1 VIRGINIA CIVIL PROCEDURE Supplement Professor Robert C. Wood, III SPRING 2009 WASHINGTON AND LEE UNIVERSITY SCHOOL OF LAW LEWIS HALL LEXINGTON, VIRGINIA 24450
2 Supplement - Table of Contents 1 Introduction PAGE B. Courts and Alternatives General District Court Addison v. Salyer... 1 Introduction Chapter 1: Law and Equity New Rule Three A New Deal in Virginia The VADA Journal of Civil Litigation, Vol. XVIII, No A. Claims at Law or in Equity Gasque v. Mooers Advanced Marine Enterprises v. PRC, Inc Dairy Queen, Inc. v. Wood B. Injunctions Boerner v. McCallister C. General District Court Forms and Actions... Addendum Unlawful Entry and Detainer , -130 Detinue , -121 Attachment , -576 Distress Warrant , -235 Debtor Interrogatories , -510 Garnishment , -525 Writ of Fieri Facis , -505 D. Plea of Worker's Compensation Whalen v. Dean Steel Erection Co., Inc Chapter 2: Parties and Claims B. Joinder of Claims and Parties Generally Old Dominion Iron v. Vepco... 46
3 D. Misjoinder Nonjoinder Election of Remedies Necessary Parties Mendenhall v. Cooper Wilkins v. Peninsula K. Joint Tortfeasors Release and Contribution Dickenson v. Tabb Nationwide Mutual Ins. Co. v. Jewel Tea Sullivan v. Robertson Drug Co L. Medical Malpractice Castle v. Lester M. Sovereign Immunity UVA v. Carter O. Suretyship Bd. of Supervisors v. Safeco P. Stockholders, Officers & Directors of Corporations Willard, et al. v. Moneta Building Supply, Inc Q. Stockholder Derivative Actions Simmons v. Miller R. Employers and Employees Gina Chin & Associates v. First Union Bank Peace v. Conway S. Anonymous Plaintiff Section T. County and Local Governing Body Miller v. Highland County U. Declaratory Judgment Miller v. Highland County Chapter 3: Venue and Forum Non Conveniens E. Forum Non Conveniens Virginia Electric Power Company v. Dungee Chapter 4: Service of Process and Personal Jurisdiction H. Long-Arm Statute International Shoe Co. v. State of Washington Hanson v. Denckla Keeton v. Hustler Magazine Shaffer, et al. v. Heitner
4 World-Wide Volkswagen Corp. v. Woodson, et al Chapter 5: Pleading and Motions M. Emotional Torts Womack v. Eldridge Miller v. Johnson Naccash v. Burger Sea-Land v. O'Neal Russo v. White Almy v. Grisham N. Tort or Contract Sensenbrenner v. Rust, Orling & Neale O. Wrongful Discharge Bowman v. State Bank of Keysville Doss v. JAMCO, Inc Mitchem v. Counts Chapter 6: Counterclaims, Cross-claims and Third-Party Practice A. Defendant v. Plaintiff -- Rule 1:4 - Packett v. Herbert Chapter 7: Claim Splitting, Estoppel and Res Judicata Introduction Davis v. Marshall Homes Gary Steel v. Kitchen Graves v. Associated Transport Chapter 8: Limitations of Actions C. 5. Willard v. Moneta Building Supply, Inc Eagles Court Condominium v. Heatilator, Inc Newman v. Walker
5 1 Addison v. Salyer 185 Va. 644, 40 S.E.2d 760 (1946) Hudgins, J., delivered the opinion of the court. On April 17, 1940, J. O. Salyer filed a petition for an attachment before the trial justice of Russell county, in which it was alleged that Marjorie D. Addison and Stanley Addison, the principal defendants, were indebted to him in the sum of $300; that they were removing, or about to remove, out of the State with intent to change their domicile; and that they were assigning and disposing of their estate, or the greater part thereof, with intent to hinder, delay and defraud creditors. Attachments were issued, served upon the defendants and levied on a truck and a stock of merchandise owned by defendants. On April 30, 1940, the trial justice entered a judgment for plaintiff in the sum of $240 and ordered the property seized under the attachment to be sole to satisfy the same. One the same day an appeal was allowed, with Joel Campbell as surety on defendants' appeal bond. On September 3, 1940, the two defendants named in the attachment presented a petition before the circuit court for a writ of prohibition against the trial justice, on the ground that he had no jurisdiction to try the claim asserted against them because it involved title to real estate. No decision was rendered on this petition. On December 10, 1940, a jury was sworn to try the appeal of the attachment. After plaintiff had introduced a part of his evidence, he moved to declare a mistrial and to transfer the case to the equity side. Over the objection of defendants, this motion was sustained, one juror was withdrawn, the others were discharged, and the case was ordered to be transferred to the equity side of this court. Pursuant to this order, plaintiff filed a bill in chancery as an amendment to, or substitute for, the petition for the attachment previously filed before the trial justice, in which bill it was alleged (1) that plaintiff had purchased from defendants 16.1 acres of land for the purchase price of $65 per acre; (2) that the description in the deed was not accurate and did not describe the land actually purchased; and (3) that a correct survey of the tract involved showed that it contained only 12.4 acres, a shortage of 3.7 acres, for which plaintiff was entitled to recover the sum of $ The bill recited the institution of the attachment proceedings before the trial justice, the levy of the attachment on defendants' property, the judgment of the trial justice for plaintiff in the attachment proceedings, the appeal from this judgment by defendants, the execution of a forthcoming bond in the sum of $600 with Joel Campbell as surety, the surrender of the attached property to defendants, and the order of the circuit court transferring the case to the equity side.
