Present: Hassell, C.J., Lacy, Koontz, Kinser, and Lemons,
JJ., and Compton* and Russell, S.J.
CHERYL L. MONTGOMERY
v. Record No. 051243 OPINION BY JUSTICE ELIZABETH B. LACY
April 21, 2006
DAVID H. MCDANIEL, ET AL.
FROM THE CIRCUIT COURT OF THE CITY OF VIRGINIA BEACH
H. Thomas Padrick, Judge
I.
In this case we consider whether a plaintiff alleged
sufficient facts to maintain a cause of action for abuse of
process.
II.
Cheryl L. Montgomery was employed by Laser Skin and Vein
Center of Virginia, P.C. (LSVC), and David H. McDaniel, the
owner and president of LSVC. Montgomery's daughter, Casey M.
Bushey, also worked for LSVC and McDaniel. In early 2004,
Bushey complained to LSVC's chief financial officer, Gregory
P. Bergethon, that McDaniel sexually harassed her and
committed an assault and battery on her. Bergethon confronted
McDaniel, and on February 2, 2004, McDaniel signed an
agreement providing for disciplinary action. As part of that
agreement, McDaniel was relieved of his duties and was not to
contact any employee or enter the premises of LSVC. A month
*
Senior Justice Compton participated in the hearing and
decision of this case before his death on April 9, 2006.
later, on March 4, 2004, McDaniel repudiated the agreement,
returned to LSVC, and placed Bergethon and three other
employees on administrative leave.
On April 23, 2004, Bushey filed a bill of complaint
against McDaniel, LSVC, and other entities owned by McDaniel.1
Bushey sought a declaratory judgment that she had ownership
rights in McDaniel's entities based on McDaniel's oral
promise. She also sought compensatory and punitive damages
for assault and battery, damages for fraud, an accounting, and
a constructive trust. McDaniel filed a third-party cross-bill
against Bergethon, Montgomery, and three other LSVC employees
charging tortious interference with business relationships
(Count I), breach of fiduciary duty (Count II), constructive
fraud (Counts III and IV), common law and statutory conspiracy
(Counts V and VI), breach of contract (Count VII), and breach
of employment duties and responsibilities (Count VIII). The
cross bill sought $1,000,000 in compensatory damages, $350,000
in punitive damages, and treble compensatory damages for the
statutory conspiracy claim. Bushey was subsequently added as
a cross-defendant.
1
The other defendants were SkinConcepts, Ltd., LLC,
SkinConcepts, Ltd., and Anti-Aging Research and Consulting,
LLC. We will refer to all these parties collectively as
"McDaniel."
2
The three LSVC employees named in the cross-bill filed a
lawsuit against McDaniel and LSVC and, in his response to the
cross-bill, Bergethon raised a number of claims against
McDaniel. With the consent of the parties, the trial court
consolidated these matters with the Bushey lawsuit.
By June 11, 2004, McDaniel had nonsuited the cross-bill
as to the three LSVC employees other than Bushey and
Montgomery and, by July 21, 2004, McDaniel had dismissed the
cross-bill against Bergethon with prejudice pursuant to the
terms of a settlement agreement.2 McDaniel refused to dismiss
the cross-bill against Montgomery and Bushey with prejudice,
but nonsuited them prior to December 10, 2004, when Montgomery
filed this litigation.
In her motion for judgment claiming abuse of process,
Montgomery alleged that McDaniel and LSVC filed the cross-bill
naming her as a defendant as a means of forcing Bushey to
withdraw her suit.3 Montgomery sought $200,000 in compensatory
damages and $350,000 in punitive damages, plus costs and
attorneys fees. McDaniel and LSVC filed a demurrer, asserting
that Montgomery's pleadings did not state a cause of action
2
The settlement agreement is not part of this record.
3
Montgomery also included a count for malicious
prosecution. At trial Montgomery conceded she could not
prevail on that count and it was dismissed.
3
for abuse of process. The trial court sustained the demurrer.
We awarded Montgomery an appeal.
III.
On appeal, we review a trial court's judgment sustaining a
demurrer de novo. Glazebrook v. Board of Supervisors, 266 Va.
550, 554, 587 S.E.2d 589, 591 (2003). We consider as true the
facts alleged in the motion for judgment and the reasonable
factual inferences that can be drawn from the facts alleged.
McDermott v. Reynolds, 260 Va. 98, 100, 530 S.E.2d 902, 903
(2000). We do not evaluate the merits of the allegations, but
only whether the factual allegations sufficiently plead a cause
of action. Riverview Farm Assocs. Va. Gen. P'ship v. Board of
Supervisors, 259 Va. 419, 427, 528 S.E.2d 99, 103 (2000).
