Present: All the Justices
LOFTON RIDGE, LLC
v. Record No. 032716 OPINION BY JUSTICE DONALD W. LEMONS
September 17, 2004
NORFOLK SOUTHERN RAILWAY
COMPANY, ETC.
FROM THE CIRCUIT COURT OF AUGUSTA COUNTY
Charles H. Smith, Jr., Judge
In this appeal, we consider whether the trial court
properly applied the doctrine of judicial estoppel in
dismissing with prejudice a plaintiff’s suit seeking
declaration of an easement for access to a parcel of land.
I. Facts and Proceedings Below
Lofton Ridge, LLC, (“Lofton Ridge”) purchased 226 acres
of land in Augusta County, Virginia in the fall of 1998 with
the intention of subdividing the property for twelve
residential home sites. Access to the property was
anticipated to be along an unpaved road connecting the
property to State Route 853. According to the plat of the
property, the unpaved road enters property owned by Norfolk
Southern Railway Company (“Norfolk Southern”) twice before
connecting with Route 853. At the first point, the road
travels roughly 200 feet through Norfolk Southern’s property,
parallel to the train track. At the second point, the unpaved
road crosses approximately 100 feet of Norfolk Southern’s
property immediately before connecting with Route 853.
On June 16, 2000, Norfolk Southern locked a gate located
where the unpaved road first crosses into its property.
Lofton Ridge filed a bill of complaint and later an amended
bill of complaint seeking a judgment that it has an easement
over the unpaved road to Route 853. Lofton Ridge requested
the trial court to enter an order “permanently enjoining or
prohibiting Norfolk Southern and any person claiming under it
from further interfering with Lofton Ridge’s use and enjoyment
of the [p]roperty and the dirt road to State Route 853.”
Almost one year later, Lofton Ridge filed a motion for
judgment against the attorneys and the surveyor involved in
its purchase of the land, alleging constructive fraud and
professional negligence against each for making false
representations about access to the subject property that led
Lofton Ridge to purchase and attempt to develop the property.
The motion for judgment sought $400,000 in damages. Lofton
Ridge’s claims against its attorneys were dismissed with
prejudice on December 19, 2002, following mediation between
the parties. The terms of the agreement resulting from the
mediation were subject to a confidentiality agreement and are
not a part of this record.
After the motion for judgment against the attorneys was
dismissed, Norfolk Southern filed a plea in bar in its case
alleging that Lofton Ridge’s claims against it were barred
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under the doctrines of judicial estoppel and election of
remedies. Following a two-day trial, the trial court did not
decide the case on the merits; rather, it sustained Norfolk
Southern’s plea in bar and dismissed Lofton Ridge’s amended
bill of complaint with prejudice "based on the doctrine of
judicial estoppel." Lofton Ridge appeals the adverse
judgment of the trial court.
II. Analysis
Lofton Ridge contends that the trial court erred in its
application of the "doctrine of estoppel by inconsistent
position" or "judicial estoppel." We agree.
The terms "doctrine of estoppel by inconsistent position"
and "judicial estoppel" are often used interchangeably. See
The Pittston Co. v. O'Hara, 191 Va. 886, 902, 126 S.E. 34, 43
(1951) (referring to "the doctrine of estoppel by inconsistent
position"); Scales v. Lewis, 261 Va. 379, 383-84, 541 S.E.2d
899, 901-02 (2001) (discussing judicial estoppel and the
doctrine of preclusion of inconsistent position); Black's Law
Dictionary 571 (7th ed. 1999) (providing that judicial
estoppel is also referred to as the doctrine of preclusion of
inconsistent position). See also Wagner v. Professional
Eng'rs, 354 F.3d 1036, 1044 (9th Cir. 2004) (explaining that
"[j]udicial estoppel [is] sometimes also known as the doctrine
of preclusion of inconsistent positions"). Essentially,
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judicial estoppel forbids parties from "assum[ing] successive
positions in the course of a suit, or series of suits, in
reference to the same fact or state of facts, which are
inconsistent with each other, or mutually contradictory."
Burch v. Grace Street Bldg. Corp., 168 Va. 329, 340, 191 S.E.
672, 677 (1937); Rohanna v. Vazzana, 196 Va. 549, 553, 84
S.E.2d 440, 442 (1954); accord Nagle v. Syer, 150 Va. 508,
513, 143 S.E. 690, 692 (1928). It derives from the
prohibition in Scottish law against approbation and
reprobation. Id. The doctrine is often confused with the
concepts of res judicata and collateral estoppel. However,
the doctrine of judicial estoppel differs from both by the
elements required for its invocation and its effect.
Res judicata provides that:
When the second suit is between the same
parties as the first, and on the same cause of
action, the judgment in the former is
conclusive of the latter, not only as to every
question which was decided, but also as to
every other matter which the parties might have
litigated and had determined, within the issues
as they were made or tendered by the pleadings,
or as incident to or essentially connected with
the subject matter of the litigation, whether
the same, as a matter of fact, were or were not
considered. As to such matters a new suit on
the same cause of action cannot be maintained
between the same parties.
See, e.g., Kemp v. Miller, 166 Va. 661, 674-75, 186 S.E. 99,
103-04 (1936).
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Collateral estoppel, on the other hand,
is the preclusive effect impacting in a
subsequent action based upon a collateral and
different cause of action. In the subsequent
action, the parties to the first action and
their privies are precluded from litigating any
issue of fact actually litigated and essential
to a valid and final personal judgment in the
first action.
