We’d like to give a hearty “Hoorah” to Ann Neil Cosby, who won her accolade through her advocacy of governments and private clients in environmental law, and especially because of her influential blog on the subject: VaEnvironmentalLaw.com. We’re proud of her work and accomplishments.

Filing and enforcing a mechanic’s lien can be a strong and effective way to minimize risk of lack of payment for work done on a project. Creditors, including general contractors, subcontractors and materials suppliers, routinely assert liens and file lawsuits to enforce these liens. A creature of statute, and the subject of numerous decisions from the Virginia Supreme Court, mechanic’s liens can be complex and subject to very technical legal requirements. This article will examine some of the issues associated with filing and enforcing a mechanic’s lien.
By statute, all persons providing labor or materials for the construction, removal, repair or improvement of any permanent building or structure annexed to real estate are entitled to a mechanic’s lien. General contractors, subcontractors, and sub-subcontractors fall within the classes of those entitled to file a mechanic’s lien, as are architects and, presumably, engineers. A lien claimant’s recovery, however, may not have priority. For example, although Subcontractor A files his lien first, and then Subcontractor B files, the two subcontractors would take a pro rata share if there were any proceeds to be disbursed. Note, however, that the lien of a subcontractor takes priority over the lien of his general contractor. Other rules apply among lienors of different statuses. Of particular interest is that a mechanic’s lien has priority over a prior deed of trust on the property up to the amount of value of improvements on the property, but is inferior to a prior deed of trust as to the value of the unimproved land.
Careful attention must be paid as to when the lien is filed. By law, a lien claimant must file within 90 days from the last day of the month in which he last performed labor or furnished material. However, the lien may not be filed later than 90 days after the project is completed or the work has otherwise been terminated. This exception will typically have greater effect for later trades on a project. Questions will sometimes arise as to whether performing warranty or punch list work amounts to the last performance on the job for purposes of the 90-day filing period. This question has not been entirely answered by our courts, but the inquiry will focus on whether the work was undertaken in “good faith” or delayed in bad faith as well as how the contractor describes the remaining work.

It is very important to remember that the lien may only include the value of the labor or materials furnished within 150 days from the last day labor was performed prior to the filing of the lien. It can be a fatal defect to the lien if the value of labor or materials claimed includes amounts from more than 150 days before the lien was filed. If the lienor includes claims for this earlier work, the entire lien can be invalidated. There are limited exceptions, and the court has some discretion to reduce the amount of the lien rather than invalidate it in its entirety, but tread very carefully in this area.
Virginia Code §43-5 sets out the form which must be followed for both the memorandum and affidavit for the mechanic’s lien. These forms are also available online. A title search may be well advised to ascertain the name of the owner of record at the time the lien is filed. The lienor should also be careful to describe the type of work performed or materials furnished to distinguish itself from another claimant who did similar work. It is always a good idea to particularize work done and materials furnished. One should also take care to note the title of the person signing the affidavit (for example, president, vice-president), as well as stating that the affiant is also an agent of the lienor.
There are special notice requirements related to one-and two-family residential dwelling units. When a permit designates a mechanics’ lien agent, for example, additional notice procedures are required, including that notice be given to the mechanics’ lien agent within 30 days of first performing labor or providing materials to the project. The contents of the notice are dictated by statute.
Other pitfalls may arise where a contractor wants to assert a lien over multiple units or multiple lots. For example, one old Virginia Supreme Court case held that separate liens must be filed for each parcel of land where the work was performed. In a more recent case, the court held that a mechanic’s lien filed on a parcel where the contractor worked would invalidate the lien in its entirety. In short, keep in mind that a blanket lien should raise a red flag where multiple parcels are involved.

Filing the lien, in and of itself, may not be enough to get a contractor paid. Once again, the Code of Virginia sets forth what must be done to enforce the lien. The lienor is required to file a complaint itemizing the amount he is owed, the amount and character of work done or materials furnished, what was charged, what payments if any were made and the balance due. An affidavit verifying this information must also be filed. The suit must be filed where the property is located or where any owner of the property resides. Typically, claims such as breach of contract are also included in a mechanic’s lien complaint and are advisable in the event that the lien itself is held to be invalid. The timing for the suit is very short. The Code requires that any suit to enforce a mechanic’s lien must be filed within six months from the date that the lien was recorded or within 60 days from the time the building was completed or the work was terminated, whichever occurred last.

It is also critically important to name all necessary parties as defendants in a suit to enforce a mechanic’s lien. In addition to the owner, the law requires that other defendants must include any party with an interest in the property which may be adversely affected by the lienor’s claim. Such parties would include lenders, judgment creditors, trustees under deeds of trust, other mechanic’s lien holders and possibly others.

There are many other issues which can come into play in a mechanic lien setting, including lien waivers, releasing liens, bonding-off liens and the effect of bankruptcy. These matters will be the subject of discussion in a future article. In the meanwhile, should you have any questions, please feel free to contact the author.

You can read more about the details of how the rules passed on the Virginia Lawyer’s Weekly website, where they have a great article about the last minute effort by legislators like Del. G. Manoli Loupassi, R-Richmond, one of the bill’s sponsors, to make it happen.  A complete copy of the new rules is available online, in PDF format. If signed into law by the governor, the rules will go into effect July 1, 2012. Passage of the Virginia Rules of Evidence leaves Massachussetts as the only state without codified evidence rules.

