LOFTON RIDGE v. Norfolk Southern Ry. Co.

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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