Title: Sheets v. Castle

State: virginia

Issuer: Virginia Supreme Court

Document:

PRESENT: All the Justices 
 
KENNETH R. SHEETS, ET AL. 
 
 
 
             OPINION BY 
v.  Record No. 010965 
            JUSTICE DONALD W. LEMONS 
 
 
 
           March 1, 2002 
HARRIET A. CASTLE 
 
FROM THE CIRCUIT COURT OF PAGE COUNTY 
John J. McGrath, Jr., Judge 
 
 
In this appeal, we consider whether a denial of a petition 
for appeal by the Supreme Court of Virginia has precedential 
effect.  Additionally, we consider whether a defendant is a 
“prevailing party” under the terms of a contract when the 
plaintiff takes a voluntary nonsuit. 
I.  Facts and Proceedings Below 
 
On November 19, 1999, Kenneth R. and Ann R. Sheets 
(collectively “Sheets”) entered into a contract to sell 
approximately 100 acres of real property in Page County to 
Harriet A. Castle (“Castle”).  The contract included a provision 
entitled “Attorney’s Fees,” that stated in relevant part: 
 
In any action or proceeding involving a dispute 
between the Purchaser and the Seller arising out 
of this Contract, the prevailing party shall be 
entitled to receive from the other party 
reasonable attorney’s fees to be determined by 
the court or arbitrator(s). 
 
The parties never closed on the property. 
 
On March 31, 2000, Sheets sold a portion of the same 
property to Derek K. Goebel (“Goebel”) and Janine S. Siebens 
(“Siebens”) and granted to them an option to purchase the 
remainder of the property.  Castle subsequently filed a bill of 
complaint against Sheets, Goebel, Siebens, and others, seeking 
rescission of the sale to Goebel and Siebens and specific 
performance of the contract between Castle and Sheets.  In the 
bill of complaint, Castle alleged that she was “ready, willing, 
and able to settle on the contract,” but that Sheets had refused 
to complete settlement. 
 
Sheets filed an answer alleging that Castle had failed to 
comply with the contract terms; therefore, their contract was 
null and void.  The answer included a request for costs and 
attorney’s fees.  Sheets also filed a motion craving oyer and a 
demurrer.  Castle’s attorney died after filing the bill of 
complaint, so the trial court ordered her to obtain new counsel 
by July 11, 2000, the date scheduled for a hearing on the motion 
craving oyer.  The demurrer was set for argument on July 18, 
2000. 
 
Castle did not obtain new counsel by the July 11, 2000 
hearing and, as a result, she appeared pro se.  At the hearing, 
Castle moved for a voluntary nonsuit pursuant to Code § 8.01-
380.  Sheets objected to the entry of a nonsuit, arguing that 
their claims for costs and attorney’s fees were counter-claims 
arising out of the contract, which prevented the plaintiff from 
suffering a nonsuit.  The trial court found that the claims for 
 
2
costs and fees were subject to independent adjudication and 
granted Castle’s motion for nonsuit. 
 
On July 19, 2000, the Sheets filed a petition for 
attorney’s fees.  Citing the “Attorney’s Fees” clause of the 
real estate contract, the Sheets claimed to be the prevailing 
party because the suit against them was nonsuited. 
 
By order dated February 2, 2001, the trial court denied 
Sheets’ petition for attorney’s fees.  According to the trial 
court, the term “prevailing party” in the parties’ contract was 
“clear and unambiguous;” therefore, the trial court applied the 
“plain meaning” rule of contract interpretation.  The trial 
court held that because there was no “final judgment” in the 
case, there was no “prevailing party” under the terms of the 
contract.  The trial court also opined that awarding attorney’s 
fees to defendants such as Sheets “would serve as a substantial 
and unnecessary burden on and an abridgement of plaintiffs’ 
closely guarded statutory right to take a first voluntary non-
suit free from sanctions.”  Sheets filed a motion to stay the 
trial court’s order and a petition for rehearing, both of which 
the trial court denied by order dated February 27, 2001.  Sheets 
appeals the adverse ruling of the trial court. 
II.  Standard of Review 
 
3
 
The trial court’s judgment is predicated entirely upon 
questions of law which we review de novo.  Transcontinental Ins. 
Co. v. RBMW, Inc., 262 Va. 502, 510, 551 S.E.2d 313, 317 (2001). 
III.  Analysis 
a.  Precedential Value to  
Denial of Petition for Appeal 
 