6 The prayer of the bill was 'that said defendants (including Joel Campbell) may be required to answer this bill, they now being before said court;' that the deed be reformed and a correct description inserted; and that plaintiff recover of defendants, including Joel Campbell, the sum of $240.50, with the costs of the attachment proceedings. To this bill defendants filed a demurrer, challenging its sufficiency on various grounds, and, without waiving their demurrer, filed an answer and crossbill. The final decree, entered on August 9, 1945, declared that plaintiff in the attachment proceedings was entitled to have his deed reformed in accordance with his prayer. In addition, judgment was entered for him against the defendants, including Joel Campbell, in the sum of $240.50, with interest from the date of the deed and all costs. From this decree this appeal was allowed. Defendants, in their various assignments of error, challenge the jurisdiction of the trial justice to hear and determine the matter in the first instance. The trial justice courts are the successors to the justice of the peace courts which were abolished in The language of the statutes conferring jurisdiction on the trial justices is substantially the same as the language of the statutes that fixed and determined the jurisdiction of the justices of the peace, except that the maximum amount recoverable in certain classes of actions has been increased. Code, 1942 (Michie), secs. 4987f1, (c) and This court has held repeatedly that a justice of the peace has limited jurisdiction, and that, since he derives all his jurisdictional authority from the statute, he 'can only exercise such jurisdiction as is expressly conferred upon him.' See Wall v. American Bank, etc., Co., 159 Va. 871, 167 S.E. 425, and cases cited. The statement is equally applicable to a trial justice. Since 1808 this court has consistently held that a justice of the peace has no jurisdiction in cases involving title to real property. See Miller v. Marshall, 1 Va.Cas. (3 Va.) 158; Warwick v. Mayo, 15 Gratt. (56 Va.) 528, 542; Martin v. Richmond, 108 Va. 765, 62 S.E. 800; 31 Am.Jur ; Anno. 115 A.L.R The question raised in Richmond v. Sutherland, 114 Va. 688, 77 S.E. 470, was whether or not a police justice of the city of Richmond had jurisdiction to try a person charged with encroachment upon the street in violation of a city ordinance where such person claimed title to the land involved. The trial court followed the decision in Martin v. Richmond, supra, and decided that the police justice had no jurisdiction. On appeal it was held that the 1910 amendment (Acts 1910, p. 424) to section 4106 of the Code of 1887 expressly granted to police justices and justices of the peace authority to try such offenses, but the principle applicable to courts of limited jurisdiction was reiterated; namely, that such courts 'can only exercise such jurisdiction as is expressly conferred.' When it appeared from the evidence before the trial justice that the plaintiff in the attachment based his claim upon the loss of acreage in, and an inaccurate 2
7 description of, the tract of land described in his deed, it became the duty of the trial justice to dismiss the case from its docket. On appeal the defendants raised the question before and after the jury were sworn. When the want of jurisdiction of the trial justice appeared to the circuit court, it should have sustained the defendants' motion to dismiss, as 'the action of the justice of the peace in issuing the warrant was null and void, and could not confer jurisdiction upon any court to try the case. ' (Italics supplied.) Wall v. American Bank, etc., Co., supra. 'Any act of a tribunal beyond its jurisdiction is null and void, and of no effect whatever, whether without its territorial jurisdiction or beyond its powers.' Western Union Tel. Co. v. Pettyjohn, 88 Va. 296, 298, 13 S.E An appeal in a civil case from a judgment of a trial justice, as an appeal from a conviction in a criminal case, is tried de novo before the circuit or corporation court. Gravely v. Deeds, post, p. 662,40 S.E.(2d) 175; Copperthite Pie Corp. v. Whitehurst, 157 Va. 480, 162 S.E. 189; Wygal v. Wilder, 117 Va. 896, 86 S.E. 97. The statute (Code, sec. 6038) expressly declares that 'every appeal shall be tried by the court in a summary way, without pleadings in writing, or, if the amount in controversy exceeds twenty dollars, by a jury, if either party requires it. All legal evidence produced by either party shall be heard, whether the same was produced or not before the justice from whose decision the appeal is taken, * * *. ' Code, sec. 6038, provides that every appeal 'shall be determined according to the principles of law and equity.' These mandates of the statutes clearly reveal that the provisions of Code, sec. 6084, dealing with the transfer of cases from one side of the court to the other, have no application to cases appealed from the decision of a trial justice. Another assignment of error is based upon the action of the court in refusing to grant a writ of prohibition against the trial justice for the purpose of prohibiting him from taking further steps in the attachment proceedings. This assignment of error is not well taken for the simple reason that there was nothing more the trial justice could do in the case. An appeal, properly perfected, transfers the entire record to the circuit or corporation court for a retrial as though originally brought therein. The judgment of the trial justice is completely annulled by the appeal and is not thereafter effective for any purpose. Mr. Justice Holt, in Gemmell, Inc. v. Svea Fire, etc., Ins. Co., 166 Va. 95, 98-9, 184 S.E. 457, said: 'A court which hears a case de novo, which disregards the judgment of the court below, which hears evidence anew and new evidence, and which makes final disposition of the case, acts not as a court of appeals but as one exercising original jurisdiction. * * * ''When an appeal is taken by either party, its effect is not only to suspend but to destroy the effect of a judgment of a justice. It makes it as though no judgment had been rendered. The cause is considered as 3
