Title: Ballagh v. Fauber Enters.

State: virginia

Issuer: Virginia Supreme Court

Document:

PRESENT: All the Justices 
 
DEBRA A. BALLAGH 
 
 
 
 
 
 
 
 OPINION BY 
v.  Record No. 141248 
  
    
JUSTICE WILLIAM C. MIMS 
 
 
 
 
 
 
 
     June 4, 2015 
FAUBER ENTERPRISES, INC., ET AL. 
 
 
FROM THE CIRCUIT COURT OF THE CITY OF LYNCHBURG 
F. Patrick Yeatts, Judge 
 
In this appeal, we consider the standard of proof a 
plaintiff must satisfy to prevail upon claims alleging 
violations of the Virginia Consumer Protection Act, Code §§ 
59.1-196 to -207 (the “VCPA”). 
I.  BACKGROUND AND MATERIAL PROCEEDINGS BELOW 
In May 2010, Debra A. Ballagh bought a parcel of real 
property from Fauber Enterprises, Inc. (“Fauber”).  Soon 
thereafter, the basement of the house flooded when it rained. 
In March 2012, Ballagh filed a complaint against Fauber, 
Fauber’s real estate agent, and others.  She alleged that the 
basement flooded when it rained at least three times while 
Fauber owned the parcel.  She alleged that Fauber obtained 
estimates to waterproof the basement but did not have the work 
done.  Rather, she alleged, it simply repaired the water 
damage. 
Ballagh further alleged that she had specifically asked 
about water leaks in the basement before buying the parcel.  
 
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She alleged that Fauber’s real estate agent assured her, 
through her agent, that there were no leaks or water damage.  
She alleged that although she waived a professional home 
inspection, she and a friend viewed the property and did not 
observe any defects in the basement because Fauber had 
affirmatively concealed them.  She alleged that a professional 
home inspection would not have revealed the defects in any 
event. 
Among other things, Ballagh’s complaint included claims 
alleging violations of the VCPA.  Specifically, Ballagh claimed 
that the defendants had “misrepresented that goods, including 
real property, were of a particular standard or quality,” in 
violation of Code § 59.1-200(A)(6), and had “used ‘deception, 
fraud, false pretense, false promise, or misrepresentation in 
connection with a consumer transaction,’” in violation of Code 
§ 59.1-200(A)(14). 
The case proceeded to jury trial.  At its conclusion, the 
parties offered competing jury instructions as to the standard 
of proof required for the VCPA claims.  Ballagh asserted that 
the VCPA requires a plaintiff to prove a violation by only a 
preponderance of the evidence.  The defendants asserted that 
because Ballagh’s claims involved alleged misrepresentations, 
she was required to prove them by clear and convincing evidence 
as required for claims of common law fraud. 
 
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After a hearing, the circuit court agreed with the 
defendants.  It rejected the jury instructions Ballagh proposed 
and gave those proposed by the defendants.  The jury returned a 
defense verdict.  Ballagh moved for a new trial, arguing that 
the instructions on the standard of proof were incorrect.  
After a hearing, the court denied her motion.  It thereafter 
entered final judgment on the jury’s verdict. 
We awarded Ballagh this appeal. 
II.  ANALYSIS 
In her sole assignment of error, Ballagh asserts that the 
circuit court erred by instructing the jury that she was 
required to prove her VCPA claims by clear and convincing 
evidence, rather than by a preponderance of the evidence.  She 
argues that the VCPA creates a new, statutory cause of action 
that is distinct from and in addition to common law fraud.  She 
argues that a preponderance of the evidence is the default 
standard of proof for statutory causes of action unless the 
General Assembly expressly provides for a higher standard.  She 
argues that the preponderance standard is especially warranted 
here because the express language of the statute states that 
the General Assembly enacted it with a remedial purpose, and 
remedial legislation is to be construed and applied liberally 
by the courts. 
 
