Opinion
Law No. 2010-3122
09-24-2010
Roy Ballard v. The Hanover Research Council
Daniel B. Krisky, Esquire DANIEL B. KRISKY, P.C. Counsel for Plaintiff, Roy Ballard Matthew H. Sorenson, Esquire GREENBERG TRAURIG LLP Counsel for Defendant, The Hanover Research Council LLC
MARCUS D. WILLIAMS
JANE MAPUM ROUSH
LESLIE M. ALDEN
JONATHAN C. THACHER
R. TERRENCE NEY
RANDY I. BELLOWS
CHARLES J. MAXFIELD
BRUCE D. WHITE
ROBERT J. SMITH
DAVID S. SCHELL
JAN L. BRCDE
LORRAINE NORDLUND
BRETT A, KASSABIAN
MICHAEL F. DEVINE
JUDGES
BARNARD F. JENNINGS
THOMAS J. MIDDLETON
THOMAS A FORTKORT
RICHARD J. JAMBORSKY
JACK B. STEVENS
J. HOWE BROWN
F. BRUCE BACH
M, LANGHORNE KEITH
ARTHUR B. VIEREGG
KATHLEEN H. MACKAY
ROBERT W. WOOLDRIOGE, JR.
MICHAEL P. MCWEENY
GAYLORD L FINCH, JR.
STANLEY P. KLEIN
RETIRED JUDGES
September 24, 2010
Dear Counsel:
This matter came before the Court on July 30, 2010. After considering the pleadings, memoranda, and arguments of counsel, the Court took the matter under advisement. The following embodies the Court's ruling.
FACTS
Roy Ballard ("Ballard") was employed by The Hanover Research Council, LLC ("HRC") from April 26, 2007 through April of 2008. On March 25, 2008, Ballard asserts that during his employment he was sexually assaulted and battered by Peter Dodge ("Dodge"), the founder, majority owner, chairman and CEO of HRC.
On May 21, 2010, this Court held a hearing on HRC's Demurrer. At that time the Complaint alleged claims of negligent retention, breach of contract, and intentional inflictionof emotional distress ("intentional infliction claim"). This Court overruled the Demurrer as to Ballard's negligent retention claim but sustained the remainder of the Demurrer with leave to amend.
Ballard filed an Amended Complaint on June 7, 2010, which alleged claims of negligent retention, breach of contract and implied covenant of good faith and fair dealing, and negligent infliction of emotional distress ("negligent infliction claim").
HRC filed its Demurrer to the Amended Complaint. HRC contends that the negligent infliction claim is barred by the statute of limitations.
ANALYSIS
Standard On Demurrer
"A demurrer tests the legal sufficiency of a pleading and can be sustained if the pleading, considered in the light more favorable to the plaintiff, fails to state a valid cause of action." The sole question to be decided by the court is whether the facts pleaded, implied, and fairly and justly inferred are legally sufficient to state a cause of action against the Defendant. On demurrer, the court must admit the truth of all material facts that are properly pleaded, facts which are impliedly alleged, and facts which may be fairly and justly inferred from the alleged facts. A demurrer does not admit the correctness of any conclusions of law.
It did not relate back to the date of the original motion for judgment seeking money damages and punitive damages.
That is not the case here.
I. Statute Of Limitations
The first issue before this Court is whether the statute of limitations has run on the negligent infliction claim when it was not alleged until the filing of the Amended Complaint on June 7, 2010. The injury occurred on March 25, 2008.
The intentional infliction claim was asserted in the original Complaint, which was filed on March 5, 2010.
Under Virginia law, a right of action accrues and the prescribed limitations period begins to run from the date the injury is sustained. Because Virginia has no specific statute of limitations for negligent infliction of emotional distress, and such action is for personal injuries, the two-year limitations period applies.
Here, HRC asserts that Ballard's Amended Complaint is insufficient because stock options are mentioned nowhere in the Employment Agreement.
A. The Negligent Infliction Claim Relates Back To The Original Complaint Because
It Is Not A New Substantive Cause Of Action.
