Michael R. Agnew v. United Leasing Corporation

• Court: Court of Appeals of Virginia
• Decided: April 30, 2024
• Docket: 1724222
• Status: Published

Opinion

COURT OF APPEALS OF VIRGINIA

Present: Judges Malveaux, Raphael and Senior Judge Petty PUBLISHED

Argued by videoconference

MICHAEL R. AGNEW, ET AL. OPINION BY v. Record No. 1724-22-2 JUDGE MARY BENNETT MALVEAUX APRIL 30, 2024 UNITED LEASING CORPORATION

FROM THE CIRCUIT COURT OF THE CITY OF RICHMOND Jacqueline S. McClenney, Judge

David C. Reinhardt1 (Steven S. Biss; Law Office of Steven S. Biss, on brief), for appellants.

Alexander P.M. Boyd (Nathaniel L. Story; James E. Kane; Hirschler Fleischer, PC; Kane & Papa, P.C., on brief), for appellee.

Michael R. Agnew and Barbara Agnew appeal from a final decree of the circuit court

approving a commissioner’s report and judicial sale and confirming the deed transferring

ownership of their property. On appeal, the Agnews argue that the circuit court erred in:

(1) denying their motion for reconsideration and to set aside the confessed judgment of United

Leasing Corporation (“ULC”); (2) confirming the property’s sale to “Jayne A. Foster-Fair for

FRP, LLC”; and (3) granting the commissioner’s amended motion for approval of report and

sale. For the following reasons, we affirm the circuit court.

1 Mr. Reinhardt of Reinhardt Vandenbrook, PLLC, assumed this matter after the parties had submitted their briefs. I. BACKGROUND

“According to well settled principles, we recite the relevant facts in the light most favorable

to [ULC], . . . the prevailing party in the circuit court.” Nichols Constr. Corp. v. Va. Mach. Tool

Co., LLC, 276 Va. 81, 84 (2008).

This appeal concerns the real property located at 1309 Taylor’s Point Road in the City of

Virginia Beach (“the property”), which formerly was the Agnews’ home. On June 2, 2000, the

Agnews and ULC executed a forbearance agreement to resolve a dispute over how much money the

Agnews owed ULC under several leases and a promissory note.2 See Agnew v. United Leasing

Corp., 680 F. App’x 149, 150-51 (4th Cir. 2017). As part of the forbearance agreement, the

Agnews consented to a confessed judgment in favor of ULC. Id. at 151. The confessed judgment

included a lien against the property. Id.

By April 2008, the Agnews had not paid ULC the full amount they owed under the

confessed judgment. Id. ULC filed suit to enforce its lien, and the circuit court referred the matter

to a commissioner. Id. In October 2009, the Agnews moved to set aside the confessed judgment as

void ab initio and dismiss ULC’s suit on various grounds. Id. In an October 21, 2010 order, the

circuit court denied the Agnews’ motion. Id.

In September 2013, ULC filed a motion seeking approval of the commissioner’s report and

entry of a decree of sale for the property. Following a hearing on the motion, the circuit court

entered a decree on April 25, 2014 directing that the property be sold at public auction. Id.

The sale was automatically stayed when the Agnews filed a bankruptcy petition three days

prior to the auction. Id. The Agnews then sued ULC in bankruptcy court, seeking a determination

of the amount they owed ULC and raising the same challenges to the confessed judgment they had

2 AGM Development Corporation, the Agnews’ company, was also a party to the forbearance agreement. -2- raised in the circuit court in 2009. Id. The bankruptcy court referred the matter to the federal

district court, which granted summary judgment to ULC on November 13, 2015. Id.; see also

Agnew v. United Leasing Corp., Civ. Action No. 2:14cv525 (E.D. Va. Nov. 13, 2015). The

Agnews appealed, and on February 22, 2017, the United States Court of Appeals for the Fourth

Circuit affirmed the district court after finding the Agnews’ claims “simply meritless.” Agnew, 680

F. App’x at 155. Following the conclusion of federal litigation, the circuit court appointed a new

commissioner to proceed with the property’s sale pursuant to the April 2014 order.

On August 14, 2017, the Agnews filed a motion for reconsideration of the circuit court’s

October 21, 2010 order. Reiterating their arguments from 2009 and relying on the case of

Westlake Legal Group v. Flynn, 293 Va. 344 (2017), the Agnews argued that service defects

rendered the confessed judgment void, and also that “[b]ecause the debt owed to ULC was not

fixed, liquidated and/or acknowledged by the Agnews, under Flynn the confessed judgment is

void.” In response, ULC asserted pleas in bar of res judicata and collateral estoppel.

By order dated August 2, 2018, the circuit court denied the Agnews’ motion. The court

first held that the instant case was procedurally distinguishable from Flynn. It also sustained

ULC’s pleas in bar, holding that because service issues and the confessed judgment’s validity

had been litigated previously in both the circuit court and the federal courts, those matters were

not subject to reconsideration “pursuant to . . . Rule 1:6 Res Judicata Claim Preclusion.”

