PRESENT: All the Justices
JAMES BERNARD BARNETT
v. Record No. 051091 OPINION BY JUSTICE BARBARA MILANO KEENAN
January 13, 2006
STEPHEN L. KITE
FROM THE CIRCUIT COURT OF THE CITY OF RICHMOND
Melvin R. Hughes, Jr., Judge
In this appeal, we decide whether the circuit court erred
in overruling the defendant’s objection to venue.
In December 2000, James B. Barnett was involved in a
physical altercation with Stephen L. Kite. The incident
occurred near Kite’s residence in Powhatan County. Kite later
filed a motion for judgment against Barnett in the Circuit Court
of the City of Richmond (the circuit court), alleging that
Barnett “assaulted and battered” him causing severe and
permanent injuries.
Barnett filed an objection to venue and motion to transfer
the action to Powhatan County. He asserted that the City of
Richmond was not a proper venue because the incident occurred in
Powhatan County where Kite resided, and Barnett lived in
neighboring Chesterfield County and owned real property in
Powhatan County. Barnett further maintained that all the
potential witnesses resided in or near Powhatan County and
Chesterfield County. Additionally, Barnett asserted that he did
not have sufficient contacts with the City of Richmond, did not
own property in Richmond, and did “not individually regularly
conduct business in the City of Richmond as that term has been
construed” by this Court.
In November 2003, the circuit court conducted a hearing on
Barnett’s objection to venue.1 Kite argued that venue was proper
in the City of Richmond, relying on Barnett’s status as majority
shareholder of Barnett’s Heating & Air Conditioning Inc. (BHAC),
a closely held Virginia corporation that conducts certain
business in Richmond.
BHAC, which was not a party to the present action, is in
the business of installing and servicing heating and air
conditioning equipment. BHAC primarily provides services to
customers in Chesterfield and Powhatan Counties and maintains
offices in both these locations. Barnett holds 51 percent of
BHAC’s shares, and his wife holds the remaining 49 percent.
The evidence presented at the hearing focused on the two-
year period before the motion for judgment was filed. That
evidence showed that BHAC obtained equipment and other items on
a daily basis from two major suppliers in the City of Richmond,
and that about five percent of BHAC’s customers were located in
the City of Richmond. Additionally, BHAC advertised its
1
Barnett’s objection to venue was heard and decided by
another judge in the circuit court.
2
business in the Richmond area in the “Verizon SuperPages”
telephone directory and in some local radio commercials.2
The evidence also showed that Barnett was the president of
BHAC and worked for the corporation about four days per week in
a “supervisory” role. Barnett testified that “I go in and make
sure everyone shows up for work and then make sure everything is
working okay and everybody’s going and doing what they are
supposed to do.” Barnett further stated that he had not done
any work or made any service calls in the City of Richmond
during the two-year period in question.
Barnett also testified that he did not make any other
business-related visits to the City of Richmond, nor did he
personally conduct any business with BHAC’s Richmond-based
suppliers. Finally, Barnett stated that his only personal
contacts with the City of Richmond consisted of meetings with
his lawyers concerning this action.
Kite argued that Barnett’s business relationship with BHAC
provided a sufficient basis for venue in the City of Richmond,
despite the fact that Kite’s action was filed against Barnett
personally. The circuit court denied Barnett’s objection to
venue, holding that venue was proper in the City of Richmond
2
The record is unclear regarding the frequency of the radio
advertisements.
3
because BHAC advertised its business in media that reached the
City’s general population.
The case proceeded to trial before a jury, which awarded
Kite $260,000 in compensatory damages and $25,000 in punitive
damages. This appeal followed.
Barnett argues that the circuit court abused its discretion
when it overruled his objection to venue. Former Code § 8.01-
262(3) (2000), in effect when the circuit court made its ruling
in this case, provided that venue is proper in any county or
city “[w]herein the defendant regularly conducts affairs or
business activity.”3
Barnett asserts that the circuit court erroneously treated
Barnett and BHAC as “one and the same.” Barnett observes that
corporations, including those that are closely held, are
entities separate and distinct from their individual
stockholders. Therefore, he contends that any business activity
BHAC conducted in the City of Richmond could not be imputed to
him for purposes of venue in a matter pending against him
personally.
In response, Kite argues that Barnett’s status as BHAC’s
majority shareholder and his frequent participation in BHAC’s
3
Code § 8.01-262 was amended in 2004. The current statute
provides that venue is proper in any county or city “[w]herein
the defendant regularly conducts substantial business activity.”
