Present: Carrico, C.J., Compton, Stephenson, 1 Lacy, Keenan, and
Koontz, JJ., and Whiting, Senior Justice
KEITH EDWARD ANGSTADT, ET AL.
v. Record No. 961579 OPINION BY JUSTICE BARBARA MILANO KEENAN
September 12, 1997
ATLANTIC MUTUAL INSURANCE
COMPANY
FROM THE CIRCUIT COURT OF ARLINGTON COUNTY
Paul F. Sheridan, Judge
The primary issues in this appeal are (1) whether the
defendants in a declaratory judgment suit were denied their right
to a jury trial by the trial court’s ruling that the jury was
impaneled under Code § 8.01-336(E) to decide an issue out of
chancery, and (2) whether the trial court erred in entering
judgment contrary to the jury verdict.
Atlantic Mutual Insurance Company (Atlantic) filed a
declaratory judgment suit against Keith Edward Angstadt, Raymond
Rask, and Multicomm Telecommunications, Inc. (Multicomm), seeking
relief from any duty to pay a $2,000,000 judgment Angstadt had
obtained against Atlantic's insureds, Multicomm and Multicomm's
employee, Rask. Angstadt, Rask, and Multicomm (collectively, the
defendants) submitted an amended answer and grounds of defense,
and moved to transfer the case for consolidation with an action
at law, a declaratory judgment action brought by Atlantic against
1
Justice Stephenson participated in the hearing and decision
of this case prior to the effective date of his retirement on
July 1, 1997.
National Union Fire Insurance Company. 2 The trial court denied
the motion.
Citing Code § 8.01-188, the defendants requested that a jury
be impaneled to determine issues of fact. This section provides
that
[w]hen a declaration of right or the granting of
further relief based thereon shall involve the
determination of issues of fact triable by a jury, such
issues may be submitted to a jury in the form of
interrogatories, with proper instructions by the court,
whether a general verdict be required or not.
The trial court granted this motion.
The trial court then granted Atlantic's motion for summary
judgment against all the defendants. In their original appeal to
this Court, the defendants challenged the award of summary
judgment, but they did not assign error to the trial court's
earlier ruling denying transfer of the case. We reversed the
award of summary judgment in Angstadt v. Atlantic Mutual
Insurance Company, 249 Va. 444, 457 S.E.2d 86 (1995), and
remanded the case for further proceedings.
During a pre-trial hearing on remand, the trial court
requested the parties to frame "the issue out of chancery [that]
the jury is going to decide." The trial court later repeated its
request for "the issue out of chancery," and indicated that the
verdict would be an "advisory decision by the jury." The
2
National Union Fire Insurance Company provided excess
coverage above Atlantic's $1,000,000 policy limit.
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defendants did not object to the trial court's characterization
of the jury verdict as being advisory, or to the court's request
for a statement of the issue out of chancery.
Atlantic and the defendants agreed that the sole question to
be presented to the jury was whether Rask willfully failed to
cooperate with Atlantic by not appearing at a scheduled
deposition on April 26, 1993. The trial court heard the
following evidence with a jury in a three-day trial.
In the underlying tort action, Angstadt had filed suit
against Rask and Multicomm, claiming he had been injured as a
result of the negligent installation of a microwave transmitter.
John D. McGavin, whom Atlantic had employed to defend Multicomm
and Rask, testified that, during the course of the litigation, he
was unsuccessful in repeated attempts to contact Rask by
telephone, letter, and facsimile.
Based on concerns about Rask’s lack of cooperation, Atlantic
sent Rask a "reservation of rights" letter, reminding him of his
obligation under the insurance policy to cooperate with McGavin.
McGavin also stated that he warned Rask about the possibility of
sanctions, including the entry of a default judgment against him,
if he failed to cooperate with Atlantic.
After McGavin was unsuccessful in obtaining Rask's
appearance for a de bene esse deposition, the trial court entered
an order compelling Rask to appear for a deposition on April 26,
1993, in Salt Lake City, Utah, where Rask resided and conducted
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business. Four days before that deposition, Rask sent McGavin a
facsimile stating that a close family member, who actually was
the father of Rask’s close friend, had suffered a stroke, and
that Rask would not be available to attend the deposition if that
person died. McGavin repeatedly tried to contact Rask by
telephone, but Rask failed to return his messages.
Rask sent another facsimile to McGavin on April 23, 1993,
stating that the "family member" had passed away, and that he
would have to reschedule the deposition for April 28, 1993.