8 still pending, no regard is had to the judgment of the justice, and the rights of the parties are the same as they would be in any other suit pending in the courts of record.' Turner v. Northcut, 9 Mo The next question raised is whether a plaintiff, while his case is pending in the circuit court on appeal from a decision of the trial justice, may amend his pleadings to present a case which, as clearly shown on the face of the pleadings, the trial justice has no jurisdiction to determine. This is an open question in Virginia. In Copperthite Pie Corp. v. Whitehurst, supra, it was held that a civil justice had jurisdiction to hear and determine defendant's right of set-off and that, even if set-off was not pleaded before the civil justice, on appeal it could be pleaded before the circuit or corporation court. The discussion in the case was based on the assumption that the amount of the set-off claimed did not exceed the original jurisdiction of the civil justice. The general rule is that jurisdiction of the circuit or corporation courts to try cases appealed from a decision of a trial justice is derivative and if the trial justice had no jurisdiction to issue the warrant, the appellate court acquired no jurisdiction by an appeal -- that is, the jurisdiction of the appellate court in such matters is the same as that of the court in which the action was originally instituted. * The limitation of power in the trial justice court adheres to the case throughout. 'The jurisdiction of an appellate court on an appeal from a justice of the peace is entirely derivative, and if the justice had no jurisdiction in an action as it was before him the appellant court acquires no jurisdiction by an appeal, and can derive none by amendment.' 31 Am.Jur Stacey Cheese Co. v. Pipkin, 155 N.C. 394, 71 S.E. 442, 37 L.R.A. (N.S.) 606 and note; Davis v. Hagan (Tex. Civ. App.), 255 S.W. 484; Missouri, etc., Ry. Co. v. Hughes, 44 Tex.Civ.App. 436, 98 S.W. 415; Bankers' Mortgage Co. v. Rogers (Tex. Civ. App.), 61 S.W.(2d) 593; Brandon v. Progress Distilling Co., 167 Ala. 365, 52 So. 640; Tracy v. Sumida, 31 Cal.App. 716, 161 P. 503; O'Mara v. Mancourt, 92 Ind.App. 426, 174 N.E. 297; Short v. Morrison, 149 Mo.App. 372, 130 S.W. 78; Bickett v. Garner, 21 Ohio St. 659; Albinola v. Horning, 39 Idaho 515, 227 P. 1054; Rose v. Christinet, 77 Ark. 582, 92 S.W. 866; Saunders v. Scott, 132 Mo.App. 209, 111 S.W In Hamilton v. Canfield, 70 W.Va. 629, 74 S.E. 878, the West Virginia court held that, on an appeal from the judgment of the justice, the jurisdiction of the appellate court is not broader than that of the justice as regards the subject matter of the action. For a more detailed discussion of this question, see Stacy v. Mullins, post, p. 837, 40 S.E.2d 265. There is one exception to this rule, expressly stated in Code, section 5449, which provides that, on appeal from a decision of the trial justice in actions of forceful entry or unlawful detainer, the trial justice may require the defendant 'to give security also for all rent which has accrued upon said premises and which may accrue thereon, but for not more than one year's rent in all, * * *.' A similar 4
9 West Virginia statute was construed in State v. Black, 91 W.Va. 251, 112 S.E It was held that a plaintiff was entitled to damages sustained between the time of the institution of the action of unlawful detainer in the justice's court and the rendition of the final judgment thereon by the circuit court on appeal, although the amount was in excess of the justice's jurisdiction. The decree is reversed and all proceedings are dismissed. Reversed and dismissed. New Rule Three A New Deal in Virginia In 1932, President Roosevelt presented to the American people a new deal that eventually led our country out of a depression and established new opportunities for all American citizens. Our Virginia Supreme Court has likewise given the citizens of our Commonwealth a new deal that will provide a more efficient and effective civil justice system. Effective January 1, 2006, our Court adopted a new Rule Three (and abrogated Rule 2 - equity procedure) that allows both legal and equitable remedies to be sought in a single action. After two centuries of rigid adherence to English Common Law that made a marked distinction between law and equity practice, a litigant no longer must choose between filing an action at law where the court did not have the power to grant equitable relief, and filing a bill in equity where the litigant had to forego a right to a jury trial. See, e.g., Advanced Marine Enterprises v. PRC, Inc., 256 Va. 106, 501 S.E.2d 148 (1998). A litigant who seeks both money damages and an equitable remedy, such as an injunction, specific performance, or rescission, may now join in a single action all claims that arise out of the same transaction or occurrence. Virginia has joined the overwhelming majority of her sister states, and the federal courts, that for many decades have allowed joinder of claims for legal and equitable relief in a single complaint. However, this reform of our civil procedure does not alter the principals or elements of legal or equitable claims in Virginia, and in no way denies, or enlarges, a party s right to a jury trial. Instead, it allows all parties claims and prayers for relief in a complaint, counterclaim, cross-claim, or third party complaint to be heard in one proceeding. It allows depositions and other discovery to be done once, and it facilitates resolutions of all claims between the litigants arising out of the same transaction or occurrence in a single case. When pled properly, our new system will avoid the potential pitfall under our former system of a plea of res judicata where a second action at law was filed after the chancellor had granted equitable relief to the plaintiff in an earlier action. See, e.g., Wright v. Castles, 232 Va. 218, 349 S.E.2d 125 (1986); Worrie v. Boze, 198 Va. 533, 95 S.E.2d 192 (1956). Virginia s new deal serves the public interest by allowing all claims of any nature to be joined, thereby expediting the resolution of litigants claims in a simpler, more efficient system, and thereby eliminating unnecessary delays, costs, and expenses in the administration of the civil justice system. I. What the New System Does 5
10 New Rule Three provides for one form of action in Virginia courts called a civil action. A civil action is now commenced by filing a complaint. There are no more motions for judgment or bills of complaint. This simplification of procedure accomplishes one fundamental goal: it avoids the mistakes and burdens that occurred when parties had to select one side of the court on which to bring a claim, defense, counterclaim or cross-claim. The New Rule eliminates the necessity for Virginia Code Section that allowed a plaintiff who brought the action on the wrong side of the court to have the action transferred to the proper side of the court and to thereafter amend the pleadings so as to obviate the objection that the action was not brought on the right side of the court. The paradigm example of the problems and pitfalls for attorneys and trial judges under the old system was the case of Standardsville Volunteer Fire Department v. Berry, 229, Va. 587, 331 S.E. 2d, 466 (1985). In an action for trespass, the plaintiff filed its claim on the law side of the court seeking only money damages. The defendant, who happened to be a circuit court judge, filed a counterclaim to establish an equitable easement over the land of the plaintiff and moved the trial court to transfer the entire case from law to equity. Over the objection of the plaintiff, the trial court made the transfer, and thereafter, hearing the case ore tenus, ruled that the defendant had established an equitable easement over the plaintiff s property. On appeal the Virginia Supreme Court reversed and held that it was reversible error, not harmless error, for the trial court to have made the transfer from law to equity since it denied the plaintiff its constitutional right to a jury trial. Sadly, the parties