Related articles

• Codified Rules of Virginia Evidence on the Horizon? (sandsandersonriskmanager.com)

The plaintiff bears the burden to prove his or her damages with “reasonable certainty.” Gwaltney v. Reed, 196 Va. 505, 507, 84 S.E.2d 501, 502 (1954). While mathematical precision is not required, such evidence cannot be speculative or wholly based on information gleaned from statistics rather than from facts specific to the individual plaintiff. When the plaintiff is a minor claiming lost future earning capacity as an element of damages, the Virginia Supreme Court has held that the burden of proof becomes nearly insurmountable. However, the Abingdon Division of the Western District of Virginia recently held otherwise, denying the defense’s motion in limine to exclude expert testimony regarding future lost earning capacity, holding that the testimony presented was sufficiently based on data gathered directly from the plaintiff’s own records and family history that it was not considered speculative. Musick v. Dorel Juvenile Group, 2011 U.S. Dist. LEXIS 118354 (W.D. Va. Oct. 13, 2011).

Samantha Musick, five years old, was severely injured during a car accident when she hit her head against the side of her booster seat. Her family filed suit against the manufacturer of the booster seat and intended to introduce expert testimony at trial of Samantha’s loss of earning capacity. The plaintiffs introduced evidence of Samantha’s future earning capacity through an economist and vocal rehabilitation expert. In order to determine her earning capacity, the vocal rehabilitation specialist interviewed the plaintiff’s family members and reviewed her academic and medical records. The expert also assessed the academic history of her family members to determine her expected level of completed education. Based on that information, he determined that Samantha would have the capacity to complete either high school or an associate degree program. This information was compared to the U.S. Census Bureau statistical tables to determine that Samantha’s annual income would result to between $24,000 and $34,000 annually. The economist subsequently took Samantha’s anticipated annual income and calculated her lost earning capacity based on a range of variables including her degree of education and age of retirement, concluding her earning capacity to fall between $576,000 and $1.2 million.

In deciding to allow the evidence, the court distinguished the evidence of damages presented in the case from prior Virginia cases that held the future earning capacity to be too speculative. In Bulala v. Boyd, 239 Va. 218, 389 S.E.2d 670 (1990) the Virginia Supreme Court held that evidence of a child’s future earning capacity was inadmissible because not only was it speculative, but it shifted the burden to the defendant to refute information based on assumptions. Veronica Boyd, through her parents, filed suit against Dr. Bulala for medical malpractice that they claim resulted in birth defects that occurred during child birth. The court instructed the jury that in determining damages for Veronica Boyd, the child, they could consider any loss of future earning capacity. In support of such an instruction, the plaintiffs introduced an economist’s expert opinion regarding the child’s potential earning capacity. The economist looked to the median income for women in metropolitan areas of Virginia and multiplied the number by the normal number of years expected to work based on national averages.

The Court found that the evidence presented did not permit Veronica Boyd to recover for lost future earning capacity. “Estimates of damages based entirely upon statistics and assumptions are too remote and speculative” to establish damages with reasonable certainty. 239 Va. at 233, 389 S.E.2d at 677. While a child is in theory able to claim future lost earnings as an element of his or her damages, the Virginia Supreme Court has “never held that statistical averages alone can form a sufficient evidentiary foundation for such damages.” Id., 389 S.E.2d at 678. In fact, the Supreme Court even found that calculating an infant plaintiff’s damages without any work history or prospect of future earning ability to be “an impossible burden.” Id. This is because the “evidence must relate to facts and circumstances personal to the plaintiff as an individual, not merely to his membership in a statistical class.” Id.

The Court found fault not only with the statistical data, but assumptions made regarding Veronica’s future. The Court stated that in reaching a figure for lost earning capacity, the experts assumed that she would have lived a normal life span, would have been motivated to acquire a reasonable education, would have been motivated to acquire necessary work skills, would have been motivated to work all her life, and would have had the opportunity to do so without hindrance by health, economic, or other factors. The evidence assumes that Veronica would have been spared most of life’s hazards.  Id. There is no ability for the defense to refute any of those assumptions, and they are therefore impermissible.

Judge Jones distinguished the expert testimony presented here from that of Bulala. According to Judge Jones, the plaintiffs’ experts based their opinions not on statistical averages, but rather on data specific to Samantha and her family. However, it would appear that the evidence presented in Musick still assumed that Samantha, too, would be spared life’s hazards. At trial, the jury returned a defense verdict for Dorel Juvenile Group, rendering moot the court’s previous decision to allow evidence of future earning capacity. To date, no other court has relied on Musick to hold that expert testimony regarding future lost earning capacity of a minor is admissible, and the case is not mandatory precedent in Virginia state courts.

The Voice, the house organ of the Defense Research Institute (DRI), the national organization for members of the defense Bar, put out a nice writeup of Chip Delano’s recent work in the U S. District Court for the Eastern District of Virginia in the matter of Auxo Medical, LLC v. Ohio National Life Assurance Corporation. You can read and download the whole article right here 

We’re pleased both for Chip’s results for our client and that he was noticed at the top professional organization for our work.