McGavin testified that Rask did not communicate further with him
about the deposition, except to send McGavin a copy of a
facsimile directed to Angstadt's counsel, stating that Rask had
advised McGavin that he would not be available for deposition on
April 26, 1993.
Alicia L. Summers, McGavin's associate, testified that she
informed Angstadt's counsel that Rask would be available for
deposition on April 28, 1993, but not on April 26, 1993.
Angstadt's counsel responded that he would attend the Salt Lake
City deposition at Multicomm's premises on April 26, 1993 as
scheduled. Angstadt's counsel informed McGavin that if the
funeral was held at the deposition time of 2:00 p.m., Angstadt
could accommodate Rask at another available time that day.
Summers then informed Angstadt's counsel that any attempt to
enter Multicomm's premises on April 26, 1993 would constitute a
trespass which would be reported to the "appropriate
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authorities." Both McGavin and Summers denied that they had
informed Rask or Multicomm that the deposition had been
rescheduled for April 28, 1993.
Rask testified that a week before the April 26, 1993
deposition, the father of his close friend suffered a stroke.
Rask stated that he sent two facsimiles to McGavin purporting to
cancel the deposition because the funeral was set for 9:30 a.m.
on the morning of April 26, 1993. Rask testified that he would
have been available to attend the deposition after the funeral on
April 26, 1993, but that he believed the deposition had been
canceled, because he learned that McGavin had directed Multicomm
to notify the authorities if Angstadt's counsel attempted to
enter the premises. However, Rask conceded that he never
attempted to contact McGavin to determine whether the deposition
had been rescheduled. 3
After hearing the above evidence, the jury concluded that
3
As a result of Rask's failure to attend the April 26, 1993
deposition, the trial court, in the underlying tort action,
granted Angstadt a default judgment on the issue of liability.
In a bench trial on the issue of damages, Angstadt recovered the
$2,000,000 judgment at issue against Multicomm and Rask. Shortly
after the judgment was entered, National Union Fire Insurance
Company paid Angstadt $650,000 to settle its obligation to
provide excess coverage.
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Rask did not willfully fail to cooperate by failing to attend the
April 26, 1993 deposition. Atlantic requested the chancellor to
enter judgment in its favor on the basis that the jury verdict
was merely advisory, or in the alternative, on the ground that
the verdict was contrary to the evidence.
The chancellor held that since the jury was impaneled to
decide an issue out of chancery, the verdict was advisory and
non-binding. The chancellor also ruled that the verdict was
contrary to the law and the evidence because "there is no
question . . . on the facts that the insured willfully failed to
cooperate." The chancellor ruled that there was no valid
explanation for Rask's failure to attend the 2:00 p.m.
deposition, since he testified that the funeral was held at 9:30
a.m.
The chancellor stated that Rask "made a deliberate, knowing,
calculated and well-advised choice to not attend that
deposition." The chancellor then entered judgment for Atlantic,
declaring that Atlantic was not obligated to indemnify Multicomm
or Rask for Angstadt's judgment against them.
On appeal, the defendants argue that they had a statutory
and constitutional right to a jury trial, and that the chancellor
abused his discretion in refusing to transfer the case for trial
at law. In the alternative, the defendants contend that, if the
chancellor did not abuse his discretion in refusing to transfer
the case, he erred in ruling that the jury verdict was advisory.
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Finally, the defendants argue that, if this Court determines
that the jury properly was presented an issue out of chancery,
judgment should have been entered in accordance with the verdict
because it was supported by Rask's testimony that he believed the
deposition had been rescheduled. We disagree with the
defendants.
Initially, we will not consider the issue whether the
chancellor abused his discretion in refusing to transfer the
case, because the defendants did not assign error to this ruling
in their first appeal, and the issue was not raised again after
remand of the case. We will only consider errors timely assigned
in a petition for appeal. See Rule 5:17(c).
We also conclude that the defendants have waived the
argument that they were entitled to a binding jury verdict in
this declaratory judgment suit. The defendants failed to state
an objection at the time the chancellor announced that he was
impanelling the jury to decide an issue out of chancery and asked
the parties to frame the issue. Further, when the chancellor
asked the defendants' counsel how many questions should be
included in the issue out of chancery, the defendants' counsel
did not object to the use of that procedure, but discussed the
substantive questions involved. Thus, we do not consider the
merits of this argument. Rule 5:25.