had extended time, energy and financial resources futilely for over five years after the dispute had arisen. The parties and their counsel had to regroup and start all over again. This result will never happen again in Virginia. New Rule Three eliminates such an obvious waste of time, money, and judicial resources. A single form of civil action permits a trial judge to follow equitable doctrines for claims at law for money damages and for claims where the parties seek only equitable relief. See Va. Code The New Rule does not restrict a party s right to a jury trial and monetary relief for claims at law for money damages. The litigant no longer will be required to file multiple suits or seek transfer of an action from one side of the court to the other where there are concurrent claims for money damages and an equitable remedy. For example, in Worrie v Boze, supra, the plaintiffs brought a second action at law claiming compensatory and punitive damages, alleging a conspiracy by the defendants to breach an employment contract between the parties. The defendants filed a plea of res judicata arguing that a prior equity suit brought by the plaintiffs for an injunction barred the law action. The equity suit involved the same employment contract between the parties that contained a covenant prohibiting the defendants from competing with the plaintiffs within a certain area for a stated period of time. When the defendants opened a competing business in this restricted area, the plaintiffs had filed a bill of complaint in which they sought only an injunction to restrain the defendants from operating the competing business. The chancellor 6
11 granted the injunction, but awarded no monetary relief since there was no prayer for assessment of damages. The Supreme Court upheld the trial court s rejection of the defendants plea of res judicata. The issues in the equity suit were whether the contract was valid and enforceable, and if so whether it should be enforced. On the other hand, the second action at law for money damages was based upon an alleged tort, i.e., conspiracy to induce breach of contract. While the causes of action in the two suits were closely related, our Court held that they were not identical. Now any practitioner who is faced with competing claims for equitable and legal relief, as experienced by the attorneys in Worrie v. Boze, Wright v. Castles, and Standardsville v. Berry, no longer has to choose one side of the court over the other side, a choice where potentially draconian consequences lurked for a mistaken choice of a forum. Under new Rule Three, the plaintiffs claims for both equitable and legal relief can be joined in a single action. II. What the New System Will Not Do While law and equity procedures are merged, the new system creates only a single procedural system for civil cases and preserves in all respects the distinctions between legal and equitable remedies. For instance, claims for purely equitable relief such as injunctions, specific performance, reformation, and rescission, or for the partition of property do not affect in any way the established equitable principles upon which these remedies are premised; and in such claims there is no constitutional right to a jury trial. The principles underlying a right of action, defensive pleading, including demurrers, a plea of the statute of limitations, joinder of parties, and limitations on a court s exercise of in personam jurisdiction and/or subject matter jurisdiction have not been affected in any manner. The historic rules providing for the right to a jury trial are not altered in any way. New Rule 3:25 contains a new jury demand procedure, but the right to demand a jury trial in an action at law in which a jury is available is preserved. Actions sounding in equity will be heard without a jury. However, Virginia s established practice allowing for a jury trial on a special plea in equity or for an advisory jury on a purely equitable claim is preserved. See (D) and (E). As discussed later, it is contemplated that claims triable to a jury will be heard before the trial court makes any determination on an equitable claim where the claims arise out of the same transaction or occurrence. Virginia still adheres to the concept of notice pleading. Rule 1:4(k) tells attorneys that brevity is enjoyed as the outstanding characteristics of good pleading. The only exceptions to this rule are claims of fraud or conspiracy which require the plaintiff to plead with particularity. See, e.g., Tuscarora v. B.V.A. Credit Corp., 218 Va. 849, 241 S.E.2d 778 (1978). Remember, however, that there can be no recovery unless the theory upon which the party prevails has 7
12 been pled. See, e.g., Ted Lansing Supply v. Royal Aluminum, 221 Va. 1139, 277 S.E.2d 228 (1981). The rules governing joinder of claims are not altered in any way. The single form of action system does not alter the rules permitting joinder of claims or defenses and pleading alternative facts or legal theories that arise out of the same transaction or occurrence. See Rule 1:4(k) and Code and The rules providing for counterclaims, cross-claims and third party complaints have not been altered or abridged in any manner. The defendant may, but is not required to, plead as a counterclaim any cause of action that the defendant may have against the plaintiff, whether or not it grows out any transaction set forth in the complaint. The New Rule has not been changed to require a defendant to file a compulsory counterclaim. However, the practitioner needs to remember that while there is no compulsory counterclaim, the rules of collateral estoppel may have a profound affect in a second action brought by either of the parties after a final judgment in the first suit on issues common to both claims. See e.g., Carter v. Hinkle, 189 Va. 1, 52 S.E.2d 135 (1949). See Rule 3:9. There is no charge with regard to cross-claim (a claim by one defendant against another defendant). Any cross-claim by one defendant against another defendant must grow out of any matter pled at the complaint. A cross-claim that does not arise out of the matter pled in the complaint is subject to a demurrer. Rule 3:10. Third party practice remains essentially the same. Rule 3:13. The defendant as a third-party plaintiff may file and serve a third-party complaint upon a person, not a party to the action, who is or may be liable to the third-part plaintiff, for all or part of the plaintiff s claim against the third-party plaintiff. This procedure is generally used in personal injury actions where the plaintiff has decided to name only one defendant where there may be two or more joint tortfeasors. The named defendant may file a third-party complaint against a second (or third or fourth tortfeasor) for contribution or indemnification. The defendant may file this complaint even though there has been no determination of any liability of the defendant (or third-party plaintiff) to the plaintiff. Va. Code (5). Remember that the plaintiff has the right in a personal injury or property damage action arising out of a motor vehicle accident to have the third party complaint severed and have a separate trial on the original complaint. Va. Code (B). The joinder of parties has not changed. New Rule Three neither expands nor contracts existing provisions for joinder of parties, plaintiff or defendant, under the code or case law. For example, in Fox v Deese, 234, Va. 412, 362 S.E. 2d 699 (1997), the plaintiff filed an eight count action joining contract and tort claims against the City of Richmond and joined as defendants, the City Manager, and three other City employees. The Supreme Court reversed the trial court that had sustained a demurrer for misjoinder of parties and causes of action. The 8