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Bloomberg Businessweek posted an interesting video featuring Sheryl Sandberg, chief operating officer of Facebook, Inc. talking about how women don’t identify themselves as “ambitious” and don’t seek leadership roles in business organizations. Check it out here.

She analyzes what creates this “ambition gap” that prevents women from becoming CEOs or seeking other leadership roles. Part of it is a perception that powerful and successful women aren’t likeable. Part of it is that women are actively discouraged from being ambitious at an early age. Part of it is that women still take on the lion’s share of work at home, even when they work full-time outside the home as well.

This “ambition gap” is certainly evident in law. Women go to law school in equal numbers as men, but few make it to equity partner at law firms. The women I know are certainly ambitious in law school and sought to be the Editors in Chief of law review and other journals, chief justice of the moot court, and tops in the class rank for GPA. Over time, however, those ambitious female law students gravitate away from becoming equity partners – or they are pushed out.

As a female trial attorney, there is another consideration. Jurors need to perceive a party’s attorney as credible, trustworthy, and who are enthusiastic. (See, for example, this article posted by American Law School about the power of persuasion. On page 19 of the excerpt, page 4 of the posted PDF, the author discusses how jurors are influenced by the likeability of an attorney.) Powerful and effective female trial lawyers have to balance that line between appearing successful, confident, enthusiastic, but still likeable. It can be a challenge for a female attorney to aggressively cross examine a witness, without bankrupting all the rapport and “likeability” built up with jurors earlier in the trial.

Given these considerations, should people hiring a lawyer think about hiring a man who can negotiate more forcefully and cross examine a witness more aggressively without losing likeability? Sandberg addresses this problem with the resounding answer no. She illustrates the point with a great quote by Warren Buffet, who said that one key to his success was that he “was privileged to work during a period when it was only necessary to compete against half the population.” Clearly, allowing women to step aside and surrender leadership roles – in an organization or on a trial team — removes half the talent available to a client or to a firm. For example, I am adept at some of the newest trial technology, because I had the privilege of being a Graduate Research Fellow for the Center for Legal and Court Technology when I was a law student at William and Mary. There I learned technology-assisted trial advocacy from some of the best and I have the ability to understand the intersection between traditional trial tactics and the capabilities of new technologies better than many other attorneys at my firm. That is a knowledge base worth keeping, even if I face some unique challenges as a female trial attorney.

I welcome your ideas on how to balance the need for women to be successful while staying “likeable” and how to keep top female talent in the spotlight at law firms and on litigation teams. How do you strike the balance? How do you think firms and clients can use their talented female attorneys better? Can we cure the “ambition gap” by changing perceptions of successful women?

The new rule from the Department of Transportation prohibits commercial motor vehicle (CMV) drivers from holding, dialing, or reaching for a hand-held mobile phone while driving, except for emergency purposes. This rule applies to buses and trucks on interstate routes.

Commercial motor vehicle (CMV) means a motor vehicle or combination of motor vehicles used in commerce to transport passengers or property if the motor vehicle:

1.  Has a gross combination weight rating or gross combination weight of 11,794 kilograms or more (26,001 pounds or more), whichever is greater, inclusive of a towed unit(s) with a gross vehicle weight rating or gross vehicle weight of more than 4,536 kilograms (10,000 pounds), whichever is greater; or
2.  Has a gross vehicle weight rating or gross vehicle weight of 11,794 or more kilograms (26,001 pounds or more), whichever is greater; or
3.  Is designed to transport 16 or more passengers, including the driver; or
4.  Is of any size and is used in the transportation of hazardous materials as defined in the law. http://www.fmcsa.dot.gov/rules-regulations/administration/fmcsr/fmcsrruletext.aspx?reg=383.5
Hands-free use of cellular phones is allowed. This new regulation does not affect Citizen Band Radio, GPS or fleet management system use.

Drivers can be fined $2,750 per violation and carriers may be fined $11,000.

It is recommended that employers institute new employee guidelines and training in order to be in compliance.

If you should need any assistance with developing a policy, the employment law lawyers at Sands Anderson PC would be pleased to assist.

Anyone who has been a defendant in a lawsuit will tell you that the process is expensive, time consuming and stressful. I have spent the past twenty years defending businesses and individuals in courts throughout Virginia and can attest to the emotional and financial toll which a lawsuit can have on the litigant. This article will focus on what steps a business in general and a builder in particular can take to make this process as painless as possible.

There are some steps a builder can take to defend itself even before a lawsuit is filed. Frequently, a builder will have some inclination that a lawsuit is imminent. If that is the case, one should make sure to preserve all evidence, including putting a hold on all e-mails, correspondence and other documents which may be relevant. Courts can impose heavy sanctions when evidence is discarded, even unintentionally, when a party has reason to know that a claim might be filed. Taking photographs of the project is very important, especially since access to the property will be restricted once the case is in suit.

Once a plaintiff files a lawsuit, Virginia law allows the party to wait for up until one year before the complaint has to be served on the defendant or its registered agent. Once the defendant has been served, it is important to promptly notify your attorney and liability insurance carrier or agent. Notifying the insurance company, even as early as the time when a builder has reason to believe that a suit may be filed, could have the effect of having insurance company hire a lawyer at the insurer’s expense to defend the law suit. An insurer’s requirement to defend and indemnify a builder for a construction defect claim is a subject for another article, but placing the carrier on notice of a law suit is a step which a defendant should take.

