Virginia Supreme Court Reverses Fees and Costs for City’s Nonsuit

By: Andrew McRoberts, Editor. This was posted Friday, September 18th, 2009

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The Virginia Supreme Court has overturned a grant of attorneys fees and costs to a landowner upon the City’s nonsuit pursuant to Virginia Code § 8.01-380(B). In the case, the Supreme Court addressed what constitutes a “second nonsuit” in a local government tax sale case, and clarified the 21-day rule when circuit courts grant nonsuit motions.

The case is styled, City of Suffolk v. Lummis Gin Company, Record No. 082345, September 18, 2009. You can read the opinion here: http://www.courts.state.va.us/opinions/opnscvwp/1082345.pdf

In the case, the City of Suffolk sought the sale of real estate for delinquent taxes. Apparently, the taxes on the property had not been paid for many years since the tax delinquency had required litigation before. The circuit court (Judge Rodham T. Delk, Jr.) ruled that the two cases (one filed in 1995/nonsuited in 1996, and a second filed in 2006/nonsuited in 2008) were sales of real estate for delinquent taxes for the same parcel, and agreed that this was a “second nonsuit,” justifying fees and costs under Section 8.01-380(B).

On appeal, the Virginia Supreme Court resolved two issues in the opinion, both in favor of the City of Suffolk:

First, the Supreme Court considered whether the nonsuited granted by the circuit court in 2008 was the “first nonsuit” as to the defendants seeking the fees and costs under Section 8.01-380(B). Although the property was the same and the causes of action were similar (sale for delinquent taxes), the Supreme Court determined that “the record in the present case does not support the [defendants’] assertion that they were parties to the prior suit as successors in title [to the former owner].” Moreover, “assuming that they could establish an ownership interest in the property” in the former suit, “the present action sought recovery for delinquent taxes regarding different tax years.” Since the cause of action under Virginia Code § 58.1-3965(A) was for sale of certain tax years, the nonsuit of later tax years did not constitute a “second nonsuit.”

This primary ruling assists local governments when filing serial cases to collect delinquent taxes on the same parcel. If the cases involve different tax years, a nonsuit is not a “second nonsuit,” exposing the local government to the possible fees and costs under Virginia Code § 8.01-380(B).

Second, although its first ruling resolved the appeal, the Supreme Court went on to decide the finality of the 2008 nonsuit order and reaffirmed the strict jurisdictional effect of Rule 1:1 and the 21-day rule. In 2008, the circuit court judge granted the City’s nonsuit motion, but then attempted in his order to retain the case on the docket “to determine issues concerning attorney fees, costs and expenses incurred” by the landowners who brought the 8.01-380(B) motion. The Supreme Court ruled that when the circuit court did rule on the Section 8.01-380(B) motion some months later, it lacked the jurisdiction to act pursuant to Rule 1:1.

This secondary ruling on Rule 1:1 seems intended to caution circuit court judges to be more careful when granting nonsuits. The same circuit court judge could have taken the nonsuit motion and the matter of costs under advisement and ruled on both simultaneously, or simply ruled on the motion for fees and costs within the 21 days.

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