Virginia Code Section 8.01-6.1 states:
Subject to any other applicable provisions of law, an amendment of a pleading changing or adding a claim or defense against a party relates back to the date of the original pleadings for purposes of the statute of limitations if the court finds (i) the claim or defense asserted in the amended pleading arose out of the conduct, transaction or occurrence set forth in the original pleading, (ii) the amending party was reasonably diligent in asserting the amended claim or defense, and (iii) parties opposing the amendment will not be substantially prejudiced in litigating on the merits as a result of the timing of the amendment. In connection with such an amendment, the trial court may grant a continuance or other relief to protect the parties.
"The general rule in this Commonwealth is that amendments will be permitted where they seek determination of the same subject matter of the controversy originally pleaded. Amendments will not be allowed, however, when they raise a new substantive cause of action which is different from that which the plaintiff asserted when he or she first filed the action."
In Painter, the original pleadings alleged that the defendant negligently permitted water, sediment, and mud to be thrown upon the property of the plaintiff. In the amended pleadings, the plaintiff asserted an unlawful, rather than negligent, act. He argued that the defendant had committed a trespass on his property. The court held that the amendment did not allege a new substantive cause of action because the injuries complained of in both the original and the amended declaration were the same. The amendment "only varied the mode of demanding the same things - that is, damages done the same property by the same causes."
Cox Cable Hampton Roads, Inc. v. City of Norfolk, 242 Va. 394, 410 S.E.2d 652 (1991).
Ward's Equip., Inc. v. New Holland North America, Inc., 254 Va. 379, 382, 493 S.E.2d 516, 518 (1997).
See Va. Code § 8.01-234(A); see also Moore v. Allied Chem. Corp., 480 F.Supp. 364 (E.D. Va. 1979) (holding that actions for emotional distress are considered actions for personal injuries and, thus, carry a two-year limitations period).
In Vines the plaintiff filed a motion for judgment seeking compensatory and punitive damages. She alleged that she purchased an automobile, but that the defendant had the vehicle titled in her own name and retained possession of it.When the defendant ceased to provide plaintiff with transportation, she demanded the return of the automobile and defendant refused.
Irene Vines v. Regina Vines Branch, 244 Va. 185, 188, 418 S.E.2d 890, 892-93 (1992), citing New River Min. Co. v. Painter, 100 Va. 507, 510, 42 S.E. 300, 301 (1902).
Painter, 100 Va. at 510, 42 S.E. at 301. 9 10 100 Va. at 511, 42 S.E. at 301-02. 11 Id.
Vines, 244 Va. 185, 418 S.E.2d 890 (1992),
"The trial court sustained the defendant's plea of the statute of limitations, finding that the motion for judgment alleged a tort action for the recovery of personal property which was governed by the one-year limitation of Code § 8.01-248." The court granted plaintiff leave to file an amended motion for judgment.In that motion, plaintiff alleged both breach of an oral contract and continuing trespass to personal property.
Id. 14 Id.
Id. at 186, 418 S.E.2d at 891. 16 Id. 17 Id. 18 ld. at 188, 418 S.E.2d at 893. 19 Vines, 244 Va. at 188, 418 S.E.2d at 892-93. 20 id. 21 Womack v. Eldridge, 215 Va. 338, 342, 210 S.E.2d 145, 149 (1974).
See Hughes v. Moore, 214 Va. 27, 197 S.E.2d 214 (1973). 23 On June 25, 2010, upon the parties' Agreed Motion, the court endorsed an order permitting Ballard's Employment Agreement to be attached and incorporated into the Amended Complaint.
"[The defendant] filed a motion to dismiss, contending that both claims were barred by the statute of limitations." Agreeing, the trial court dismissed the case. The Virginia Supreme Court affirmed that the plaintiff's claim for breach of an oral contract to provide transportation and driving lessons was a new, substantive cause of action.
