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Limited Nonsuit Right for Dissolution Petition

A plaintiff may not rely on Va. Code § 8.01-380 to nonsuit a petition for dissolution of a corporation under Code § 13.1-747(A)(1) after the corporation or one or more shareholders has elected to purchase all of plaintiff’s shares pursuant to Va. Code § 13.1-749.1, a Virginia Beach Circuit Court says, but a court may approve discontinuance of the petition under Code § 13.1-749.1(B).

Sections 8.01-380 and 13.1-749.1 each address a plaintiff’s right to nonsuit. Section 8.01-380 provides plaintiffs with one nonsuit of right so long as a motion to strike the evidence has not been sustained, the jury has not retired from the bar or the matter has not been submitted to the court for decision, and there is no counterclaim, cross claim or third-party claim that cannot be independently adjudicated.

Section 13.1-749.1 provides that after an election under Code § 13.1-747(A)(1), a proceeding may not be discontinued or settled, nor may the petitioning shareholder sell or otherwise dispose of the petitioner’s shares, unless the court determines it would be equitable to the corporation and the shareholders other than petitioner, to permit such discontinuance, settlement, sale or other disposition. The term “discontinue” in this statute includes a nonsuit taken by a plaintiff.

When one statute addresses a subject in a general manner and another addresses a part of the same subject in a more specific manner, the two statutes should be harmonized if possible, and when they conflict, the more specific statute prevails.

In this instance, § 8.01-380 and § 13.1-749.1 cannot be harmonized because allowing a plaintiff to nonsuit a § 13.1-747(A)(1) claim after an election is made would frustrate the intent of the language prohibiting such a nonsuit in § 13.1-749.1(B). Section 13.1-749.1 provides a specific rule for situations where a petitioner has filed for judicial dissolution and there has been an election to purchase the shares of the petitioner, and thus it must prevail over the general nonsuit language of § 8.01-380. Thus, after an election pursuant to § 13.1-749.1, a plaintiff petitioning for judicial dissolution may only nonsuit the case if first the court determined it would be equitable to the corporation and the shareholders other than petitioner, to permit such discontinuance.

Motion to nonsuit pursuant to Code §8.01-380 is denied.

Suter v. Freeman (Padrick) No. CL 14-3065, Jan. 7, 2015; Va. Beach Cir.Ct.; Gregory A. Giordano, Kevin A. Martingayle, Glen M. Robertson for the parties. VLW 014-8-001, 3 pp.

VLW 014-8-001

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