Afzall ex rel. Afzall v. Com.

639 S.E.2d 279, 273 Va. 226, 2007 Va. LEXIS 3
Supreme Court of Virginia·Decided January 12, 2007·No. Record No. 060767.·Published·Cited by 1 cases

Opinion

OPINION BY Senior Justice HARRY L. CARRICO.

Adam Afzall, an infant then nine years of age, was severely injured by the negligence of a third party. The Department of Medical Assistance Services (DMAS), the Commonwealth's provider of benefits under the national Medicaid program, paid $419,809.56 for a portion of the costs of Adam's treatment related to those injuries. Adam, by his parents and next friends, Sophia and Stephen Afzall, brought an action against the third *281party alleging the third party's negligence caused Adam's injuries. The parties settled the case, which was approved by the trial court on September 3, 2004.

By letter dated December 3, 2004, the Commonwealth claimed a lien for the amount DMAS paid for Adam's care. Adam's counsel computed the "Commonwealth's share" of Adam's expenses for legal fees and costs at $142,017.62 in obtaining the settlement.1 Counsel submitted a check to the Office of the Attorney General for $277,791.94, representing the amount DMAS paid less the proportionate amount of Adam's legal fees and costs, "in full satisfaction of [the] lien." The Office of the Attorney General returned the check with a demand for payment of the full lien in the amount of $419,809.56.

Adam, by his parents and next friends, then filed a motion for declaratory judgment against the Commonwealth, seeking a declaration that the "Commonwealth's share" of his expenses for legal fees and costs in obtaining settlement of his negligence case should be deducted from the amount of the lien.

In support of his position, Adam cited a provision in the second paragraph of Code § 8.01-66.9, which, after establishing liens for payments made by DMAS and other institutions for persons who sustain personal injuries, provides as follows:

The Commonwealth's or such Department's or institution's lien shall be inferior to any lien for payment of reasonable attorney's fees and costs, but shall be superior to all other liens created by the provisions of this chapter and otherwise. Expenses for reasonable legal fees and costs shall be deducted from the total amount recovered.

Adam argued in the trial court that a plain reading of Code § 8.01-66.9 dictates that a plaintiff's legal fees and costs must be deducted from DMAS's share of any recovery. The Commonwealth argued that the statute did not require any deduction. The trial court rejected Adam's argument and dismissed his motion for declaratory judgment. We awarded Adam this appeal.

Adam makes the same argument on appeal as he made in the trial court. However, for the first time, the Commonwealth interposes an argument that "[s]overeign immunity bars a declaratory judgment against the Commonwealth or its agencies."

The Commonwealth concedes that it did not raise the doctrine of sovereign immunity in the trial court or in its brief in opposition to Adam's petition for appeal, but it asserts that the failure to raise the issue at an earlier time does not constitute the Commonwealth's waiver of its sovereign immunity, citing Commonwealth v. Luzik, 259 Va. 198, 206-07, 524 S.E.2d 871, 877 (2000) (failure to assign cross-error to trial court's denial of claim of sovereign immunity cannot constitute waiver of claim). Adam does not question the timeliness of the Commonwealth's argument concerning the doctrine of sovereign immunity, but he contends sovereign immunity does not apply in this case.

We agree that the Commonwealth can raise the defense of sovereign immunity for the first time on appeal because if sovereign immunity applies, the court is without subject matter jurisdiction to adjudicate the claim. Id. at 206-07, 524 S.E.2d at 876-77. "[O]nly the legislature acting in its policy-making capacity can abrogate the Commonwealth's sovereign immunity." Id. at 206, 524 S.E.2d at 876. A "`waiver of immunity cannot be implied from general statutory language'" but must be "`explicitly and expressly announced'" in the statute. Hinchey v. Ogden, 226 Va. 234, 241, 307 S.E.2d 891, 895 (1983) (quoting Elizabeth River Tunnel Dist. v. Beecher, 202 Va. 452, 457, 117 S.E.2d 685, 689 (1961)).

In the absence of such a waiver by the legislature, the courts of this Commonwealth wealth do not have the necessary jurisdiction "to entertain [an] action." Luzik, 259 Va. at 206, 524 S.E.2d at 877. Such subject matter jurisdiction cannot be waived by the Commonwealth or given to a court by agreement *282or inaction of the parties. Subject matter jurisdiction

can only be acquired by virtue of the Constitution or of some statute. Neither the consent of the parties, nor waiver, nor acquiescence can confer it. Nor can the right to object for a want of it be lost by acquiescence, neglect, estoppel or in any other manner . . . . and the want of such jurisdiction of the trial court will be noticed by this court ex mero motu.

Board of Supervisors v. Board of Zoning Appeals, 271 Va. 336, 344, 626 S.E.2d 374, 379 (2006) (quoting Humphreys v. Commonwealth, 186 Va. 765, 772-73, 43 S.E.2d 890, 894 (1947)).

"As a general rule, the Commonwealth is immune both from actions at law for damages and from suits in equity to restrain governmental action or to compel such action." Alliance to Save the Mattaponi v. Commonwealth, 270 Va. 423, 455,

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Afzall ex rel. Afzall v. Com., 639 S.E.2d 279, 273 Va. 226, 2007 Va. LEXIS 3 (Va. 2007).

639 S.E.2d 279 (Afzall ex rel. Afzall v. Com.) — published by Counsel Stack Legal Research, free access to 12M+ legal documents.

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