Source: http://virginia-appeals.com/analysis-of-november-22-2017-supreme-court-opinions/
Timestamp: 2019-04-25 20:47:01+00:00

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I’m trying to be helpful.
When an inmate wants to file a lawsuit, he can do so without paying the required filing fee or service costs if he shows that he “has had no deposits in his inmate trust account for the preceding six months.” The justices explore this provision today in Grethen v. Robinson.
Grethen is enjoying a period of free room and board with the compliments of the Director of Corrections. The Supreme Court describes him today as “a prolific litigator.” He sought to file a mandamus petition challenging the prison’s restriction of his access to computers, legal-research materials, and photocopying. He filed an affidavit saying that he had no available funds.
But “no available funds” isn’t the same thing as “no deposits … for the preceding six months.” His account records showed deposits of $25 for one three-month period and $183 for the preceding year. Based on that, a circuit-court judge refused to allow him to proceed in forma pauperis. Grethen appealed, and the justices agreed to take a look.
This morning, a divided court reverses. Justice McCullough writes for the majority, noting that each inmate has several trust accounts for different purposes – court obligations, loans, and others – with the residue held in a “spend” account, available for any purpose the inmate chooses. When the inmate incurs costs, such as a $5 fee for a doctor’s visit, the facility either deducts that amount from his trust funds or “lends” him the money and then debits it immediately. These loans/debits are the basis of the roughly $200 in deposits shown on the records.
The Supreme Court today holds that while the prison may call those loans “deposits,” that doesn’t match the commonly accepted definition of what a deposit is. No real money ever changed hands, so there’s no way that Grethen could use the money to pay the filing fee. The majority thus remands the case for adjudication of the mandamus petition.
Justice McClanahan (joined by Justice Powell) has other ideas. No real money? Tell that to the taxpayers whose cash funded Grethen’s lifestyle (modest as it may be). The dissent maintains that no matter the source, someone deposited money into Grethen’s account, so he doesn’t qualify for automatic IFP status. In that instance, the trial court has the discretion to allow it or not.
It’s impossible to read today’s decisions without that frequent-flyer status in the back of your mind. Justice McClanahan quotes the majority’s own phrase – “a prolific litigator” – and implies that the trial court should, in this context, be allowed to consider that in deciding whether Grethen deserves to file yet another free lawsuit.
We’ll turn now to your dinner-conversation topic for tomorrow. In Woolford v. Department of Taxation, the justices evaluate a claim for a $5 million tax credit for donation of a conservation easement.
Woolford is the trustee of a family trust that owns a large agricultural tract in King William County. The family wanted to donate a conservation easement over part of the farm to preserve it from development for a sand-and-gravel mining operation. They secured a report from a licensed appraiser, indicating that the land was worth about $13 million as it stood – with development potential intact – but would be worth only $1 million without those development rights.
The trust conveyed a deed of gift to a public conservation agency and then claimed a 40% tax credit for the value thus conveyed. That’s how we get to our $5 million playing field in this appeal.
The Department of Taxation initially accepted the credit application, but later rescinded that ruling, contending that the appraiser didn’t meet statutory requirements. The Department reduced the credit to zero, prompting a trip to court. The circuit court agreed with the Department, since the appraiser – who otherwise appeared well-qualified in his field – had not received educational training in the appraisal of sand/gravel mining operations.
The Supreme Court unanimously reverses today. The court explores the credentialing requirements in state and federal statutes and concludes that the trial court’s analysis of an educational requirement was too strict. To be sure, the court also rejects the trust’s argument for a liberal interpretation of qualifications; but it eventually rules that the appraiser’s credentials in related fields, and his previous experience in four other mining appraisals, were enough to qualify him here. The court remands so the trial court can evaluate the case on the merits.
The court has two parting shots. The first is to implicitly chide the Department for taking an extreme position: In the absence of a qualified appraiser, the correct amount of tax credit is zero. The justices plainly are skeptical of this, and the opinion concludes with a gentle rejoinder to the Department to play a little more fairly with the trust.