The property was sold3 at public auction on March 9, 2021 and the commissioner

prepared a Memorandum of Special Commissioner’s Sale indicating that the purchaser was

“Jayne A. Foster-Fair for FRP, LLC.” On April 23, 2021, the commissioner filed an amended

3 Prior to the sale, on July 24, 2019, the circuit court entered an amended decree appointing a new special commissioner. On December 1, 2020, the circuit court entered a second amended decree ordering that the property be sold at public auction no later than April 30, 2021. -3- motion of commissioner for approval of report and sale, with a copy of his previous

memorandum attached; the amended motion indicated that “Jayne A. Foster-Fair” had been the

purchaser and that she had “registered and was bidding in her individual capacity.” The Agnews

opposed the motion. Among other objections, they contended that FRP, LLC did not exist on the

date of the sale. Following a hearing, the circuit court granted the commissioner’s motion and

approved the sale in an opinion and order dated June 30, 2021. An order and decree of sale and

confirmation was entered by the circuit court on July 22, 2021.

On November 15, 2021, the Agnews filed a “Motion to Set Aside Sale and to Dismiss

Th[e] Suit.”4 They contended that the sale was void because the circuit court’s second amended

decree expressly required payment of the balance of the purchase price within 21 days of the

sale’s confirmation, and the commissioner had concealed from them the fact that FRP, LLC had

failed to comply with this requirement. Following a hearing, the circuit court entered an opinion

and order denying the Agnews’ motion on February 16, 2022.

This appeal followed.

II. ANALYSIS

On appeal, “[t]he judgment of a circuit court will be set aside only if ‘it appears from the

evidence that such judgment is plainly wrong or without evidence to support it.’” Callison v. Glick,

297 Va. 275, 287 (2019) (quoting Code § 8.01-680). “We defer to the circuit court’s factual

findings and view the facts in the light most favorable to . . . the prevailing party below, but we

review de novo the court’s application of the law to those facts.” Koons v. Crane, 72 Va. App. 720,

732 (2021). Additionally, we review de novo issues of statutory interpretation and the circuit

4 Prior to filing this motion, the Agnews appealed the circuit court’s July 22, 2021 order to the Supreme Court of Virginia. They later filed a notice of withdrawal of their appeal, which the Supreme Court granted. See Michael Agnew, et al. v. United Leasing Corp., No. 210980 (Va. Feb. 2, 2022) (order). -4- court’s application of statutes to its factual findings. Hawkins v. Town of South Hill, 301 Va. 416,

424 (2022).

A. Denial of the Motion for Reconsideration

The Agnews argue that “in light of the holding in Westlake Legal Group v. Flynn,” the

circuit court erred when it denied their motion for reconsideration.

In denying the Agnews’ motion for reconsideration, the circuit court first held that the

instant case was procedurally distinguishable from Flynn and that Flynn did not “change[] the

law regarding confessed judgments . . . [or] the result in this case.” It then held that the issues

the Agnews raised relating to alleged service defects and the validity of the confessed judgment

had previously been resolved by both Virginia and federal courts. With respect to its second

holding, the circuit court further explained that it was applying “Res Judicata Claim Preclusion”

pursuant to Rule 1:6 and granting ULC’s “Pleas of Res Judicata and Collateral Estoppel.” So,

there were two grounds upon which the circuit court denied the Agnews’ motion, although the

Agnews’ assignment of error challenges only the first ground pertaining to “the holding in . . .

Flynn.”

“It is well-settled that a party who challenges the ruling of a lower court must on appeal

assign error to each articulated basis for that ruling.” Rankin v. Commonwealth, 297 Va. 199,

202 (2019) (quoting Ferguson v. Stokes, 287 Va. 446, 452 (2014)). Absent this requirement, “an

appellant could avoid the adverse effect of a separate and independent basis for the judgment by

ignoring it and leaving it unchallenged.” Id. (quoting Manchester Oaks Homeowners Ass’n, Inc.

v. Batt, 284 Va. 409, 422 (2012)). However, “[t]he fact that an appellant ‘has not assigned error

to each basis for [a lower] court’s ruling does not end the inquiry.’ Instead, we determine

whether any unchallenged basis ‘provides a sufficient legal foundation for the [lower court’s]

ruling.’” Id. (second and third alterations in original) (citation omitted) (quoting Manchester

-5- Oaks, 284 Va. at 422). But “[i]n making this determination, ‘we do not examine the underlying

merits of the alternative holding—for that is the very thing being waived by the appellant as a

result of his failure to [assign error to it] on appeal.’” Id. (second alteration in original) (quoting

Manchester Oaks, 284 Va. at 422).

