Title: N. Va. Real Estate v. Martin

State: virginia

Issuer: Virginia Supreme Court

Document:

Present:  All the Justices 
 
NORTHERN VIRGINIA REAL ESTATE, INC., ET AL. 
 
v.  Record No. 101836 
OPINION BY JUSTICE DONALD W. LEMONS 
 
 
 
 
 
 
 
January 13, 2012 
KAREN MARTINS, ET AL. 
 
 
FORREST WALPOLE 
 
v.  Record No. 101844 
 
KAREN MARTINS, ET AL. 
 
FROM THE CIRCUIT COURT OF FAIRFAX COUNTY 
Jonathan C. Thacher, Judge 
In these appeals, we consider whether the Circuit Court of 
Fairfax County erred when it imposed sanctions, pursuant to 
Code § 8.01-271.1, against Northern Virginia Real Estate, Inc. 
("NVRE"), its principal broker, Lauren Kivlighan ("Kivlighan"), 
and their counsel, Forrest Walpole ("Walpole"). 
I. Facts and Proceedings Below1 
In July 2007, NVRE and Kivlighan (together, "the 
plaintiffs"), filed a four-count complaint against McEnearney 
Associates, Inc., its real estate agent Karen Martins, and 
David and Donna M. Gavin (together, "the defendants"), alleging 
conspiracy to harm in business, interference with contract, 
interference with contract expectancy, and defamation.   
                     
1 The relatively tortuous path of complaints, demurrers, 
motions, amended complaints, and other pleadings is recited 
herein to illustrate why and how expenses and legal fees 
ultimately accumulated. 
 
2 
Specifically, the plaintiffs' complaint alleged that: (1) 
Donna Gavin (acting as attorney-in-fact for her mother 
Bernadette A. Kennedy) signed a written 90-day exclusive 
listing agreement ("listing agreement") with NVRE for NVRE to 
sell certain real estate ("the Kennedy property") owned by the 
Bernadette A. Kennedy Living Trust ("the Trust"), Bernadette A. 
Kennedy and Donna M. Gavin, Trustees, in exchange for a five 
percent commission of the sales price; (2) the defendants knew 
of the listing agreement; (3) NVRE delivered a written purchase 
offer for $750,000 to Donna Gavin on May 5, 2007; (4) 
thereafter, the defendants formed a conspiracy and interfered 
with NVRE's listing agreement or contract expectancy, which 
caused Donna Gavin to terminate the listing agreement on May 8, 
2007, and NVRE to lose the five percent commission when 
Kennedy's property was sold to buyers represented by McEnearney 
Associates, Inc. ("MAI") and Karen Martins ("Martins").  The 
plaintiffs sought $1 million in compensatory damages and 
$500,000 in punitive damages. 
 
Regarding the defamation count, plaintiffs alleged that: 
(1) between May 4 and May 8, 2007, MAI and Martins falsely 
accused Kivlighan of "not working in the best interest" of the 
Kennedy property's owner and "discouraging [Martins] from 
submitting a written offer to purchase the [Kennedy] property"; 
(2) David Gavin falsely accused Kivlighan of "lying" to him and 
 
3 
Donna Gavin; and (3) the Gavins, writing to the Virginia 
Department of Professional and Occupational Regulation 
("DPOR"), falsely accused Kivlighan of being "an untrustworthy 
agent" who "misrepresented her clients," and turned Kennedy's 
property into a "pocket listing."  The complaint further 
asserted, within the defamation count, that plaintiffs were 
"likely to have evidentiary support after a reasonable 
opportunity for discovery." 
 
The Gavins demurred to the defamation count and MAI and 
Martins moved for a bill of particulars.  In a consent order, 
the trial court sustained the Gavins' demurrer to the 
defamation claims and granted MAI's and Martins' motion for a 
bill of particulars, and allowed plaintiffs to amend their 
complaint. 
 
Plaintiffs subsequently filed an eleven-count amended 
complaint, alleging two counts each of conspiracy to harm in 
business and interference with contract expectancy against 
David Gavin, Martins, and MAI; three counts of defamation as to 
MAI and Martins; three counts of defamation as to David and 
Donna Gavin; and one count of defamation as to David Gavin, 
separately.  The amended complaint included allegations that 
Martins stated in a May 8, 2007 letter to the Gavins that, 
"[m]y broker [(MAI)] had myself add certain verbiage to help 
protect you against your former obligation to the other agent," 
 
4 
and that David Gavin told Martins, "I caught [Kivlighan] in a 
few lies." 
 
The plaintiffs also filed a bill of particulars listing 
their damages as $168,000 (trebled to $504,000) – consisting of 
$37,500, which represented a five percent commission on the 
$750,000 purchase offer submitted to Donna Gavin by Kivlighan, 
plus $130,500, which represented a six percent commission on a 
future sale of the property for $2.175 million as a result of 
improvements the plaintiffs proposed their prospective buyer 
("Alnifaidy") was going to make to the property. 
 
Regarding conspiracy, the bill of particulars stated that, 
beginning May 5, 2007, David Gavin and Martins acted together 
to deny NVRE its commission when they: (1) engaged in 
"wrongful, slanderous attacks on the character and integrity of 
[Kivlighan] with the intent of destroying the confidence [Mrs. 
Gavin] had in her"; (2) caused Donna Gavin "to cease working 
with plaintiffs and to ignore [NVRE's] valid exclusive listing 
agreement"; (3) "in violation of law, failed to work through 
[NVRE] in connection with all offers to purchase the [Kennedy] 
Property"; and (4) "sought to duplicate the Alnifaidy $700,000 
written cash offer for the [Kennedy] Property delivered by 
[NVRE] but under a 'For Sale by Owner' scheme" with a three 
percent commission to MAI. 
 
5 
MAI and Martins demurred to the plaintiffs' amended 
complaint as amplified by the bill of particulars, and the 
Gavins demurred to the plaintiffs' allegations of defamation, 
claiming absolute privilege because the statements they were 
alleged to have made "were made (if at all) in the course of a 
quasi-judicial proceeding."  The trial court: (1) sustained 
MAI's and Martins' demurrer to defamation without leave to 
amend; (2) sustained the Gavins' plea of absolute privilege and 
dismissed the defamation counts involving their statements made 
to DPOR; (3) sustained David Gavin's demurrer to defamation; 
and (4) granted the plaintiffs leave to file a second amended 
complaint. 
 
The plaintiffs filed an eight-count second amended 
complaint, again alleging two counts each of conspiracy to harm 
in business and interference with contract expectancy against 
David Gavin, Martins, and MAI; three counts of defamation 
against the Gavins as to their statements made to DPOR; and one 
count of defamation against David Gavin separately as to the 
statement he allegedly made to Martins, that he "caught 
[Kivlighan] in a few lies."  
 
MAI and Martins demurred to the plaintiffs' second amended 
complaint, but the trial court overruled their demurrer.  David 
Gavin also demurred to the conspiracy to harm in business and 
 
6 
interference with contract expectancy allegations but the trial 
court did not rule on his demurrer before trial. 
Significantly, MAI and Martins asserted, in their answer 
to the plaintiffs' second amended complaint, a "Fifth 
Affirmative Defense," namely, that "[n]either Plaintiff ever 
had a contract with the owner of the Subject Property, nor did 
either Plaintiff have a reasonable contractual or business 
expectancy which could support a claim of tortious 
interference.  A reply is requested pursuant to Virginia Rules 
3:11 and 1:4(e)."  The plaintiffs never replied to MAI's and 
Martins' fifth affirmative defense, and it was deemed admitted 
before trial.  The case proceeded to a jury trial against MAI, 
Martins, and David Gavin on conspiracy to harm in business and 
interference with contract expectancy, and against David Gavin 
on the one count of defamation alleging that he told Martins, 
"I caught [Kivlighan] in a few lies." 
 