 
The contractual term at issue in this case entitles “the 
prevailing party” to an award of reasonable attorney’s fees.  
Initially, Sheets argues that we have already decided whether a 
defendant is a “prevailing party” when the plaintiff takes a 
voluntary nonsuit.  Sheets maintains that in a prior case before 
the Circuit Court of Fairfax County, the trial court decided 
that a defendant was a “prevailing party” under similar 
contractual provisions and that the petition for appeal was 
denied by the Supreme Court of Virginia.  See Ayoub v. Trautner, 
Record No. 990491 (June 4, 1999).  Sheets argues that because a 
petition for appeal is resolved by the Supreme Court of Virginia 
on the merits, our denial of the petition bestows binding 
precedential application of the circuit court opinion throughout 
the Commonwealth. 
 
We note that the Attorney General has employed a similar 
argument concerning unpublished opinions of the Court of Appeals 
of Virginia.  The Attorney General has argued that unpublished 
opinions of the Court of Appeals which would otherwise have no 
 
4
precedential value (see Code § 17.1-413), nonetheless attain the 
status of binding precedent if a petition for appeal is refused 
by the Supreme Court of Virginia.  See Bowman v. Commonwealth, 
30 Va. App. 298, 305, 516 S.E.2d 705, 708 (1999). 
 
With the exception of cases with procedural defects and the 
limited number of cases for which appellate review by the 
Supreme Court of Virginia is dependent upon “a substantial 
constitutional question as a determinative issue or matters of 
significant precedential value” (Code §§ 17.1-410 and -411), the 
refusal of a petition for appeal constitutes a decision on the 
merits.  See Saunders v. Reynolds, 214 Va. 697, 700, 204 S.E.2d 
421, 424 (1974) (“[w]e state unequivocally that a decision to 
grant or refuse a petition for writ of error is based upon one 
equally-applied criterion – the merits of the case”); see also 
Wright v. West, 505 U.S. 277, 283 (1992) (“the Supreme Court of 
Virginia refused the petition – a disposition indicating that 
the [C]ourt found the petition without merit”); Jackson v. 
Virginia, 443 U.S. 307, 311 n.4 (1979) (“[e]ach petition for 
writ of error under Va. Code § 19.2-317 (1975) is reviewed on 
the merits . . . and the effect of a denial is to affirm the 
judgment of conviction on the merits”); Dodson v. Director, 233 
Va. 303, 307 n.5, 355 S.E.2d 573, 576 n.5 (1987) (“[i]n 
Virginia, aside from appeals from a capital murder conviction, 
criminal appeals to both the Court of Appeals and to this Court 
 
5
are discretionary, and ‘a decision to grant or refuse a petition 
[for appeal] is based upon one equally-applied criterion – the 
merits of the case.’ ”). 
 
While a decision “on the merits,” including a denial of a 
petition for appeal, may have precedential value, discerning the 
grounds that formed the basis for denial is indispensable in 
assessing its potential applicability in future cases.  Most 
often the refusal of a petition for appeal merely recites: 
Upon review of the record in this case and 
consideration of the argument submitted in 
support of and in opposition to the granting of 
an appeal, the Court is of opinion there is no 
reversible error in the judgment complained of.  
Accordingly, the Court refuses the petition for 
appeal. 
 
From such an order, the grounds upon which the Court relied 
as a basis for denial cannot be determined.  While it may be 
that there is simply no error found, there are several other 
possibilities.  To name but a few of the several possible 
grounds, the trial court may have been in error, but the error 
was “harmless.”  See Holmes v. LG Marion Corp., 258 Va. 473, 
483, 521 S.E.2d 528, 535 (1999); see also Clay v. Commonwealth, 
262 Va. 253, 259, 546 S.E.2d 728, 731 (2001).  The trial court 
may have been in error, but the court “reached the correct 
result . . . for the wrong reason.”  See Chesterfield County v. 
Stigall, 262 Va. 697, 704, 554 S.E.2d 49, 53 (2001).  The trial 
court may have been in error, but there exists an independent 
 
6
basis for the trial court’s judgment that has not been argued as 
error. See Magco of Maryland, Inc. v. Barr, 262 Va. 1, 1, 545 
S.E.2d 548, 548 (2001); see also Parker-Smith v. Sto Corp., 262 
Va. 432, 440-41, 551 S.E.2d 615, 620 (2001).  While refusals of 
petitions for appeal may be grounded upon each of the reasons 
illustrated in these examples, among others, and the 
dispositions would be “on the merits,” there could be error in 
the judgments of a non-reversible nature. 
 