Here, the circuit court denied the Agnews’ motion not only on the grounds that Flynn was

distinguishable from the instant case, but also on the grounds that res judicata and collateral

estoppel barred reconsideration of the validity of the confessed judgment. The latter

determination provided a sufficient legal foundation for the circuit court’s denial of the Agnews’

motion. Because the Agnews assign error only to the circuit court’s ruling that Flynn did not

render the confessed judgment void, and fail to assign error to the circuit court’s independent

holding that res judicata and collateral estoppel barred reconsideration of the judgment’s validity,

the Agnews have waived their first assignment of error.5

5 The Agnews also contend that ULC’s claim is barred by the law of the case doctrine because the forbearance agreement, the contract pursuant to which the confessed judgment was obtained, provided that any funds required to satisfy a judgment after litigation were to be “paid by AGM,” the Agnews’ company. Because “the parties’ contract becomes the law of the case,” and because the forbearance agreement provided that AGM was to pay any remaining funds needed to satisfy ULC’s judgment, the Agnews maintain that “ULC has no right to come after [them] for any deficiency.” But the record before us is insufficient for us to reach the merits of this argument. “[A]n appellate court’s review of the case is limited to the record on appeal,” Wilkins v. Commonwealth, 64 Va. App. 711, 717 (2015) (alteration in original) (quoting Turner v. Commonwealth, 2 Va. App. 96, 99 (1986)), and “it is the responsibility of an appellant to provide us with a record sufficient to allow us to reach his or her assignments of error,” Browning v. Browning, 68 Va. App. 19, 31 (2017); see also Rule 5A:8(b)(4)(ii); Rule 5A:18. “If an insufficient record is furnished, the judgment appealed from will be affirmed.” White v. Morano, 249 Va. 27, 30 (1995). The Agnews indicate on brief that they preserved this argument in their August 15, 2011 renewed motion for summary judgment, motion to strike plaintiff’s case and for the entry of judgment. But the record does not contain a copy of this motion or the Agnews’ briefing on it. The Agnews further indicate that they preserved this issue in the circuit court’s final decree, but it contains no written objections from the Agnews. They also contend that their argument was preserved in the circuit court’s order of April 25, 2014, which states that on that date, the circuit court heard argument on the Agnews’ motion and denied the motion “[f]or the reasons stated on

-6- B. Confirmation of the Sale

The Agnews next argue that the circuit court erred by confirming the sale of the property

to “Jayne A. Foster-Fair for FRP, LLC.” Specifically, they contend that FRP, LLC’s corporate

existence was cancelled in 2018, and thus the bid received by the commissioner “from ‘Jayne

Foster-Fair for FRP, LLC’ was void ab initio.” The Agnews also maintain that the circuit court

erred in its construction and application of Code § 13.1-1050.5 and that the reinstatement of

FRP, LLC on April 17, 2021 did not render the sale valid.6

the record in open court at that hearing and upon consideration of all of the arguments presented in the Motions.” However, the record contains no transcript of, or written statement of facts pertaining to, this hearing. The Agnews further assert preservation in the circuit court’s decree of April 25, 2014, granting ULC’s motion to appoint a special commissioner and for entry of a decree of sale. The decree states that the matter was heard on April 25, 2014, and it includes written objections by the Agnews; but those written objections state only, “seen & objected to for the reasons stated in the pleadings at the trial and in the Agnews Renewed Motions to Strike & for Summary Judgment.” Again, the referenced pleadings and relevant hearing transcript do not appear in the record. Thus, the Agnews have provided no basis for us to determine whether this argument was preserved for appeal. 6 The Agnews also assert that “Jayne Foster-Fair, as trustee in liquidation” of FRP, LLC, lacked authority to bid on the property, and thus “her bid . . . [was] an ultra vires act.” But in its opinion and order confirming the sale of the property, the circuit court neither discussed nor ruled on the authority of Jayne Foster-Fair, as an alleged “trustee in liquidation” of FRP, LLC, to bid on the property. Accordingly, the Agnews have waived this issue by failing to obtain a ruling on it from the circuit court. See McDaniel v. Commonwealth, 73 Va. App. 299, 313 (2021) (noting the appellant’s burden to obtain a ruling from the circuit court on an issue he wishes to raise on appeal); Bailey v. Commonwealth, 73 Va. App. 250, 264 (2021) (noting that the appellant’s failure to obtain a ruling below “leav[es] us with no decision of the circuit court on that issue to consider on appeal”); Rule 5A:18. The Agnews further contend that the circuit court erred in confirming the sale because “the ‘winning bidder’ and putative purchaser, ‘FRP, LLC,’ does not exist. It never has.” This argument is not properly before this Court, both because it is not encompassed by the Agnews’ assignment of error and because this bald assertion is not developed on brief. See Banks v. Commonwealth, 67 Va. App. 273, 290 (2017) (“[W]e do not consider issues touched upon by the appellant’s argument but not encompassed by his assignment of error.”); Parrish v. Callahan, 78 Va. App. 630, 647 n.13 (2023) (“[W]here a party fails to develop an argument in support of his or her contention or merely constructs a skeletal argument, the issue is waived.” (quoting Bartley v. Commonwealth, 67 Va. App. 740, 746 (2017))); Rule 5A:20(e). -7- When engaging in statutory interpretation, “[o]ur task ‘is to ascertain and give effect to

legislative intent, as expressed by the language used in the statute.’” Verizon Va. LLC v. State