At trial, the evidence demonstrated that: (1) Martins 
called Donna Gavin on May 2, 2007, and that Martins told Donna 
Gavin she had possible buyers for the home; (2) Donna Gavin 
told Martins that David Gavin would call her back "because we 
had a real estate agent and he could provide her with all the 
information"; (3) David Gavin returned Martins' call on May 3, 
2007; and (4) David Gavin gave Kivlighan's phone number to 
Martins.  Martins subsequently called Kivlighan, who told her 
 
7 
there was a full-price offer with a discounted commission for 
the Kennedy property, which Kivlighan thought that her clients 
would take.  When Martins' prospective buyers (the "Wheelers") 
heard of the full price offer, they told Martins not to make an 
offer because they did not want to get into a bidding war. 
 
On May 4, 2007, Kivlighan sent by facsimile a $730,000 
offer from Alnifaidy to Donna Gavin.  On May 5, 2007, David 
Gavin called Kivlighan, upset about the offer's conditions, 
including the fact that there was a home inspection contingency 
despite the cover sheet to the offer stating that the offer was 
for the Kennedy property "as-is" and that the offer included a 
four-point-one (4.1) percent seller subsidy, resulting in an 
actual offer of just over $700,000, not $730,000. 
 
Thereafter, on May 5, 2007, David Gavin left a voicemail 
for Martins; Martins returned David Gavin's call the next day 
and told him, in response to his question why she had never 
submitted an offer on behalf of her interested buyers, that 
Kivlighan had discouraged her from submitting an offer.  David 
Gavin told Martins that they were "in the process of 
terminating" Kivlighan.  At trial, David Gavin denied saying he 
had caught Kivlighan "in a few lies," and Martins offered no 
evidence that Gavin made that statement.  Both denied the 
allegation that Martins said Kivlighan was not working in the 
Gavins' best interest. 
 
8 
 
On May 7, 2007, Donna Gavin sent Kivlighan an electronic 
mail message stating that she would not accept Alnifaidy's 
offer unless it was resubmitted under different terms, 
including a reduction in the seller subsidy and clarification 
that the house would be sold "as-is."  Donna Gavin also asked 
Kivlighan to "explain why Mr. Alnifaidy's Earnest Money [wa]s 
in the form of a Check [dated almost one and a half (1½)] 
months prior to m[y] signing [the listing agreement]."  
 
Donna Gavin testified that, based on "what [she] saw in 
[Alnifaidy's offer and a conversation with her husband, she 
decided] to have an attorney look at th[e] contract.  There's 
something just not right about it."  As a result of the 
information she received from a lawyer, Donna Gavin concluded 
that she "had grounds to terminate [Kivlighan]," and on May 8, 
2007, she sent Kivlighan written notice terminating the listing 
agreement. 
 
Donna Gavin subsequently refused an increased offer from 
Alnifaidy, having received it from Kivlighan after she signed a 
contract to sell the Kennedy property to the Wheelers.  
Thereafter, the Kennedy property was sold to the Wheelers with 
a buyer's commission paid to MAI. 
 
Significantly, Kivlighan admitted at trial that: (1) she 
was not owed a commission on Alnifaidy's offers; (2) MAI never 
had a listing agreement for the Kennedy property; and (3) she 
 
9 
never heard any telephone conversations between Martins and 
Donna or David Gavin.  Alnifaidy testified that he never had 
any agreement with Kivlighan or told her that she could sell 
the Kennedy property for him in the future. 
 
The defendants moved to strike the plaintiffs' evidence at 
the close of the plaintiffs' case-in-chief but, before the 
trial court ruled on the defendants' motion to strike, the 
plaintiffs moved to nonsuit, and the trial court granted the 
plaintiffs' motion to nonsuit as against all defendants.  The 
defendants stated they intended to file motions for sanctions, 
and the trial court suggested that counsel for all the parties 
"confer.  If there are any motions, decide a day that you want 
to argue . . . ."  The defendants' counsel suggested "a 
suspending order of 30 days . . . just to be safe," and the 
trial court stated that "[t]hirty days is fine, or you can say 
until further order of Court.  Whatever language you can agree 
on." 
 
On April 30, 2008, the trial court entered an order which: 
(1) granted the plaintiffs' motion to nonsuit all counts; (2) 
dismissed the case as to all counts and all parties; and (3) 
further stated that "this Order is SUSPENDED until further 
order of this Court." 
 
On July 11, 2008, the defendants filed motions for 
sanctions against the plaintiffs and plaintiffs' counsel, 
 
10 
Forrest Walpole ("Walpole"), seeking attorneys' fees and costs, 
and arguing that the plaintiffs violated Code § 8.01-271.1 "by 
filing this suit without any basis in fact, without support in 
law, and with improper purposes, all as prohibited by statute."  
In response, the plaintiffs and Walpole filed an opposition to 
the defendants' motions for sanctions, arguing that the motion 
for sanctions should be denied because the plaintiffs and 
plaintiffs' counsel "[i]n good faith and after reasonable 
inquiry . . . filed the claims for conspiracy, defamation and 
tortious interference with contract and contract expectancy 
when Defendants acted in concert to deprive NVRE of a 
commission and contract expectancy from the sale of [the 
Kennedy property]." 
 
The trial court subsequently heard oral argument on the 
motions for sanctions, and the defendants submitted the billing 
records for their attorneys' fees and costs to the trial court.  
On March 17, 2009, the trial court issued a letter opinion 
explaining its rulings, and followed that on May 14, 2009, with 
a lengthy order granting the defendants' motions for sanctions. 
 
Specifically, the trial court found that: (1) the 
complaint, by stating that the allegations were likely to have 
support "after reasonable opportunity for discovery," was a 
"per se" violation of Code § 8.01-271.1 under Ford Motor Co. v. 
Benitez, 273 Va. 242, 639 S.E.2d 203 (2007); (2) the 
 
11 
plaintiffs' claims "were filed out of a vindictive and 
malevolent desire to injure and intimidate a business 
competitor"; and (3) the plaintiffs lacked "any factual basis 
for their $135,000 claim to the 'second commission', and 
lack[ed] any basis for the $1.35 million defamation claims.  
Plaintiffs further lack[ed] a factual basis for a conspiracy 
claim." 
 
Although the trial court's May 14, 2009 order stated that 
the defendants are entitled to sanctions, the order also stated 
that, "on this record, the Court is unable to determine the 
appropriate size of the sanction."  As a result, the trial 
court continued the matter "to hear evidence and argument as to 
the quantum of sanctions and reasonableness of Defendant[s'] 
attorney's fees, respectively, whether the said expenses are 
related to the violations of the sanctions statute and to 
determine as against whom the respective sanction(s) should be 
assessed." 
 