Bates v. Devers, 214 Va. 667, 671, 202 S.E.2d 917, 921 (1974).
Unlike res judicata and collateral estoppel, the doctrine
of judicial estoppel does not require a prior final judgment
to be invoked. The doctrine of judicial estoppel may bar a
party from taking inconsistent positions within a single
action. See Berry v. Klinger, 225 Va. 201, 207, 300 S.E.2d
792, 795 (1983) (A party, "having contended in their pleadings
and in their initial arguments at trial that the language in
question was unambiguous, will not be allowed to take a
contrary position thereafter."); McLaughlin v. Gholson, 210
Va. 498, 501, 171 S.E.2d 816, 818 (1970) (A party may not
"change his position to the prejudice of his adversaries in
contravention of [a] stipulation freely entered into.").
Additionally, judicial estoppel may act as a bar to
maintaining a new cause of action. C & O Ry. Co. v. Rison, 99
Va. 18, 31, 37 S.E. 320, 324 (1900) ("An unsuccessful
plaintiff in a suit for the specific performance of a contract
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was not permitted to maintain a suit to reform the contract
and enforce it as reformed.").
The doctrine of judicial estoppel applies where the
position taken is inconsistent relative "to the same fact or
state of facts." Burch, 168 Va. at 340, 191 S.E. at 677.
However, "[a] person who has taken an erroneous position on a
question of law is ordinarily not estopped from later taking
the correct position, provided his adversary has suffered no
harm or prejudice by reason of the change." The Pittston Co.,
191 Va. at 904, 63 S.E.2d at 43. Thus, in Spandorfer v.
Cooper, 141 Va. 792, 799, 126 S.E. 558, 560 (1925), the Court
said, "We fail to see how one who has stumbled into the wrong
forum, and whose attorney had contended in such forum that in
a matter of law he was in the right forum, should be precluded
from instituting a new proceeding in the proper forum."
In this appeal, Lofton Ridge asserts numerous reasons in
support of its assignment of error that the trial court
improperly applied the doctrine of judicial estoppel. Lofton
Ridge maintains that: a) the doctrine of judicial estoppel
does not apply where the parties to the proceedings are not
the same; b) the allegations of the amended bill of complaint
and the motion for judgment in these proceedings are not
inconsistent; c) the doctrine of judicial estoppel does not
apply when "the allegedly inconsistent position was not the
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position first adopted or previously assumed;" d) no evidence
was presented by Norfolk Southern that it relied to its
prejudice upon the allegedly inconsistent position taken by
Lofton Ridge; and, e) policy reasons for applying the doctrine
of judicial estoppel are absent from this case. We need only
resolve Lofton Ridge's first assertion to decide this appeal.
In The Pittston Co., we held that "[t]he doctrine of
estoppel by inconsistent position [i.e., judicial estoppel]
does not apply to a prior proceeding in which the parties are
not the same." 191 Va. at 902, 126 S.E. at 43. See also
Ferebee v. Hungate, 192 Va. 32, 35-36, 63 S.E.2d 761, 764
(1951). An exception to this requirement may exist where the
liability of one defendant is derivative of the liability of
another; for example, "where the relation between defendants
in the two suits has been that of principal and agent, master
and servant, or indemnitor and indemnitee." Town of
Waynesboro v. Wiseman, 163 Va. 778, 782-83, 177 S.E. 224, 226
(1934).
Norfolk Southern relies on Canada v. Beasley & Bros., 132
Va. 166, 173-74, 111 S.E. 251, 254 (1922), in its argument
that Lofton Ridge's claim should be barred. In Canada, the
creditor of a husband sought to reach property of the husband
protected by a homestead deed. The creditor argued that an
earlier conveyance of the protected property from the wife to
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the husband was invalid because the wife was also in debt to
the creditor. Id. at 173, 111 S.E. at 254. We held that the
wife was not a debtor, which "destroy[ed] the foundation of
the suit." Id. at 174, 111 S.E. at 254.
Further, we explained that the creditor, during the
earlier bankruptcy proceeding against the husband, "with full
knowledge of the facts, elected to treat the entire property
. . . as belonging to [the husband] and to assert its debt
against him alone." Id. We stated that the "creditor cannot
now assume a different attitude, and claim that the property
belonged to Mrs. Canada, and the debt was now due from her."
Id. This alternative justification for the ruling was
unnecessary to the holding. As such, it is dicta. To the
extent that Canada suggests that judicial estoppel applies in
cases where the parties are not the same and do not have a
derivative liability relationship such as those listed in Town
of Waynesboro, it is overruled. While an assertion of fact in
a judicial proceeding may be introduced, subject to certain
conditions, as a party admission in a subsequent proceeding,
the doctrine of judicial estoppel will not act as a preclusive
bar to the subsequent proceeding unless the parties are the
same.
In this case, Norfolk Southern and Lofton Ridge's
attorneys are not related parties. Under the rule stated in
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The Pittston Co., Norfolk Southern may not invoke the doctrine
of judicial estoppel against Lofton Ridge.
III. Conclusion
For the reasons stated, we hold that the trial court
erred in granting Norfolk Southern's plea in bar and
dismissing Lofton Ridge's amended bill of complaint. We will
remand the case to the trial court for further proceedings
consistent with this opinion.
Reversed and remanded.
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