Virginia Lawyers Weekly VA Lawyers Weekly
A Roanoke lawyer whose client won a $3.1-million slip-and-fall verdict from a Richmond jury in May is battling on several fronts to recover funds for the injury.
Gregory D. Habeeb won a default judgment against the corporate owner of the Holiday Inn Central in Richmond when the business failed to respond to the lawsuit filed by Ava Blount. Blount, a North Carolina real estate agent, suffered alleged permanent nerve damage when she broke her ankle in a 2008 fall at the hotel.
Despite his success with the Richmond jury, Habeeb said he has to contend with an insurance company that denied liability, a liability policy with limits of only $1 million, and a corporate defendant he believes is unable to pay even the $500,000 judgment entered in the case.
To try to recover damages in the case, Habeeb is defending motions to overturn Blount’s default judgment. He is appealing the ruling limiting the judgment to $500,000. At the same time, he is suing to reach the personal assets of the company’s individual members.
Habeeb’s petition for appeal at the Supreme Court of Virginia challenges the ruling of Richmond Circuit Judge Melvin R. Hughes that limited Blount’s judgment to the original demand of $500,000. Habeeb said he filed the suit while Blount was still being treated and doctors had not yet rendered opinions on her prognosis. Hughes denied Blount’s motions, filed after the defendant’s default, to increase her demand to as much as $2.5 million.
That appeal may be put on hold, however, because litigation continues in the trial court. Hotel owner DK Hospitality, LLC, is asking Hughes to set aside the default judgment and to stay the appeal proceedings until the default challenge is resolved. In motions filed after entry of the final judgment, DK Hospitality claims Habeeb failed to exercise “reasonable diligence” to serve the company’s registered agent before resorting to service through the State Corporation Commission.
A hearing on the motions to set aside the default judgment is scheduled for September 27, according to Habeeb.
In the meantime, Habeeb has filed an entirely new $12-million lawsuit seeking to “pierce the corporate veil” and hold the individual members of DK Hospitality liable for Blount’s judgment.
The piercing lawsuit alleges DK Hospitality was undercapitalized, that it obtained insurance with limits of only $1 million instead of $5 million as required by its deed of trust, and that it has not observed the corporate formalities required of an LLC.
The piercing lawsuit was seen as a long shot by Arlington business lawyer James V. Irving. “Courts don’t want to pierce the corporate veil except under extreme circumstances,” Irving said. “You have to show the corporation was a sham or a fraud or significantly undercapitalized.”
Habeeb said he filed the original suit less than a year after Blount’s accident because there was no apparent chance at a settlement and he saw no need to wait until the last minute.
Habeeb said he agreed with the proposition that lawyers should make sure their cases were well documented before filing suit, but the doctors’ opinions about permanent nerve damage came as a surprise. “We had a good handle on the case,” he said. “We had the medicals, we had the work history. She was still undergoing treatment.”
DK Hospitality is being represented by Richmond lawyer Reiner H. Smith. He had not responded to a request for comment as of press time.