After an evidentiary hearing, at which the trial court 
heard voluminous testimony, both expert and otherwise, 
regarding the defendants' attorneys' fees, as well as 
Kivlighan's own testimony that she relied on Walpole's advice, 
the trial court issued a letter opinion and order on June 29, 
2010, ordering the plaintiffs and Walpole, jointly and 
severally, to pay $113,778.06 to MAI and Martins, and 
 
12 
$158,318.40 to the Gavins.  The trial court also ordered "that 
the Court's suspension of Plaintiffs' nonsuit taken on April 
[30], 2008 is lifted." 
 
Specifically, the trial court found that: (1) the 
appropriate sanction in this case is the reasonable attorneys' 
fees and costs incurred by the defendants; (2) attorneys and 
their clients are both "required to act appropriately, 
ethically, and within the confines of the law when litigating 
cases in Virginia courts"; and (3) there is "substantial 
evidence of sanctionable behavior on the part of both the 
litigants and the[ir] lawyer."  The trial court further opined 
that, "[Kivlighan's] actions showed a clear intent to support 
[filing] these claims, which were speculative at best . . . 
[m]oreover, her actions throughout the litigation are 
indicative of and establish the improper purpose with which she 
filed this lawsuit." 
 
The trial court also rejected the plaintiffs' and 
Walpole's argument that the attorneys' fees and costs claimed 
by the defendants were unreasonable because: (1) the defendants 
failed to mitigate their damages; (2) defendants' counsel used 
block billing practices; and (3) the attorneys' fees incurred 
by the defendants were excessive.  The trial court subsequently 
denied: (1) the plaintiffs' and Walpole's motions to suspend 
the June 29, 2010 order "to permit Plaintiffs [and Walpole] 
 
13 
adequate time to file their Motion[s] for Reconsideration and 
for the Court to consider and rule upon such motion[s]"; and 
(2) Walpole's motion for reconsideration and renewed motion for 
entry of a suspending order because "Walpole has not raised any 
issues not already considered in the matter."   
 
NVRE, Kivlighan, and Walpole timely filed their notices of 
appeal and we granted these appeals on the following 
assignments of error: 
For Northern Virginia Real Estate, Inc., et al. v. Karen 
Martins, et al., Record No. 101836: 
 
1. 
The trial court erred in awarding sanctions under Va. 
Code § 8.01-271.1 against NVRE, Kivlighan, and their 
trial counsel and in favor of Martins, MAI, Donna 
Gavin, and David Gavin when the trial court lacked 
jurisdiction to do so because the motions for 
sanctions were made, heard, and decided more than 21 
days after entry of a nonsuit order, and the trial 
court lacked authority under Rule 1:1 of the Rules of 
the Supreme Court of Virginia to suspend the finality 
of the nonsuit order. 
 
2. 
The trial court erred in imposing sanctions under Va. 
Code § 8.01-271.1 against NVRE, Kivlighan, and their 
trial counsel, jointly and severally, rather than 
apportioning the sanctions among them based on their 
respective conduct relative to each of the parties 
that was awarded sanctions. 
 
3. 
The trial court erred in awarding sanctions under Va. 
Code § 8.01-271.1 against NVRE, Kivlighan and their 
trial counsel and in favor of Martins, MAI, Donna 
Gavin, and David Gavin because it abused its 
discretion by making its sanction determination based 
on post-filing factual findings, evidentiary rulings, 
hindsight, and improper considerations rather than an 
objective view of whether NVRE, Kivlighan, and their 
trial counsel, after reasonable inquiry, could have 
formed a reasonable belief that the Complaint, 
 
14 
Amended Complaint, Bill of Particulars, and Second 
Amended Complaint met the certification requirements 
of Va. Code § 8.01-271.1 at the time each was 
respectively filed. 
 
For Forrest Walpole v. Karen Martins, et al., Record No. 
101844: 
 
1. 
The trial court erred in awarding sanctions under Va. 
Code § 8.01-271.1 against Walpole, NVRE, and 
Kivlighan because it abused its discretion by making 
its sanction determination based on post-filing 
factual findings, evidentiary rulings, and other 
hindsight rather than an objective view of whether 
NVRE, Kivlighan, and Walpole, after reasonable 
inquiry, could have formed a reasonable belief that 
the Complaint, Amended Complaint, Second Amended 
Complaint and Bill of Particulars met the 
certification requirements of Va. Code § 8.01-271.1 
at the time it was filed. 
 
2. 
The trial court erred in determining the terms of and 
quantum of sanctions against Walpole, NVRE and 
Kivlighan because it did not properly consider the 
defendants' failure to mitigate, the billing 
practices of defendants' counselors, the punitive 
effect of the award, and ability to pay. 
 
3. 
The trial court erred when it denied Walpole's motion 
for entry of a suspending order without giving 
Walpole the opportunity to present oral argument 
under Va. Sup. Ct. R. 4:15(d). 
 
4. 
The trial court erred in awarding sanctions under Va. 
Code § 8.01-271.1 against NVRE, Kivlighan and Walpole 
when the trial court lacked jurisdiction to do so 
because the motions for sanctions were made, heard, 
and decided more than 21 days after entry of a 
nonsuit order, and the trial court lacked authority 
under Rule 1:1 of the Rules of the Supreme Court of 
Virginia to suspend the finality of the nonsuit 
order. 
 
 
 
 
15 
II. Analysis 
A. Standard of Review 
 
We have clearly articulated the standard of review for 
cases of statutory interpretation: 
[A]n issue of statutory interpretation is a pure 
question of law which we review de novo.  When 
the language of a statute is unambiguous, we are 
bound by the plain meaning of that language.  
Furthermore, we must give effect to the 
legislature’s intention as expressed by the 
language used unless a literal interpretation of 
the language would result in a manifest 
absurdity.  If a statute is subject to more than 
one interpretation, we must apply the 
interpretation that will carry out the 
legislative intent behind the statute. 
 
Conyers v. Martial Arts World of Richmond, Inc., 273 Va. 96, 
104, 639 S.E.2d 174, 178 (2007) (citations omitted).  
Similarly, as a question of law, the interpretation of one of 
the Rules of this Court is subject to de novo review.  See 
Brown v. Commonwealth, 279 Va. 210, 217, 688 S.E.2d 185, 189 
(2010).  
 
Additionally, in reviewing a trial court's award of 
sanctions under Code § 8.01-271.1, we apply an abuse of 
discretion standard.  Flippo v. CSC Assocs. III, L.L.C., 
262 Va. 48, 65, 547 S.E.2d 216, 227 (2001).  We have 
stated that, 
[i]n applying that standard, we use an objective 
standard of reasonableness in determining whether 
a litigant and his attorney, after reasonable 
inquiry, could have formed a reasonable belief 
 
16 
that the pleading was well grounded in fact, 
warranted by existing law or a good faith 
argument for the extension, modification, or 
reversal of existing law, and not interposed for 
an improper purpose. 
 