Corp. Comm’n, ___ Va. ___, ___ (Nov. 30, 2023) (quoting Cuccinelli v. Rector & Visitors of the

Univ. of Va., 283 Va. 420, 425 (2012)). “Under basic rules of statutory construction, we

determine the General Assembly’s intent from the words contained in the statute[,]” id. at ___

(alteration in original) (quoting Williams v. Commonwealth, 265 Va. 268, 271 (2003)), and we

“are bound by ‘the plain language of a statute unless the terms are ambiguous or applying the

plain language would lead to an absurd result,’” Commonwealth v. Delaune, ___ Va. ___, ___

(Dec. 14, 2023) (quoting City of Charlottesville v. Payne, 299 Va. 515, 527 (2021)). Thus, we

“limit[] our inquiry to ‘what the statute says and not . . . what we think it should have said.’”

Verizon Va. LLC, ___ Va. at ___ (second alteration in original) (quoting Commonwealth v.

Amerson, 281 Va. 414, 421 (2011)).

Relevant here, Code § 13.1-1050.2(A) of the Virginia Limited Liability Company Act,

Code §§ 13.1-1000 to -1099.27, provides that where a limited liability company, or LLC, fails to

timely pay its annual registration fee to the State Corporation Commission, “the existence of the

[LLC] shall be automatically cancelled as of that day.” However, Code § 13.1-1050.4(A) and

(B) provide a mechanism by which certain LLCs that have “ceased to exist” may seek

“reinstatement within five years thereafter.”7 In turn, Code § 13.1-1050.4(C) provides that for

LLCs that have been reinstated, their existence “shall be deemed to have continued from the date

of the cancellation as if cancellation had never occurred, and any liability incurred by the [LLC]

or a member, manager, or other agent after the cancellation and before the reinstatement is

7 Code § 13.1-1050.4(A) provides that the statute’s reinstatement mechanism does not apply to certain LLCs, but those statutory exclusions do not apply here. See Code § 13.1-1050.4(A) (excluding from the reinstatement mechanism those LLCs that were cancelled pursuant to Code § 13.1-1050.3(A)(1) or judicially dissolved pursuant to Code § 13.1-1047). -8- determined as if cancellation . . . had never occurred.” Also relevant here, Code § 13.1-1050.5

provides that

[t]he cancellation of existence of a limited liability company shall not take away or impair any remedy available to or against the limited liability company or its members or managers for any right or claim existing, or any liability incurred, before the cancellation. Any action or proceeding by or against the limited liability company may be prosecuted or defended by the limited liability company in its name. The members or managers shall have power to take limited liability company action or other action as shall be appropriate to protect any remedy, right, or claim.

Here, the circuit court found that FRP, LLC’s “registration was automatically cancelled

on June 30, 2018 pursuant to . . . Code § 13.1-1050.2(A) due to its failure to pay its annual

registration fee. However, [the] LLC thereafter filed an application for reinstatement and was

formally reinstated . . . on April 17, 2021,” some 40 days after the sale of the property.8 The

circuit court then considered the Agnews’ argument that the sale was “void” because FRP, LLC

“did not exist” on the date of the sale. It further considered the Agnews’ argument that under the

“plain meaning of . . . Code § 13.1-1050.5,” the cancellation of FRP, LLC “completely took

away and impaired all remedies available to [it] . . . for any right or claim that arose or any

liability that was incurred after cancellation,” and thus “[b]ecause the bid and tender . . . occurred

after [FRP], LLC was cancelled, the bid/tender is invalid.”

The circuit court rejected both arguments. It first distinguished Code § 13.1-1050.5 as

inapplicable to the facts of this case. It then noted FRP, LLC’s post-sale reinstatement pursuant

to Code § 13.1-1050.4, and the statute’s provision that as a matter of law, a reinstated LLC’s

existence and incurred liabilities during the cancellation period are treated “as if cancellation had

never occurred.” “Therefore,” the circuit court held, “the bid by ‘Jayne A. Foster-Fair for [FRP,

8 The Agnews do not challenge the circuit court’s factual finding that FRP, LLC was reinstated within three years of its cancellation, nor do they challenge the cancellation and reinstatement timeline determined by the circuit court. -9- LLC]’ and the sale of the [p]roperty [were] not invalidated by the temporary lapse” of the LLC’s

existence.

