Don’t Give Short Shrift to Written Agreements at the Close of Mediation

Written by Danny Royce, Esq. A critical tool in our case resolution arsenal is mediation.  Many carriers and claimants turn toward mediation to resolve contentious litigation.  As we all know, mediation sessions can be slow and arduous often taking the better part of a day (and sometimes longer).  More often than not, mediation sessions accelerate toward compromise toward the end of a long session.  Such compromise frequently coincides with the highest points of stress and fatigue among litigants and lawyers.  One potential consequence of this confluence of factors is a hastily written or incomplete settlement agreement.  This presents a pitfall easily avoided by the savvy and conscientious lawyer.  The Supreme Court of Virginia recently ruled on this very issue in the case of LongView Int’l Technology Solutions Inc. v. Lin (2017 Va. Unpub. LEXIS 9 *, VLW 017-6-030(UP)).  Longview presents as a cautionary tale for litigants and lawyers trying to finalize mediated settlement agreements. In LongView, the parties participated in a 12 hour mediation session with an experienced mediator.   Upon reaching an agreement, the lawyers drafted a six-paragraph “Term Sheet” which stated the defendant tech company would pay the plaintiff investor (and former officer) $3 million over a four-year period, and another $12 million when the company was sold.  The Term Sheet included language at the top of the document that the parties were “intending to be fully bound by its terms.”  The parties signed the Term Sheet and sought to remove the trial from the docket.  The judge managing the docket heard a request for a continuance of the case and pressed the parties on whether they had...

Property Damage Claim: To Be Arbitrated or Not?

Written by Delia DeBlass, Esq. Edited by Bill Pfund, Esq. Property damage claims can be made by filing a separate Warrant in Debt or by including the claim in the same action for personal injury. There is also a VA Code Section that states that “insurers shall arbitrate and settle all disputed claims made for automobile physical damage between them in accordance with the terms of the Nationwide Intercompany Arbitration Agreement.” (See Va. Code §38.2-2231(A)). This Code Section, however, has been deemed unconstitutional by a number of Circuit court decisions in Virginia. In 1999, the Circuit Court of Danville, Virginia first ruled on this issue. In Bass v. Young, the Court noted that it had “serious concerns about the constitutionality of Va. Code §38.2-2231” as it did away with the right to a jury trial and provided no appeal or judicial review of an arbitrator’s decision. (See Bass v. Young, 49 Va. Cir. 525 (1996)). The Circuit Court in Rockbridge County also agreed that this Code Section is unconstitutional. (See Virginia Mut. Ins. Co. v. Dean, 49 Va. Cir. 132 (1999)). In Virginia Mutual Insurance Company v. Dean, the Plaintiff insurance carrier, acting as subrogee of the insured, filed a property damage claim against the operator of another insured automobile. The Defendant filed a plea in bar, asserting that pursuant to §38.2-2231, arbitration was the exclusive remedy. The Court denied the Defendant’s plea in bar and set the matter for trial, finding that the remedy provided by the Legislature was to be “in addition to and not in lieu of the ancient common law right of trial by jury.”...

Occupational Disease Claims: “Employment” Means More than an Employer-Employee Relationship

  Written By Joseph Smith, Esq. Edited by Rachel Riordan, Esq. Most workers’ compensation claims are claims that involve bodily injury. However, certain diseases can also be covered under workers’ compensation. These “occupational disease” claims are defined in Va. Code § 65.2-400 and require that a claimant prove the disease arose out of the employment based upon several factors that establish the employment caused the claimant to contract the disease, rather than an exposure where the general public was equally at risk. Occupational disease claims must be proven by a preponderance of the evidence. Additionally, certain “ordinary disease of life” claims, which includes exposure to diseases to which the public is exposed outside of the employment, can also be compensable occupational diseases pursuant to Va. Code § 65.2-401. However, ordinary disease of life claims have to be proven by clear and convincing evidence, which is a higher burden than the preponderance of the evidence required for occupational disease claims. Claims for post-traumatic stress disorder (PTSD) have become commonplace and are difficult to defend, as the symptoms can be quite subjective in nature. PTSD can be covered as either an occupational disease or an ordinary disease of life and the Commission must determine whether the PTSD was caused by the employment or an outside exposure. In the context of occupational disease claims, the Commission has traditionally defined “the employment” not as an employer-employee relationship but instead as “work or process which the employee has been engaged.” Pocahontas Fuel Co. v. Godbey, 192 VA. 845, 852, 66 S.E.2d 859, 864 (1951). The Court of Appeals recently addressed this issue in City...