Id. at 65-66, 547 S.E.2d at 227.  We have also held that "a 
court's imposition of a sanction will not be reversed on appeal 
unless the court abused its discretion in 1) its decision to 
sanction the litigant, or 2) in the court's choice of the 
particular sanction employed."  Switzer v. Switzer, 273 Va. 
326, 331, 641 S.E.2d 80, 83 (2007). 
B. Rule 1:1 
 
The plaintiffs argue that the trial court erred in 
awarding sanctions against them and in favor of the defendants 
because "the motions for sanctions were made, heard, and 
decided more than 21 days after entry of a nonsuit order, and 
the trial court lacked authority under Rule 1:1 of the Rules of 
[this Court] to suspend the finality of the nonsuit order."  
Specifically, the plaintiffs argue that the trial court was 
without authority to suspend the nonsuit order because: (1) 
there were no motions pending at the time of the nonsuit; (2) 
"Rule 1:1 must be interpreted to prohibit trial courts from 
generally suspending nonsuit orders to allow motions for 
sanctions to be filed, heard, and decided more than 21 days 
after [a] nonsuit is taken as a matter of right"; and (3) the 
nonsuit order did not "clearly and expressly suspend the final 
 
17 
judgment that is obtained upon the granting of a motion for 
nonsuit."  We disagree and find these arguments without merit. 
 
Rule 1:1 declares that "[a]ll final judgments, orders, and 
decrees, irrespective of terms of court, shall remain under the 
control of the trial court and subject to be modified, vacated, 
or suspended for twenty-one days after the date of entry, and 
no longer." 
Significantly, for the purposes of this case, we have 
previously held that 
the provisions of Rule 1:1 are mandatory in order 
to assure the certainty and stability that the 
finality of judgments brings.  Once a final 
judgment has been entered and the twenty-one day 
time period of Rule 1:1 has expired, the trial 
court is thereafter without jurisdiction in the 
case.  Thus, only an order within the twenty-one 
day time period that clearly and expressly 
modifies, vacates, or suspends the final judgment 
will interrupt or extend the running of that time 
period so as to permit the trial court to retain 
jurisdiction in the case. 
 
Super Fresh Food Mkts. of Va., Inc. v. Ruffin, 263 Va. 555, 
563-64, 561 S.E.2d 734, 739 (2002) (some emphasis omitted).  
Additionally, we have noted that, "from its very nature, an 
order granting a nonsuit should be subject to the provisions of 
Rule 1:1," and "the concept of nonsuit is sufficiently imbued 
with the attributes of finality to satisfy the requirements of 
Rule 1:1."  James v. James, 263 Va. 474, 481, 562 S.E.2d 133, 
137 (2002). 
 
18 
In this case, the trial court entered an order granting 
the plaintiffs a nonsuit on April 30, 2008.  However, the trial 
court also expressly suspended the nonsuit order on that same 
date, pursuant to Rule 1:1, stating:  
 
This matter came to be heard on the 30th day 
of April, 2008, on the Plaintiff[s'] motion to 
nonsuit all counts and Defendants' oppositions 
thereto. 
 
Upon the matter presented to the Court at 
the hearing, it is hereby  
 
ADJUDGED, ORDERED, and, DECREED as follows: 
 
The Motion[] to Nonsuit is granted, and this 
case is dismissed as to all counts and all 
parties; and it is further 
 
ADJUDGED, ORDERED, and DECREED that this 
Order is SUSPENDED until further order of this 
Court. 
 
(Emphasis added.)  The trial court did so in order to entertain 
the defendants' motions for sanctions. 
The trial court was well within its authority under Rule 
1:1 to suspend the nonsuit order as it did and, by explicitly 
doing so, it properly retained jurisdiction in this case.  Rule 
1:1; Super Fresh Food Markets, 263 Va. at 563-64, 561 S.E.2d at 
739.  Accordingly, we hold that the trial court did not lack 
jurisdiction to consider and impose sanctions, as it did in 
this case, because the trial court properly suspended the 
nonsuit order within the 21-day period provided for in Rule 
1:1.  The trial court retained jurisdiction over this suit 
until 21 days after June 29, 2010 – the date upon which the 
 
19 
trial court lifted the suspension of the April 30, 2008 nonsuit 
order and entered the final order in this case. 
C. Code § 8.01-271.1 
 
Code § 8.01-271.1 provides that, 
every pleading, written motion, and other paper 
of a party represented by an attorney shall be 
signed by at least one attorney of record in his 
individual name . . . . 
 
 
The signature of an attorney or party 
constitutes a certificate by him that (i) he has 
read the pleading, motion, or other paper, (ii) 
to the best of his knowledge, information and 
belief, formed after reasonable inquiry, it is 
well grounded in fact and is warranted by 
existing law or a good faith argument for the 
extension, modification, or reversal of existing 
law, and (iii) it is not interposed for any 
improper purpose, such as to harass or to cause 
unnecessary delay or needless increase in the 
cost of litigation.  
 
The statute further provides that if this rule is violated, the 
court "shall impose" an appropriate sanction upon the attorney, 
a represented party, "or both," and that such sanctions may 
include reasonable attorney's fees.  Code § 8.01-271.1. 
 
Accordingly, we must determine whether the trial court 
properly concluded that the plaintiffs and their attorney, 
after a reasonable inquiry, could not have formed a reasonable 
belief that the second amended complaint was well grounded in 
fact and warranted by existing law, or by a good faith argument 
for the extension, modification, or reversal of existing law.  
Flippo, 262 Va. at 65-66, 547 S.E.2d at 227.  Significantly, we 
 
20 
have previously stated that a "trial court [is] not limited to 
the record in the present case, but [may] properly consider any 
relevant and admissible evidence tending to show the attorney's 
state of knowledge at the time in question."  Benitez, 273 Va. 
at 251, 639 S.E.2d at 207. 
In this case, the second amended complaint was filed after 
the trial court allowed the plaintiffs to amend both their 
initial complaint and their first amended complaint.  
Nevertheless, the trial court noted, in its order granting the 
defendants' motions for sanctions, that "Plaintiffs' [sic] 
apparently have forgotten that many of their claims were 
dismissed on demurrer, and with prejudice."  The trial court 
further noted that, 
[a]t minimum, the filing of the initial complaint 
violated [Code § 8.01-271.1] by asserting in four 
numbered paragraphs that the allegations therein 
were likely to have support "after reasonable 
opportunity for discovery."  As this Court 
understands the Virginia Supreme Court's decision 
in Benitez, such a pleading is a per se violation 
of [Code] § 8.01-271.1.  Although the 
[plaintiffs'] amended complaint contained no such 
candid admission that its allegations were 
unsupported by fact, Plaintiffs lack any factual 
basis for their $135,000 claim to the "second 
commission", and lack any basis for the $1.35 
million defamations claims.  Plaintiffs further 
lack a factual basis for a conspiracy claim. 
 
 
Significantly, the trial court stated in its ruling 
granting the defendants' motions for sanctions: 
 
21 
 
The only claim Kivlighan ever advanced that 
was reasonably well grounded in fact, is a 
$37,500 contract claim.  Instead of limiting the 
action to that claim Kivlighan and her counsel 
chose to advance at least three wildly 
speculative claims that lacked any basis in fact.  
These three claims dramatically increased the 
cost and duration of the litigation.  Counsel's 
decision to pursue a three day jury trial in the 
face of a devastating ruling, that no contract 
existed between the parties, further increased 
the cost to the defendants, without any possible 
chance of success. 
 
 
Standing alone, the Court might conclude 
that any of these claims were merely a mistake or 
an oversight by counsel, and might warrant only a 
mild sanction.  However, the combination of so 
many frivolous claims, supported by such wild 
speculation, so virulently prosecuted even after 
any legitimate prospect of success had vanished, 
convinces the Court that the claims were not an 
oversight or mistake.  The Court is of the firm 
conviction that they were filed out of a 
vindictive and malevolent desire to injure and 
intimidate a business competitor. 
 
