Source: https://www.vafiduciarylaw.com/page/2/
Timestamp: 2019-04-21 06:11:02+00:00

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Picture your client: the executor of an estate.
In short, the second spouse says, “pay the mortgage, but not from my real estate,” and the children say, “you can’t pay the mortgage, because it must pass to our dear stepmother with the lien on the property.” What to do?
If you said get the court’s aid and guidance, you’d be one step ahead of the curve. The trial court reasoned that the will’s intent was to pass the property subject to the lien. And the will’s stated intent must ultimately control, right?
The Virginia Supreme Court, in Dolby v. Dolby, reversed the trial court. The Supreme Court held that the estate was obligated to pay the decedent’s mortgage debt and that because the real estate passed outside of the probate estate by operation of law—namely, pursuant to the survivorship clause in the deed—the provision in the will relied upon by the decedent’s children did not apply. The Court’s decision, issued in 2010, relied upon the principle that the duty of an executor of an estate is to first pay the decedent’s debts. In doing so, the Court cited to Edmunds v. Scott, a prior decision of the Court. The Scott opinion was issued in 1884.
Small business litigation presents a variety of challenges, particularly when a claim for breach of fiduciary duties is involved. To the litigants, the stakes are high—and the desire to pursue their claims often motivated by the business duress suffered at the hands of former partners. In Syed v. ZH Technologies, Inc., a 2010 decision of the Virginia Supreme Court, the Court’s analysis stands as a reminder that, notwithstanding the evidence actually adduced at trial, in considering the viability of a party’s claims, the pleadings still count.
Among the various holdings in ZH Technologies, the Virginia Supreme Court reversed the trial court for permitting a litigant’s jury instructions to set up a theory of the case that had not been pleaded. At trial, the trial court had denied the motion to amend the complaint, noting that such an amendment would be “fundamentally unfair.” In reversing the trial court, the Virginia Supreme Court noted that permitting a litigant to espouse a new theory of the case that had not been previously pleaded, by way of jury instructions and closing argument, was likewise “fundamentally unfair” and “prejudicial.” The Virginia Supreme Court reversed and remanded the claim for retrial on the merits. The Court observed, however, that a renewed motion to amend the complaint could be considered in the discretion of the trial court.
The primary lesson of the four cases featured in our four-part series of posts (Perils in Virginia Estate Litigation) is not so much that the Virginia Supreme Court stands on technicalities—many lawyers might agree that it can and does so regularly, yet they might further observe that “technicalities” exist for a reason. Rather, one lesson is that personal representatives, be they executors, administrators or trustees, and their trial counsel would do well to consult with experienced fiduciary litigation counsel even when the subject matter of the case does not directly implicate a will or trust. The four 2010 Virginia Supreme Court opinions discussed in our four-part installment illustrate only two of the complexities in dealing with or representing fiduciaries in court—standing and proper parties. As the Virginia Supreme Court’s recent decisions continue to reflect, there are many other complexities. With the advent, adoption, and overlay of the Uniform Trust Code, these complexities will only continue to surface in the fiduciary litigation setting, increasingly placing a premium on the fiduciary litigator’s substantive knowledge of fiduciary law in Virginia.
May the Administrator Appeal pro se?
The third of the Virginia Supreme Court's recent opinions in our four-part installment also turned on standing or, more accurately, lack of standing. In Hawthorne v. VanMarter, the decedent’s administrator was represented as a plaintiff by licensed counsel in the trial court on a claim of negligence for personal injuries. After the jury trial resulted in a defense verdict, the administrator of the estate appealed “pro se.” The Virginia Supreme Court considered the appellee’s objection to the estate’s appeal, holding that, under Virginia law, the administrator could not mount an appeal pro se but must be represented by licensed counsel. The cause of action at issue belonged to the beneficiaries of the estate, which the administrator only served in a representative capacity. The court dismissed the administrator’s pro se appeal.
In Part I of our four-post series on the perils in Virginia estate litigation, we discussed a recent Virginia Supreme Court opinion on proper parties. In that case, naming the "Estate" as the defendant proved fatal to the plaintiff's claims. In Part II of our four post-series on the subject, we discuss another 2010 opinion by the Virginia Supreme Court.
In Antisdel v. Ashby, the Virginia Supreme Court affirmed the dismissal of an action filed by an estate’s administrator for lack of standing—the converse of the complication encountered by the plaintiff in Helou (the subject of our first in a four-post series on standing and proper parties). The estate’s personal representative in Ashby had properly qualified under Virginia law to serve as administrator for the purpose of bringing a wrongful death claim. The administrator later brought suit not to assert a wrongful death claim, but personal injury “survival claims” instead—claims the decedent could have asserted during his lifetime in his own right. The Virginia Supreme Court found that the applicable statute in the title of the Virginia Code governing Wills and Decedent’s Estates permits appointment of an administrator for purposes of bringing personal injury claims, wrongful death claims, or both.
In Ashby, the order granting the appointment only reflected the administrator’s request to bring a wrongful death claim, however. Thus, the administrator lacked standing to prosecute the personal injury or “survival claims.” Affirming the dismissal of the case with prejudice, the court also rejected the administrator’s argument that the trial court should have modified the order of appointment nunc pro tunc.
In 2010, the Virginia Supreme Court has published numerous opinions implicating the laws governing fiduciaries, wills, or trusts. Four of these decisions are particularly instructive about two continuing perils: standing and proper parties. Here is a little teaser: have you, as counsel of record, or has your lawyer, named the such-and-such “Estate” or the so-and-so “Trust” as the party—whether as plaintiff or defendant—in your case? If so, you should read on, as we will bring you a four-part series of posts to discuss these cases on standing and proper parties. Our first of four case discussions appears in the post below.
PART I: HAVE YOU SUED THE "ESTATE" LATELY?
In Idoux v. Helou, the Virginia Supreme Court affirmed the dismissal of claims filed against the “Estate of Raja Alexander Helou.” The court reiterated that under Virginia statutes and Virginia precedent the “Estate” could not be a proper party to the lawsuit. In Virginia, the proper party is the personal representative—in Helou, it would have been the executor. The problem for the plaintiff in Helou was that the lawsuit filed against the “Estate” amounted to a “legal nullity.” Accordingly, it did not toll, or halt, the running of the statute of limitation, which had expired. Therefore, the plaintiff could not amend his complaint to substitute the executor as the proper party.

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