Finally, there’s a hand grenade for the appellate bar. In a footnote – where, as I’ve often preached, the goblins usually hang out – the court expressly overrules a previous preservation requirement. That counts as big news here at VANA, so we’ll explore it.
In the trial court, the Department made several other arguments that the trial court decided not to address. Those arguments would have provided an alternate route to the conclusion that the circuit court reached – the one that got reversed this morning – so the judge felt no need to decide them. On appeal, the Department didn’t assign cross-error to that refusal to rule.
In the past, that decision has had fatal consequences. Most memorably, in VMRC v. Clark in 2011, the justices had a nasty surprise for a party to an admin-law appeal. Clark had appealed to the Court of Appeals the dismissal of his claim on standing grounds. In the trial court, Clark had argued against the dismissal and had also asked for leave to amend – leave that the trial court had rejected. The CAV took the easy route, reversing on the standing issue and deciding that the amendment issue was unnecessary in light of its holding.
We have previously held that an appellee must assign cross-error to a lower tribunal’s failure to rule on alternative grounds to preserve the issue for appellate review. [Citations to Horner v. Dep’t of Mental Health and VMRC v. Clark] Those holdings are incompatible with our current approach, which requires an assignment of cross-error (or a cross-appeal) “only when an appellee seeks to modify or otherwise change a favorable judgment ‘with a view either to enlarging his own rights thereunder or of lessening the rights of his adversary.’” Our holdings in Horner and Clark on the requirement of assigning cross-error in a failure to rule situation are hereby expressly overruled.
(Internal citations omitted) I emphatically applaud the justices for this decision, though the news will be cold comfort to Clark.
You know that hot feeling you get in the pit of your stomach when you sense that something really bad is about to happen? I got that sensation before I finished reading the first paragraph of Appalachian Regional Healthcare v. Comm’r of Insurance. That’s because I ran across the phrase, “Reciprocal of America.” And every lawyer knows that invoking that phrase is bound to end in tears.
Appalachian is part of a group of hospitals in, of all places, Kentucky that formed two self-insured trusts to cover employee-liability claims (for example, Workers’ Comp) and professional/general liability claims (for example, medical malpractice), respectively. As an aside, the second one was named Kentucky Hospital Association Trust, generating the unfortunate acronym KHAT. Given that khat is a controlled substance, that’s akin to a hospital association with the acronym OPIUM. But I digress.
The two trusts merged into Reciprocal in 1997. As part of the merger agreement, Reciprocal agreed to indemnify the hospitals for any liabilities formerly insured by the trusts. It also promised to cover their reasonable costs and fees incurred in defending claims against the hospitals – basically, the kind of coverage you’d expect.
As you’ll recall, Reciprocal suffered a grisly death by receivership almost 15 years ago. The Commissioner of Insurance, appointed as Special Receiver, filed suit in the SCC seeking approval to continue paying employees’ claims from what assets were left. The Hospitals later joined in that request for relief, and also filed a suit of their own in Kentucky to achieve a parallel purpose. Those efforts were successful; the Virginia litigation and the Kentucky lawsuit both ended in victories for the hospitals.
The hospitals then sought payment of their legal fees, roughly $440,000, for the two actions under the indemnification provision. The SCC refused, and the hospitals exercised that rare right in the Virginia appellate universe: an appeal of right to the Supreme Court.
Today a unanimous court affirms. While the path may seem complex, even tortuous, for someone who doesn’t practice in this field, the ultimate ruling is simple and, in my mind, unassailable. The indemnity agreement assured payment of fees and costs incurred in defending against damage claims. But the hospitals weren’t defending anything; they were plaintiffs, seeking affirmative relief.
The hospitals argued that this was just a matter of semantics, and they were just seeking an advance adjudication of their potential future liability problems. But the justices stop the interpretive process at Step 1: The plain meaning of defend doesn’t extend to the affirmative assertion of claims. And when the meaning of language is plain, courts don’t engage in construction or even interpretation; they just apply the plain language and say, “Next case, please.” The hospitals thus have to pay their own lawyers, without any help from Reciprocal dollars.

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