PRESENT: Hassell, C.J., Lacy, Keenan, Kinser, Lemons, and Agee,
JJ., and Russell, S.J.
1924 LEONARD ROAD, L.L.C.
v. Record No. 052526 OPINION BY JUSTICE BARBARA MILANO KEENAN
November 3, 2006
DOROTHY VAN ROEKEL, ET AL.
FROM THE CIRCUIT COURT OF FAIRFAX COUNTY
Gaylord L. Finch, Jr., Judge
This appeal arises from the circuit court’s holding that a
resulting trust was established in favor of an alleged widow of
a previous co-tenant of certain real property. We consider
various evidentiary issues decided by the circuit court,
including (1) an application of Code § 8.01-397, commonly known
as the “dead man’s statute,” (2) the exclusion of several
documents purportedly failing to qualify for admission under the
business records exception to the hearsay rule, (3) the
admission of evidence concerning the alleged widow’s
“understanding” of the original purchase of the property, and
(4) the circuit court’s failure to apply the principle of
estoppel by deed. Because we hold that the circuit court erred
in certain of these evidentiary rulings, and that those errors
require a new trial, we do not reach the issue whether the
evidence was sufficient to support the circuit court’s judgment.
I.
This case began with a bill of complaint filed by 1924
Leonard Road, L.L.C. (the LLC), requesting partition of certain
real property in Fairfax County improved with a single-family
dwelling (the property). The LLC claimed that it and Dorothy E.
Van Roekel (Dorothy) each owned as tenants in common a one-half
undivided interest in the property. Dorothy filed a cross-bill
of complaint to quiet title, alleging she was the sole owner of
the property by virtue of a resulting trust or by adverse
possession.
The evidence at trial showed that Dorothy married Herman W.
Van Roekel (Herman) in 1946. Herman was employed by Francis E.
Malcolm, Sr. (Malcolm), a real estate broker. In November 1955,
Malcolm wrote a letter to Captain John S. Albright (Albright),
the property’s owner, regarding a potential sale of the
property.
In his letter, Malcolm explained that Herman and his family
needed a home but that Herman was “somewhat short of ready cash”
and was willing to accept the property “as is.” Malcolm asked
Albright to sell the property to Herman for “no additional
expense to [Herman]” other than the past due payments on the
house and any transfer expenses.
Ten days later, Malcolm again wrote to Albright, informing
him that Herman was willing to assume Albright’s loan on the
property in order to effect the sale. Malcolm explained that
because he knew Herman and was confident that Herman would make
timely payments on the deed of trust, Malcolm was willing “to
2
take title jointly with [Herman], thereby, making [Malcolm]
responsible on the financing and giving [Albright] extra
protection.”
Albright conveyed the property by deed (the original deed)
to Malcolm and Herman, as tenants in common. Malcolm and Herman
also assumed liability for repayment of the existing mortgage on
the property.
At this time, Herman and Dorothy were not living together.
Herman contacted Dorothy and informed her that he had purchased
a house for their family. Herman, Dorothy, and their children
moved to the property in the summer or fall of 1956.
After Dorothy moved into the house, she paid all the real
estate taxes and made all the mortgage payments on the property.
According to Dorothy, neither Herman nor Malcolm made any tax or
mortgage payments. In December 1961, Herman deserted his
family.
In November 1962, a fire damaged the property. Dorothy
contacted Malcolm to obtain his signature for an insurance
claim. According to handwritten notes Malcolm kept, when he
spoke with Dorothy a few days later, Dorothy informed him that
“[Herman] went to Mexico Christmas, 1961, and hadn’t been heard
from since.”
In December 1970, Malcolm wrote Herman a letter offering to
pay him $500 for Herman’s interest in the property. In the
3
letter, Malcolm also asked Herman to provide information about
his marital status, advising him that if he had remarried, his
present wife would also need to sign any sales contract.