1. Code § 13.1-1050.4

We first consider the circuit court’s application of Code § 13.1-1050.4 in holding that the

“temporary lapse” of FRP, LLC’s registration did not invalidate Foster-Fair’s bid and thus void

the property’s sale. Virginia appellate courts have not previously interpreted Code

§ 13.1-1050.4, but the plain language of the statute makes clear that it operates to retroactively

effectuate and give full legal force to the post-cancellation actions of an LLC, its members,

managers, or agents. Under the statute, so long as a cancelled, qualifying LLC complies with the

reinstatement requirements of Code § 13.1-1050.4(A) and (B), the State Corporation

Commission “shall enter an order of reinstatement of existence”; then, “[u]pon entry of the

order,” the LLC’s existence “shall be deemed to have continued from the date of the cancellation

as if cancellation had never occurred”; and thus “any liability incurred” by the LLC “or a

member, manager, or other agent after the cancellation and before the reinstatement is

determined as if cancellation of the LLC’s existence had never occurred.” Code

§ 13.1-1050.4(C). It is thus clear from the plain language of Code § 13.1-1050.4 that where an

LLC is properly reinstated after cancellation, the action of an LLC’s agent purporting to incur

liability for the LLC during the cancellation period is retroactively given full legal force and

effect.9

See Dynamic Aviation Grp., Inc. v. Dynamic Int’l Airways, LLC, Case No. 9

5:15-cv-00058, at *10 (W.D. Va. July 5, 2016) (order) (considering the application of Code § 13.1-1050.4(C) and noting that under the statute, a party’s “successful reinstatement by the Virginia State Corporation Commission will . . . negate the impact of its . . . cancellation”); Wallace v. Commonwealth, 79 Va. App. 455, 467 (2024) (en banc) (noting that “well-reasoned opinions from other jurisdictions” are “not binding on this Court,” but may nevertheless provide “persuasive authority”); Smith v. Commonwealth, 78 Va. App. 371, 383 n.4 (2023) (“[U]npublished opinions can be cited and considered for their persuasive value.” (quoting Otey

- 10 - Our Supreme Court’s interpretation of an analogous statutory provision supports our

interpretation of Code § 13.1-1050.4. Code § 13.1-754, a portion of the Virginia Stock

Corporation Act, Code §§ 13.1-601 to -800, is identical in its substantive language to Code

§ 13.1-1050.4. It provides for the reinstatement, within five years, of corporations that have

ceased to exist, and further provides that upon entry of an order of reinstatement by the State

Corporation Commission,

the corporate existence shall be deemed to have continued from the date of termination as if the termination had never occurred, and any liability incurred by the corporation or a director, officer, or other agent after the termination and before the reinstatement is determined as if the termination of the corporation’s existence had never occurred.

In Syed v. Zh Technologies, Inc., 280 Va. 58, 69 (2010), our Supreme Court held that in choosing

this language, “the General Assembly adopted the principle that if a corporation’s existence is

reinstated the legal consequence of action by officers, directors, and agents are determined as

though the corporation remained in existence throughout the period of termination.” This

reading of the legislative intent behind a statute so clearly analogous to Code § 13.1-1050.4

bolsters our conclusion that, where a previously cancelled LLC is reinstated, purportedly

liability-incurring actions of the LLC’s agent during cancellation are retrospectively effectuated.

It is thus clear that when, during the cancellation period of FRP, LLC, Foster-Fair bid on

and purchased the property on behalf of the LLC, the subsequent reinstatement rendered her

actions as if they had occurred while the LLC was in existence. See Code § 13.1-1050.4(C).

Accordingly, the circuit court did not err in holding that Code § 13.1-1050.4 applies to the

instant case and the “temporary lapse” of FRP, LLC’s registration did not invalidate

Foster-Fair’s bid on the property.

v. Commonwealth, 61 Va. App. 346, 350 n.3 (2012))); Rule 5A:1(f) (permitting citation of unreported judicial opinions as “informative”). - 11 - 2. Code § 13.1-1050.5

We next consider the circuit court’s rejection of the Agnews’ argument that Code

§ 13.1-1050.5 controls here and that under the statute’s “plain meaning,” FRP, LLC’s

cancellation at the time of the sale invalidated Foster-Fair’s bid on the property. As with the

previous code section, Virginia appellate courts have not previously interpreted the language of

Code § 13.1-1050.5. The plain language of the statute, however, makes clear its inapplicability

to the instant case. As noted above, the statute provides that where an LLC has been cancelled,

that cancellation “shall not take away or impair any remedy available to or against the [LLC] or

its members or managers for any right or claim existing, or any liability incurred, before the

cancellation.” Code § 13.1-1050.5 (emphases added). Further, “[a]ny action or proceeding by

or against the [LLC] may be prosecuted or defended by the [LLC] in its name. The members or

managers shall have power to take limited liability company action or other action as shall be

appropriate to protect any remedy, right, or claim.” Id. (emphases added). From this language,

it is facially clear that Code § 13.1-1050.5 is a remedies statute, which allows cancelled LLCs,

their members, and their managers to litigate suits concerning the LLC’s rights, claims, or

liabilities that predate its cancellation. Contrary to the Agnews’ argument, the “plain meaning”

of the statute does not exclude an LLC or its agent from incurring LLC liabilities after

cancellation, even by bidding on property as Foster-Fair did here.

