Northern Virginia Real Estate, Inc. v. Martins

80 Va. Cir. 478, 2010 Va. Cir. LEXIS 72
CourtFairfax County Circuit Court
DecidedJune 29, 2010
DocketCase No. CL 2007-8717
StatusPublished
Cited by2 cases

This text of 80 Va. Cir. 478 (Northern Virginia Real Estate, Inc. v. Martins) is published on Counsel Stack Legal Research, covering Fairfax County Circuit Court primary law. Counsel Stack provides free access to over 12 million legal documents including statutes, case law, regulations, and constitutions.

Bluebook
Northern Virginia Real Estate, Inc. v. Martins, 80 Va. Cir. 478, 2010 Va. Cir. LEXIS 72 (Va. Super. Ct. 2010).

Opinion

By Judge Jonathan C. Thacher

This matter comes to the Court on Defendants’ Motions for Sanctions. The Court previously found that the actions of Plaintiffs and their counsel, throughout the prosecution of the underlying case, were sanctionable. After considering the pleadings, the evidence, the oral and written arguments of counsel, and the relevant legal authority, the Court finds that the appropriate sanction is the reasonable attorney’s fees and costs incurred by Defendants. The Court also finds that Plaintiffs and their counsel are jointly and severally liable for the sanctions.

Background

Plaintiff Northern Virginia Real Estate, Inc. (“NVRE”) is a real estate broker operating in northern Virginia. Plaintiff Lauren Kivlighan is a real estate agent and the owner of NVRE. Both Plaintiffs were originally represented in this matter by Forrest Walpole.

[479]*479Defendant McEneamey Associates, Inc. (“McEneamey”) is also a real estate broker operating in northern Virginia. Defendant Karen Martins is a real estate agent associated with McEneamey. McEneamey and Ms. Martins are represented in this matter by Sands Anderson, P.C., and by Barbara Beach, who serves as McEneamey’s general counsel. Defendants Donna Gavin and David Gavin are a married couple residing in Virginia. They are represented in this matter by the law firm Brincefield Hartnett, P.C.

Plaintiffs filed a multi-count lawsuit (“the Underlying Action”) arising out of their alleged agreement with the Gavins to sell the couple’s home (“the Property”). At the time of the initial agreement between Plaintiffs and the Gavins, Plaintiffs already had spoken with Osman Alnifaidy, who offered to purchase the Property as a “pocket buyer.” As a result, Plaintiffs expected to capture a full six percent commission on the sale of the Property by representing both the seller and the pocket buyer. The relationship, however, between the Gavins and Plaintiffs turned sour. As a result, the Gavins engaged McEneamey to sell their home to another buyer.

Plaintiffs then filed the Underlying Action, which alleged conspiracy to do harm in business, interference with contract expectancy, and defamation. Defendants filed an Answer, which requested a reply from Plaintiffs, in accordance with Rules 3:11 and l:4(e) of the Rules of the Supreme Court of Virginia, as to a pleading admission. Plaintiffs failed to respond.

The matter came before the Court for a jury trial. As a preliminary matter, the Court granted Defendants’ motion in limine and deemed the Plaintiffs to have admitted the unanswered pleading admission. The admission stated that “[n]either Plaintiff ever had a contract with the owner of the Subject Property, nor did either Plaintiff have a reasonable contractual or business expectancy which could support a claim of tortious interference.”

Despite this rather damaging admission, Plaintiffs insisted on proceeding with a three day jury trial. After the close of Plaintiffs’ evidence on the second day, Defendants moved to strike the evidence. While the motion was pending, Plaintiffs exercised their right to a voluntary nonsuit. The nonsuit was suspended pending Defendants’ motions for sanctions.

The Court later heard evidence and argument as to whether Plaintiffs or Mr. Walpole violated Va. Code § 8.01-271.1 (“Statute”) in prosecuting the Underlying Action. Following that hearing (“Sanctions [480]*480Hearing”), the Court found that Plaintiffs and their counsel violated the Statute. Specifically, the Court found that the Underlying Action was a combination of frivolous claims supported by wild speculation and virulently prosecuted even after any legitimate prospect of success had vanished. Moreover, the Court found that the action was filed out of a vindictive and malevolent desire to injure and intimidate a business competitor. The basis for the Court’s decision to order sanctions and the full background of the underlying lawsuit between the parties is fully discussed in the Court’s letter opinion of March 17, 2009.

While the Court decided that Plaintiffs and Mr. Walpole violated the Statute, the record was insufficient to determine the appropriate size of the sanction. As a result, the Court set a second hearing to establish whether Defendants’ claimed expenses are reasonable and whether they are related to Plaintiffs’ violations of the Statute.

At this hearing, the Defendants submitted bills for their legal fees and costs to the Court. They also called expert witnesses who testified to the reasonableness of the fees they incurred. Mr. Walpole’s counsel called an expert witness who challenged the reasonableness of the fees incurred by Defendants in this matter. Plaintiffs also contended throughout the hearing that they should not be sanctioned at all for the maimer in which the Underlying Action was prosecuted. Instead, Plaintiffs claim that they were merely acting on the advice of counsel and are not in violation of the Statute.

Analysis

A. Sanctions against the Represented Parties

1. Liability of Represented Parties for Violations of the Statute

Essentially, Plaintiffs argue that a party who acts on advice of counsel has a safe haven from sanctions. Furthermore, they contend that holding represented parties liable for sanctions under the Statute would have a chilling effect on the litigation process.

This argument ignores the plain language of the Statute, which states that “[i]f a pleading, motion, or other paper is signed or made in violation of this rule, the court. . . shall impose upon the person who

[481]*481signed the paper or made the motion, a represented party, or both, an appropriate sanction. . . Va. Code Ann. § 8.01-271.1. Lawyers and their clients are both required to act appropriately, ethically, and within the confines of the law when litigating cases in Virginia courts. Even represented parties are expected to be active participants in the litigation process. There is no safe harbor for parties who act improperly, even upon the advice of their lawyers. Here, as in other areas of law, ignorance of the law is not an excuse.

The Court does not contend that the advice of counsel is never relevant to the question of whether the party acted in violation of the Statute. Nothing prohibits a party from waiving the attorney-client privilege to show that their actions were manifestly reasonable and not in violation of the Statute, as indeed Plaintiffs have attempted to do through their witnesses in this matter. The Court, however, finds that Plaintiffs are as culpable as their lawyer on this case.

2. Plaintiffs ’ Violations of the Statute

The Statute requires that:

[E]very pleading, written motion, and other paper of a party represented by an attorney shall be signed by at least one attorney of record in his individual name....

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Cite This Page — Counsel Stack

Bluebook (online)
80 Va. Cir. 478, 2010 Va. Cir. LEXIS 72, Counsel Stack Legal Research, https://law.counselstack.com/opinion/northern-virginia-real-estate-inc-v-martins-vaccfairfax-2010.