After the lawsuit has been served, a defendant has twenty-one days to file responsive pleadings. These pleadings can come in a variety of forms, depending on the nature of the asserted claims and the defendant’s available defenses. Some early responsive pleadings can focus on a discreet issue, such as whether the lawsuit was timely filed, and can allow a defendant an opportunity to dismiss a meritless claim early in the proceedings. In many lawsuits, a general contractor may want to assert claims against third parties not named as defendants, such as a sub-contractor whose work led to the defect at hand. If the lawsuit involves injury to an employee of a subcontractor, a plea asserting that the injured employee’s sole remedy is through workers’ compensation may also be pursued. In a defect case brought by a homeowner against a subcontractor, a valid dispositive defense may be that the lack of a contract between the parties is fatal to the homeowner’s case. The defendant will need to coordinate strategy with its lawyer to make sure that the proper defenses have been asserted in a timely manner.

After responsive pleadings have been filed and preliminary motions argued before the court, the parties will typically launch into the discovery phase whereby each side tries to learn what information the other side has. Our system is designed for the full exchange of documents and information between the parties. Construction lawsuits typically involve the exchange of hundreds or thousands of pages of documents. Many trees have died at the hands of construction lawyers. The parties will also be required to answer under oath written questions, referred to as “interrogatories.” The parties are also allowed to issue subpoenas to non-parties to obtain their records. Documents can also be sought from governmental agencies, such as building inspectors’ offices, through Freedom of Information Act requests.

Retaining the right expert witnesses is a critical step in the pre-trial process. Most construction cases involve engineering, architectural and building code issues on which expert witnesses can offer their opinions. There is no shortage of available experts of varying quality throughout Virginia. It is important not to rush into retaining an expert. Carefully checking the expert’s background, qualifications and ability to testify well in front of a jury are all critical steps.

Once documents have been exchanged, interrogatories answered and each side has become thoroughly familiar with the other side’s position and theories, the next stage in the discovery process involves the taking of depositions of the parties and important witnesses, including experts. At its essence, a deposition is a question and answer session in which the lawyer asks the deponent questions under oath. A court reporter is present, transcribing the testimony. The scope of questions which can be asked in a deposition is much broader than what would be admissible at trial. There is no judge present to rule on objections made during a deposition, and the parties are largely left to self-police their conduct. The vast majority of depositions, while they can certainly be contentious, run smoothly without the need for the lawyers to place a call to a judge for intervention. A deposition, however, can be very long, depending on such things as the complexity and quantity of issues, the amount of money at stake, the reasonableness of the lawyer and the amount of material to cover, among other factors.

By the time the discovery phase has been completed, and usually well before that time, the parties should be in a position to evaluate their strengths and weaknesses. Most cases will settle out of court. However, with the economy as it is, my experience of late has been that builders are frequently financially unable to settle cases which would require that they spend even modest amounts of money.

In the event that the parties are unable to reach a settlement, the case will generally proceed to trial. Under our system, either party may require that a court empanel a jury consisting of seven citizens to decide factual disputes. In my experience, juries have little patience for either plaintiffs or defendants in construction dispute cases and frequently will not be able to understand the subtleties of complex issues which frequently are found in such cases. For these reasons, the parties may well be better off having their case tried by a judge rather than a jury. Invariably, each side will have volumes of exhibits to introduce into evidence. Such exhibits can include documents, photographs, inspection reports and other records. The parties should give a lot of thought to stipulating to the admissibility of non-controversial exhibits in order to speed up the trial and allow it to run more efficiently. Of course, witnesses will also testify at the trial. Assuming the judge does not dismiss the case for one reason or another during the trial, the case would then be submitted to the court or jury for its consideration of the law and evidence after the lawyers have completed their closing arguments.

There is no question that law suits are expensive, time consuming and stressful for all. Knowing the process and having good communication with counsel can, however, help make the process more bearable.

In fact, this Veterans Day, the Virginia Bar Association is really working to get the word out and raise money and sign up pro bono volunteers to meet the needs of Veterans in Virginia. Please visit their website to learn more: www.vba.org/veterans.

Sands Anderson is also supporting the effort this year by raising money to help the Helping Military Veterans through Higher Education (“HMVHE”) program, a consortium of Virginia’s colleges and universities that use the resources of their graduate programs to assist veterans with their legal, medical, psychiatric, and veterans benefits needs.

I am lucky to work with many veterans who have used their military service in their law practices. Al Orgain and John Butler are both former military aviators who use that experience in their aviation practice. Doug Winegardner uses his experience as a Navy JAG not only as a litigator, but to develop a maritime practice. (Sadly, he says it is almost nothing like this: 

Good thing he actually was in the Navy and not just a school play!) Army Captain Stacey-Rae Simcox has also been a mentor and inspiration to me throughout law school and my law practice.

So what are your stories? How have veterans inspired you? Please leave a comment if you are participating in any Veterans Day activities, even if it is just a $10 donation to help fund the clinics around Virginia to give back to those who inspire us every day.