In addition, the defendants did not file a plea in equity,
which would have entitled them to a jury trial under Code § 8.01-
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336(D). A plea in equity is a discrete form of defensive
pleading that does not address the merits of the complaint, but
raises a single issue of fact which, if proved, constitutes an
absolute defense to the suit. Nelms v. Nelms, 236 Va. 281, 289,
374 S.E.2d 4, 9 (1988); Bolling v. General Motors Acceptance
Corp., 204 Va. 4, 8, 129 S.E.2d 54, 56 (1963). A jury verdict
returned under a plea in equity is as binding and conclusive on
the factual issue submitted as a jury verdict in an action at
law. Stanardsville Volunteer Fire Co. v. Berry, 229 Va. 578,
587, 331 S.E.2d 466, 471-72 (1985).
We also find no merit in the defendants' argument that they
were entitled to a binding jury verdict under Code § 8.01-188.
That section addresses only the form in which an issue of fact
may be submitted to a jury, and does not provide a party in a
declaratory judgment suit a separate right to a binding jury
verdict.
We next consider the defendants' argument that the
chancellor erred in entering judgment contrary to the jury
verdict. A chancellor has discretionary authority under Code
§ 8.01-336(E) to impanel a jury to decide an issue out of
chancery. The jury verdict is advisory or persuasive, and serves
to inform the conscience of the chancellor. Bowers v. Westvaco
Corp., 244 Va. 139, 147, 419 S.E.2d 661, 666 (1992);
Stanardsville, 229 Va. at 587, 331 S.E.2d at 471; Harris v.
Citizens Bank & Trust Co., 172 Va. 111, 133, 200 S.E. 652, 660
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(1939). However, as we stated in DeJarnette v. Brooks Lumber
Company, 199 Va. 18, 97 S.E.2d 750 (1957),
[w]hen the chancellor has decided the case himself,
despite the verdict of the jury and contrary to their
findings, on appeal the duty devolves upon the
appellate court to examine the evidence and if in its
opinion the preponderance thereof is with the verdict
the decree will be reversed and final judgment entered
in accordance with the verdict. But where the evidence
preponderates in support of the judgment of the
chancellor his judgment will be upheld.
Id. at 21, 97 S.E.2d at 752; see also Fitchette v. Cape Charles
Bank, 146 Va. 715, 733, 133 S.E. 492, 494 (1926).
In determining whether a preponderance of the evidence
supports the chancellor's judgment, we first note that Atlantic's
insurance policy does not define the word "willful." Although we
previously have addressed the issue whether an insured has
willfully failed to cooperate with its insurer, see, e.g., State
Farm Insurance Company v. Davies, 226 Va. 310, 310 S.E.2d 167
(1983); Cooper v. Employers Mutual Liability Insurance Company,
199 Va. 908, 10 S.E.2d 210 (1958), we have not defined the word
"willful" in the context of a "cooperation clause" in an
insurance contract. However, in a civil action involving a claim
that an attorney "willfully" violated a provision of the Virginia
Freedom of Information Act, Code §§ 2.1-340 to -346.1, we stated
that conduct is "willful" when it is intentional. RF&P Corp. v.
Little, 247 Va. 309, 320, 440 S.E.2d 908, 915 (1994). The word
"willful" also has been defined, in a non-criminal law context,
as denoting an act which is intentional, knowing, or voluntary.
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See United States v. Murdock, 290 U.S. 389, 394 (1933). We apply
these definitions to our review of the evidence in the present
case.
We conclude that a preponderance of the evidence supports
the chancellor's judgment that Rask willfully failed to cooperate
with Atlantic by failing to attend the April 26, 1993 deposition.
Atlantic had warned Rask of his obligation under the insurance
policy to cooperate with McGavin. Moreover, McGavin had informed
Rask that his failure to appear at a deposition could result in
the entry of a default judgment against him. Despite these prior
warnings, Rask intentionally refused to appear that afternoon,
although the funeral for his friend's father had been held at
9:30 a.m.
While Rask testified that he thought the deposition had been
rescheduled, he did not attempt to contact McGavin to confirm
that fact. He refused to return McGavin's telephone calls,
although he was aware that McGavin was trying to reach him to
discuss the situation. Rask also admitted that he had not
received any confirmation from McGavin that Atlantic had agreed
to reschedule the deposition. Therefore, we conclude the
chancellor did not err in entering judgment, contrary to the jury
verdict, that Rask's willful failure to cooperate with Atlantic
relieved Atlantic of any duty under its policy with Rask and
Multicomm to indemnify Rask or Multicomm for the $2,000,000
judgment entered in favor of Angstadt against them.
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For these reasons, we will affirm the chancellor's judgment.
Affirmed.
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