Herman did not respond to Malcolm’s offer. According to
Malcolm’s notes, about one year later, when Dorothy spoke with
Herman, he promised to send “papers” on the property and also
mentioned that he had a “new” wife. Dorothy also asked Herman
to send her “divorce papers,” which Dorothy never received.
In 1972, Herman sent Dorothy a deed (the 1972 deed). The
1972 deed, which was later recorded, stated that Herman and his
wife, Billie Sue Van Roekel (Billie Sue), conveyed to Dorothy an
undivided one-half interest in the property. Dorothy made the
final deed of trust payment on the property in 1976.
Herman died in 1984. Although Herman’s death certificate
listed his marital status as “divorced,” Dorothy testified that
she and Herman had not obtained a divorce.
Dorothy also introduced evidence purporting to show
Malcolm’s intent at the time he and Herman purchased the
property. Over the LLC’s objection, the circuit court permitted
Dorothy to testify concerning her “understanding” of the reason
Malcolm’s name appeared as a grantee on the original deed.
Dorothy stated that Malcolm was named as a grantee in the
original deed in order that “[she and Herman] could buy the
house. And once it got paid for, it would be [Dorothy’s].”
4
In 1977, Malcolm suffered a debilitating stroke that
rendered him incapable of conducting his business affairs.
After his stroke, his daughter, Ann B. Malcolm (Ann), served as
his attorney-in-fact. Malcolm also had established a revocable
living trust (the trust), naming his wife, Wilda P. Malcolm, and
his daughters, Ann and Joan M. Hottman (Joan), as trustees for
the benefit of Ann, Joan, and his son, Francis E. Malcolm, Jr.
(trust beneficiaries).
In 1996, Ann executed a quitclaim deed on Malcolm’s behalf,
conveying his one-half interest in the property to the surviving
trustees of the trust, Ann and Joan (trustees). Malcolm died
later that year.
In July 2003, the trust beneficiaries executed a quitclaim
deed, attempting to convey their right, title, and interest in
the property to the LLC. Because of an error in the deed’s
recitals, the LLC executed two additional quitclaim deeds (the
amended deeds), the more recent of which was recorded and
conveyed the interest in the property from the trustees to the
trust beneficiaries and from the trust beneficiaries to the LLC.
Dorothy objected to the admission of the amended deeds.
She asserted that the LLC had not timely produced the amended
deeds under terms of discovery orders entered by the court. The
circuit court sustained Dorothy’s objection.
5
The LLC made a motion in limine, asking that the circuit
court apply the principle of estoppel by deed and hold that
Dorothy was estopped from claiming that she was married to
Herman, or that she owned anything more than a one-half interest
in the property. The LLC asserted that this principle was
applicable because the 1972 deed, from which Dorothy obtained
her interest in the property, listed Billie Sue as Herman’s wife
and stated that Herman owned only a one-half interest in the
property. The circuit court denied the LLC’s request.
The LLC presented evidence that Malcolm regarded his
interest in the property as an investment interest. Ann
explained that her parents owned many single-family homes as
investment properties. She stated that her parents shared
ownership of “everything,” with the exception of two cemetery
plots and the property. With regard to the property, Ann
explained that her mother had refused to put her name on the
original deed “with a thief.”
After counsel asked Ann how she became aware of “this
story,” Dorothy raised a hearsay objection. The LLC responded
that Ann would testify regarding her father’s statements to her
about the property, and that such testimony was admissible under
the “dead man’s statute” exception to the hearsay rule found in
Code § 8.01-397. The circuit court sustained Dorothy’s
objection.
6
The LLC proffered for the record the testimony that Ann
would have given in response to the LLC’s question concerning
Ann’s knowledge of the original transaction. This proffered
testimony included Ann’s statements that (1) Malcolm did not
agree to become liable on the property’s debt based on
“charitable concerns;” (2) Malcolm considered the property as
part of his investment portfolio; (3) Malcolm interceded with
the lender when Dorothy’s account fell past due; and (4) Malcolm
maintained an insurance policy on the property.