Our interpretation of this statute is again supported by our Supreme Court’s interpretation

of an analogous statutory provision. Code § 13.1-755 is a portion of the Virginia Stock

Corporation Act that is substantively identical to its analogue statute under the Virginia Limited

Liability Company Act, Code § 13.1-1050.5. In Harris v. T.I., Inc., 243 Va. 63, 68 (1992), our

Supreme Court noted that “[u]nder the common law, once a corporation’s existence is

terminated, its capacity to sue, or to be sued, likewise is terminated . . . . Code § 13.1-755,

- 12 - however, partially changed the common law rule” so that claims and liabilities by, against, or of

the corporation “survive the termination.” This interpretation of the stock corporation analogue

to Code § 13.1-1050.5 supports our conclusion that Code § 13.1-1050.5 is a remedies statute that

merely preserves a cancelled LLC’s ability to “sue, or . . . be sued,” id., and not, as the Agnews

argue, a statute that bars an agent of an LLC from incurring liabilities for the LLC during a

period of cancellation. Indeed, to interpret Code § 13.1-1050.5 as the Agnews suggest—as a

statutory provision that excludes an LLC from incurring liabilities during a temporary period of

cancellation—would render Code § 13.1-1050.4 a nullity. That is, the Agnews’ interpretation

would negate the latter statute’s effect of ensuring that liabilities incurred by an LLC, its

members, managers, or agents during a period of temporary cancellation will have full legal

force and effect after the LLC’s reinstatement. See City of Lynchburg v. English Constr. Co.,

277 Va. 574, 584 (2009) (“It is the duty of the courts to construe statutory enactments so as to

avoid repugnance and conflict between them and, if possible, give force and effect to each . . . .

Statutes should be construed as a whole . . . . No part of an act should be treated as meaningless

unless absolutely necessary.” (citations omitted)); Armstrong Furniture v. Elder, 4 Va. App. 238,

242 (1987) (“[N]o statute should be interpreted in a way which would render another statute

superfluous.”).

Based on the foregoing analysis, the circuit court did not err in rejecting the Agnews’

argument that Code § 13.1-1050.5 controls here and rendered Foster-Fair’s bid on the property

for FRP, LLC “invalid.” And, as noted above, the circuit court did not err in holding that Code

§ 13.1-1050.4 controls in the instant case and that under that statute’s application, the “temporary

lapse” of FRP, LLC’s registration did not invalidate Foster-Fair’s actions. Because the circuit

court’s interpretation and application of these statutes governing LLCs was correct, we affirm the

circuit court’s confirmation of the property’s sale.

- 13 - C. The Amended Motion for Approval of Report and Sale

The Agnews argue that the circuit court erred in granting the commissioner’s amended

motion for approval of report and sale, where that motion “sought an order approving a sale to

Jayne Foster-Fair individually and never sought an order approving a sale to ‘Jayne A.

Foster-Fair for FRP, LLC.’” They maintain that, in filing his amended motion, the commissioner

“clearly sought . . . confirmation of a sale to ‘Jayne Foster-Fair’” and thereby “abandoned a sale

to ‘Jayne Foster Fair for FRP, LLC.’” Relying on Berry v. Klinger, 225 Va. 201 (1983), the

Agnews contend that “a litigant’s pleadings are binding upon him. His opponent is entitled to

rely on the position he takes, and . . . to prepare for trial with the assurance that this position will

not be suddenly changed without notice.” Thus, because “[a] litigant’s pleadings have to mean

something,” the circuit court should have estopped the commissioner from taking the position

that “the real ‘winning bidder’ was ‘Jayne Foster-Fair.’”

Contrary to the Agnews’ argument, the commissioner was not a “litigant” in the instant

case. Rather, it is well-established in Virginia law that a commissioner “is a quasi judicial

officer.” Brown v. Brown, 11 Va. App. 231, 234 (1990) (quoting Mountain Lake Land Co. v.

Blair, 109 Va. 147, 159 (1909)); see also Griffin v. Tomlinson, 155 Va. 150, 153 (1930) (noting

that commissioners in a partition action “are, for the time being, officers of the court”); Code

§ 8.01-607(A) (providing for appointment of commissioners “for the convenient dispatch of the

business of [the] court”); Code § 8.01-609 (authorizing commissioners to “examine, and report

upon, any matters as may be referred to [them] by any court” and to conduct “proceedings”

according to statute and rules of court). Such an officer is “a mere agent of the court in selling

property,” for “[t]he court and not the commissioner is the real seller at a judicial sale and the

commissioner is merely the ministerial agent of the court and the medium through which the

purchaser makes an offer to the court.” French v. Pobst, 203 Va. 704, 709 (1962) (citation

- 14 - omitted); see also French v. Phipps, 171 Va. 133, 139 (1938) (“A special commissioner of a

court to make a sale is a mere instrumentality of the court and exercises only the naked powers

conferred upon him by the court’s decree.”). This quasi-judicial status of the commissioner

renders Berry inapposite, as it concerns the pleadings of litigants. Because the commissioner

was an agent of the circuit court, rather than a litigant before it, we find no merit in the Agnews’

argument.