To prevail in a cause of action for abuse of process a
plaintiff must plead and prove: "(1) the existence of an
ulterior purpose; and (2) an act in the use of the process not
proper in the regular prosecution of the proceedings." Donohoe
Constr. Co. v. Mount Vernon Assocs., 235 Va. 531, 539, 369
S.E.2d 857, 862 (1988). There is little dispute that
Montgomery's motion for judgment contains allegations that are
sufficient to satisfy the first element necessary to establish
abuse of process, an ulterior motive. The motion for judgment
contains numerous allegations that McDaniel named Montgomery as
a defendant in the cross-bill as a means of pressuring Bushey to
4
withdraw her suit against McDaniel. The only issue before us is
whether the facts alleged by Montgomery in her motion for
judgment support the second prong of the cause of action,
improper use of regularly issued process.
Montgomery argues, as she did in the trial court, that
multiple allegations in her motion for judgment establish the
improper use of regularly issued process. She first asserts
that this burden was satisfied by her allegations that
McDaniel continued to maintain the cross-bill against her
knowing he could not "make a case" against her because he had
"concede[d]" that no plan or conspiracy existed when he non-
suited the LSVC employees other than Montgomery and Bushey and
dismissed Bergethon with prejudice. We have not previously
addressed whether allegations such as these that describe a
failure to act rather than an affirmative act satisfy the
requirement of showing "an act in the use of the process not
proper in the regular course of the proceeding." Donohoe, 235
Va. at 539, 369 S.E.2d at 862. Nevertheless, we need not
address that question in this case because other allegations
in Montgomery's pleadings show that maintaining the cross-bill
against Montgomery was justified regardless of the status of
the conspiracy claim.
In addition to a conspiracy count, McDaniel's cross-bill
contained allegations that Montgomery engaged in tortious
5
interference with business relationships (Count I), breach of
fiduciary duty (Count II), and breach of employment duties and
responsibilities (Count VIII). Thus, it was not improper use
of process to maintain Montgomery as a defendant in the cross-
bill when the conspiracy claim was allegedly no longer viable.
Next Montgomery argues that nonsuiting the cross-bill
against her rather than dismissing it with prejudice was
"evidence of [McDaniel's] intent to use it as a future
threat." According to Montgomery, such a threat amounts to
coercion and thus satisfies the second prong of the abuse of
process analysis.
Adopting Montgomery's argument would render many nonsuits
an improper use of process under the abuse of process analysis
because a first nonsuit carries with it the right to refile
the litigation in the future provided other requirements are
met such as limitations periods. See, Code § 8.01-380(B),
Code § 8.01-229(E)(3). The ability to refile the action at
some future time is a right afforded a plaintiff by the
General Assembly, regardless of any inconvenience or
discomfort it might place on the nonsuited defendant.
Exercising the statutory right to take a nonsuit knowing that,
by statute, the litigation can be refiled does not qualify as
"an act in the use of the process not proper in the regular
6
prosecution of the proceedings." Donohoe, 235 Va. at 539, 369
S.E.2d at 862.
At oral argument, Montgomery's counsel cited as an
independent act supporting the abuse of process claim the
allegation that McDaniel's failure to produce the entire
settlement agreement in "bad faith."4 Conceding that the
pleadings did not allege that McDaniel was under any court
order or other duty to provide the settlement agreement,
Montgomery argued that this allegation of "bad faith" created
an inference that Montgomery was legally entitled to the
documents. This argument, however, was not raised before the
trial court, and we do not consider it for the first time on
appeal. Rule 5:25.
Furthermore, Montgomery alleges in her pleadings that
McDaniel provided part of the settlement document to
Montgomery and, arguing the remainder of the agreement was
confidential and should not be subject to production,
submitted the issue to the trial court for resolution.
McDaniel complied with the trial court's ruling requiring
production of the remainder of the settlement agreement.
While withholding of documents may be sanctionable conduct
4
At trial Montgomery asserted that the failure to produce
the entire settlement document was part of the proof that the
conspiracy claim was no longer viable and McDaniel should have
7
under Code § 8.01-271.1 in some circumstances, liability under
that statute does not establish liability in an action for
abuse of process. In the present case, the pleadings recite a
routine use of process and fail to show an improper use of
that process.
IV.
In summary, Montgomery's motion for judgment clearly
alleges a malicious or malevolent intent in McDaniel's
institution of process; however, the allegations do not assert
an act in the use of process not proper in the regular conduct
of the proceeding. The absence of such allegation is fatal to
Montgomery's claim for abuse of process. Accordingly, for the
foregoing reasons, we will affirm the judgment of the trial
court.
Affirmed.
JUSTICE LEMONS, with whom CHIEF JUSTICE HASSELL joins,
dissenting.
I respectfully dissent. Because the motion for judgment
filed by Cheryl L. Montgomery ("Montgomery") alleged
sufficient facts to maintain a cause of action for abuse of
process and survive demurrer, I would reverse the judgment of
the trial court.
dismissed the cross-bill against Montgomery, an argument we
have already addressed.
8
"To survive a challenge by demurrer, a pleading must be
made with 'sufficient definiteness to enable the court to find
the existence of a legal basis for its judgment. In other
words, despite the liberality of presentation which the court
will indulge, the motion must state a cause of action.' "
Hubbard v. Dresser, Inc., 271 Va. 117, 122-23, 624 S.E.2d 1, 4
(2006) (quoting Moore v. Jefferson Hospital, Inc., 208 Va.