Legal Ethics Opinion 1858 (LEO 1858), issued July 27, 2011, is of particular interest to all parties, especially with the introduction of the SCHIP Extension Act of 2007, which requires certain entities, including liability carriers, to report certain payments made to plaintiffs to the Center for Medicare and Medicaid Services (CMS). The goal of this legislation is to protect Medicare’s interest as a secondary payer. Because there are penalties for any party who fails to protect Medicare’s interests, plaintiffs and defendants alike are concerned with ensuring that third party liens are satisfied at the time of settlement. However, practically speaking, the attorneys involved do not always know what liens exist, and must rely on the lay parties for that information. It is no surprise, then, that both attorneys and insurers have an interest in protecting themselves from incurring a penalty from CMS to the extent a third party claim exists of which they are unaware.

LEO 1885 examines the issue against the backdrop of the Virginia Rules of Professional Conduct, noting that a plaintiff’s attorney would be prohibited from agreeing to indemnify the defendant, as Rule 1.8(e) prohibits a lawyer from providing financial assistance to his client in connection with pending or contemplated litigation (with a few exceptions not applicable here). Also, such an indemnification agreement would violate ethics Rule 1.7(a), since it presents a potential conflict of interest between the lawyer and the client, under the idea that the settlement can only go forward if the indemnification clause is included (making plaintiff’s counsel personally responsible for any third party liens), the attorney may be less likely to settle the case despite the plaintiff’s wishes.

LEO 1885 also discusses the defendant’s attorney’s ethical obligations with regard to such an indemnification clause, and concludes that by insisting that the plaintiff’s attorney agree to this provision in the settlement agreement, the defense attorney is inducing the plaintiff’s attorney to act unethically, which is itself a violation of Rule 8.4(a).

The LEO only discusses the obligations of attorneys under the Virginia Rules of Professional Conduct. There is nothing to prevent a plaintiff (versus his counsel) from personally indemnifying a defense attorney or a carrier from liability for any outstanding third party claims.

Colleen Gentile authored this article and is a member of the firm’s Healthcare and Business and Professional Litigation groups. Her practice is focused primarily on medical malpractice defense, which includes the defense of hospitals, doctors, nurses, and other health care providers in professional liability cases

What do you think? Is letting non-parties gamble on the outcome of litigation an innovative way to fuel the expensive American justice system, or another sign of a system that has gotten too far from the concept of justice?

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This encouraging news certainly brightened my day as a practicing Virginia litigator: 

Virginia Lawyer’s Weekly has posted an article indicating movement to codify Virginia Rules of Evidence. 

Virginia has long considered codification of its rules of evidence, but previously, the proposed rules never made it past Virginia’s Supreme Court. As discussed in the Virginia Lawyer’s Weekly article, codified rules would make it far easier to argue objections to evidence in real time during a trial or plea in bar (link goes to a case explaining Virginia’s plea in bar). Plus, key evidentiary considerations, such as whether a piece of favorable evidence will be admissible and why, will rely more on codified rules and less on hours of expensive legal research to find just the right case, allowing parties more certainty and less expense as they evaluate cases set to go trial. 

This news definitely will give me something to look forward to in the 2012 legislative session of Virginia’s General Assembly.

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Amen to Ted Tjaden for writing this article about why “and/or” should never be used in legal writing. 

Although I know that “and/or” has its place – it certainly is economical – that place is not in well-crafted discovery requests. Too often I see it when the drafter of the document simply failed to really think about what he was saying and making a commitment. For some attorneys, use of “and/or” is nearly a reflex, born of the philosophy that “if ‘and’ is good, ‘and/or’ is better!” Yet, in nearly every sentence in which “and/or” appears, the sentence would be clearer and easier to read if the writer simply committed to using one or the other. In crafting discovery that is genuinely attempting to elicit a cogent response from the opposing party, clarity is vital. It helps the other party know exactly what the writer is asking for, and it will help the court find the request clear and reasonable if the other party is non-responsive in the answer.

Use of “and/or” also seems uncertain, as if the writer was afraid that if he asked for “any document or picture that supports the damages in this case” instead of “any document and/or picture that supports the damages” opposing counsel would clap her hands in glee, because she only had to produce the documents OR the pictures, not both, in response. Of course, this fear is utterly unfounded. The request for production that asks for “any document or picture” clearly also asks for the production of both, if available. Woe to any attorney that attempts to skirt the discovery rules by arguing otherwise.

Eliminating “and/or” eliminates the impression that the writer is lazy or uncertain. It shows that the writer really thought about what he wanted, rather than copying from a form book. It suggests confidence and precision. It is also easier to read, which should be the goal of most legal writing, particularly in discovery, when the objective of the request is to obtain a useful answer.