When Bankruptcy Attacks

Written by Lee Hoyle, Esq. Bankruptcy law and civil litigation rarely mix.  When bankruptcy issues arise in civil lawsuits, it generally means that something has gone terribly wrong for one side or the other.  If the defendant is invoking the automatic stay, pausing the civil litigation while a bankruptcy case is administered, the civil defendant probably has bigger problems than the lawsuit.  Along the same lines, if a civil plaintiff’s bankruptcy pops up as an issue in the civil case, the civil case may be in jeopardy of dismissal. The reason why having bankruptcy enter a civil claim at all is so dangerous for the plaintiff is that it probably means that the plaintiff messed something up.  When a person (or company for that matter) declares bankruptcy, all of their assets become part of the bankruptcy estate.  If the debtor wants to remove an asset from the bankruptcy estate, they need to disclose the item and have it exempted or otherwise taken out of the estate.  In Virginia, civil lawsuits are exempt from creditors in the bankruptcy process.  As long as the debtor discloses the claim as an asset, the bankruptcy court should enter an order exempting the claim from the estate. The Virginia Supreme Court has twice affirmed dismissals of civil claims asserted by debtors in bankruptcy.  In Kocher v. Campbell, 282 Va. 113, 712 S.E.2d 477 (2011), the civil plaintiff filed for bankruptcy and received a discharge after the accident happened but before he filed his lawsuit.  He did not disclose the existence of the potential civil claim to the bankruptcy court until after he filed suit. ...

What is a Nonsuit and Why Should it Matter?

Written by Jessica Relyea, Esq. Edited by Brian Cafritz, Esq. Almost every state has certain rules or procedures that are unique to that jurisdiction.  In Virginia, one of our legal oddities is the existence and breadth of the voluntary nonsuit.  A voluntary nonsuit in state court is a procedural right to voluntarily dismiss the case, but it is created by statute.  Va. Code Ann. § 8.01-380.  Although it is a voluntary dismissal, a nonsuit does not operate the same way as a voluntary dismissal in federal court.   It allows the Plaintiff to correct a flaw in her case and reset the matter to the start in a future filing, with no real penalty or hardship.  The Supreme Court of Virginia has described a voluntary nonsuit as a “powerful tactical weapon in the hands of Plaintiff.”  Trout v. Commonwealth Transp. Comm’r of Va., 241 VA 69, 73 (1991). Given this tool at plaintiff’s disposal, it is important for all defendants to understand what a voluntary nonsuit is, how it can be used, and how it may impact their case. In Virginia, a Plaintiff is allowed one nonsuit as a matter of right, which can be taken at any point before a motion to strike the evidence has been sustained or before the case has been submitted to the jury.  Va. Code Ann. § 8.01-380.  This means a Plaintiff can nonsuit her case while a motion for summary judgment is pending or in the middle of trial if she does not like the make-up of the jury or how her doctor testified.  Plaintiff does not need the consent of all parties...

Inadvertent Disclosure of the Claim File – When Is It a Waiver of Privilege?

Written by Stephanie G. Cook, Esq. Edited by William J. Pfund, Esq. A recent opinion in the United States District Court for the Western District of Virginia, Abingdon Division, provides an excellent guide as to what arguments to make upon the inadvertent disclosure of privileged documents. It includes an in depth analysis of whether the attorney client privilege and the work product privilege have been waived.  Harleysville Ins. Co. v. Holding Funeral Home, Inc., 2017 U.S. Dist. Lexis 162058 (October 2, 2017) (vacating Harleysville Ins. Co. v. Holding Funeral Home, Inc., 2017 U.S. Dist. Lexis 18714 (Feb. 9, 2017). In Harleysville, an insurance company filed a declaratory judgment action asking the court to find that it had no duty to pay benefits under a policy to its insured, Holding Funeral Home. The funeral home had burned to the ground, and an expert hired by Harleysville determined the fire had been intentionally set. Harleysville sought to deny coverage on the grounds of material misrepresentation. During Harleysville’s investigation, an investigator for Harleysville shared information with the National Insurance Crime Bureau (NICB) by uploading it to a “Box Folder” on an internet file sharing service.  An email with a sharing link was sent by the investigator to NICB. No password was required in order to access the folder. During the course of discovery in the declaratory judgment action, counsel for Holding issued a subpoena to NICB requesting their entire file pertaining to the fire. NICB produced the email from Harleysville’s investigator. By this time, the Box Folder included the entire claim file. Using the link in the email, counsel for Holding reviewed...