UNPUBLISHED

UNITED STATES COURT OF APPEALS

FOR THE FOURTH CIRCUIT

GERALD E. SCEARCE,

Plaintiff-Appellee,

v. No. 95-2307

HALIFAX COUNTY, VIRGINIA,

Defendant-Appellant.

GERALD E. SCEARCE,

Plaintiff-Appellant,

v. No. 95-2308

HALIFAX COUNTY, VIRGINIA,

Defendant-Appellee.

Appeals from the United States District Court

for the Western District of Virginia, at Danville.

William L. Osteen, Sr., District Judge, sitting by designation.

(CA-94-20-D)

Argued: July 10, 1996

Decided: September 5, 1996

Before WILKINS and LUTTIG, Circuit Judges, and

G. ROSS ANDERSON, JR., United States District Judge for

the District of South Carolina, sitting by designation.

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Affirmed in part, reversed in part, and remanded with instructions by

unpublished opinion. Judge Wilkins wrote the opinion, in which

Judge Luttig and Judge Anderson joined.

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COUNSEL

ARGUED: Elizabeth Kay Dillon, WOODS, ROGERS & HAZLEGROVE, Roanoke, Virginia, for Appellant. Alexander Wayne Bell,

Lynchburg, Virginia, for Appellee. ON BRIEF: W. Fain Rutherford,

Thomas M. Winn, III, WOODS, ROGERS & HAZLEGROVE, Roanoke, Virginia; W. Carrington Thompson, Chatham, Virginia, for

Appellant.

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Unpublished opinions are not binding precedent in this circuit. See

Local Rule 36(c).

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OPINION

WILKINS, Circuit Judge:

A jury returned a verdict in favor of Gerald E. Scearce, finding that

Halifax County, Virginia had terminated his employment in violation

of his rights under the First Amendment, see 42 U.S.C.A. § 1983

(West 1994), and in violation of Virginia law. The County appeals the

judgment awarding actual and punitive damages, as well as attorneys'

fees, and Scearce challenges the amount of the attorneys' fees award.

We affirm the award of actual damages and attorneys' fees, reverse

the award of punitive damages, and remand for entry of an amended

judgment.

I.

Scearce was employed as a truck driver at the County landfill

beginning in 1990. During the course of his employment, he became

aware of a pattern of illegal use of property and resources belonging

to the County by its Director of Public Works, Leroy Farmer. Scearce

ultimately recorded incriminating videotape of missing County property that substantiated wrongdoing by Director Farmer. Scearce

brought the improper conduct and the videotape to the attention of his

immediate superior and other County officials, including a member of

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the Board of Supervisors, Richard Abbott. These officials cautioned

Scearce that he might be terminated as a result of his whistleblowing

activities and informed him that others in his situation had been

threatened with discharge.

Soon afterward, in January 1992, Scearce was invited to attend a

meeting with Director Farmer and Administrator Robert Lawler during which Scearce was questioned concerning his 1990 employment

application. Scearce acknowledged that he had been employed briefly

by a company that was not listed on his application form. He

explained, however, that he had been unaware of any omission since

his grandmother had completed the application form for him because

he was illiterate. Administrator Lawler thereafter attended a meeting

of the Board of Supervisors and stated that Scearce should be terminated for falsifying his personnel records, an offense under the applicable personnel policy punishable by discharge or suspension for one

to 30 working days. When Administrator Lawler raised the issue,

Supervisor Abbott discussed the existence of the videotape recorded

by Scearce and a heated discussion among the members followed.

The Board finally decided by a vote of six to one to permit Administrator Lawler to handle the matter as he deemed most appropriate.

Administrator Lawler thereafter terminated Scearce.

Scearce subsequently brought this lawsuit. His first cause of action

alleged a violation of 42 U.S.C.A. § 1983, maintaining that he was

terminated for exercising his First Amendment rights. His second

cause of action alleged that his termination violated Virginia law. The

jury found in Scearce's favor on both causes of action, awarding

$155,417.24 in actual damages and $75,000 in punitive damages.

Thereafter, the district court awarded reasonable attorneys' fees and

costs to Scearce. Although both parties appeal, we conclude that only

the County's claim that it is entitled to sovereign immunity warrants

extended discussion.

II.

The County maintains that the district court erred in failing to grant

its motion for judgment as a matter of law with respect to Scearce's

claim predicated on Virginia law, asserting that it is entitled to sovereign immunity. Under Virginia law, counties are entitled to sovereign

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immunity from tort actions unless that immunity has been waived.