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As a lawyer representing homebuilders and general contractors, I am sometimes asked to assist them in responding to complaints filed against them by dissatisfied homeowners with the Department of Professional and Occupational Regulation (“DPOR”). For builders, these complaints can be stressful, time-consuming, expensive and potentially detrimental to their licenses. Should you face a complaint, you should keep a few principles in mind.
DPOR regards its mission as, among other things, protecting the health, safety and welfare of the public by licensing qualified businesses and enforcing standards of professional conduct. Part of DPOR’s job is to administer and investigate consumer complaints filed against businesses licensed by DPOR. The process begins when a consumer files a complaint. For our purposes, let’s assume the consumer is an individual who has contracted with a builder for a new home. Once DPOR receives the complaint, its first step is to determine whether it is authorized to process the complaint. Assuming DPOR has jurisdiction, it will notify the builder of the complaint and request a written response, normally within a short period of time. In my experience, DPOR is generally willing to extend the time for responding.
Once the builder has responded, DPOR will typically investigate further. Often, if the circumstances so justify, the DPOR investigator will interview the homeowner, builder and other relevant witnesses. Such witnesses may include subcontractors and building inspectors. Frequently, DPOR will request documents from the parties. It is important to keep in mind that the file compiled by the DPOR investigator will likely be subject to disclosure under the Freedom of Information Act. As a result, information which the parties share with the investigator will typically not enjoy any anonymity.
After its investigation, DPOR will decide whether or not a violation of a law or board regulation may have occurred. In the event that DPOR concludes that a violation did occur, the investigator will prepare a report of findings setting forth the facts in support of its conclusion that violations have occurred. If such findings are found, the next step involves the disciplinary process. Generally, DPOR will present the builder with a consent offer. The consent offer will usually include one or more forms of punishment. Disciplinary action can include a requirement that the builder undertake remedial education. A monetary fine may be imposed. In some circumstances, the builder’s license can be suspended or revoked.
A builder facing a consent offer has some choices. The builder can accept the offer and the punishment which it entails. A builder needs to be careful in doing so because such could be construed as an admission of guilt. If a civil lawsuit is later filed by the homeowner, such an admission could be a real disadvantage to the builder. Another option which the builder has is to propose a counter-offer. In doing so, the builder may want to suggest a lower monetary fine and state that it is not in any way admitting guilt or liability. The builder also has the option of rejecting the consent offer outright. If the builder does so, the matter will move on to the Board for a hearing.
If a builder has concerns during construction that the homeowner is not happy with the project and may be contemplating a lawsuit or DPOR complaint, it is important for the builder to properly document its files. Doing so could include taking extensive photographs of the construction, ensuring that pertinent e-mails are saved and writing letters to the homeowner. Keep in mind that a builder’s access to the homeowner’s property may be severely limited after the builder ends his involvement with the construction.
It is also important to be forthcoming and responsive to the DPOR investigator and his/her requests for information. Remember, the investigator is at the front line of making decisions on the complaint which could have serious implications for your business. Keep in mind also, because the investigator’s file will likely be discoverable in any civil lawsuit, that the builder’s statements are clearly thought out and well organized. What the builder says during the DPOR investigation could come back to haunt him during a later civil lawsuit.
DPOR has a helpful website which does a good job of explaining the complaint process. The site can be found a thttp://www.dpor.virginia.gov/dporweb/dpormainwelcome.cfm . Feel free to contact Henry Spalding should you have any questions about this article.

We’re pleased both for Chip’s results for our client and that he was noticed at the top professional organization for our work.

Jayne was recognized for, among other things, her work in the Metropolitan Richmond Women’s Bar Association (MRWBA) and Big Brothers Big Sisters of Central Virginia (BBBS).

In the MRWBA, Pemberton quickly rose through the ranks to the presidency this year. Under her leadership, MRWBA has adopted the Peter Paul Development Center in Church Hill as a public service project, raising money, sponsoring a family at Christmas, and organizing parties at Christmas and in the spring for the children, attended by MRWBA members.

At BBBS, Pemberton has been in lead positions for the Board during the hiring and installation of a new Executive Director. She has mentored one young lady through her senior year in high school and graduation from the BBBS program, and has started mentoring a second “little sister” in January of this year. In 2007, she was awarded the prestigious Big Sister of the Year Award for her years of service to BBBS. Recently, Jayne has been working to garner the support of BBBS by MRWBA, marrying two of her passions within and without the practice of law.

Pemberton joined Sands Anderson in 2005 and focuses her legal practice on defense of companies and individuals in insurance litigation, and on insurance coverage issues. She earned Bachelors and Masters of Arts degrees at Baylor University and her law degree at the University of Richmond School of Law.

Now in its third year, the Virginia Lawyers Media awards program recognizes the outstanding efforts of women in the commonwealth in all fields, including law, business, health care, education and the arts. The honors are given to individuals who are making notable contributions to their chosen professions, their communities and society at large, according to publisher Paul Fletcher. The entire class of 2011 recipients was covered in a special publication inserted in the May 9 edition of Virginia Lawyers Weekly.

Regardless of how carefully plaintiff’s counsel may attempt to disguise claims for severance in state law clothing, employers should remember that claims of entitlement to severance benefits by former employees under a plan established by the employer for the purpose of providing severance to employees are frequently ripe for dismissal as being preempted in their entirety by the Employee Retirement Income Security Act of 1974, 29 U.S. § 1001, et seq., (“ERISA”), as illustrated by a recent decision from the U. S. District Court Western District of Virginia.

In Woodruff v. Monumental Life Ins. Co., 2011 U.S. Dist. LEXIS 8250 (W.D. Va. 2011), a long time employee who retired from his job with an insurance company sued alleging that his former employer had withheld a severance package from him. The plaintiff filed suit in state court, making state law claims of breach of contract and quantum meruit. Monumental removed the case to federal court and moved to dismiss the action for failure to state a claim upon which relief can be granted. The District Court ruled that the plaintiff’s action was preempted by the ERISA, but granted plaintiff leave to file an Amended Complaint under that federal statute.