The LLC also attempted to admit as business records Exhibit
6, a series of five letters exchanged between Malcolm and the
National Bank of Washington (the bank), the holder of the deed
of trust on the property. The initial letter from the bank,
dated May 27, 1976, notified Malcolm and Herman that the deed of
trust had been paid in full. The letter also referenced
enclosed checks made payable to Malcolm and Herman for
overpayment of the loan and the remaining balance from the
mortgage escrow account.
Malcolm responded to the bank’s letter by correspondence
dated July 20, 1976, and explained that the checks should be
redrawn in equal amounts and made payable to Malcolm and Dorothy
because Herman had conveyed his one-half interest in the
property to Dorothy. Responding on July 23, 1976, the bank
asked Malcolm to send a copy of the deed from Herman to Dorothy.
7
Malcolm complied by letter dated August 10, 1976. In its August
16, 1976 letter, the bank sent Malcolm his half of the excess
funds, as he had requested. When Dorothy raised a hearsay
objection to the admission of Exhibit 6, the circuit court
sustained Dorothy’s objection.
After hearing all the evidence, the circuit court issued a
letter opinion holding that clear and convincing evidence
supported the court’s conclusion that Dorothy was the sole owner
of the property by virtue of a resulting trust. The circuit
court determined that Malcolm’s letters to Albright at the time
of the sale provided a “clear indication” that Malcolm took
title to facilitate the sale as an “accommodation” to Herman.
The circuit court also concluded that Dorothy’s interest derived
from either the 1972 deed or, because “no evidence of a divorce
was ever produced,” from Dorothy’s interest as Herman’s widow.
The circuit court did not address Dorothy’s claim of adverse
possession. The court entered a final decree incorporating the
letter opinion and dismissing the LLC’s bill of complaint. This
appeal followed.
II.
Initially, we observe that the circuit court made the
contested evidentiary rulings in the context of Dorothy’s cross-
bill seeking a resulting trust. Therefore, although we do not
reach the issue of the sufficiency of the evidence in support of
8
the court’s holding, we state basic principles relevant to the
circuit court’s consideration of Dorothy’s claim.
A resulting trust is an indirect trust that arises from the
parties’ intent or from the nature of the transaction and does
not require an express declaration of trust. Tiller v. Owen,
243 Va. 176, 180, 413 S.E.2d 51, 53 (1992); Salyer v. Salyer,
216 Va. 521, 525, 219 S.E.2d 889, 893 (1975). For a resulting
trust to arise, the alleged beneficiary must pay for the
property, or assume payment of all or part of the purchase money
before or at the time of purchase, and have legal title conveyed
to another without any mention of a trust in the conveyance.
Morris v. Morris, 248 Va. 590, 593, 449 S.E.2d 816, 818 (1994);
Tiller, 243 Va. at 180, 413 S.E.2d at 53; Leonard v. Counts, 221
Va. 582, 588, 272 S.E.2d 190, 194 (1980). The alleged
beneficiary also must have paid the purchase money as his own,
and not as an agent or lender of the title holder. Morris, 248
Va. at 593, 449 S.E.2d at 818; Tiller, 243 Va. at 180, 413
S.E.2d at 53; Salyer, 216 Va. at 526, 219 S.E.2d at 893.
A resulting trust can only arise from the parties’ original
transaction, at the time that transaction occurs, and at no
other time. Morris, 248 Va. at 594, 449 S.E.2d at 818; see
Ogden v. Halliday, 235 Va. 639, 642, 369 S.E.2d 417, 419 (1988).
Finally, because a resulting trust generally contravenes the
express language of a written document, a party seeking to
9
establish such a trust must do so by clear and convincing
evidence. Gifford v. Dennis, 230 Va. 193, 197-98, 335 S.E.2d
371, 373 (1985); Leonard, 221 Va. at 589, 272 S.E.2d at 195.
