PRESENT: All the Justices
KENNETH R. SHEETS, ET AL.
OPINION BY
v. Record No. 010965 JUSTICE DONALD W. LEMONS
March 1, 2002
HARRIET A. CASTLE
FROM THE CIRCUIT COURT OF PAGE COUNTY
John J. McGrath, Jr., Judge
In this appeal, we consider whether a denial of a petition
for appeal by the Supreme Court of Virginia has precedential
effect. Additionally, we consider whether a defendant is a
“prevailing party” under the terms of a contract when the
plaintiff takes a voluntary nonsuit.
I. Facts and Proceedings Below
On November 19, 1999, Kenneth R. and Ann R. Sheets
(collectively “Sheets”) entered into a contract to sell
approximately 100 acres of real property in Page County to
Harriet A. Castle (“Castle”). The contract included a provision
entitled “Attorney’s Fees,” that stated in relevant part:
In any action or proceeding involving a dispute
between the Purchaser and the Seller arising out
of this Contract, the prevailing party shall be
entitled to receive from the other party
reasonable attorney’s fees to be determined by
the court or arbitrator(s).
The parties never closed on the property.
On March 31, 2000, Sheets sold a portion of the same
property to Derek K. Goebel (“Goebel”) and Janine S. Siebens
(“Siebens”) and granted to them an option to purchase the
remainder of the property. Castle subsequently filed a bill of
complaint against Sheets, Goebel, Siebens, and others, seeking
rescission of the sale to Goebel and Siebens and specific
performance of the contract between Castle and Sheets. In the
bill of complaint, Castle alleged that she was “ready, willing,
and able to settle on the contract,” but that Sheets had refused
to complete settlement.
Sheets filed an answer alleging that Castle had failed to
comply with the contract terms; therefore, their contract was
null and void. The answer included a request for costs and
attorney’s fees. Sheets also filed a motion craving oyer and a
demurrer. Castle’s attorney died after filing the bill of
complaint, so the trial court ordered her to obtain new counsel
by July 11, 2000, the date scheduled for a hearing on the motion
craving oyer. The demurrer was set for argument on July 18,
2000.
Castle did not obtain new counsel by the July 11, 2000
hearing and, as a result, she appeared pro se. At the hearing,
Castle moved for a voluntary nonsuit pursuant to Code § 8.01-
380. Sheets objected to the entry of a nonsuit, arguing that
their claims for costs and attorney’s fees were counter-claims
arising out of the contract, which prevented the plaintiff from
suffering a nonsuit. The trial court found that the claims for
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costs and fees were subject to independent adjudication and
granted Castle’s motion for nonsuit.
On July 19, 2000, the Sheets filed a petition for
attorney’s fees. Citing the “Attorney’s Fees” clause of the
real estate contract, the Sheets claimed to be the prevailing
party because the suit against them was nonsuited.
By order dated February 2, 2001, the trial court denied
Sheets’ petition for attorney’s fees. According to the trial
court, the term “prevailing party” in the parties’ contract was
“clear and unambiguous;” therefore, the trial court applied the
“plain meaning” rule of contract interpretation. The trial
court held that because there was no “final judgment” in the
case, there was no “prevailing party” under the terms of the
contract. The trial court also opined that awarding attorney’s
fees to defendants such as Sheets “would serve as a substantial
and unnecessary burden on and an abridgement of plaintiffs’
closely guarded statutory right to take a first voluntary non-
suit free from sanctions.” Sheets filed a motion to stay the
trial court’s order and a petition for rehearing, both of which
the trial court denied by order dated February 27, 2001. Sheets
appeals the adverse ruling of the trial court.
II. Standard of Review
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The trial court’s judgment is predicated entirely upon
questions of law which we review de novo. Transcontinental Ins.
Co. v. RBMW, Inc., 262 Va. 502, 510, 551 S.E.2d 313, 317 (2001).
III. Analysis
a. Precedential Value to
Denial of Petition for Appeal
The contractual term at issue in this case entitles “the
prevailing party” to an award of reasonable attorney’s fees.