13 Supreme Court held that the plaintiff could join these defendants in the same action, even though these defendants were not jointly and separately liable on all claims in the motion for judgment since all claims arose out of the same transaction or occurrence. See and There is no change regarding the applicable statute of limitations to legal claims or the concept of laches to any equitable claim. Periods of limitations continue to apply to legal claims, and laches will still apply for equitable claims. Any overlap will be handled as it has historically has been dealt. See, e.g., Belcher.v Kirwood, 238 Va. 430, 383 S.E. 2d, 729 (1989). The basic legal principles for default and the entry of a default judgment are not materially altered. Rule 3:19. However, the New Rule adds a new provision that allows a court, prior to entry of a default judgment for good cause shown, to allow the filing of a late responsive pleading. Rule 3:19(b). It also adds a subparagraph (d) that provides during the twenty-one day period after a default judgment, the trial court may, by written order, relieve a defendant of a default judgment after consideration of the extent and cause of the defendant s delay in tendering a responsive pleading. The trial court can consider whether service of process and actual notice of the claim were timely provided to the defendant, and the effect of the delay upon the plaintiff. New Rule Three is not designed to alter the doctrines of res judicata and collateral estoppel, or the requirement of mutuality of estoppel articulated in Virginia cases. See e.g. Norfolk & Western Railroad v. Bailey, 221 Va. 638, 272 S.E. 2d, 217 (1980). However, there is a caveat of which to be aware. While the New Rule does not specifically alter the doctrines of res judicata and collateral estoppel, it certainly eliminates one of the foundations for a plea of res judicata. In Wright v. Castles, supra, the plaintiff filed two successive actions, both of which arose out of the same occurrence, the first on the equity side of the court in which a final decree was entered, and the second on the law side. Rejecting the defendant s plea of res judicata, our Court held that for the purposes of res judicata, four elements must concur: 1) identity of the remedy sought; 2) identity of the causes of action; 3) identity of the parties; and 4) identity of the quality the persons for or against whom the claim is brought. Wright v. Castles, 213 Va. at 222, 349 S.E.2d at 128. Now that a plaintiff may seek both legal and equitable relief in a single action, the ground that there must be an identity of remedy sought is no longer an issue since legal and equitable relief can be claimed in the complaint. Thus, it could be argued that a plaintiff, who previously filed a complaint seeking only an equitable remedy, would later be barred on a plea of res judicata when in a second complaint the plaintiff sought money damage if the two actions arise out of the same transaction or occurrence. The case of Davis v. Marshall Homes, Inc., 265 Va. 159, 576 S.E. 2d, 504 (2003), concerned a plea of res judicata filed by a defendant in a second action for default on a note after the defendant had prevailed in an earlier action for 9
14 fraud. Both of the actions arose out of the same transaction. Our Court held that the test to determine whether claims are part of a single cause of action is whether the same evidence is necessary to prove each claim. Since the same evidence was not required in both cases, the Court overruled the plea of res judicata. The strict application of this test would seem to allow a plaintiff to file an action seeking solely equitable relief, and a second action seeking legal relief since the same evidence would not be necessary to prove each claim. In Marshall, there was strong dissent. There is currently proposed a new rule winding its way through the rulemaking process that would overrule the same evidence test enunciated in the Marshall case.1 Under this proposed rule, a party who makes a claim for relief, legal or equitable, from an identified transaction or occurrence upon which there is a final, unappealable judgment is barred from filing, or making, a subsequent claim, against the same opposing party that arises from the same transaction or occurrence. The plea of res judicata must be sustained by the trial court even though a party argues a new legal theory or right of recovery, and regardless of the legal elements or the evidence upon which any claim in the prior proceeding depended. There are two exceptions in this new rule. Its provisions do not bar a party, or a party s insurer, from prosecuting separate personal injury and property damage claims arising out of the same conduct, and it does not bar a party who 10 1 The Proposed New Rule 1:6 provides: (a) Definition of Cause of Action. A party whose claim for relief arising from identified conduct, a transaction, or an occurrence, is decided on the merits by a final judgment, shall be forever barred from prosecuting any second or subsequent civil action against the same opposing party or parties on any claim or cause of action that arises from that same conduct, transaction or occurrence, whether or not the legal theory or rights asserted in the second or subsequent action were raised in the prior lawsuit, and regardless of the legal elements or the evidence upon which any claims in the prior proceeding depended, or the particular remedies sought. A claim for relief pursuant to this rule includes those set forth in a complaint, counterclaim, cross-claim or third party pleading; (b) Effective Date. This rule shall apply to all Virginia judgments entered in civil actions commenced after July 1, (c) Exceptions. The provisions of this Rule shall not bar a party or a party s insurer from prosecuting separate personal injury and property damage suits arising out of the same conduct, transaction or occurrence, and shall not bar a party who has pursued mechanic s lien remedies pursuant to Virginia Code 43-1 et seq. from prosecuting a subsequent claim against the same or different defendants for relief not recovered in the prior mechanic s lien proceedings, to the extent heretofore permitted by law. (d) Privity. The law of privity as heretofore articulated in case law in the Commonwealth of Virginia is unaffected by this Rule and remains intact. For purposes of this Rule, party or parties shall include all named parties and those in privity.