A. “Dead Man’s Statute”
We first consider the LLC’s argument that the circuit court
erred in refusing to apply the “dead man’s statute” exception to
the hearsay rule found in Code § 8.01-397. The LLC argues that
pursuant to this exception, the circuit court should have
permitted Ann to testify about statements Malcolm made
concerning his acquisition of the property and should have
admitted into evidence Exhibit 6, the series of letters between
Malcolm and the bank. In support of its argument, the LLC
relies on our decision in Nicholson v. Shockey, 192 Va. 270, 64
S.E.2d 813 (1951), contending that the “dead man’s statute”
permitted admission of the LLC’s proffered evidence because
Dorothy’s cross-bill was in effect an action against Malcolm’s
estate. We disagree with the LLC’s argument.
The hearsay exception provided in Code § 8.01-397 is plain
and unambiguous. Therefore, we are bound by the plain meaning
of that language and apply the statute as written. See Alcoy v.
Valley Nursing Homes, Inc., 272 Va. 37, 41, 630 S.E.2d 301, 303
(2006); Williams v. Commonwealth, 265 Va. 268, 271, 576 S.E.2d
468, 470 (2003); Woods v. Mendez, 265 Va. 68, 74-75, 574 S.E.2d
263, 266 (2003). The statute provides, in relevant part:
10
In an action by or against a person who, from any
cause, is incapable of testifying, or by or against the
committee, trustee, executor, administrator, heir or other
representative of the person so incapable of testifying, no
judgment or decree shall be rendered in favor of an adverse
or interested party founded on his uncorroborated
testimony. In any such action . . . all entries,
memoranda, and declarations by the party so incapable of
testifying made while he was capable, relevant to the
matter in issue, may be received as evidence in all
proceedings.
Code § 8.01-397.
By its terms, this statutory language does not apply to the
LLC. The LLC received its interest in the property through a
quitclaim deed from Malcolm’s trustees. The LLC, a limited
liability company created under authority of the Virginia
Limited Liability Company Act, Code §§ 13.1-1000 through -1080,
is a distinct entity that bore no legal relationship to
Malcolm’s trust or estate. The LLC also is an entity separate
from its members. See Hagan v. Adams Prop. Assocs., Inc., 253
Va. 217, 220, 482 S.E.2d 805, 807 (1997).
The LLC’s separate legal identity distinguishes the facts
of the present case from those presented in Nicholson, in which
we applied a provision contained in the “dead man’s statute.”
There, a son claimed title to funds by virtue of a gift from his
deceased mother made during her lifetime. The son’s siblings
alleged that their mother’s transfer to the son was the result
of undue influence he exercised while acting as her attorney-in-
fact. Id. at 274, 64 S.E.2d at 815-16. The siblings asked that
11
the circuit court declare the funds at issue an asset of the
mother’s estate. Id. at 274, 64 S.E.2d at 816.
We held that although the son had not initiated the suit
against his mother’s estate or personal representative, the son
effectively had proceeded against her estate by asserting that
the disputed funds belonged to him, rather than to the estate,
as his siblings claimed. Id. at 283, 64 S.E.2d at 821.
Therefore, we applied a provision of the “dead man’s statute,”
and held that the decree was erroneously entered in favor of the
son based on the son’s uncorroborated testimony. 1 Id.
In contrast, the “dead man’s statute” is inapplicable here
because the present litigation involving the LLC is not
effectively a proceeding brought by or against Malcolm’s estate
or trust. Therefore, the LLC was not entitled to claim the
benefit of the hearsay exception in the “dead man’s statute,”
and the circuit court did not err in concluding that the
proffered evidence was inadmissible under Code § 8.01-397.
B. Business Records Exception
The LLC argues that the letters comprising Exhibit 6 were
alternatively admissible under the business records exception to
the hearsay rule, and that the circuit court erred in sustaining
1
At that time, we applied former Code § 8-286, the
predecessor statute of Code § 8.01-397, which contained
essentially the same provision prohibiting entry of a decree
based on the uncorroborated testimony of an adverse or
interested party.