We hold that the trial court did not abuse its discretion 
in imposing sanctions in this case.  Rather, the trial court 
correctly applied an objective standard of reasonableness in 
concluding that the facts of this case could not support a 
reasonable belief that the plaintiffs' claims alleging: (1) 
interference with contract expectancy; (2) conspiracy to harm 
in business; and (3) defamation; along with the damages sought, 
were well grounded in fact or law, as required by Code § 8.01-
271.1. 
 
 
22 
1. Interference with Contract Expectancy 
 
Significantly, the trial court noted that it "imposed a 
pleading admission on the Plaintiffs [just before trial] for 
failing to respond to [the] Defendants' properly propounded 
Fifth Affirmative Defense seeking a reply," that, "[n]either 
Plaintiff ever had a contract with the owner of the Subject 
Property, nor did either Plaintiff have a reasonable 
contractual or business expectancy which could support a claim 
of tortious interference.  A reply is requested pursuant to 
Virginia Rules 3:11 and 1:4(e)."  The trial court's ruling 
deemed the plaintiffs to have admitted the affirmative defense 
they failed to reply to and excluded any reference to, or 
evidence of, facts that conflicted with that admission.  
Despite this damaging admission and the imposition of such "a 
devastating ruling," the plaintiffs "insisted on proceeding 
with a three day jury trial" on all of its claims, including 
the allegation that the defendants interfered with contract 
expectancy.  
 
Specifically, the plaintiffs alleged total damages of 
$168,000 (trebled to $504,000) as a result of the defendants' 
interference with contract expectancy.  The plaintiffs further 
alleged that these damages consisted of $37,500, which 
represented a five percent commission on the $750,000 Alnifaidy 
purchase offer, plus $130,500, which represented a six percent 
 
23 
commission on the future sale of the property for $2.175 
million as a result of improvements Alnifaidy was supposedly 
going to make to the property. 
 
However, the trial court correctly found that, "[e]ven if 
Kivlighan did have a valid claim for a commission on the 
[Kennedy] property," Kivlighan would have realized "at most 
$37,500 from any contractual interest she acquired from the 
listing agreement" – and this is only "assuming that 
[Kivlighan's] pocket buyer's offer was accepted, and that she 
was paid both the buyer's and seller's agent commissions on the 
'unsubsidized' contract price of the highest offer her buyer 
ever made."  The trial court accurately noted that, "[i]n 
truth, [Kivlighan's] valid expectancy is probably limited to 
two-fifths of that amount [(or $15,000)], because [the listing 
agreement] provided for a seller's commission of only two 
percent."2 
 
Moreover, the plaintiffs offered no evidence that could 
possibly lead the trial court to reasonably conclude that the 
plaintiffs ever had a factual basis for their claim for 
$130,500, which represented a six percent commission on the 
                     
2 Although the plaintiffs alleged that Donna Gavin signed 
the listing agreement with NVRE for NVRE to sell the Kennedy 
property in exchange for a five percent commission of the sales 
price, the listing agreement signed by Donna Gavin provided for 
a two percent commission to be paid to the selling broker and a 
three percent commission to be paid to the buyer's agency. 
 
24 
future sale of the Kennedy property for $2.175 million as a 
result of improvements Alnifaidy was going to make to the 
property.  The trial court noted that, although Kivlighan 
claimed the loss of a commission from a second, future sale of 
the Kennedy property,  
based upon her contention that she was almost 
certain to obtain the listing for the [Kennedy] 
Property again after a new house was built[, h]er 
deposition testimony established that she lacked 
a factual basis to advance this theory.  
Furthermore, the testimony of Mr. Alnifaidy, both 
in his deposition and at trial, established that 
he had never engaged her as an agent to re-sell 
the [Kennedy] Property again in the future.  
Indeed, [K]ivlighan later admitted at trial that 
she was not engaged to re-sell the property. 
 
Alnifaidy testified at trial that he never told Kivlighan he 
would let her sell the Kennedy property for him at a later 
date.  The following exchange occurred during the defendants' 
cross-examination of Alnifaidy at trial: 
[Defendants' Counsel:] [Y]ou never had a 
 
written agreement directly with Lauren 
 
Kivlighan, correct? 
 
[Alnifaidy:] No. 
 
[Defendants' Counsel:] And [Kivlighan] was 
 
never your real estate agent regarding  any 
property at any time[?] 
 
[Alnifaidy:] No. 
 
[Defendants' Counsel:] And you never  
promised 
[Kivlighan] that she could be  
your real 
estate agent[?] 
 
[Alnifaidy:] No. 
 
25 
 
[Defendants' Counsel:] That is correct? 
 
[Alnifaidy:] That's correct.  Yes. 
 
[Defendants' Counsel:] In fact, [Kivlighan] 
 
never asked you to be your real estate 
 
agent[?]   
 
[Alnifaidy:] No. 
 
Accordingly, we agree with the trial court's conclusion that, 
the claims [the plaintiffs] advanced for the 
"second commission" on a sale of the same 
property at (1) some unknown date an indefinite 
number of years in the future, by (2) a seller 
whose offer to purchase the property was twice 
rejected, to (3) a not even speculatively 
identified purchaser for (4) precisely $2.175 
million dollars, after (5) a contractor, whom the 
seller who did not yet own the home had not 
entered a contract with, would have torn down the 
existing structure and erected a mansion based on 
(6) unknown and unsolicited plans from an 
unidentified architect, are, to say it as kindly 
as possible, not "well grounded in fact and . . . 
warranted by existing law or a good faith 
argument for the extension, modification, or 
reversal of existing law." 
 
 
Lastly, even if the plaintiffs may have had a valid 
contractual claim for a commission on the Kennedy property, it 
should be noted that the plaintiffs never filed suit against 
the actual owner of the Kennedy property, the Bernadette A. 
Kennedy Living Trust.  Rather, the plaintiffs repeatedly named 
Donna Gavin personally, and not in her representative capacity 
as Trustee, as a defendant in their complaint, amended 
complaint, and second amended complaint.  The record 
 
26 
demonstrates that they did so despite the fact that the 
plaintiffs were on notice, and actually knew, at the time they 
filed the second amended complaint that the Kennedy property 
was owned, at all relevant times, by the Trust. 
 