After plaintiff filed his Amended Complaint alleging violations of ERISA, a state statute, breach of contract and quantum meruit, the District Court again held that each of plaintiff’s state law claims seeking severance was preempted by ERISA and must be dismissed.

With respect to plaintiff’s allegations attempting to make a claim under ERISA, the District Court ruled that in his Amended Complaint plaintiff had still failed to adequately allege a right to recovery under an ERISA plan, citing plaintiff’s failure to allege that he was even covered by such a plan much less the terms of that ERISA plan. Since the plaintiff had pled only a conclusory allegation that he was entitled to severance, the District Court granted Monumental’s Motion to Dismiss and dismissed each of plaintiff’s claims without prejudice.

As we move into 2011, we thought it would be helpful to reflect on 2010 and highlight some of the litigation activity of the risk management attorneys at Sands Anderson. 

January

David Hearn saved the client the burden and expense of costly products liability litigation when he successfully argued a plea in bar after his client was added as a defendant after the statute of limitations had expired.
Chip Delano proved the old adage “cheaters never win” after successfully arguing that a woman was not entitled to her husband’s $200,000 life insurance policy when she canceled it before he died, but sued the insurance company for reinstatement after his death.
Will Watkins obtained a defense verdict in a construction and products liability case before a jury in Covington, Virginia.
Jayne Pemberton had a significant victory in a recent premises liability case in which she won a defense verdict after a one day trial.
February

Chip Delano wrote $162,000 brief when he a won another significant victory against claimants who made material misrepresentations when applying for a life insurance policy. Upon receiving Chip’s brief in support of his motion for summary judgment to dismiss the family’s claim against the insurance company, the claimants dismissed their $162,000 claim with prejudice rather than attempt to develop an opposition to Chip’s brief.
David Hearn won a defense verdict in a trucking case tried in the Roanoke division of the Western District Federal Court, sparing his client from the Plaintiff’s claim of $750,000 in damages with $100,000 in medical expenses.
Jayne Pemberton settled two multi-million dollar cases days just weeks before the trials for a small fraction of the amount sued for, which was a significant savings to her client.

March

Terrence Graves and Drew Wilson successfully defended a high-value brain injury case in which the plaintiff originally sued for $68 million in compensatory damages after a fall down a outside flight of stairs, allegedly because of a flyer left on the landing by the management of the apartment complex. After a strong defense on liability and damages, including assertions that her deficits were due to other factors, such as age and pre-existing health problems, they were able to settle the case for just .02% of the initial ad damnum.

April-May

Chip Delano won a significant victory for his client recently in the Eastern District of Virginia when the court accepted his argument for summary judgment against a plaintiff who claimed permanent disability benefits that should have been covered by his wife’s insurance policy were denied. First, Chip successfully convinced the judge that the plan changed the standard of review that should be used by the court and then proved that the insured was not completely paralyzed in his leg as the plan required to pay the benefit.
Terrence Graves and Drew Wilson won a defense verdict when defending a tractor-trailer driver sued by a driver of a car and his wife after the tractor-trailer was struck by a car driven by a driver who fell asleep. The sleepy driver’s car caused the tractor-trailer to swerve out of control, causing the driver to hit his head and lose consciousness. Thus, when the tractor-trailer hit the plaintiffs’ vehicle, it was not through any negligence on the part of the trucker.
June

David Hearn won a significant victory by settling a maritime products liability case pending in federal court for only defense costs. David torpedoed the plaintiff’s case by finding a “smoking gun” document that clearly fixed liability for the plaintiff’s sunken boat on a third party.
Justin Ward’srecent win was written up in Virginia Lawyers Weekly when he successfully argued in Stanley, Adm’r v. Star Transport Inc.. that Iqbal applies to state law claims filed in federal cases, which lead to the court’s dismissal of the plaintiff’s claim for reckless acts, negligent hiring and supervision, and punitive damages. The opinion agreeing with Justin’s argument was featured in the statewide publication in the Daily Alert for May 28, 2010.
Doug Winegardner won a General District Court case recently when the plaintiff filed suit to recover defense costs in an underlying suit brought in federal court. Doug won at trial after proving that the damages claimed did not meet the policy definitions of an “advertising injury,” when the basis for the plaintiff’s claim was a breach of warranty action arising out of statements made in advertising about a residential subdivision.

July

Erin McNeill successfully presented a Special Plea in Bar on the issue of respondeat superior to Judge C. N. Jenkins of the Richmond Circuit Court July 19, 2010. The claims were for intentional torts allegedly made by private security forces. Erin represented the property owner and property management company and argued that only the security company had respondeat superior liability for the acts of the guards. We presented two witnesses in support, after convincing the judge that he could sit as fact-finder on a plea in bar and that the parties were not bound only to the pleadings. The Court sustained the Plea and dismissed both of Sands Anderson’s clients from the case with prejudice.
Drew Wilson was vindicated recently, by the apprehension of one of Chip Delano client’s insureds in a case that is unusual even by Risk Management standards. Drew successfully argued before a court in North Carolina that his client, a life insurance company, should not be obligated to pay on the policy, although the insured had been missing for over the seven year period required to create a presumption of death. Drew was able to overcome the presumption by showing that the insured was alive, but in hiding as a fugitive from justice – the insured was even featured on America’s Most Wanted! When the insured was apprehended in Florida, it was a satisfying resolution to the exceptional case.