12
Dorothy’s objection to their admission on this basis. The LLC
asserts that Ann’s testimony established the foundation for the
admission of these documents because she had been the custodian
of her father’s business records since his stroke in 1977.
In response, Dorothy asserts that letters comprising
Exhibit 6 were not verified regular business entries as required
under the business records exception. She contends that the LLC
failed to establish an adequate foundation for the admission of
these documents because the LLC did not demonstrate that the
records “were entries made in the course of business, rather
than old papers maintained in a file.” 2 We disagree with
Dorothy’s arguments.
In Virginia, the business records exception to the hearsay
rule, also referred to as the “modern shop book rule,” permits
the admission of verified regular entries of a business provided
that such evidence has a direct or circumstantial guarantee of
trustworthiness. Frank Shop, Inc. v. Crown Central Petroleum,
261 Va. 169, 175, 540 S.E.2d 897, 901 (2001); Kettler & Scott,
Inc. v. Earth Technology Companies, Inc., 248 Va. 450, 457, 449
S.E.2d 782, 785 (1994); “Automatic” Sprinkler Corp. of America
v. Coley & Petersen, Inc., 219 Va. 781, 792, 250 S.E.2d 765, 773
(1979); Frye v. Commonwealth, 231 Va. 370, 387, 345 S.E.2d 267,
2
Dorothy did not object to Exhibit 6 at trial on the
grounds of relevance, nor does she raise that argument in this
appeal.
13
279-80 (1986). We have further explained that the
trustworthiness or reliability of such records is guaranteed by
the fact that they are regularly prepared and relied on in the
conduct of business by the persons or entities for which the
records are kept. Frank Shop, 261 Va. at 175, 540 S.E.2d at
901; Kettler & Scott, 248 Va. at 457, 449 S.E.2d at 785-86;
Marefield Meadows, Inc. v. Lorenz, 245 Va. 255, 264, 427 S.E.2d
363, 368 (1993). Therefore, to be admissible as a business
record, a document must be produced by its proper custodian, be
a record kept in the ordinary course of business, and be made at
the time of an event by a person having a duty to keep a true
record of that event. Frank Shop, 261 Va. at 175-76, 540 S.E.2d
at 901; Kettler & Scott, 248 Va. at 457, 449 S.E.2d at 786;
“Automatic” Sprinkler, 219 Va. at 793, 250 S.E.2d at 773;
Marefield Meadows, 245 Va. at 264, 427 S.E.2d at 368; Ashley v.
Commonwealth, 220 Va. 705, 707-08, 261 S.E.2d 323, 324-25
(1980).
Here, the LLC presented testimony from Ann establishing
that she had worked in her father’s office for several years
when he was alive, had helped maintain the records there, and
was familiar with the manner in which her father conducted his
various businesses. She also stated that she had been the
custodian of her father’s business records since his stroke in
14
1977, and that she continued to maintain those records in the
same filing cabinets and file folders used by her father.
Ann explained that her father kept carbon copies of all
typed letters that he generated in the course of his property
management business. She stated that he maintained his records
on a “by property basis,” and that he kept notes on all
transactions concerning those properties. These properties
included the 10 single-family homes that Malcolm and his wife
owned, as well as between 15 and 20 homes that Malcolm
“managed.”
Ann stated that her father also maintained records
involving the “payoff” of mortgages on his properties. She
related that Malcolm would take such action as necessary to
ensure that “the payoff of any note” was properly recorded.
We hold that Ann’s testimony provided a sufficient
foundation for admission of the letters Malcolm wrote that were
part of Exhibit 6. 3 The reliability of those records was
guaranteed by the fact that the documents were regularly
3
In addition to challenging the foundation for Exhibit 6,
Dorothy raised an objection that the August 10, 1976 letter from
Malcolm to the bank, which was part of Exhibit 6, was
inadmissible because the LLC did not properly produce this
letter in discovery. The circuit court sustained this
objection. However, the LLC has not assigned error to the
circuit court’s ruling that the August 10, 1976 letter was
inadmissible because it was not timely produced in discovery.