438, 440, 158 S.E.2d 124, 126 (1967)). "For an abuse of
process claim to survive a challenge by demurrer, one must
plead: '(1) the existence of an ulterior purpose; and (2) an
act in the use of the process not proper in the regular
prosecution of the proceedings.' " Ely v. Whitlock, 238 Va.
670, 676, 385 S.E.2d 893, 897 (1989) (quoting Donohoe
Construction v. Mount Vernon Assoc., 235 Va. 531, 539, 369
S.E.2d 857, 862 (1988)). As the majority recognizes, it is
evident that Montgomery satisfied the first prong of an abuse
of process claim. However, the majority concludes that
Montgomery failed to "assert an act in the use of process not
proper in the regular conduct of the proceeding." I disagree.
Montgomery's motion for judgment chronicled the relevant
facts necessary to plead a cause of action for abuse of
process. In Paragraph 2, Montgomery alleged that Dr. McDaniel
sexually harassed Montgomery's daughter, Casey. In Paragraph
3, Montgomery alleged that Dr. McDaniel admitted his
9
misconduct and "signed an agreement providing for disciplinary
action and protection for Casey." Montgomery attached a copy
of this agreement to her motion for judgment. She then
alleged in Paragraphs 4 and 5 that Dr. McDaniel "repudiated
and revoked the agreement," placed numerous employees who knew
about the alleged sexual harassment on administrative leave,
"essentially [made] it impossible for [Casey] to continue her
employment," and had his attorneys intimate to Casey's
attorneys "that any legal action by Casey . . . would prove
ill-advised."
After Casey filed a bill of complaint against Dr.
McDaniel, he then filed a cross-bill against, among others,
Casey and Montgomery seeking $3,350,000.00 in damages.
Montgomery included this fact in her motion for judgment.
Montgomery then alleged in Paragraph 7 that Dr. McDaniel's
"joinder of [Montgomery] . . . was without any basis in fact,
was malicious, and was an outrageous and vicious act of
retaliation." Montgomery also alleged that Dr. McDaniel's
cross-bill was to serve his "ulterior motive . . . namely, to
put pressure on Casey to dismiss her suit . . . or to settle
her just claims for a nominal sum, in order to spare her
mother the stress and expense of defending a multi-million
dollar claim." In Paragraph 14, Montgomery alleged that Dr.
McDaniel withdrew his cross-bill against all of the named
10
parties except Casey and Montgomery. In Paragraph 20,
Montgomery alleged that Dr. McDaniel did so "in the hope that
[the cross-bill's] continued existence and the expense and
inconvenience of defending it would be so destructive
emotionally, physically and financially to Cheryl Montgomery
that it would weaken Casey's resolve to have her claims
adjudicated." Finally, in Paragraphs 15 and 16, Montgomery
alleged that Dr. McDaniel "furnished [Montgomery] with a self-
serving portion of the settlement documents, containing
provisions designed to avoid the long scheduled July 21
hearing on the enforceability of the disciplinary action
agreement" and that Dr. McDaniel "unsuccessfully sought to
conceal the other provisions of the settlement from
[Montgomery], well knowing that revealing those provisions
would eliminate any chance of prevailing."
In discussing this last allegation, the majority states,
"While withholding of documents may be sanctionable conduct
under Code § 8.01-271.1 in some circumstances, liability under
that statute does not establish liability in an action for
abuse of process. In the present case, the pleadings recite a
routine use of process and fail to show an improper use of
that process." I disagree. The question is not whether
liability under Code § 8.01-271.1 establishes liability in an
action for abuse of process. Instead, the question is whether
11
Montgomery's allegation is an act by Dr. McDaniel in the use
of process that was not proper in the regular prosecution of
the proceedings such that Montgomery's motion for judgment
survives Dr. McDaniel's demurrer. Montgomery's allegation is
exactly the type of conduct that should suffice to bring a
cause of action for abuse of process because it goes directly
to an illegitimate purpose in Dr. McDaniel's use of process.
Obstruction of discovery is a serious matter, and both
the Code and our Rules allow for substantial consequences to
both attorneys and parties who engage in such tactics. See
Code § 8.01-271.1 and Rule 4:12. An allegation involving an
abuse of discovery which increases the cost of litigation
surely must qualify as "an improper use of process,"
especially where the improper motive is financial coercion.
Based on these allegations, Montgomery's motion for
judgment was made with "sufficient definiteness to enable the
court to find the existence of a legal basis for its
judgment." Hubbard, 271 Va. at 122, 624 S.E.2d at 4.
Montgomery's motion for judgment contained both the existence
of an ulterior purpose by Dr. McDaniel and an act by Dr.
McDaniel in the use of the process that was not proper in the
regular prosecution of the proceedings. Therefore, I would
reverse the judgment of the trial court and overrule Dr.
McDaniel's demurrer.
12