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Questions relating to burden of proof, including the 
standard of proof and which party bears the burden to meet it, 
are questions of law reviewed de novo.  Mulford v. Walnut Hill 
Farm Group, LLC, 282 Va. 98, 111, 712 S.E.2d 468, 476 (2011). 
We agree that the VCPA creates a new, statutory cause of 
action distinct from and in addition to common law fraud.  
Owens v. DRS Auto. Fantomworks, Inc., 288 Va. 489, 497, 764 
S.E.2d 256, 260 (2014) (“[T]he legislative purpose underlying 
the VCPA was, in large part, to expand the remedies afforded to 
consumers and to relax the restrictions imposed upon them by 
the common law. . . .  Therefore, [it] extends considerably 
beyond fraud.”).  The elements of the two claims are different.  
Wilkins v. Peninsula Motor Cars, 266 Va. 558, 562-63, 582 
S.E.2d 581, 587 (2003).  In fact, although a plaintiff may not 
recover double damages by claiming both a VCPA violation and 
common law fraud, he or she may present both claims in the same 
action and elect between the damages awarded if both are 
proven.  Id. 
We also agree that “the ordinary burden in civil actions 
[is] preponderance of the evidence.”  Wyatt v. McDermott, 283 
Va. 685, 700, 725 S.E.2d 555, 563 (2012).  Accordingly, we 
presume that when the General Assembly creates a new, statutory 
cause of action, it intends the preponderance standard to apply 
unless it expressly states otherwise. 
 
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The defendants argue that there are several indicators 
within the VCPA showing that the General Assembly intended a 
higher standard of proof to apply, but none of them are express 
statements of such intent. 
First, the defendants argue that when enacting the VCPA, 
the legislature deviated from the language in the model Uniform 
Deceptive Trade Practices Act.  They cite examples where it 
chose to use the words “fraudulent” and “misrepresenting” in 
the VCPA in lieu of the phrases “deceptive” and “causes 
likelihood of confusion or misunderstanding as to” used in the 
model act.  Compare Unif. Deceptive Trade Practices Act § 2(a), 
9A U.L.A. 14 (Supp. 1967) with Code § 59.1-200(A).  They 
contend that these deviations from the model act express 
legislative intent to conform the statute’s standard of proof 
to the standard for common law fraud.  We disagree. 
The principal source from which to determine the General 
Assembly’s intent in enacting a statute is the language it used 
in the statute itself.  Virginia Dep't of Health v. Kepa, Inc., 
___ Va. ___, ___, 766 S.E.2d 884, 889 (2015).  When that 
language is not sufficiently clear, we also may consider why 
the statute was enacted.  Copeland v. Todd, 282 Va. 183, 193, 
715 S.E.2d 11, 16 (2011). 
The legislature seldom chooses to expressly direct the 
courts how to apply a statute.  When it does so we must pay 
 
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special attention to that choice and ensure that it is given 
full effect.  The General Assembly chose to include such 
direction in the VCPA.  It declared that the VCPA “shall be 
applied as remedial legislation to promote fair and ethical 
standards of dealing between suppliers and the consuming 
public.”  Code § 59.1-197.  We construe remedial legislation 
liberally, in favor of the injured party.  E.I. du Pont de 
Nemours & Co. v. Eggleston, 264 Va. 13, 17, 563 S.E.2d 685, 687 
(2002). 
Thus, the General Assembly’s decision to define the 
elements of the VCPA using terms of art already familiar to the 
bench and bar from common law fraud is insufficient to express 
an intent that plaintiffs must prove claims of VCPA violations 
by clear and convincing evidence.  Despite the defendants’ 
argument, any light the adoption of such terms may shed on the 
standard of proof is eclipsed by the legislature’s express 
direction that we apply the VCPA as remedial legislation.  That 
language supports a conclusion that it intended that we apply 
the lower, preponderance standard more favorable to the injured 
plaintiff. 
Next, the defendants note that Code § 59.1-207 provides an 
affirmative defense in certain circumstances, and expressly 
provides a preponderance of the evidence standard of proof for 
that defense.  They argue that this provision would be 
 
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superfluous or redundant if the preponderance standard applied 
to the whole VCPA, and such a result would contravene our 
canons of statutory construction.  See Owens, 288 Va. at 497, 
764 S.E.2d at 260. 
Although this is a plausible argument, the General 
Assembly’s decision to expressly provide a preponderance 
standard of proof for a defendant’s affirmative defense is not 
an express statement that it intended a clear and convincing 
evidence standard to apply to a plaintiff’s VCPA claims.  The 
implication that the higher standard applies to the plaintiff 
because the lower standard applies to the defendant is again 
simply too subtle, especially in the face of both the general 
presumption that the preponderance standard applies to civil 
actions and the rule that remedial legislation is construed in 
favor of the injured party. 
The defendants also argue that a statute is presumed not 
to alter the common law unless the legislature has expressly 
indicated otherwise.  They argue that allowing a plaintiff to 
prove a misrepresentation for the purposes of the VCPA by a 
preponderance of the evidence would alter the common law 
without such express indication by the General Assembly.  
However, as noted above, the VCPA creates a new, statutory 
cause of action in addition to common law fraud.  It does not 
replace or in any way narrow the tort of common law fraud.  
 