Thus, the circuit court’s exclusion of the August 10, 1976
letter based on the LLC’s discovery violation precludes its
admission on retrial of this case.
15
prepared in the ordinary course of business, having been made as
part of the loan “payoff” transactions described in the
correspondence, and that Malcolm relied on them in the conduct
of his property management business.
We also hold that the correspondence Malcolm received from
the bank was admissible as Malcolm’s business records. We
initially recognize that the business records exception
generally does not apply to records merely received by a
business. Decipher, Inc. v. iTRiBE, Inc., 262 Va. 588, 595, 553
S.E.2d 718, 721 (2001); see Ford Motor Co. v. Phelps, 239 Va.
272, 276, 389 S.E.2d 454, 457 (1990). However, our
consideration of this general rule does not conclude our
analysis.
The central consideration in a business records exception
analysis is whether the records demonstrate reliability and
trustworthiness. Here, although Malcolm did not generate the
letters from the bank, those letters were part of a series of
correspondence between Malcolm and the bank discussing the
mortgage “payoff.” The reciprocal nature of these
communications demonstrates the reliability and trustworthiness
of the letters from the bank. Also, Malcolm kept the letters
from the bank in the regular course of his business and relied
on the accuracy of the information contained in the letters in
order to draft his responses and collect his reimbursement
16
funds. Thus, no additional foundation evidence was required for
admission of the bank’s letters to Malcolm. See Marefield
Meadows, 245 Va. at 263-64, 427 S.E.2d at 367-68; “Automatic”
Sprinkler, 219 Va. at 792-94, 250 S.E.2d at 773-74.
C. Evidence of Dorothy’s “Understanding”
We next consider the LLC’s argument that the circuit court
erred in allowing Dorothy to testify concerning her
“understanding” of the original purchase of the property. The
LLC contends that this testimony was inadmissible because
Dorothy did not have personal knowledge of the transaction, and
her testimony did not provide a factual basis for its admission.
In her brief, Dorothy does not address this assignment of
error. Based on our review of the record, we agree with the
LLC’s argument.
Dorothy’s testimony regarding her “understanding” of the
original transaction was not based on any personal knowledge of
the transaction, or on any information she received that would
have provided a basis for such testimony. Instead, her
testimony established that she did not learn of the purchase
until Herman told her that he had bought a house. Dorothy also
confirmed that she did not have any contact with Malcolm at the
time the property was purchased, and only spoke with him once in
1963 when she needed his signature for an insurance claim she
was filing on the property. She testified that at that time,
17
“He just asked why I was there and signed the paper and then
gave it back to me.”
This testimony, considered collectively, demonstrated that
Dorothy lacked an opportunity for knowing the intention of the
parties at the time the property was purchased, and that she did
not have a basis in fact for testifying about her
“understanding” of that transaction. Therefore, we hold that
the circuit court erred in permitting her to testify about her
purported “understanding” of the purchase. See 1 Kenneth S.
Broun, McCormick on Evidence § 10 (6th ed. 2006).
D. Estoppel by Deed
The LLC argues that the circuit court erred in overruling
the LLC’s motion in limine, which sought to enforce the doctrine
of estoppel by deed. The LLC contends that Dorothy attempted by
her evidence to contradict the clear wording of the 1972 deed
from which she derived her ownership interest. Thus, the LLC
maintains that Dorothy should have been estopped from claiming
that she owned more than a one-half interest in the property and
from asserting that she and Herman were not divorced. We
disagree with the LLC’s arguments.
In an action against a third party, the doctrine of
estoppel by deed binds a grantor and his privies, but does not
bind the grantee of a deed. As we have stated, “the doctrine of
estoppel by deed provides that equity will not permit a grantor,
18
or one in privity with him, to assert anything in derogation of
an instrument concerning an interest in real or personal
property as against the grantee or his successors.” Barris v.