15 has pursued mechanic s lien remedies pursuant to Code 43.1, et seq. from prosecuting a subsequent claim against the same or different defendants for relief not recovered in the prior mechanic s lien proceeding, to the extent now permitted by law. Finally, the new rule articulated does not affect the existing laws of privity. Party or parties includes all named parties and those in privity. See e.g., Nero v. Ferris, 222 Va. 807, 284 S.E.2d 828 (1981). When the proposed new rule is adopted by the Supreme Court, the doctrine of res judicata will be altered to a significant extent, and existing case law would have little, or no, precedential value. However, under the exception in the proposed new rule, the law as pronounced in Carter v. Hinkle, supra, will not be altered in any manner. The proposed new rule would require a party to join all claims for relief, both legal and equitable, that arise from an identifiable transaction or occurrence. Failure to do so would forever bar a subsequent action arising out of the same transaction or occurrence. Under the new rule, the defendants pleas of res judicata in the cases of Davis v. Marshall Homes, supra, Wright v. Carter, supra, and Worrie v. Boze, supra, would be sustained. The wise practitioner should join all claims that arise from a identified transaction or occurrence, even if the new proposed rule is not adopted by a court. III. Jury Trial Rights in Multi-Claim Actions When parties, whether plaintiff or defendant, present both legal and equitable claims in a single action, the trial court must determine whether or not to present common questions of fact first to a jury before determining whether any party is entitled to equitable relief. This issue was presented to the trial court in Standardsville v. Berry, supra. In reversing the trial court for depriving the plaintiff of its constitutional right to a jury trial, the Supreme Court provided a road map how the case should proceed on remand. If the defendant wished to test his right to an equitable easement over the plaintiff s land before undergoing a jury trial in the trespass case, the defendant was entitled to bring a chancery suit seeking an equitable easement and have the chancery court enjoin the plaintiff s action at law for trespass until the chancery court had made its ruling on the defendant s claim. If the defendant was successful in equity, the plaintiff would be permanently enjoined from interfering with the defendant s easement, and the plaintiff obviously would not be entitled to any damages in the action at law. If the defendant did not prevail in equity, the plaintiff s right to proceed in the action at law would be unimpaired, and the issue of damages would be submitted to a jury. Under New Rule Three, it is anticipated our Court s proffered road map in Standardsville would be reversed 180 degrees. It is reasonable to expect that the Virginia Supreme Court would follow the guidelines set forth in the United States Supreme Court decisions of Beacon Theater, Inc. v. Westover, 359, U.S. 500 (1959) and Dairy Queen, Inc. vs. Wood, 369, U.S. 469 (1962). In Beacon 11
16 Theater, the Supreme Court established the proper federal practice when legal and equitable claims are raised in a single action. It held that the Seventh Amendment Right to a jury trial on legal claims must be preserved by trying the legal claims first, or at least simultaneously with equitable claims, and the jury s finding on any common question of fact must be applied when the court decided the equitable claims. In Dairy Queen, the Supreme Court stated as long as any legal cause is involved, the jury rights it creates control. Daily Queen, 369, U.S. at 473. If our Court, when presented with a case similar in nature to Standardsville v. Berry, supra, follows Beacon Theater and Dairy Queen, common questions of fact must first be tried to a jury since the jury trial right should not be impaired through the prior determination of equitable claims. The jury would determine, upon proper instructions, whether the defendant had trespassed over the plaintiff s land. If so, the plaintiff is entitled to recover money damages, and of course, the defendant would not obtain any equitable relief. Conversely, if the plaintiff did not prove that the defendant had trespassed over its land, then that finding by the jury would be applied by the court in fashioning the equitable remedy requested by the defendant, an equitable easement over the plaintiff s land. IV. Conclusion The New Rule Three affords attorneys, judges and the public a simplified procedural system that fosters the administration of justice in a timely, efficient, and less expensive manner. We are indebted to our Supreme Court for its insight in moving our civil justice system beyond 200 years of Virginia s slavish adherence to the marked distinction between law and equity procedures. Citizens of our Commonwealth now have a civil justice system that is vastly simplified and improved and can resolve citizens complaints and disputes without the hassle of whether the parties are on the right side of the court. 12 Gasque v. Mooers 227 Va. 154, 313 S.E.2d 384 Russell, J. delivered Opinion in this case. This case requires consideration of the rights of a buyer of a defective automobile who seeks the remedy of revocation of acceptance against the seller and the manufacturer under the Uniform Commercial Code (Va. Code ). On January 8, 1980, Patricia E. Gasque and Earl L. Gasque (buyers) filed a suit in equity against Mooers Motor Car Co., Inc. (Mooers) and Fiat Motors of North America, Inc. (Fiat). They alleged that they had purchased a new 1979 Fiat station wagon, manufactured by Fiat, from Mooers on February 21, 1979; that after delivery they discovered numerous defects in the car; that Mooers had made at least five attempts to correct the defects, without success; that on September 19, 1979, the buyers had demanded rescission of the sale and return of the