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Accordingly, applying the preponderance standard to allegations 
of VCPA violations does not alter the common law. 
The defendants also argue that the VCPA provides 
extraordinary relief, including the possibility of treble 
damages, which they contend shows the General Assembly intended 
a higher standard of proof to apply.  However, many statutes 
include similar provisions without imposing a higher standard 
of proof.  See, e.g., Code §§ 8.01-27.2 (authorizing treble 
damages for giving a bad check for rent), 8.01-27.4 
(authorizing treble damages for failure to apply insurance 
proceeds to unpaid balances for professional services), 18.2-
190.8 (authorizing treble damages for using an unlawful 
electronic communication device for commercial advantage or 
financial gain), 55-216 (authorizing treble damages for waste 
by a tenant of real property), and 56-5 (authorizing treble 
damages for damage to property of a public service 
corporation).  Accordingly, the measure of damages allowed by 
the VCPA does not dictate the standard of proof a plaintiff is 
required to satisfy. 
The defendants also argue that applying the preponderance 
standard for VCPA violations would make common law fraud 
obsolete because plaintiffs would allege VCPA violations 
instead to benefit from the lower standard of proof.  However, 
as noted above, plaintiffs may, and do, bring claims for a VCPA 
 
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violation and common law fraud in the same complaint.  Wilkins, 
266 Va. at 559, 587 S.E.2d at 582.  While the standard of proof 
may be higher for common law fraud, a plaintiff who satisfies 
that higher burden and proves punitive damages may recover far 
more than merely three times his or her actual damages.  See, 
e.g., id. at 559, 563, 587 S.E.2d at 582, 584 (upholding a jury 
award of $100,000 punitive damages, 56.68 times the award of 
$1862.86 in actual damages on a claim of common law fraud).  
Accordingly, plaintiffs will pursue claims for common law fraud 
despite the lower standard of proof for VCPA violations, where 
the evidence supports such claims. 
Finally, we note that the highest courts of several states 
have concluded that the preponderance standard applies under 
their own states’ similar statutes.  See, e.g., Aguilar v. 
Atlantic Richfield Co., 24 P.3d 493, 521 (Cal. 2001); Service 
Rd. Corp. v. Quinn, 698 A.2d 258, 265 (Conn. 1997); Avery v. 
State Farm Mut. Auto. Ins. Co., 835 N.E.2d 801, 856 (Ill. 
2005); Kelly v. Vinzant, 197 P.3d 803, 812-13 (Kan. 2008); 
State v. Price-Rite Fuel, Inc., 24 A.3d 81, 87 (Me. 2011); Hair 
Excitement, Inc. v. L'Oreal U.S.A., Inc., 965 A.2d 1032, 1038 
(N.H. 2009); Liberty Mut. Ins. Co. v. Land, 892 A.2d 1240, 
1247-48 (N.J. 2006); State ex rel. Spaeth v. Eddy Furn. Co., 
386 N.W.2d 901, 903 (N.D. 1986); State ex rel. Redden v. 
Discount Fabrics, Inc., 615 P.2d 1034, 1038-39 (Or. 1980); 
 
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Smith v. Baldwin, 611 S.W.2d 611, 616 (Tex. 1980); Poulin v. 
Ford Motor Co., 513 A.2d 1168, 1172 (Vt. 1986).  The principles 
guiding those courts are persuasive. 
III.  CONCLUSION 
For these reasons, we conclude that a plaintiff must prove 
a violation of the VCPA by a preponderance of the evidence 
rather than by clear and convincing evidence.  Accordingly, we 
will reverse the judgment of the circuit court and remand the 
case for further proceedings consistent with this opinion. 
Reversed and remanded.