Title: Kittrell v. Fowler
Citation: N/A
Docket Number: 201419
State: Virginia
Issuer: Virginia Supreme Court
Date: March 24, 2022

VIRGINIA: 
 
 
In the Supreme Court of Virginia held at the Supreme Court Building in the 
City of Richmond on Thursday the 24th day of March, 2022. 
 
Present: Mims, Powell, Kelsey, McCullough, and Chafin, JJ., and Russell and Millette, S.JJ. 
 
 
Rachel Hurley Kittrell, 
 as Member of Hurley, LLC, et al., 
 
 
 
 
 
 
Appellants, 
 
 against 
Record No. 201419 
 
 
Circuit Court No. CL18-64 
 
Susan H. Fowler, et al., 
 
 
Appellees. 
 
 
Upon an appeal from an order 
entered by the Circuit Court of Middlesex 
County. 
 
 
 
In this interlocutory appeal, Appellants challenge the circuit court’s decision overruling 
their demurrer and allowing Appellees to proceed with their claims.  Upon consideration of the 
record, briefs, and argument of counsel, the Court is of opinion that the decision of the circuit 
court should be reversed. 
I.  Background 
 
Walter Hurley, Sr. and his wife, Margaret, had two daughters, Susan H. Fowler and Lisa 
H. Foster (collectively, the “Appellees”), and one son, Walter Hurley, Jr.  Before Walter, Sr.’s 
death, Walter, Sr., Margaret, and Walter, Jr. each owned approximately one-third of Hurley, 
LLC.  When Walter, Sr. died on April 28, 2006, his interest in Hurley, LLC passed to Walter, Jr., 
his tangible personal property passed to Margaret, and the remainder of his property passed to 
the Walter Boyd Hurley Revocable Trust (the “Walter Sr. Trust”).  Walter, Jr. served as trustee 
 
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of the Walter Sr. Trust, and as such, he was to distribute assets to provide for Margaret during 
her lifetime and distribute any remaining trust assets to his siblings after Margaret’s death. 
 
On May 15, 2006, Margaret signed a document entitled “Sales Verification” transferring 
her interest in Hurley, LLC to Walter, Jr. in exchange for a promissory note in the amount of 
$950,000 (the “Hurley Transaction”).1 
 
In July 2007, Margaret created her own revocable trust, the Margaret H. Hurley Living 
Trust (“Margaret’s Living Trust”), which provided that upon Margaret’s death, any residual trust 
property should be distributed equally between her children.  However, Margaret’s Living Trust 
specifically indicated that Walter, Jr. should not receive a share of the trust after Margaret’s 
death. 
 
In September 2008, Margaret signed a document entitled “First Amendment to the 
Margaret H. Hurley Living Trust.”  In the amended trust agreement, Margaret specifically stated 
that she “intentionally, and with full knowledge, chose[] not to provide for [her] child WALTER 
B. HURLEY, JR., or his issue” as he received “Five Hundred Thousand Dollars ($500,000.00) in 
disclaimed assets and the Fair Market Value (“FMV”) of the campsite properties.”  Thus, 
Appellees were to receive the living trust properties in two equal shares. 
 
On March 8, 2013, Walter, Jr. closed Margaret’s checking account titled “Margaret H. 
Hurley Living Trust” at the Colonial Bank of Gloucester and opened a new account bearing the 
same title.  On April 1, 2013, a check for $999,999.00 was written on the new account and was 
made payable to “Margaret’s Future Trust.”  Appellees contend this check was repayment for the 
promissory note given in exchange for Margaret’s 2006 sale of her one-third interest in Hurley, 
 
 
1 A $950,000 check dated May 15, 2006, and payable to “Margaret H. Hurley” from 
Hurley, LLC appears in the record.  However, the check does not appear to have been negotiated. 
 
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LLC to Walter, Jr. 
 
On April 15, 2013, Margaret purportedly signed a document entitled “Second 
Amendment to the Margaret Hurley Living Trust,” which provided that if Margaret resigned as 
the trustee of her living trust, Walter Jr. would become the substitute trustee.  On the same date, 
Margaret purportedly signed another document entitled “Margaret’s Future Trust,” creating an 
irrevocable trust for the benefit of Walter, Jr.’s children, of which Walter, Jr. was named the 
trustee. 
 