Specifically, MAI and Martins stated in their memorandum 
in support of their demurrer to the second amended complaint 
that "title to the [Kennedy] property was actually held by the 
Bernadette A. Kennedy Trust, and not Bernadette A. Kennedy 
personally."  The Gavins also stated in their memorandum in 
support of their demurrer to the second amended complaint that, 
as "admitted in the [s]econd [a]mended [c]omplaint in ¶ 29 
. . . Bernadette Kennedy (in her personal capacity) was not the 
owner of the [Kennedy p]roperty, nor was . . . Donna Gavin."  
The plaintiffs, themselves, stated in ¶ 29 of the second 
amended complaint that "actual title to the [Kennedy p]roperty 
was in the Bernadette A. Kennedy Trust, Donna M. Gavin, Co-
Trustee . . . pursuant to a deed from Bernadette A. Kennedy, 
dated April 11, 2007." 
2. Conspiracy to Harm in Business 
 
Regarding the plaintiffs' claims alleging conspiracy to 
harm in business, the trial court noted that, "[a]lthough [the] 
Plaintiffs' pleadings never clarified whether the business 
conspiracy claims were based on a common law right of action or 
the statutory cause authorized by [Code] § 18.2-499, [the] 
 
27 
Plaintiffs [took] the position that the action is for statutory 
conspiracy."  Statutory conspiracy requires "two or more 
persons [to] combine, associate, agree, mutually undertake or 
concert together for the purpose of . . . willfully and 
maliciously injuring another in his reputation, trade, business 
or profession."  Code § 18.2-499(A).  Moreover, "[i]n order to 
sustain a claim for this statutory business conspiracy, the 
plaintiff must prove by clear and convincing evidence that the 
defendants acted with legal malice, that is, proof that the 
defendants acted intentionally, purposefully, and without 
lawful justification, and that such actions injured the 
plaintiff's business."  Williams v. Dominion Tech. Partners, 
L.L.C., 265 Va. 280, 290, 576 S.E.2d 752, 757 (2003). 
 
However, there is simply no factual basis to support the 
plaintiffs' allegation that David Gavin and Martins formed any 
agreement to harm the plaintiffs in business during their 
telephone conversations.  To the contrary, both David Gavin and 
Martins denied any agreement to cut Kivlighan out of the sale 
of the Kennedy property, and David Gavin testified that the 
calls were specifically prompted by the fact that Kivlighan 
only presented the Gavins with Alnifaidy's offer and had not 
presented them with the Wheelers' offer. 
 
Additionally, the trial court correctly noted that the 
"Plaintiffs' entire factual basis for pleading conspiracy 
 
28 
appears to be the fact that David Gavin and [Martins] spoke to 
each other on the telephone, that David Gavin 'exhibited a 
hostile and mean spirited manner,' and that [Kivlighan] was 
discharged."  Accordingly, there is no factual basis to support 
the plaintiffs' allegation that David Gavin and Martins formed 
an agreement to harm the plaintiffs and no evidence that the 
defendants acted with malice.  As a result, we agree with the 
trial court's conclusion that "[n]o court could responsibly 
permit such a claim to go to the jury without evidence, and no 
attorney could responsibly plead such a claim without facts to 
support it." 
3. Defamation 
 
The plaintiffs' second amended complaint alleged that 
David Gavin told Martins, "I caught [Kivlighan] in a few lies," 
and the plaintiffs requested damages against David Gavin in the 
amount of $1 million, plus $350,000 in punitive damages.  
However, the plaintiffs offered no evidence that David Gavin 
actually spoke these words. 
 
In fact, Kivlighan testified that she did not personally 
overhear any telephone conversations or any recordings of any 
telephone conversations between either Martins and David Gavin 
or Martins and Donna Gavin and that she "never personally heard 
[David Gavin and Martins] speaking."  Additionally, David Gavin 
 
29 
denied saying that he had caught Kivlighan "in a few lies," and 
Martins' testimony supported Gavin. 
 
Furthermore, the plaintiffs' repeated defamation counts 
regarding the statements the Gavins allegedly made to DPOR 
demonstrate clearly that each of the plaintiffs' successively 
filed complaints lacked a proper basis in law and in fact.  
Specifically, Walpole should have known that the statements 
allegedly made by the Gavins to DPOR were privileged because 
they were made in the course of a quasi-judicial proceeding. 
 
We have previously held that "false, misleading, or 
defamatory communications, even if published with malicious 
intent, are not actionable if they are material to, and made in 
the course of, a judicial or quasi-judicial proceeding."  
Lockheed Info. Mgmt. Sys. Co. v. Maximus, Inc., 259 Va. 92, 
101, 524 S.E.2d 420, 424 (2000).  Significantly, "[t]his 
absolute privilege has been extended to communications made in 
administrative hearings so long as the 'safeguards that 
surround' judicial proceedings are present."  Id. (quoting 
Elder v. Holland, 208 Va. 15, 22, 155 S.E.2d 369, 374 (1967)).  
"Those safeguards include such things as the power to issue 
subpoenas, liability for perjury, and the applicability of the 
rules of evidence," all of which are present in proceedings  
before DPOR, an administrative agency of the Commonwealth of 
Virginia.  Id.  See Code §§ 54.1-300 through -311 (pertaining 
 
30 
to DPOR); Code § 2.2-4022 (providing that DPOR "may, and on 
request of any party to a case shall, issue subpoenas requiring 
testimony or the production of books, papers, and physical or 
other evidence"); Code § 2.2-4020 (providing that presiding 
officers at DPOR proceedings may "administer oaths and 
affirmations [and] receive probative evidence, exclude 
irrelevant, immaterial, insubstantial, privileged, or 
repetitive proofs, rebuttal, or cross-examination, rule upon 
offers of proof, and oversee a verbatim recording of the 
evidence"); and Code § 18.2-434 (providing that "[i]f any 
person to whom an oath is lawfully administered on any occasion 
willfully swears falsely on such occasion . . . he is guilty of 
perjury"). 
 
Nevertheless, the plaintiffs' complaint, amended 
complaint, and second amended complaint, all signed by Walpole, 
included three counts of defamation alleging that the Gavins, 
writing to DPOR, falsely accused Kivlighan of being "an 
untrustworthy agent" who "misrepresented her clients," and 
turned Kennedy's property into a "pocket listing."  
Inexplicably, the second amended complaint included these 
defamation counts after the trial court: (1) sustained the 
Gavins' demurrer to these counts in the original complaint and 
allowed the plaintiffs to amend their complaint; and (2) 
sustained the Gavins' demurrer and plea of absolute privilege 
 
31 
in relation to these defamation counts with prejudice, and 
allowed the plaintiffs to again amend their amended complaint. 
 
Lastly, it should be noted that the trial court concluded 
that Kivlighan's "actions throughout the litigation [were] 
indicative of and establish[ed] the improper purpose with which 
she filed this lawsuit."  In particular, the trial court 
observed that Kivlighan was "nonresponsive to counsels' 
questions both at her deposition . . . and when she took the 
witness stand throughout this litigation[, and] she constantly 
engaged in diatribes which were non-responsive and irrelevant," 
thereby demonstrating that "she filed this lawsuit out of a 
vindictive and malevolent desire to injure each of the 
[d]efendants and to intimidate a business competitor.  
Moreover, her behavior is indicative of the lack of a factual 
basis for bringing the [u]nderlying [a]ction." 
 
The trial court also found that Kivlighan's testimony at 
the hearing to determine the reasonableness of the defendants' 
attorneys' fees "was evasive and misleading at times."  For 
example, Kivlighan first testified that she only spoke to 
Walpole and one other attorney about the issues involved in the 
underlying action before filing suit.  Additionally, Kivlighan 
testified that she did not meet with any other attorneys before 
filing this suit relative to her claim. 
 
32 
 
Upon cross-examination, defense counsel asked Kivlighan if 
she spoke to any other attorneys about the matter prior to 
consulting with Walpole.  Kivlighan unequivocally denied such 
conversations.  She was forced, however, to admit that this 
assertion was inaccurate and that she spoke to at least one 
other attorney about the case.  The trial court noted that 
Kivlighan "attempted to justify the omission by claiming that 
she never attempted to retain [the other attorney]."  However, 
the trial court was "not impressed by the excuse and note[d] 
yet another example of [Kivlighan's] lack of candor on the 
witness stand." 
 
