Appellate attorneys’ fees OK’d in case of first impression

A Greene County circuit judge awarded more than $13,000 in appellate attorneys’ fees in a long-standing dispute after finding the appellees were the prevailing party in the Supreme Court of Virginia appeal.

In a case of first impression, Greene County Circuit Judge Dale B. Durrer analyzed the intersection of two Virginia Supreme Court rules — Rules 1:1A and 5:35(b) — to determine if the appellees prevailed in the case despite the high court dismissing the appeal due to untimely filing.

“[T]he court holds that Appellees are the prevailing party and may recover attorney’s fees under Rule 1:1A and 5:35(b),” Durrer wrote.

Durrer provided his ruling in Dogwood Valley Citizen’s Association v. Miller (VLW 023-8-007) in a letter opinion sent to the attorneys in the case, J. Michael Sharman and Joseph T. Wright, and shared with Virginia Lawyers Weekly.

Long history

Durrer noted that the Dogwood Valley case has “generated significant litigation” over the years, including two Supreme Court of Virginia opinions, “approximately seven” opinions from the Orange and Greene County Circuit Courts and two unpublished opinions from the 4th U.S. Circuit Court of Appeals.

In 2021, Virginia Lawyers Weekly reported that Durrer upheld a 2019 decision that found Dogwood Valley Citizen’s Association board members — appellants Gary Lowe and Matthew Brown — personally liable for actions taken while serving on the association’s board, ruling the pair had pierced the corporate veil. That action stemmed from a 2017 warrant of debt case against resident Samuel Miller for nonpayment of dues.

The 2021 opinion from Durrer said the pair “had no authority to issue the annual fee to the Defendant” and stated that witnesses alleged Brown and Lowe attempted to sell board memberships and the DVCA itself. The DVCA dissolved in 2019.

In the present opinion, Miller petitioned the Greene County Circuit Court for recovery of appellate attorneys’ fees and costs under Rule 1:1A and 5:35(b) of the Rules of the Supreme Court of Virginia.

This follows a 2022 dismissal of Brown and Lowe’s notice of appeal by the Supreme Court of Virginia, with the high court holding that the appellants “did not timely file their appeal within thirty days after July 20, 2020.” The court also denied the appellants’ petition for rehearing.

In arguing for attorneys’ fees, the appellees claimed Rule 1:1A “provides that the ‘prevailing’ appellee in the appeal who recovered attorneys’ fees in a circuit court may make application in the circuit court that entered judgement for attorneys’ fees, costs or both incurred on appeal.”

The Greene County Circuit Court awarded attorneys’ fees to the appellees in 2019.

Brown and Lowe argued that the appellees did not prevail in the appeal because it was dismissed on jurisdictional grounds and was never heard on its merits.

First impression

Virginia Supreme Court Rule 1:1A — “Recovery of Appellate Attorney Fees in Circuit Court” — permits a “prevailing appellee” who has previously recovered attorney fees or costs in the circuit court to “make application in the circuit court in which judgment was entered for attorney fees, costs or both incurred on appeal.”

Durrer noted that a 2022 unpublished decision from the Court of Appeals of Virginia — Schneider v. Brant — said that circuit courts “have continuing jurisdiction for an application for attorneys’ fees and costs under Rule 1:1A.”

The appellees further sought recovery under Rule 5:35(b), “Attorney Fees, Costs, and Notarized Bill of Costs,” which says a prevailing appellee “who was awarded attorney fees and costs in the circuit court may make application in the circuit court for additional fees and costs incurred on appeal pursuant to Rule 1:1A.”

“The Virginia Supreme Court has not interpreted the application and intersection of 1:1A and 5:35(b). Thus, this is a case of first impression,” Durrer wrote.

For Rule 1:1A to apply, Durrer said three prerequisites must apply: the action is one appealed from the circuit to the Virginia Supreme Court; the petition for appeal was denied by the Virginia Supreme Court, along with petitions for rehearing; and the applicant has “recovered attorneys’ fees, costs, or both in the action appealed.”

Here, Durrer said the appellees were awarded attorneys’ fees and costs by the Greene County Circuit Court in 2019 and the Virginia Supreme Court denied the petition for rehearing in 2022.

With those prerequisites met, at issue was the definition of “prevailing party” under Virginia law, with the assertion that the appellees prevailed on appeal contested by Brown and Lowe.

The Virginia Supreme Court, Durrer explained, defines a prevailing party as “one whose favor a judgement is rendered, regardless of the amount of damages awarded.”

The judge sided with the appellees.

“The Appellees were successful in the Virginia Supreme Court because no finding of the Greene County Circuit Court was reversed, altered or remanded,” Durrer wrote. “Further, there is no dismissal without prejudice or non-suit associated with the litigation. … Some of our sister states have dealt with this issue and reached the same conclusion.”

Also, “[t]he procedural dismissal is still an adjudication on the merits because the findings of the Greene County Circuit Court have not been altered.”

Durrer analyzed evidence provided by Miller, the fact that litigation before the Virginia Supreme Court “is complex and requires thorough research and preparation” and used Sharman’s hourly rate.

The court awarded the appellees $13,542.31 in attorneys’ fees and costs, under Rule 1:1A and Virginia law.