Case Title: Barnett v. Kite

Citation: 

Docket Number: 051091

State: virginia

Court: Virginia Supreme Court

Date: 2006-01-13T00:00:00Z

Document:
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 
 
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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. 
 
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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. 
 
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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 
 
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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. 
 
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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. 
 
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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.