Initially, Sheets argues that we have already decided whether a
defendant is a “prevailing party” when the plaintiff takes a
voluntary nonsuit. Sheets maintains that in a prior case before
the Circuit Court of Fairfax County, the trial court decided
that a defendant was a “prevailing party” under similar
contractual provisions and that the petition for appeal was
denied by the Supreme Court of Virginia. See Ayoub v. Trautner,
Record No. 990491 (June 4, 1999). Sheets argues that because a
petition for appeal is resolved by the Supreme Court of Virginia
on the merits, our denial of the petition bestows binding
precedential application of the circuit court opinion throughout
the Commonwealth.
We note that the Attorney General has employed a similar
argument concerning unpublished opinions of the Court of Appeals
of Virginia. The Attorney General has argued that unpublished
opinions of the Court of Appeals which would otherwise have no
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precedential value (see Code § 17.1-413), nonetheless attain the
status of binding precedent if a petition for appeal is refused
by the Supreme Court of Virginia. See Bowman v. Commonwealth,
30 Va. App. 298, 305, 516 S.E.2d 705, 708 (1999).
With the exception of cases with procedural defects and the
limited number of cases for which appellate review by the
Supreme Court of Virginia is dependent upon “a substantial
constitutional question as a determinative issue or matters of
significant precedential value” (Code §§ 17.1-410 and -411), the
refusal of a petition for appeal constitutes a decision on the
merits. See Saunders v. Reynolds, 214 Va. 697, 700, 204 S.E.2d
421, 424 (1974) (“[w]e state unequivocally that a decision to
grant or refuse a petition for writ of error is based upon one
equally-applied criterion – the merits of the case”); see also
Wright v. West, 505 U.S. 277, 283 (1992) (“the Supreme Court of
Virginia refused the petition – a disposition indicating that
the [C]ourt found the petition without merit”); Jackson v.
Virginia, 443 U.S. 307, 311 n.4 (1979) (“[e]ach petition for
writ of error under Va. Code § 19.2-317 (1975) is reviewed on
the merits . . . and the effect of a denial is to affirm the
judgment of conviction on the merits”); Dodson v. Director, 233
Va. 303, 307 n.5, 355 S.E.2d 573, 576 n.5 (1987) (“[i]n
Virginia, aside from appeals from a capital murder conviction,
criminal appeals to both the Court of Appeals and to this Court
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are discretionary, and ‘a decision to grant or refuse a petition
[for appeal] is based upon one equally-applied criterion – the
merits of the case.’ ”).
While a decision “on the merits,” including a denial of a
petition for appeal, may have precedential value, discerning the
grounds that formed the basis for denial is indispensable in
assessing its potential applicability in future cases. Most
often the refusal of a petition for appeal merely recites:
Upon review of the record in this case and
consideration of the argument submitted in
support of and in opposition to the granting of
an appeal, the Court is of opinion there is no
reversible error in the judgment complained of.
Accordingly, the Court refuses the petition for
appeal.
From such an order, the grounds upon which the Court relied
as a basis for denial cannot be determined. While it may be
that there is simply no error found, there are several other
possibilities. To name but a few of the several possible
grounds, the trial court may have been in error, but the error
was “harmless.” See Holmes v. LG Marion Corp., 258 Va. 473,
483, 521 S.E.2d 528, 535 (1999); see also Clay v. Commonwealth,
262 Va. 253, 259, 546 S.E.2d 728, 731 (2001). The trial court
may have been in error, but the court “reached the correct
result . . . for the wrong reason.” See Chesterfield County v.
Stigall, 262 Va. 697, 704, 554 S.E.2d 49, 53 (2001). The trial
court may have been in error, but there exists an independent
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basis for the trial court’s judgment that has not been argued as
error. See Magco of Maryland, Inc. v. Barr, 262 Va. 1, 1, 545
S.E.2d 548, 548 (2001); see also Parker-Smith v. Sto Corp., 262
Va. 432, 440-41, 551 S.E.2d 615, 620 (2001). While refusals of
petitions for appeal may be grounded upon each of the reasons
illustrated in these examples, among others, and the
dispositions would be “on the merits,” there could be error in
the judgments of a non-reversible nature.