D. Motion to Set Aside Sale

In their final assignment of error, the Agnews argue that the circuit court erred when it

denied their motion to set aside the judicial sale, “where the [c]ourt’s Second Amended Decree

expressly required payment of the remainder of the purchase price within 21 days of

confirmation [of the sale], and that express condition was disregarded.”

The circuit court’s second amended decree of December 1, 2020 contained the following

provision:

ORDERED that the Property may be sold by the terms of cash or credit bid, with a 10% deposit payable to the Special Commissioner upon a determination of the successful bidder, subject to the subsequent approval by confirmation thereof by the Court with the remainder of the purchase price to be paid to the Special Commissioner within twenty-one (21) days of confirmation of the sale by this Court, and, after the making of the sale the Special Commissioner shall report the sale to the Court for confirmation thereof, and include therewith evidence of receipt of the deposit and/or credit by the successful bidder . . . .

The commissioner sold the property at public auction on March 9, 2021. He then prepared a

Memorandum of Special Commissioner’s Sale and, on April 23, 2021, filed an amended motion

of commissioner for approval and report of sale, with a copy of his previous memorandum

attached. These documents indicated that the successful bidder had deposited 10% of the

purchase price as required by the second amended decree. Following a hearing, the circuit court

- 15 - granted the commissioner’s motion and approved the sale in an opinion and order dated June 30,

2021. An order and decree of sale and confirmation followed on July 22, 2021.

In their November 10, 2021 “Motion to Set Aside Sale and to Dismiss Th[e] Suit,” the

Agnews noted both this procedural history and the provision of the second amended decree

quoted above, and alleged the following:

7. [The commissioner] hid from the Agnews the fact that [the purchaser] failed to pay the remainder of the purchase price within twenty-one (21) days of confirmation of the sale by the Court.

8. On November 9, 2021, in response to an inquiry from counsel for the Agnews, [the commissioner] disclosed that [the purchaser] failed to pay the remainder of the purchase price.

9. The sale is void and must [be] set aside. The Second Amended Decree expressly requires payment of the remainder of the purchase price within 21 days of confirmation.

Following a hearing, the circuit court denied the Agnews’ motion in its February 16,

2022 opinion and order. Relying on Branton v. Jones, 222 Va. 305, 308 (1981), the circuit court

first noted that a judicial sale “cannot be set aside after confirmation ‘except for fraud, mistake,

surprise, or other cause for which equity would give like relief, if the sale had been made by the

parties in interest, instead of by the court.’” Relying on Benet v. Ford, 113 Va. 443, 447 (1912),

it further noted that “‘the grounds relied on for the setting aside of a judicial sale’” must “‘go to

the very substance of the contract, such as fraud, accident, mistake, or misconduct on the part of

the purchaser or other person connected with the sale.’” The circuit court then held that the

Agnews failed to allege such grounds.

“Prior to confirmation, a court can exercise considerable discretion in deciding whether

to confirm a sale.” Branton, 222 Va. at 308. After confirmation, however, “the purchaser at a

judicial sale is as much entitled to the benefit of his purchase as a purchaser in pais, and the sale

in the one case can be set aside only on such grounds as would be sufficient in the other.” Id.

- 16 - (quoting Va. Fire & Marine Ins. Co. et al. v. Cottrell, 85 Va. 857, 861 (1889)). Accordingly,

“after a judicial sale has been confirmed . . . , the court will not set aside the decree of

confirmation ‘except for fraud, mistake, surprise, or other cause for which equity would give

relief, if the sale had been made by the parties in interest, instead of by the court.’” Tr. of Zion

Baptist Church v. Conservators of Est. of Peay, 259 Va. 546, 550 (2000) (quoting Berlin v.

Melhorn, 75 Va. 639, 641 (1881)). In such cases, “the burden is upon the complaining party to

show that he has been injured.” Benet, 113 Va. at 447.