Thompson v. Skate America, Inc., 261 Va. 121, 540 S.E.2d 123 (2001). 25 Filak v. George, 267 Va. 612, 619, 594 S.E.2d 610, 614 (2004).
Intentional infliction of emotional distress requires that: (1) the wrongdoer's conduct was intentional or reckless; (2) the conduct was outrageous and intolerable in that it offends against generally accepted standards of decency and morality; (3) the wrongdoer's conduct caused the emotional distress; and (4) the emotional distress was severe,
For a negligent infliction of emotional distress claim, a plaintiff must prove all the elements of intentional infliction plus a showing of either a physical impact or physical injury.
Here, the Amended Complaint altered the cause of action from intentional infliction to negligent infliction. Yet, the only true difference between the two claims is that negligent infliction requires a physical harm.
The amendment does not allege a new substantive cause of action. The injuries complained of in the Complaint and the Amended Complaint, namely, that Dodge committed a sexual assault upon Ballard, are the same. Thus, the Amended Complaint - as in Painter - only varied the mode of demanding the same relief.
Furthermore, the standards under § 8.01-6.1 have been met because the negligence claim arises out of the same transaction or occurrence. Ballard was reasonably diligent in asserting his claim — it was added in the Amended Complaint after the original Complaint was sustained with leave to amend. No prejudice will occur by permitting Ballard to argue a claim that in essence remains essentially the same.
Because the amendment is not a new substantive cause of action, the negligent infliction claim relates back to the date of the original Complaint, and the statute of limitations is not a bar. The Demurrer is overruled.
II. The Breach of Contract Claim Survives Because The Employment Agreement
Addresses Rights to HRC Stock Through Additional Compensation.
On demurrer, the sole question to be decided by the court is whether the facts pleaded, implied, and fairly and justly inferred, are legally sufficient to state a cause of action against the Defendant.
The elements of a breach of contract action are "(1) a legally enforceable obligation of a defendant to a plaintiff; (2) the defendant's violation or breach of that obligation; and (3) injury or damage to the plaintiff caused by the breach of obligation."
Here, the alleged legally enforceable obligation is the right to stock options. In the Employment Agreement, the section titled Employee Compensation states in pertinent part:
The Employee understands that the Employee's compensation as provided in this Agreement will constitute the full and exclusive monetary consideration and compensation for all services performed by the Employee and for the performance of all the Employee's promises and obligations in this Agreement. The Employee understands and agrees that any additional compensation to the Employee (whether a bonus or other form of additional compensation) will rest in the sole discretion of the Employer and that the Employee will not earn or accrue any right to additional compensation by reason of the Employee's employment (emphasis added).
Admitting Ballard's assertions as true on demurrer, the stock options can be viewed as a "bonus or other form of additional compensation."
The elements for breach of contract have been met in the Amended Complaint.
CONCLUSION
Because the statute of limitations is not a bar to the negligent infliction of emotional distress claim, and because the elements of a breach of contract have been met, HRC's Demurrer to Ballard's Amended Complaint is Overruled.
An Order is enclosed.
Very truly yours,
R. Terrence Ney Enclosure
ORDER
This matter came before the Court on July 30, 2010, upon Defendant's Demurrer;
IT APPEARING TO THE COURT that the Demurrer should be overruled for the reasons stated in the September 24, 2010 Opinion Letter; it is hereby
ADJUDGED, ORDERED AND DECREED that the Demurrer is OVERRULED,
ENTERED this 24 day of September, 2010. _____________________
JUDGE R. TERRENCE NEY
Endorsement of this Order by counsel of record for the parties is waived in the discretion of the Court pursuant to Rule 1:13 of the rules of the Virginia Supreme Court.
8 _______________________________________________ 1 Kitchen v. City of Newport News, 275 Va, 378, 385-86, 657 S.E.2d 132, 136 (2008) (citing Welding, Inc. v. Bland County Serv. Auth., 261 Va. 218, 226, 541 S.E.2d 909, 914 (2001)). 2 Thompson v. Skate America, Inc., 261 Va. 121, 540 S.E.2d 123 (2001).