On April 19, 2013, Walter, Jr. made two deposits into the new checking account: one for 
$1,000,000.00 and one for $36,000.00.  On April 22, 2013, Margaret resigned as trustee of 
Margaret’s Living Trust. 
 
On April 16, 2014, Margaret died, and her living trust became irrevocable.  Per the terms 
of the trust, William Farinholt became the trustee and personal representative of Margaret’s 
estate.  Appellees became suspicious of Walter, Jr.’s handling of Margaret’s assets.  In early 
2017, Farinholt confronted Walter, Jr. on Appellees’ behalf.  On May 16, 2017, Walter, Jr. died 
by suicide.  Walter, Jr.’s will directed that the assets of his estate passed to the Nanba-wan Sai 
Trust for the benefit of his children. 
 
On February 28, 2018, Appellees filed a complaint against Margaret’s Future Trust, the 
Estate of Walter, Jr., and the Nanba-wan Sai Trust, seeking an accounting of each party’s assets, 
restitution, and the imposition of a constructive trust on the assets of the trusts based on Walter, 
Jr.’s alleged fraudulent conduct, unjust enrichment, and breach of fiduciary duty as trustee of 
Walter, Sr.’s and Margaret’s estates.  The defendants filed a demurrer and plea in bar.  The 
demurrer specifically alleged that Appellees failed to name the trustees of the trusts or the 
 
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executors of Walter, Jr.’s estate as defendants, failed to attach the pertinent trust documents, and 
failed to state a cause of action. 
 
Appellees filed a motion to join the proper parties and attached a First Amended 
Complaint.  The parties submitted an agreed order to the circuit court granting Appellees’ motion 
to join parties and setting a briefing schedule for responsive pleadings.  The defendants filed a 
demurrer and plea in bar to Appellees’ First Amended Complaint.  Following a hearing, the 
circuit court overruled both the demurrer and plea in bar and the case was set for trial. 
 
On April 29, 2019, Appellees filed a motion for leave to file a Second Amended 
Complaint, which proposed to add claims relating to the Hurley Transaction and join the relevant 
members of Hurley, LLC as defendants.  Specifically, the Second Amended Complaint requested 
that the circuit court declare the Hurley Transaction void and award Appellees an “amount of 
damages that is equivalent to the value of Margaret’s interest in Hurley, LLC as of the date of 
Margaret’s death.”  The defendants opposed Appellees’ motion, contending that the Appellees 
lacked standing to assert Counts 5, 6, 7, 8, and 9 of the Second Amended Complaint (the “Hurley 
Claims”).2    The circuit court granted Appellees’ motion for leave to amend, specifically stating 
that the “new issues raised are, in fact, intertwined with the existing issues.  Standing, as well as 
any other issues, can be argued upon proper motions.” 
 
 
 
2 In Counts 5-9, Appellees sought the imposition of a constructive trust on the assets of 
Hurley, LLC for Appellees’ benefit; requested an accounting of Hurley, LLC’s assets; requested 
that Hurley, LLC be required to make restitution to Appellees in the form of all assets they 
should have received from Margaret at the time of her death, plus interest from that date; and 
sought to unwind the 2006 Hurley Transaction and Margaret’s Future Trust because they were 
both products of Walter, Jr.’s undue influence and breach of fiduciary duty.  Appellees only seek 
relief to the extent the claims apply to the 2006 Hurley Transaction. 
  
 
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The defendants filed a demurrer and plea in bar, contending, among other things, that 
Appellees lack standing to assert the Hurley Claims because neither Appellee was the personal 
representative of Margaret’s estate.  The circuit court heard arguments on the demurrer,3 after 
which it ruled that “because [Walter, Jr.] basically, allegedly formed [the trust] documents 
making himself in a representative capacity, I’ll overrule the demurrer and allow the claim to go 
forward.” 
 
The defendants at that time, Rachel H. Kittrell, Sarah G. Hurley, and Walter Hurley, III 
as members of Hurley, LLC, and William and Rachel Edwards as trustees of Margaret’s Future 
Trust and Executors of Walter, Jr.’s estate, and Rachel Edwards as trustee of the Nanba-wan Sai 
Trust (collectively, the “Appellants”), sought an interlocutory appeal of the circuit court’s ruling 
as to standing pursuant to Code § 8.01-670.1.  Although the circuit court consented, Appellees 
withheld their consent. 
 