In their “Motion to Set Aside Sale and to Dismiss Th[e] Suit,” the Agnews alleged that

the balance of the purchase price was not paid within 21 days of the sale of the property, as

required by the circuit court’s second amended decree; i.e., they alleged that the purchaser failed

to satisfy a condition of the sale required by the decree. But after confirmation, a decree of

confirmation of a judicial sale may only be set aside on equitable grounds, such as “fraud,

accident, mistake, or misconduct on the part of the purchaser or other person connected with the

sale.” Benet, 113 Va. at 447. In their motion, the Agnews’ only allegation of such equitable

grounds was directed at the conduct of the commissioner, whom they allege engaged in fraud or

misconduct by “hid[ing] from [them] the fact” that the balance of the purchase price was not paid

within the requisite time period. But any such fraud or misconduct by the commissioner was not

itself a violation of the decree’s 21-day provision, much less conduct touching on the “very

substance of the contract,” that is, the terms and conditions of the sale as established by the

decree. Id. Accordingly, the circuit court did not err in holding that the Agnews failed to allege

sufficient grounds to set aside the confirmation of the sale of the property.10

10 The Agnews also argue that “[t]he failure or refusal of [the commissioner] and the alleged purchaser . . . to comply with the Second Amended Decree constitutes intentional misconduct for which the sale can and should be set aside.” But to the extent that the Agnews argue the circuit court erred in denying their motion on this basis, they cannot now expand their

- 17 - The Agnews also argue that the circuit court lacked jurisdiction to transfer ownership and

possession of the property because the remainder of the purchase price was not paid within 21

days of confirmation of the sale. The gravamen of the Agnews’ contention is that the circuit

court’s failure to strictly enforce the 21-day payment term of its second amended decree deprived

it of jurisdiction over the property and sale. We reject this argument for the simple reason that a

circuit court’s failure to enforce its own order in no way deprives it of subject matter jurisdiction

over the underlying matter.

“Jurisdiction . . . is the power to adjudicate a case upon the merits and dispose of it as

justice may require.” Pure Presbyterian Church of Wash. v. Grace of God Presbyterian Church,

296 Va. 42, 49 (2018) (alteration in original) (quoting Shelton v. Sydnor, 126 Va. 625, 629

(1920)). “[S]ubject matter jurisdiction . . . is the authority granted through constitution or statute

to adjudicate a class of cases or controversies.” Id. (quoting Morrison v. Bestler, 239 Va. 166,

169 (1990)). Thus, “[j]urisdiction of the subject matter can only be acquired by virtue of the

Constitution or some statute.” Id. at 49-50 (quoting Humphreys v. Commonwealth, 186 Va. 765,

772 (1947)). “[S]ubject-matter jurisdiction is the paramount consideration in assessing whether

a court has authority to enter judgment, and a judgment will always be void without it. And . . .

the question of subject-matter jurisdiction is a question of law . . . .” Watson v. Commonwealth,

297 Va. 347, 352 (2019).

allegation of equitable misconduct beyond their pleadings before the circuit court, which reached only the commissioner. See Wetlands Am. Trust, Inc. v. White Cloud Nine Ventures, L.P., 291 Va. 153, 174 (2016) (“A litigant’s pleadings are as essential as his proof . . . . Thus, a court is not permitted to enter a decree or judgment order based on facts not alleged or on a right not pleaded and claimed.” (quoting Dabney v. Augusta Mut. Ins. Co., 282 Va. 78, 86 (2011))); Clark v. Commonwealth, 78 Va. App. 726, 767 (2023) (“[T]his Court ‘will not consider an argument on appeal [that] was not presented in the trial court.’” (second alteration in original) (quoting Farnsworth v. Commonwealth, 43 Va. App. 490, 500 (2004))); Rule 5A:18. - 18 - Here, the circuit court was authorized by statute to conduct a judicial sale of the Agnews’

property. See generally Code §§ 8.01-96 to -113 (general provisions for judicial sales); Code

§ 8.01-96 (“In decreeing a sale under any provisions of law, the court may provide for the sale of

property in any part of the Commonwealth, and may direct the sale to be for cash, or on such

credit and terms as it may deem best . . . .”). Indeed, the Agnews do not contest that the circuit

court had such subject matter jurisdiction. Rather, they maintain that the circuit court was

somehow divested of that jurisdiction because it did not strictly enforce the terms of sale in its

second amended decree. But because “subject matter jurisdiction arises from . . . statutory grants

of authority,” any alleged “procedural errors affecting a court’s active jurisdiction do not divest

the court of its subject matter jurisdiction.” Riddick v. Commonwealth, 72 Va. App. 132, 144-45

(2020); cf. Pure Presbyterian Church of Wash., 296 Va. at 49 (defining “active jurisdiction” as a

court’s “power to adjudicate a case upon the merits and dispose of it as justice may require,” and

discussing the constituent elements of active jurisdiction, including subject matter, territorial, and

notice jurisdiction (quoting Farant Inv. Corp. v. Francis, 138 Va. 417, 427-28 (1924))). Even

assuming arguendo that the circuit court erred by not strictly enforcing its own decree, any such

error did not divest the circuit court of its statutory subject matter jurisdiction to conduct the sale.

Thus, we reject the Agnews’ argument that the circuit court lacked subject matter jurisdiction

due to an alleged failure to strictly enforce the terms of its second amended decree.

III. CONCLUSION

For the foregoing reasons, we affirm the circuit court.

Affirmed.

- 19 -