Keswick Homes, L.L.C., 268 Va. 67, 73, 597 S.E.2d 54, 58 (2004);
accord VEPCO v. Buchwalter, 228 Va. 684, 688, 325 S.E.2d 95, 97
(1985). Here, Dorothy was the grantee, not the grantor, of the
1972 deed. Therefore, the doctrine of estoppel by deed was
inapplicable under the facts presented, and we hold that the
circuit court did not err in denying the LLC’s motion in limine.
E. Evidence of a Marriage
The LLC argues that the circuit court erred in determining
that Dorothy and Herman were still married at the time of
Herman’s death. The LLC contends that Herman had married a
second time and that, therefore, a presumption arose that his
prior marriage to Dorothy had ended in divorce. According to
the LLC, Dorothy’s evidence failed to overcome that presumption.
We disagree with the LLC’s arguments.
The LLC incorrectly characterizes the substance of the
presumption on which it relies. Under that “second marriage”
presumption, when two marriages of the same person are proved, a
rebuttable presumption arises that the second marriage is valid.
Deryder v. Metropolitan Life Ins. Co., 206 Va. 602, 607-08, 145
S.E.2d 177, 180-81 (1965); Parker v. American Lumber Corp., 190
Va. 181, 185-86, 56 S.E.2d 214, 216 (1949).
19
Here, however, the LLC failed to present evidence proving
that Herman had married a second time. Herman’s recitation in
the 1972 deed that his wife was Billie Sue did not prove that
Billie Sue and Herman were legally married. Likewise, the fact
that his death certificate listed his marital status as
“divorced” provided no proof that Herman had been married a
second time, or that he had obtained a divorce from Dorothy.
Therefore, the facts before the circuit court did not give rise
to a presumption of a valid second marriage.
In the absence of such a presumption, the circuit court
relied on Dorothy’s testimony that she and Herman had not
divorced, and that she had never received “divorce papers” from
him. Based on this testimony, we conclude that the circuit
court did not err in determining that Dorothy and Herman were
married at the time of Herman’s death.
F. Defense of Laches
We find no merit in the LLC’s argument that the circuit
court erred in failing to consider its defense of laches. The
LLC bases its argument on the fact that Dorothy knew about
Malcolm’s interest in the property in 1956 and yet did not
assert any right of her own until 2003.
The doctrine of laches involves the failure of a party to
assert a known right or claim for an unexplained period of time
resulting in prejudice to the adverse party. Stewart v. Lady,
20
251 Va. 106, 114, 465 S.E.2d 782, 786 (1996); Masterson v. Board
of Zoning Appeals, 233 Va. 37, 47, 353 S.E.2d 727, 735 (1987).
The burden of proving this defense rests with the party
asserting it. Stewart, 251 Va. at 114, 465 S.E.2d at 786;
Morris v. Mosby, 227 Va. 517, 521-22, 317 S.E.2d 493, 496
(1984). Here, the LLC’s defense failed completely because the
LLC did not demonstrate that it was prejudiced by Dorothy’s
failure earlier to assert her ownership claim against the LLC.
III.
The circuit court’s error in excluding Exhibit 6 on the
basis that it was not admissible under the business records
exception and in admitting evidence of Dorothy’s “understanding”
of the original purchase of the property require that we remand
the case for a new trial. Therefore, we do not address the
LLC’s assignments of error concerning discovery issues involving
the amended deeds, because those issues do not affect our
judgment and will not arise at a new trial. We also do not
address the LLC’s assignment of error that the circuit court
erred in refusing to grant partition of the property. That
issue can be considered only after the circuit court determines
on retrial whether Dorothy met her evidentiary burden of proving
the allegations of her cross-bill. Finally, we do not reach
Dorothy’s assignment of cross-error that the circuit court erred
in failing to rule that Dorothy owned the property by virtue of
21
adverse possession, because that issue was not the subject of a
ruling by the circuit court.
For these reasons, we will affirm in part, and reverse in
part, the circuit court’s judgment and remand the case for a new
trial.
Affirmed in part,
reversed in part,
and remanded.
22