Long v. Rockingham Mutual Insurance

By Judge John J. McGrath, Jr. The issue addressed in this Opinion and Order is whether the defendant is entitled to sanctions pursuant to Virginia Code §8.01-271.1 against die plaintiffs' attorney for having filed a frivolous lawsuit which was not warranted by existing law or a good faith argument for the extension, modification, or reversal of existing law. The plaintiffs, acting through their attorney, filed a Motion tor Judgment on My 30,1997, alleging that the defendant insurance company had breached a contract of insurance, which was attached to toe Motion for Judgment as an exhibit and incorporated therein. The gravamen of toe plaintiffs' action is stated in three paragraphs of toe Motion for Judgment which read as follows: 2. On or about November 6,1995, Sue Long noticed that toeir [sic] were damages due to unlmown settling of toe structure of toe home covered by toe policy. This damage continued to worsen up until the present. 3. There is no exclusion of this type of damages included in toe Homeowner's policy. 4. Thus toe damages to toe house are covered by said policy. [450] The defendant immediately filed a Demurrer and a Motion for Sanctions. In the Demurrer, fee defendant pointed to fee Section I: Perils Insured Against provision of fee polity, which provides, in pertinent part: We insure against risk of direct loss to property described incoverages A and B only if feat loss is a physical loss to property; however, we do not insure loss: (2) caused by ... (f)(6) settling, cracking, shrinking, bulging, or expansion of pavements, patios, foundations, walls, floors, roofs, or ceilings.... Oral argument was scheduled on bofe fee defendant’s Demurrer and also fee defendant's Motion for Sanctions. At fee hearing on fee Demurrer, fee plaintiffs’ counsel’s justification and explanation for having filed fee Motion for Judgment appeared to consist of fee following feree propositions: (1) His clients have suffered serious damage because of fee collapse of all or a portion of their home. (2) Because the plaintiffs’ house has collapsed, someone should be liable. (3) Insurance companies draft their policies so that they are never liable for anything. Plaintiffs" counsel offered no cogent argument as to how or why there was an interpretation of fee policy which would, in any way, lead a reasonable attorney to conclude that there was a valid cause of action against the insurance company under these circumstances. No attempt was made to show precedent concerning fee interpretation of other insurance policies by fee courts which would lend credence to the possibility feat a cause of action might exist hero. Indeed there was not even an argument made that fee ¡mess of tiie statute of limitations or some other pressing exigency required fee filing of a Motion for Judgment before thorough research of fee factual and legal background of the Motion for Judgment could be completed. Under the circumstances of this case and fee Court’s reading of Virginia Code § 8.01-271.1, it is clear feat, if fee Court finds that this statutory provision has been violated by an attorney, the Court is required to impose sonto type of sanction. The sanction itself, of course, is in fee sound discretion of the trial court It is clear under Virginia law that at least Subsections (i) and (ii) of feds Code Section are to be given an objective interpretation in determining whether or not fee pleading was reasonable and whether it was “warranted by existing law.” See e.g., Tullidge v. Board of Supervisors of Augusta County, 239 Va. 611 (1990). This principle is further expanded upon by fee Virginia [451] Supreme Court in Oxenham v. Johnson, 241 Va. 281 (1991), where the Court stated: [t]he duty of “reasonable inquiry” arises each time a lawyer files a “pleading, motion, or other paper* or makes “an ora! motion.” If [the plaintiff had filed any paper or made any motion in die case after he knew, or reasonably should have known, that he could not create a factual issue of [the defendant's] involvement and malice, the court would have been justified in imposing a sanction upon him. See also W. Hamilton Bryson, “Motions for Sanctions,” 30 University of Richmond Law Review 1509 (1996). Under the circumstances of this case and particularly in light of die argument presented at the hearing on filis matter, the Court has been offered absolutely no explanation as how an attorney, after having carefully read the insurance policy mid considered the facts as alleged in the Motion for Judgment, could file a pleading containing essential averments in direct contradiction to the contract of insurance. As was stated by file learned Judge Robert K. Woltz, now retired, of the Twenty-Sixth Judicial Circuit: In the court's opinion, sanctions of fifis nature should be applied very cautiously. The right of litigants to seek redress in file courts and the responsibility of counsel to seek redress for their clients by the joinder of multiple parties and by advancing legal theories of recovery, even at times novel theories, should not be stifled. On the other hand, such liberty granted to litigants and their lawyers should not be construed as open season to sue anyone mid everyone within sight or sound nor to give them license to assert legal theories with insubstantial factual underpinnings. Clearly, sanctions are not appropriate in every case merely because a demurrer has been sustained. Sullivan v. Reliable Really, 16 Va. Cir. 118, 128 (Clarke County 1989). Under file facts of fifis case, the Court has no option other than to impose sanctions upon the plaintiffs’ attorney and hereby orders that within ten days of fifis Order, the plaintiffs’ attorney, Walter F. Green, IV, Esquire, shall pay to Rockingham Mutual Insurance Company file sum of $100.00 in partial reimbursement of its attorney’s fees incurred in filing file demurrer and appearing in the Court to argue the demurrer.