In January 2020, Appellants filed a “Verified Petition for Writs of Prohibition and 
Mandamus” in this Court.  On September 8, 2020, this Court dismissed Appellants’ petition.  On 
July 1, 2020, the General Assembly’s amendment to Code § 8.01-670.1 went into effect.  The 
amendment removed the requirement that all parties consent to an interlocutory appeal.  See 
2020 Acts ch. 907.  On October 1, 2020, Appellants once again sought interlocutory review of 
the circuit court’s decision as to Appellees’ standing.  The circuit court certified Appellants’ 
interlocutory appeal to this Court. 
 
 
 
 
3 The defendants’ plea in bar to the Appellees’ Second Amended Complaint remains 
pending in the circuit court.  The arguments contained therein are not at issue in this 
interlocutory appeal. 
 
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II.  Analysis 
 
In this interlocutory appeal, Appellants contend that the circuit court “improperly 
conferred standing on [Appellees] to pursue claims to challenge and unwind the arms-length sale 
by their mother, Margaret, of her minority interest in Hurley, LLC in 2006.”  We agree with 
Appellants. 
 
This issue presents a question of law that we review de novo on appeal.  See Platt v. 
Griffith, 299 Va. 690, 692 (2021).  “To establish standing, it is essential for a litigant to ‘show an 
immediate, pecuniary, and substantial interest in the litigation, and not a remote or indirect 
interest.’”  Id. (quoting Westlake Prop., Inc. v. Westlake Pointe Prop. Owners Ass’n, 273 Va. 
107, 120 (2007)).  “Virginia law establishes that ‘[t]he personal representative, not a beneficiary 
of the estate, is the proper party to litigate on behalf of the estate and that is true even when the 
personal representative is also a possible beneficiary of the estate.’”  Id. (quoting Reineck v. 
Lemen, 292 Va. 710, 722 (2016)); see also Code § 1-234. 
 
Appellees maintain that Margaret’s Living Trust, a revocable trust created in 2007, would 
have received title to Margaret’s minority share in Hurley, LLC upon her death in 2014 but for 
the sale of her interest to Walter, Jr. in 2006.  Appellees further theorize that because they were 
the ultimate remainder beneficiaries of Margaret’s Living Trust, they would have received 
Margaret’s minority interest in Hurley, LLC upon her death.  Therefore, they seek to unwind the 
2006 Hurley Transaction between Margaret and Walter, Jr. based upon Walter, Jr.’s alleged 
undue influence over Margaret and his breach of fiduciary duty. 
 
Notably, the 2006 Hurley Transaction occurred approximately one year before the 
creation of Margaret’s Living Trust, disposing of Margaret’s minority interest in Hurley, LLC 
well before the creation of her revocable trust.  Consequently, Margaret’s minority interest was 
 
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never to be a trust asset.  As remainder beneficiaries of Margaret’s Living Trust, Appellees are 
legal strangers to the 2006 Hurley Transaction because they never obtained an interest in 
Margaret’s minority interest. 
 
Assuming arguendo that a claim exists for the rescission of the 2006 Hurley Transaction, 
the claim belongs to Margaret’s estate as it would have belonged to Margaret during her lifetime. 
Upon her death in 2014, any viable claim relating to the sale of her minority interest in Hurley, 
LLC passed to her estate and may only be pursued by the estate’s personal representative.  See 
Platt, 299 Va. at 693; see also Code §§ 8.01-25, 64.2-519, and 64.2-520.  Because neither 
Appellee is the personal representative of Margaret’s estate, they lack standing to bring such a 
claim. 
 
For the reasons stated, we reverse the circuit court’s decision on these issues, dismiss 
Appellees’ claims relating to the 2006 Hurley Transaction, and remand to the circuit court for 
further proceedings consistent with this order. 
 
This order shall be published in the Virginia Reports and certified to the Circuit Court of 
Middlesex County. 
 
 
 
 
                A Copy, 
 
 
 
 
          
                    Teste: 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 Clerk