Accordingly, we hold that the trial court did not abuse 
its discretion when it imposed sanctions against NVRE, 
Kivlighan, and Walpole, based upon its conclusion that the 
plaintiffs' claims alleging interference with contract 
expectancy, conspiracy to harm in business, and defamation 
"lacked any basis in fact," and "were filed out of a vindictive 
and malevolent desire to injure and intimidate a business 
competitor."  
D. The Imposition of Sanctions Jointly and Severally 
 
The plaintiffs argue that the trial court erred in 
imposing sanctions "jointly and severally, rather than 
apportioning the sanctions among [NVRE, Kivlighan, and Walpole] 
based on their respective conduct."  We disagree. 
 
33 
 
Code § 8.01-271.1 provides that, 
[i]f a pleading, motion, or other paper is signed 
or made in violation of this rule, the court 
. . . shall impose upon the person who signed the 
paper or made the motion, a represented party, or 
both, an appropriate sanction, which may include 
an order to pay to the other party or parties the 
amount of the reasonable expenses incurred 
because of the filing of the pleading, motion, or 
other paper or making of the motion, including a 
reasonable attorney's fee.  
 
(Emphasis added.)  Significantly, in the circumstances of this 
case – in which the parties against whom sanctions were sought 
failed to provide the circuit court with evidence sufficient to 
permit it to make any distinction between those parties – Code 
§ 8.01-271.1 does not require a court to allocate fault or 
apportion sanctions between a represented party and the party's 
attorney when the statute has been violated.  Instead, Code 
§ 8.01-271.1 expressly provides for sanctions to be imposed 
upon both a represented party and the party's attorney. 
 
We have previously noted that, "it is apparent that the 
General Assembly had the opportunity to make discretionary a 
court's imposition of sanctions upon finding a statutory 
violation, but elected not to do so.  Instead, it used the 
mandatory words 'shall impose . . . an appropriate sanction.' "  
Benitez, 273 Va. at 249, 639 S.E.2d at 206 (quoting Code 
§ 8.01-271.1) (emphasis in original).  Significantly, in this 
case, the trial court twice made written findings that NVRE, 
 
34 
Kivlighan, and their trial counsel were each culpable for 
several violations of Code § 8.01-271.1.  Specifically, the 
trial court stated: 
[T]here is substantial evidence of sanctionable 
behavior on the part of both the litigants and 
the lawyer.  The evidence has established that 
[Kivlighan] went to another lawyer, who advised 
her of a reasonable remedy that she may have had 
in this matter, a breach of contract action.  
That was simply not enough for Plaintiffs, and 
they continued to shop their case.  [Walpole] 
offered Plaintiffs a grab bag of remedies.  He 
then filed suit on behalf of Plaintiffs based 
upon these remedies, with a lack of basis in law 
or fact. 
 
 
[Kivlighan] was not a passive participant in 
this process.  On the contrary, her actions 
showed a clear intent to support these claims, 
which were speculative at best. 
 
 
The initial burden of proof rests with the party seeking 
the imposition of sanctions to prove that Code § 8.01-271.1 has 
been violated, and that sanctions and the amount thereof are 
appropriate.  Significantly, we have held that, 
[a]s a general rule, confidential communications 
between an attorney and his or her client made 
in the course of that relationship and 
concerning the subject matter of the attorney's 
representation are privileged from disclosure.  
The objective of the attorney-client privilege 
is to encourage clients to communicate with 
attorneys freely, without fearing disclosure of 
those communications made in the course of 
representation, thereby enabling attorneys to 
provide informed and thorough legal advice. 
 
Walton v. Mid-Atlantic Spine Specialists, P.C., 280 Va. 113, 
122, 694 S.E.2d 545, 549 (2010) (citations omitted).  
 
35 
Accordingly, most of the information necessary to determine 
allocation of fault between attorney and client may be hidden 
by the attorney-client privilege.  Consequently, when sanctions 
are imposed against represented parties and their counsel, and 
the sanctioned parties desire to seek allocation of fault or 
the apportionment of such sanctions, they carry the burden of 
providing the trial court with evidence sufficient to do so. 
 
We are mindful of the difficulties which may arise when 
courts allocate sanctions between represented parties and their 
attorneys.  Litigation involving the allocation of sanctions 
may pit attorney against client, as each tries to prove why the 
other is responsible for the sanctionable conduct.  Disclosure 
of otherwise-privileged information may be an issue. 
 
To avoid such a conflict of interest, however, other 
courts have suggested that, where sanctions have been imposed, 
and the attorney and client disagree about who is at fault and 
wish to assign blame to the other, the attorney should withdraw 
as client's attorney and both should obtain their own counsel.  
See e.g., Slane v. Rio Grande Water Conservation Dist., 115 
F.R.D. 61, 62 (D. Colo. 1987) (explaining that the court 
"recommended that [the attorney] withdraw from his 
representation of [his clients and] obtain counsel for 
himself"); Anschutz Petroleum Mktg. Corp. v. Saybolt & Co., 112 
F.R.D. 355, 360 (S.D.N.Y. 1986) (explaining that if the 
 
36 
attorney wished to contend that their client should pay all or 
part of the sanctions imposed, the attorney "will of course 
need to be represented by separate counsel"); Eastway Constr. 
Corp. v. City of New York, 637 F. Supp. 558, 570 (E.D.N.Y. 
1986) (stating that, "[i]f attorney and client disagree about 
who is at fault and point their fingers at each other, the 
interests of the two are now clearly adverse. The client, 
therefore, will need new counsel to represent him against his 
former counsel in the proceedings to determine fault"). 
 
We agree with the trial court's conclusions that: (1) the 
plaintiffs "chose to advance at least three wildly speculative 
claims that lacked any basis in fact [and] dramatically 
increased the cost and duration of the litigation"; and (2) the 
combination of "so many frivolous claims, supported by such 
wild speculation, so virulently prosecuted even after any 
legitimate prospect of success had vanished [demonstrates] that 
the claims . . . were filed out of a vindictive and malevolent 
desire to injure and intimidate a business competitor." 
 
The plaintiffs argue that the trial court erred by not 
"apportioning the sanctions among [NVRE, Kivlighan, and 
Walpole] based on their respective conduct," and that Walpole 
"should be punished, not his clients," because "[p]enalizing 
NVRE and Kivlighan for relying on their trial counsel does not 
further the goal of . . . Code § 8.01-271.1 nor does it serve 
 
37 
the ends of justice."  However, the trial court expressly found 
that "the record does not conform with Plaintiffs' theory of 
the case.  Instead, there is substantial evidence of 
sanctionable behavior on the part of both the litigants and the 
lawyer." 
 