See, e.g., Mann v. County Bd. of Arlington County, 98 S.E.2d 515,

519 (Va. 1957); Commonwealth v. Chilton Malting Co., 152 S.E. 336,

338-39 (Va. 1930). And, Virginia law permits the recovery of punitive damages only if an action sounds in tort. See Kamlar Corp. v.

Haley, 299 S.E.2d 514, 516-18 (Va. 1983); see also Cancun Adventure Tours, Inc. v. Underwater Designer Co., 862 F.2d 1044, 1048

(4th Cir. 1988); cf. City of Newport v. Fact Concerts, Inc., 453 U.S.

247, 271 (1981) (local government not liable for punitive damages

under § 1983). Consequently, the punitive damages verdict against

the County must be set aside unless the County has waived its sovereign immunity defense.

The Commonwealth has not expressly waived the sovereign immunity traditionally afforded to counties. See Va. Code Ann. § 8.01-

195.3 (Michie Supp. 1996); Messina v. Burden, 321 S.E.2d 657, 660

(Va. 1984). Scearce, however, contends that the County waived this

defense by failing to raise it timely. Our review of the amended

answer submitted by the County convinces us that it failed to specifically plead the defense of sovereign immunity. See Fed. R. Civ. P.

8(c) (any "matter constituting an avoidance or affirmative defense"

must be affirmatively pled).1 But, waiver does not necessarily result

from a defendant's failure to raise an affirmative defense in the

answer. "Where the matter is raised in the trial court in a manner that

does not result in unfair surprise, . . . technical failure to comply precisely with Rule 8(c) is not fatal." Allied Chem. Corp. v. Mackay, 695

F.2d 854, 855-56 (5th Cir. 1983) (per curiam); accord Dresser Indus.,

Inc. v. Pyrrhus AG, 936 F.2d 921, 928 (7th Cir. 1991). The County

raised the defense of sovereign immunity from suit in its motion for

judgment at the close of the evidence, and Scearce is unable to dem-

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1 It is questionable whether the defense of sovereign immunity may be

waived by a failure to comply with federal procedural rules. See

Simmons v. City of Philadelphia, 947 F.2d 1042, 1084-86 (3d Cir. 1991)

(indicating that procedural default cannot result in waiver when defense

of sovereign immunity may not be waived under state law), cert. denied,

503 U.S. 985 (1992); Mann, 98 S.E.2d at 519 (holding that defense of

sovereign immunity is jurisdictional and may not be waived under Virginia law). We need not address that question, however, given our conclusion that the County did not waive the defense in this instance.

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onstrate that he would be unfairly prejudiced by an amendment of the

pleadings. We, therefore, deem the County's answer amended to raise

the defense of sovereign immunity. See Fed. R. Civ. P. 15(b). As a

consequence, we conclude that the award of punitive damages against

the County is improper.

III.

We have carefully considered the other issues raised by the parties

and find them to be without merit. The award of compensatory damages was supported by the finding of wrongful termination under Virginia law.2 In addition, the jury instructions given by the district court

were proper because Administrator Lawler was a final policymaking

official of the County in this instance, rendering the County liable for

the termination found by the jury to have been based on Scearce's

exercise of rights protected by the First Amendment in violation of

§ 1983. Monell v. Department of Social Servs., 436 U.S. 658, 690-91

(1978); Greensboro Professional Fire Fighters Ass'n v. City of

Greensboro, 64 F.3d 962, 964-66 (4th Cir. 1995). Finally, we reject

Scearce's claim that the district court abused its discretion in establishing the attorneys' fees award. See City of Burlington v. Dague,

505 U.S. 557, 566 (1992) (noting that "[c]ontingency enhancement is

. . . not consistent with our general rejection of the contingent-fee

model for fee awards, nor is it necessary to the determination of a reasonable fee"). Accordingly, we affirm in part, reverse in part, and

remand for entry of an amended judgment.

AFFIRMED IN PART; REVERSED IN PART; AND REMANDED

WITH INSTRUCTIONS

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2 Although sovereign immunity protects counties against tort liability,

it does not protect against liability premised on contractual obligations.

Wiecking v. Allied Medical Supply Corp., 391 S.E.2d 258, 260-61 (Va.

1990). And, the instruction given by the district court permitted the jury

to return a verdict on a theory sounding in contract. Cf. Jenkins v. County

of Shenandoah, 436 S.E.2d 607, 609 (Va. 1993) (recognizing that an

implied contractual right of action exists under Article I, § 11 of the Constitution of Virginia); City of Norfolk v. Kohler, 362 S.E.2d 894, 896 (Va.

1987) (acknowledging that public employees who possess a right to continued employment in the absence of cause for their termination have an

enforceable right).

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