August

Chip Delano held on to an earlier win last month after the trial court in the Eastern District court of Alexandria upheld their grant of summary judgment in favor of Chip’s client. The original Complaint was filed in 2003 and the plaintiff has appealed it to the Fourth Circuit twice – obtaining a remand each time. Chip’s continued zealous advocacy cemented his earlier victory and prevented the plaintiff from successfully overturning the grant of summary judgment.

September

Mike Charnoff and Doug Winegardner won a declaratory judgment action in the U.S. District Court in Lynchburg this month when the court declared after a one day trial that Doug’s client, an insurance company, was not liable for a claim brought by a landowner against the client’s insured land developer. Doug won on the argument that the developer was aware of the landowner’s pollution allegation before the effective date on his insurance policy.
Once again Justin Ward was featured in the Virginia Lawyers Weekly as the Top Opinion in their daily e-newsletter for his big win in getting a wrongful death claim dismissed that was predicated on a claim of negligent hiring. The plaintiff sued the tractor-trailer driver’s employer, claiming that they were liable for negligent hiring because the driver was fired from a previous employer for a safety violation and suspended driver’s license and because he had a prior speeding violation. The U.S. District Court in Abingdon disagreed and dismissed the claim.

In the suit, the mother alleges that the school principal, the two assistant principals, the school counselor, and the school resource officer failed their duty to protect her son while he was in their custody or under their supervision at Grafton High. The school resource officer was dismissed on demurrer, with the court holding that a school resource officer serves a peacekeeping function at the school, not one intended to supervise the students. The attorney for the defendants argued that school administrators did not have a duty to prevent a suicide that occurred at home, after the child left their custody. There was also a question whether the school administrators could have foreseen the student’s suicide based on the information available to them. The court held that the plaintiff pled enough for the case to move forward past the initial pleadings, to determine what the administrators knew about the bullying suffered by the student while he was in their care and what they could have done or should have done to protect him.

The theory of the case is not as novel as it may sound at first. The U.S. Supreme Court has dealt with a related issue in the case Davis v. Monroe County Board of Education, 526 U.S. 629 (1999). In Davis a mother brought a claim against the school board for not preventing the harassment of her daughter by a male student. She based her claim on Title IX of the Education Amendments of 1972, which guarantees equal access to educational benefits by students, regardless of the sex of the student. Because the male student sexually harassed the plaintiff’s daughter, the Court held that a school may be liable if a school is deliberately indifferent to student-on-student harassment that is “so severe, pervasive, and objectively offensive that it effectively bars the victim’s access to an educational opportunity or benefit.”

Although Davis imposes a duty on school administrators to stop gender-based sexual harassment bullying, Title IX does not offer protection based on sexual orientation or other traits that might make a student the target of bullying – anything from socioeconomic status to red hair can single out a student for pervasive harassment that bars them from educational access without triggering Title IX’s protections. If Alise Williams prevails in her wrongful death suit against Grafton High School administrators, she may create a common law protection similar to Title IX’s protection against sexual harassment.

As a defense attorney, I wonder if this type of liability really will make our schools safer for male victims of bullying. (Interestingly, the recently publicized deaths of victims of bullying due to suicide were all male.) It may make school officials less likely to dismiss a student’s complaint with a shrug and a “boys will be boys” mentality. On the other hand, how much power to school administrators really have to stop bullies from harassment that extends to facebook messages, twitter posts, and bus stop assaults? When a student is so depressed from bullying that he takes his own life, that seems to be a problem that is better addressed through parental involvement to seek mental health counseling for their child to help them withstand the psychological effects of bullying and live until their son can make his own “happy ending” like the one shared by the couple in the “It Gets Better” video, rather than school administrators who can at best offer physical security for students in their care, but not the self-confidence and counseling needed to survive the psychological effects of bullying. At the same time, if school administrators are aware of bullying but don’t provide that sense of physical safety and don’t partner with parents to alert them that their child may need counseling, maybe they should have some liability for their inaction.

For example, the recent suicide of Rutger’s student Tyler Clementi seemed to have been triggered by his roommate posting messages and video links to a Twitter feed revealing the teenager was gay. That kind of bullying is far beyond the ability of school administrators to regulate or control. Although Clementi and his roommate were college students and the wrongful death case involves the suicide of a persecuted high school student, Clementi’s death highlights how hard it is for parents and school officials to protect kids from cyber-bullying, which can be just as psychologically damaging as physical threats.

I would be interested to hear your thoughts on how effective the civil litigation system is to prevent bullying. Should we turn up the heat on school administrators to protect younger students from bullying by imposing civil liability for suicides that result from a student’s harassment at school or is this the wrong vehicle for finding ways to increase protections to students harassed by other students in ways that are outside the protections of Title IX? Do school officials have a duty to keep kids physically safe from bullies, but leave kids like Clementi unprotected from cyber bullies? These are questions worth asking as the legal system works to address the growing problem of bullying, the pervasiveness of cyberspace that allows bullies to reach kids even at home, and the devastating effects.