17 purchase price or replacement of the car; and that the demand had been refused. The bill of complaint sought only cancellation of the sale and return of the purchase price or, alternatively, replacement of the car with a new one of similar model. There was no claim for compensatory damages, although there was a claim for punitive damages and "loan interest, legal interest, costs of this litigation, and an award of attorney's fees," as well as "other and further relief." The court heard evidence ore tenus and, in a written opinion, held that the evidence did not show a substantial impairment of value of the car by reason of the defects and that the buyers had failed to revoke their acceptance within a reasonable time. At trial, the court sustained Fiat's motion to strike the evidence as to it, on the grounds that the remedy of rescission, or revocation of acceptance, was not available against a party who had no contract with the buyer. A decree was entered in favor of both defendants, from which the buyers appeal. We agree with the trial court's rulings. In accordance with established standards of appellate review, we must view the evidence in the light most favorable to the parties prevailing below. The buyers took delivery of a new Fiat from Mooers on February 21, At various subsequent times, they reported to Mooers that they had experienced a water leak, a loose gearshift lever, difficulty shifting into second and third gear, heater malfunction, an inoperative clock and interior light, a loose wire under the dash, blown fuses, a piece missing from a front door, automatic choke problems, difficulty starting, fast idling, difficulty closing the rear door on the driver's side, difficulty opening the rear door on the passenger's side, excessive oil consumption, loud vibrations, and various other noises and rattles. In addition, they claimed that the reclining front seat broke, and that they experienced repeated difficulty with the foot-long plastic extension to the gearshift lever, which pulled loose. The buyers returned the car to Mooers on March 13, March 23, an unspecified date in May, June 21, June 27, July 20, and August 6, 1979, for service. On each occasion, Mooers repaired the items complained of, without charge, although Mooers could find no evidence of some of the problems described by the buyers. Mooers conceded that the car experienced a recurring problem with the gearshift extension and testified that this defect affected three out of seventy cars of this model which it had recently sold. Mooers' service manager testified that the gearshift extension would come off only if used improperly by pulling it upward and that the car was still operable without the extension. The car was in fact driven for thousands of miles while subject to this defect. Although Mooers thought a permanent repair of this problem could be accomplished, the difficulty continued up to the time of trial. The buyers consulted counsel, who, on September 19, 1979, wrote to Mooers and to Fiat demanding "a full refund including interests and expenses for the times that the vehicle was in the shop or, in the alternative, the replacement of said automobile." The buyers continued to drive the Fiat, except when it was left with Mooers for service. When the car was last in Mooers' shop for repairs on August 6, it had 4,543 13
18 miles on the odometer. When buyers' counsel wrote to Mooers on September 19, he stated that the car had been driven 5,400 miles. At the time of the trial on May 21, 1980, the car had been driven over 8,000 miles. The buyers testified that they purchased a used Volkswagen in November 1979, and permanently parked the Fiat, which by then had been driven 8,000 miles, in their driveway. Code provides: Revocation of acceptance in whole or in part. 1. The buyer may revoke his acceptance of a lot or commercial unit whose nonconformity substantially impairs its value to him if he has accepted it a. on the reasonable assumption that its nonconformity would be cured and it has not been seasonably cured; or b. without discovery of such nonconformity if his acceptance was reasonably induced either by the difficulty of discovery before acceptance or by the seller's assurances. 2. Revocation of acceptance must occur within a reasonable time after the buyer discovers or should have discovered the ground for it and before any substantial change in condition of the goods which is not caused by their own defects. It is not effective until the buyer notifies the seller of it. 3. A buyer who so revokes has the same rights and duties with regard to the goods involved as if he had rejected them. Although the U.C.C. "Official Comment" appended to this section makes clear that the buyer is no longer required to elect between rescission and damages for breach, the buyers in this case did so by their pleading. The prayer of the bill is purely for a restoration of the parties to the status quo ante, including such incidental damages as would accomplish that purpose. The prayer for punitive damages is extraneous and ineffectual. The suit is, as it must be to accomplish its purpose, founded upon the contract between Mooers and the buyers. Punitive damages are unavailable independent, willful tort is alleged and proved. Kamlar Corp. v. Haley, 224 Va. 699, 299 S.E.2d 514 (1983). Even if the buyers' bill alleged a tort, which it fails to do, an award of compensatory damages, which are not claimed here, is an indispensable predicate for an award of punitive damages, except in actions for libel and slander. Newspaper Publishing Corp. v. Burke, 216 Va. 800, 805, 224 S.E.2d 132, 136 (1976). Thus, the trial court properly confined its consideration to the question whether the evidence supported the prerequisites for revocation of acceptance under Code : (1) substantial impairment of value to the buyer, and (2) action within a reasonable time and before any substantial change in condition of the goods which is not caused by their own defects Buyers contend that the condition of the car was in breach of implied warranties. Mooers contends that such warranties were expressly excluded by the language of the parties' contract.