We restate that, with the exceptions previously mentioned,
the refusal of a petition for appeal is based upon the merits of
the case. However, unless the grounds upon which the refusal is
based is discernible from the four corners of the Court’s order,
the denial carries no precedential value. To hold otherwise
would result in bench and bar sifting through the records of
cases buried in the office of the Clerk of the Supreme Court of
Virginia or the clerk of the circuit court to affirm or
contradict speculative assertions of the reason for the Court’s
denial of petitions for appeal. Such unreliability and lack of
clarity is not countenanced in our jurisprudence.
b. Is There a “Prevailing Party” Upon
the Taking of a Nonsuit?
The provisions of Code § 8.01-380(B) at issue state:
Only one nonsuit may be taken to a cause of
action or against the same party to the
proceeding, as a matter of right, although the
court may allow additional nonsuits or counsel
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may stipulate to additional nonsuits. The court,
in the event additional nonsuits are allowed, may
assess costs and reasonable attorney’s fees
against the nonsuiting party.
The contract at issue in this case provided that the “prevailing
party” in a dispute arising under the contract was entitled to
reasonable attorney’s fees. At the outset, it is important to
state what this case is not about. This case is not about
awarding attorney’s fees and costs under the nonsuit statute.
This case involves a single nonsuit, and thus the last sentence
of Code § 8.01-380(B) is not applicable. Nor was the nonsuit
taken within five days of a scheduled trial such as to render
subsection (C) of the Code provision applicable. * This case is
about whether there is a “prevailing party” when a nonsuit is
taken. If there is a “prevailing party” then under the terms of
the contract, attorney’s fees should be awarded. If there is no
“prevailing party” when a nonsuit is taken, then the attorney’s
fee provision of the contract is not implicated.
*
(C) If notice to take a nonsuit of right is
given to the opposing party within five days of
trial, the court in its discretion may assess
against the nonsuiting party reasonable witness
fees and travel costs of expert witnesses
scheduled to appear at trial, which are actually
incurred by the opposing party solely by reason
of the failure to give notice at least five days
prior to trial. The court shall have the
authority to determine the reasonableness of
expert witness fees and travel costs.
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A nonsuit does not involve a decision on the merits,
rather, it “simply [puts] an end to the present action, but is
no bar to a subsequent action for the same cause.” Payne v.
Buena Vista Extract Co., 124 Va. 296, 311, 98 S.E. 34, 39
(1919). The term “prevailing party” is not found in the nonsuit
statute. We will construe this term utilized by the parties in
accordance with its plain meaning. See Lansdowne Dev. Co. v.
Xerox Realty Corp., 257 Va. 392, 400, 514 S.E.2d 157, 161
(1999). We need not go farther than Black’s Law Dictionary for
its common meaning: “A party in whose favor a judgment is
rendered, regardless of the amount of damages awarded.” Black’s
Law Dictionary 1145 (7th ed. 1999).
This definition is in accord with our decision in Richmond
v. County of Henrico, wherein we stated:
The ‘prevailing party’, within the meaning of the
general rule that such a party is entitled to
costs, is the party in whose favor the decision
or verdict in the case is or should be rendered
and judgment entered, and in determining this
question the general result should be considered,
and inquiry made as to who has, in the view of
the law, succeeded in the action.
185 Va. 859, 869, 41 S.E.2d 35, 41 (1947) (quotations omitted).
We hold that under the plain meaning of the term, there is no
“prevailing party” when a nonsuit is awarded.
Of course, where the circumstances warrant the parties may
avail themselves of specific remedies provided in subsections
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(B) and (C) of the nonsuit statute itself, their contractual
agreements properly interpreted, or the sanctions provisions of
Code § 8.01-271.1. However, on this record, the trial court did
not err in holding that there was no “prevailing party” upon the
granting of a nonsuit and that attorney’s fees under the
contract could not be awarded.
We will affirm the judgment of the trial court.
Affirmed.
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