Consequently, because both Walpole and the plaintiffs 
violated Code § 8.01-271.1, and because the plaintiffs did not 
provide evidence necessary to demonstrate proper allocation of 
fault, we hold that the trial court did not abuse its 
discretion when it imposed sanctions against NVRE, Kivlighan, 
and Walpole, jointly and severally in this case. 
E. The Terms and Quantum of the Sanctions 
Walpole argues the trial court erred in determining the 
terms and quantum of sanctions because it did not properly 
consider: (1) the defendants' failure to mitigate by not filing 
a motion for summary judgment; (2) the defendants' attorneys' 
billing practices; (3) the punitive effect of the award; and 
(4) the plaintiffs' ability to pay.  We disagree. 
In reviewing a trial court's award of sanctions under Code 
§ 8.01-271.1, we have held that a court's imposition of 
sanctions will not be reversed on appeal "unless the court 
abused its discretion in 1) its decision to sanction the 
litigant, or 2) in the court's choice of the particular 
sanction employed."  Switzer, 273 Va. at 331, 641 S.E.2d at 83.  
 
38 
It is important to state that this case is not a typical 
attorneys' fees award case.  It is a sanctions case wherein the 
trial court has decided that a proper sanction would be based 
upon attorneys' fees incurred – a remedy expressly provided in 
the statute.  Code § 8.01-271.1.  Of course, proof of 
reasonableness is required.  We draw guidance from our prior 
holdings regarding determination of reasonableness of 
attorneys' fees.  We have held that, 
the fact finder must determine from the evidence 
the amount of the reasonable fees under the facts 
and circumstances of each particular case.  The 
trier of fact must weigh the testimony of 
attorneys as to the value of the services, by 
reference to their nature, the time occupied in 
their performance, and other attending 
circumstances, and by applying to it their own 
experience and knowledge of the character of such 
services.  On appeal the trial court's 
determination of the amount of the attorneys' 
fees to be awarded will be set aside only upon a 
finding of abuse of discretion. 
 
Holmes v. LG Marion Corp., 258 Va. 473, 479, 521 S.E.2d 528, 
533 (1999) (citations and internal quotation marks omitted). 
 
In this case, David S. Mercer ("Mercer") testified for the 
defendants as an expert in the "reasonableness [and] necessity 
in attorney's fees."  Specifically, Mercer testified that "the 
fees are eminently reasonable and rationally related to [this] 
case."  Mercer further testified that he considered the "time 
and effort expended by all counsel on behalf of the defense, 
. . . the nature of the services rendered and the complexity of 
 
39 
those services," and "the value of the services to the 
defendants and the results obtained," in reaching his opinion.  
Also, Mercer testified that "the fees [in this case] were under 
market from [his] experience." 
 
James C. Brincefield, Jr. ("Brincefield") testified for 
the defendants as an expert "in the field of attorney's fees, 
respectively with real estate litigation."  Brincefield 
testified that "the fees were reasonable and necessary for the 
. . . defense of this case."  Brincefield further testified 
that he considered "the time and effort expended by the 
attorneys, the complexity of the case, the experience of the 
attorneys, the reasonableness of their rates compared to the 
rates of other lawyers in the area, and the subject matter of 
the case" in forming his opinion.  
 
Significantly, the plaintiffs and Walpole stipulated as to 
the reasonableness of the defendants' counsel's billing rate, 
and the trial court noted that "[t]he only question [that] 
remain[ed] [wa]s whether the number of hours spent on the case 
was reasonable."  The trial court also noted that each 
defendant "provided the Court with the substantial legal bills 
that they incurred as a result of the litigation initiated by 
Plaintiffs." 
 
Furthermore, in reaching its decision, the trial court 
considered the necessary factors, including the facts and 
 
40 
circumstances of each particular claim, the testimony of 
attorneys as to the value of the services, the nature of those 
services, the time occupied in their performance, and other 
attending circumstances, and applied its own experience and 
knowledge of the character of such services in reaching its 
decision.  See Holmes, 258 Va. at 479, 521 S.E.2d at 533.  The 
trial court ultimately determined that most of the amount 
requested by the defendants was reasonable and that awards of 
$113,778.06 in attorneys' fees to Martins and MAI, and 
$158,318.40 in attorneys' fees to the Gavins, were reasonable. 
 
Notably, the trial court did find that certain fees were 
unreasonable, including a small amount of fees related to a 
counterclaim brought by the Gavins against the plaintiffs, 
certain fees connected to the number of hours counsel for the 
Gavins spent in preparing jury instructions for trial, and 
certain instances of duplicative and excessive billing. 
 
We hold that the trial court did not abuse its discretion 
in determining the amount of the award of sanctions, 
particularly in light of the trial court's findings that: (1) 
the plaintiffs and Walpole "violated [Code § 8.01-271.1] when 
they filed the Underlying Action for an improper purpose and 
without a proper basis in law and in fact"; and (2) "the 
appropriate sanction is to hold both Mr. Walpole and his 
 
41 
clients jointly and severally liable for the reasonable 
attorney's fees and costs of Defendants." 
F. Walpole's Motion for a Suspending Order 
 
Walpole argues that the trial court erred when it denied 
his motion for entry of a suspending order without hearing oral 
argument thereon.  We disagree. 
Rule 4:15(d) provides that, "[e]xcept as otherwise 
provided in this subparagraph, upon request of counsel of 
record for any party, or at the court's request, the court 
shall hear oral argument on a motion."  The rule "otherwise 
provide[s]" that "argument on a motion for reconsideration 
. . . shall be heard orally only at the request of the court."  
Rule 4:15(d). 
 
On July 9, 2010, NVRE, Kivlighan, and Walpole filed 
motions for entry of a suspending order without requesting a 
hearing on those motions, stating that "the entry of a 
suspending order is necessary in order for Plaintiffs [and 
Walpole] to have adequate time to brief, file and argue their 
motion[s] for reconsideration and for the Court to consider and 
rule upon such a motion[s]."  The trial court denied both 
motions on July 12, 2010.  
 
Walpole subsequently filed a motion for reconsideration 
and renewed motion for entry of suspending order on July 13, 
2010, arguing that Walpole had "multiple grounds for seeking 
 
42 
reconsideration of the [trial c]ourt's rulings," and "the entry 
of a suspending order is necessary in order for Walpole to have 
adequate time to fully brief and argue each point of 
reconsideration and for the Court to consider and rule upon 
such a motion."  Walpole did not request a hearing on that 
motion.  On July 15, 2010, the trial court denied Walpole's 
motion for reconsideration and renewed motion for entry of 
suspending order, stating that "Walpole has not raised any 
issues not already considered in [this] matter." 
 
Walpole also filed a request for expedited hearing on July 
15, 2010, in which he requested that the trial court schedule 
an expedited hearing on the previously filed motion for 
reconsideration and renewed motion for entry of suspending 
order "on or before July 20, 2010."  The trial court did not 
rule on this request before it lost jurisdiction over this suit 
pursuant to Rule 1:1. 
 
We hold that the trial court did not err in denying both 
Walpole's motion for a suspending order and Walpole's renewed 
motion for a suspending order without a hearing because it does 
not appear that Walpole requested a hearing on either motion 
before the trial court denied those motions.  Additionally, 
Walpole repeatedly stated that he sought the suspension in 
order to file and argue a motion for reconsideration, for which 
 
43 
Rule 4:15(d) provides oral argument "only at the request of the 
court."  Rule 4:15(d). 
III. Conclusion 
We hold that the trial court did not err when it imposed 
sanctions jointly and severally against NVRE, Kivlighan, and 
Walpole, pursuant to Code § 8.01-271.1.  Accordingly, we will 
affirm the judgment of the trial court. 
 
Record No. 101836 – Affirmed. 
Record No. 101844 – Affirmed.