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Lawyers have no appeal of GDC sanction

A circuit court judge ruled last month that he has no jurisdiction to hear appeals of nearly $7,800 in sanctions imposed against two lawyers in a district court case.

Richmond Circuit Judge Melvin R. Hughes Jr. said the district court’s sanctions orders were “ancillary” matters and not “final orders or judgments” subject to appeal. The ruling would appear to leave the sanctioned attorneys with no means to seek review of their punishment.

The opinion is Kleffner v. Grogan, (VLW 008-8-119).

“This is a conundrum,” said Kevin Purnell, counsel for one of the defendants who had moved for sanctions. He noted that the decision appears to leave sanctioned lawyers without any recourse for review if they are sanctioned more than 10 days after disposition of the underlying case.

Purnell said that the sanctioned attorneys, through their own counsel, have moved for re-hearing.

The district court judge de-termined that two attorneys, Louise Moore and William Grogan, had filed or persisted with baseless pleadings arising out of a warrant in debt. Richmond General District Judge Barbara Gaden entered judgments ordering those attorneys to pay attorney fees of opposing counsel. The fee awards totaled $7,791.

The sanctioned lawyers appealed to circuit court, where a hearing was held in February. In his ruling last month, Hughes reviewed the sequence of events in the district court.

The underlying district court case – a dispute over who was responsible to pay a contract debt for building materials – was dismissed by nonsuit effective May 8, 2007. The matter was continued on the docket for the defendants’ sanctions motion. The district court orders imposing sanctions came on June 6 after a hearing.

Hughes ruled that, because the sanctions orders dealt with sanctions only, and because the previous order “disposed of all relief prayed for, including attorneys fees,” the sanctions orders were not appealable final orders. Hughes denied both appeals for lack of subject matter jurisdiction.

Hughes relied on the case of Ragan v. Woodcroft Village Apartments, 255 Va. 322 (1998), in which the Supreme Court of Virginia held that denial of a motion for a new trial was not an appealable final order or judgment because it did not dispose of the merits of the underlying case.

The sanctions ruling capped off a complicated civil case in Gaden’s court. A brick company filed a warrant in debt against a defendant who had given a personal guarantee for a $2,500 payment on a contract to provide material. That defendant, through his attorney (and wife) Louise Moore, sued four former business associates seeking indemnity for the alleged debt to the brick company.

The four defendants sought sanctions, saying the cases against them were baseless. After Grogan became involved as co-counsel with Moore, he moved to nonsuit the claims against the former business associates. Those claims were dismissed.
Gaden then found in favor of the brick company and entered judgment against the defendant who had given the contract guarantee. She kept the indemnity case open to entertain the sanctions motions against Grogan and Moore.

In a rare written opinion from a district court (VLW 007-9-002), Gaden imposed sanctions on the two attorneys who had sought indemnity from the defendant’s former business associates. She wrote that Moore had pleaded fraud where she “did not have a factual or legal basis to prove fraud by anyone, much less these defendants.”

Gaden went further, finding sua sponte that both Moore and Grogan had wrongly persisted with baseless claims for contribution after abandoning the fraud allegation. The judge imposed additional fees for advancing the contribution claims.
Only the imposition of sanctions was appealed.

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