We restate that, with the exceptions previously mentioned, 
the refusal of a petition for appeal is based upon the merits of 
the case.  However, unless the grounds upon which the refusal is 
based is discernible from the four corners of the Court’s order, 
the denial carries no precedential value.  To hold otherwise 
would result in bench and bar sifting through the records of 
cases buried in the office of the Clerk of the Supreme Court of 
Virginia or the clerk of the circuit court to affirm or 
contradict speculative assertions of the reason for the Court’s 
denial of petitions for appeal.  Such unreliability and lack of 
clarity is not countenanced in our jurisprudence. 
b.  Is There a “Prevailing Party” Upon 
the Taking of a Nonsuit? 
 
 
The provisions of Code § 8.01-380(B) at issue state: 
Only one nonsuit may be taken to a cause of 
action or against the same party to the 
proceeding, as a matter of right, although the 
court may allow additional nonsuits or counsel 
 
7
may stipulate to additional nonsuits.  The court, 
in the event additional nonsuits are allowed, may 
assess costs and reasonable attorney’s fees 
against the nonsuiting party. 
The contract at issue in this case provided that the “prevailing 
party” in a dispute arising under the contract was entitled to 
reasonable attorney’s fees.  At the outset, it is important to 
state what this case is not about.  This case is not about 
awarding attorney’s fees and costs under the nonsuit statute.  
This case involves a single nonsuit, and thus the last sentence 
of Code § 8.01-380(B) is not applicable.  Nor was the nonsuit 
taken within five days of a scheduled trial such as to render 
subsection (C) of the Code provision applicable.*  This case is 
about whether there is a “prevailing party” when a nonsuit is 
taken.  If there is a “prevailing party” then under the terms of 
the contract, attorney’s fees should be awarded.  If there is no 
“prevailing party” when a nonsuit is taken, then the attorney’s 
fee provision of the contract is not implicated. 
                     
* (C) If notice to take a nonsuit of right is 
given to the opposing party within five days of 
trial, the court in its discretion may assess 
against the nonsuiting party reasonable witness 
fees and travel costs of expert witnesses 
scheduled to appear at trial, which are actually 
incurred by the opposing party solely by reason 
of the failure to give notice at least five days 
prior to trial.  The court shall have the 
authority to determine the reasonableness of 
expert witness fees and travel costs. 
 
 
8
 
A nonsuit does not involve a decision on the merits, 
rather, it “simply [puts] an end to the present action, but is 
no bar to a subsequent action for the same cause.”  Payne v. 
Buena Vista Extract Co., 124 Va. 296, 311, 98 S.E. 34, 39 
(1919).  The term “prevailing party” is not found in the nonsuit 
statute.  We will construe this term utilized by the parties in 
accordance with its plain meaning.  See Lansdowne Dev. Co. v. 
Xerox Realty Corp., 257 Va. 392, 400, 514 S.E.2d 157, 161 
(1999).  We need not go farther than Black’s Law Dictionary for 
its common meaning: “A party in whose favor a judgment is 
rendered, regardless of the amount of damages awarded.”  Black’s 
Law Dictionary 1145 (7th ed. 1999). 
 
This definition is in accord with our decision in Richmond 
v. County of Henrico, wherein we stated: 
The ‘prevailing party’, within the meaning of the 
general rule that such a party is entitled to 
costs, is the party in whose favor the decision 
or verdict in the case is or should be rendered 
and judgment entered, and in determining this 
question the general result should be considered, 
and inquiry made as to who has, in the view of 
the law, succeeded in the action. 
185 Va. 859, 869, 41 S.E.2d 35, 41 (1947) (quotations omitted).  
We hold that under the plain meaning of the term, there is no 
“prevailing party” when a nonsuit is awarded. 
 
Of course, where the circumstances warrant the parties may 
avail themselves of specific remedies provided in subsections 
 
9
(B) and (C) of the nonsuit statute itself, their contractual 
agreements properly interpreted, or the sanctions provisions of 
Code § 8.01-271.1.  However, on this record, the trial court did 
not err in holding that there was no “prevailing party” upon the 
granting of a nonsuit and that attorney’s fees under the 
contract could not be awarded. 
 
We will affirm the judgment of the trial court. 
Affirmed. 
 
10