38.2-2226, an insurer's policy defense based on breach of the cooperation clause can be waived by operation of law if there is failure to give notice to the insured within the statutory time frame. See Morrell v. Nationwide Mut. Fire Inc. Co., 188 F.3d 218 (4^th Cir. 1999)

Legal Malpractice Insurer Wins Summary Judgment in Rescission Action Based on Material Misrepresentations in the Application for Insurance

Applying Virginia law, the U.S. District Court for D.C. granted summary judgment to a professional liability insurer in a rescission action brought against a law firm based on misrepresentations in the application for insurance.  The law firm had failed to disclose the existence of a potential claim, which was evidence by a letter from the claimant which announced the intent to bring a claim.

The opinion summarized Virginia law concerning rescission based on a material misrepresentation in the application for insurance.

4th Circuit Affirms Award of Summary Judgment Where Executive Found To Have Voluntarily Resigned to Take Another Position

In a published opinion, the 4th Circuit has affirmed the Eastern District of Virginia's award of summary judgment to an employer. In this case, the plaintiff had been an executive making over $200,000 per year. The 4th Circuit found that the evidence was clear that the executive had voluntarily resigned, and that there had been no constructive discharge. Honor v. Booz-Allen & Hamilton, No. 03-2076 (4th Cir. Sept. 2, 2004).