19 A buyer's right to revoke acceptance does not arise from every breach of warranty, notwithstanding the availability of damages for the breach; it arises only where the value of the goods to the buyer is substantially impaired. Tiger Motor Co. v. McMurtry, 284 Ala. 283, 224 So.2d 638 (1969). The test of such impairment is not, however, a diminution in value of the goods on the open market, or to the average buyer, but rather a substantial impairment of value to the particular buyer involved. See Champion Ford Sales, Inc. v. Levine, 49 Md. App. 547, 433 A.2d 1218 (1981). Whether substantial impairment of value to the particular buyer exists is an issue to be determined by the trier of fact. See Asciolla v. Manter Oldsmobile- Pontiac, Inc., 117 N.H. 85, 370 A.2d 270 (1977). The buyer must carry the burden of proof on this issue by a preponderance of the evidence. The authorities disagree as to the standard of proof which should apply. The buyers urge us to adopt a subjective test, under which the buyers need only persuade the fact-finder that their "faith has been shaken" in the product. See, e.g., Stamm v. Wilder Travel Trailers, 44 Ill. App.3d 530, 358 N.E.2d 382 (1976), and Zabriskie Chevrolet, Inc. v. Smith, 99 N.J. Super. 441, 240 A.2d 195 (1968). We decline this invitation and hold that the buyer must offer objective evidence showing: (1) that the goods fail to conform to the terms of the contract of sale, and (2) that the nonconformity substantially impairs the value of the goods to the buyer. See Asciolla v. Manter, supra; GNP Commodities, Inc. v. Walsh Heffernan Co., 95 Ill. App.3d 966, 420 N.E.2d 659 (1981). How may this be shown? Undoubtedly, there may be a purchaser of an automobile who wants if for an unusual and special purpose, such as display in a collection of antique vehicles. But the burden would be on the buyer to show such a special need. In the absence of such a showing, the fact-finder is entitled to infer that the goods are needed by the buyer for their customary and ordinary purpose -- simple transportation in the case of an automobile. In the instant case, there was persuasive evidence that the Fiat in question substantially fulfilled that purpose. It had been driven 5,400 miles by the time the buyers sought to revoke acceptance and an additional 2,600 miles thereafter. The trial court applied a standard of "drivability" as the test of whether the car's value to the buyers was substantially impaired. While such a standard would not be of universal application, we cannot say that it was erroneous where the buyers failed to prove any need for the car beyond ordinary transportation. Accordingly, the trial court's finding in this respect was supported by evidence and will not be disturbed on appeal. In deciding whether the remedy of revocation of acceptance is applicable, the fact-finder must resolve additional issues: whether the buyer unreasonably delayed giving notice of revocation, whether the condition of the goods had substantially changed, and whether the buyer had made unjustified use of the goods after giving notice of revocation. As to all these issues, the buyer has the burden of proving by a 15 Because of the view we take of the case, it is unnecessary to decide this question, and we will assume, without deciding, that the warranties were effective.
20 preponderance of the evidence that his conduct was reasonable. The Uniform Commercial Code has substituted a standard of commercial reasonableness for the stricter standards which formerly prevailed, but the guiding principles are clear. Revocation or acceptance must be made promptly, or within a reasonable time after acceptance, and the buyer may not use the goods to a material degree and then attempt to revoke. Reece v. Yeager Ford Sales, Inc., 155 W. Va. 453, 184 S.E.2d 722 (1971). What constitutes a reasonable time depends upon the facts and circumstances of each case. The time for revocation will ordinarily extend beyond the time for giving notice of breach. Lanners v. Whitney, 247 Or. 223, 428 P.2d 398 (1967); Pedrini v. Mid-City Trailer Depot, Inc., 1 Wash. App. 56, 459 P.2d 76 (1969). Where the delay in notification of revocation is brought about because the buyer gave the seller repeated opportunities to correct the defects and the seller procrastinated in accomplishing repairs, the delay is not unreasonable. Seekings v. Jimmy GMC of Tucson, Inc., 130 Ariz. 596, 638 P.2d 210 (1981). But after giving notice of revocation, the buyer holds the goods as bailee for the seller. The buyer cannot continue to use them as his own and still have the benefit of rescission; his continued use becomes wrongful against the seller, unless induced by the seller's instructions or promises. Stephens Industries, Inc. v. American Express Co., 471 S.W.2d 501 (Mo. Ct. App. 1971); Sellman Auto, Inc. v. McCowan, 89 Nev. 353, 513 P.2d 1228 (1973). Exceptions have been made to the rule in mobile home cases, where departure from the home before resolving the litigation would cause undue hardship to the buyer and where the buyer's continued occupancy might be the best means of safeguarding the property for a seller who refuses to take it back. Minsel v. El Rancho Mobile Home Center, Inc., 32 Mich. App. 10, 188 N.W.2d 9 (1971). Cf. Twin Lakes Mfg. Co. v. Coffee, 222 Va. 467, 281 S.E.2d 864 (1981). But this reasoning has no application to the continuing use of an automobile, which ordinarily depreciates in value with every mile it is driven. Applying these principles to the case at bar, the buyers' delay, at least until after August 6, was reasonable in light of the seller's continuing efforts to effect repairs, which were only partially successful. But it is equally clear that the buyer's continued use of the car after giving notice of revocation of acceptance on September 19, during which time they drove it 2,600 miles, was entirely inconsistent, with their positions as a bailee, maintaining custody only to safeguard the car for the seller. Such personal use of what they contended to be the seller's property does not meet the standard of commercial reasonableness, and the trial court correctly so held. The trial court correctly struck the evidence against Fiat. The remedy of revocation of acceptance was the sole relief available to the buyers under their bill of complaint, as noted above. This remedy lies only against a seller of goods, not against a remote manufacturer. This is so because the remedy, where successful, cancels a contract of sale, restores both title to and possession of the goods to the seller, restores the purchase price to the buyer, and as fairly as possible, returns the contracting parties to the status quo ante. The remote manufacturer, having no part in the sale transaction, has no role to play in such a restoration of former positions. 16