Code § 8.01-262(3) (Supp. 2005) (emphasis added).
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business affairs resulted in a “near identity of management and
ownership” of the corporation. Kite asserts that based on
Barnett’s relationship to the corporation, BHAC’s activities
were attributable to Barnett for purposes of determining venue.
Thus, Kite contends that Barnett regularly conducted “business
activity” in the City of Richmond through BHAC’s employees and
agents, and that the circuit court correctly determined that the
City of Richmond was a proper venue for trial of this action.
We disagree with Kite’s arguments.
A defendant’s objection to venue is a matter submitted to
the circuit court’s sound discretion, and the court’s decision
in overruling such an objection will not be disturbed on appeal
unless the record shows an abuse of that discretion. Meyer v.
Brown, 256 Va. 53, 56-57, 500 S.E.2d 807, 809 (1998); Norfolk
and W. Ry. Co. v. Williams, 239 Va. 390, 392, 389 S.E.2d 714,
715 (1990). Barnett, as the party objecting to Kite’s choice of
venue, had the burden of establishing that Kite’s chosen forum
was improper. Meyer, 256 Va. at 57, 500 S.E.2d at 809.
The venue provision on which Kite relies is one of several
tests for “permissible” forums set forth in former Code § 8.01-
262. The particular statutory standard at issue here,
“[w]herein the defendant regularly conducts affairs or business
activity,” is stated in plain and unambiguous language. See
former Code § 8.01-262(3); Meyer, 256 Va. at 57, 500 S.E.2d at
5
809. Thus, our decision is determined by the plain meaning of
that language. See Alliance to Save the Mattaponi v.
Commonwealth, 270 Va. 423, 439, 621 S.E.2d 78, 86-87 (2005);
Woods v. Mendez, 265 Va. 68, 74-75, 574 S.E.2d 263, 266-67
(2003).
This statutory standard unambiguously refers to the affairs
or business activity conducted by “the defendant,” not to the
affairs or business activity conducted by a corporation in which
the defendant is a majority shareholder. This distinction is a
critical one because the defendant in the present action is
Barnett in his personal capacity, not BHAC.
As we have stated, “ ‘the proposition is elementary that a
corporation is a legal entity entirely separate and distinct
from the shareholders or members who compose it.’ ” C.F. Trust,
Inc. v. First Flight Ltd. P’ship, 266 Va. 3, 9, 580 S.E.2d 806,
809 (2003) (quoting Cheatle v. Rudd’s Swimming Pool Supply Co.,
234 Va. 207, 212, 360 S.E.2d 828, 831 (1987)); accord Bogese,
Inc. v. State Highway and Transp. Comm’r, 250 Va. 226, 230, 462
S.E.2d 345, 348 (1995). This principle is applicable even when
the corporation is owned totally by a single person, unless the
corporation is held to be the alter ego, alias, stooge, or dummy
of the individual shareholder. See O’Hazza v. Executive Credit
Corp., 246 Va. 111, 115, 431 S.E.2d 318, 320-21 (1993); Cheatle,
234 Va. at 212, 360 S.E.2d at 831.
6
In the present case, the circuit court did not conclude
that the corporate form of BHAC must be disregarded because BHAC
was an alter ego, alias, stooge, or dummy of Barnett
individually. Therefore, for purposes of this venue
determination, BHAC’s activities in the City of Richmond are not
attributable to Barnett even though Barnett had an active
supervisory role in the corporation’s business affairs.
Accordingly, our consideration is limited to the question
whether there was evidence that Barnett personally conducted
business activities and affairs on a regular basis in the City
of Richmond.
We conclude that the record does not support such a
finding. The testimony established that during the two-year
period before the motion for judgment was filed, Barnett had
minimal personal contacts in Richmond and traveled there only
occasionally to consult with his attorneys concerning this
pending litigation. Barnett’s supervisory and other job-related
activities were conducted at BHAC’s facilities located in
Chesterfield and Powhatan Counties. This evidence failed to
establish that Barnett personally conducted business activities
or affairs on a regular basis in the City of Richmond. Based on
this record, we hold that the circuit court abused its
discretion in refusing to sustain Barnett’s objection to venue.
7
For these reasons, we will reverse the judgment appealed
from and remand the case to the circuit court. Upon remand, the
circuit court shall conduct a hearing to determine the proper
venue for a new trial and shall transfer this action for trial
in that forum.
Reversed and remanded.
8