Commonwealth Of Va. v. Gavigan
| Decision Date | 22 March 2011 |
| Docket Number | Record No. 0921-10-3 |
| Parties | COMMONWEALTH OF VIRGINIA, BOARD FOR CONTRACTORS v. MICHAEL GAVIGAN |
| Court | Virginia Court of Appeals |
Present: Judges Frank, Humphreys and McClanahan
Argued by teleconference
FROM THE CIRCUIT COURT OF THE CITY OF LYNCHBURG
Steven P. Jack, Assistant Attorney General (Kenneth T. Cuccinelli, II, Attorney General, on brief), for appellant.
A. David Hawkins (Overbey, Hawkins & Wright, on brief), for appellee.
In this administrative appeal, the Commonwealth of Virginia's Board for Contractors (Board) challenges the order of the circuit court reversing the Board's decision to deny Michael Gavigan's claim under the Virginia Contractor Transaction Recovery Act (CTRA), Code §§ 54.1-1118 through-1127. The CTRA provides a limited means for payment to a claimant on an unsatisfied judgment against a licensed contractor, the "regulant," who has engaged in "[i]mproper or dishonest conduct" in relation to a contract for residential construction. Code § 54.1-1118. Such payment is made from a fund administered by the Board, and is limited to "actual monetary loss," along with attorney's fees and court costs, not to exceed a total of $20,000, regardless of the amount of the claimant's unsatisfied judgment. Code § 54.1-1123(A) & (C).
The Board argues the trial court erred in reversing its denial of payment to Gavigan because his unsatisfied judgment—upon which he filed his CTRA claim for payment of damages and attorney's fees totaling $19,000—did not represent an award for "actual monetary loss," as required by Code § 54.1-1123, thus negating the judgment's compensability under the CTRA.1 We disagree and affirm the circuit court's decision. Accordingly, we remand for the purpose of ordering the Board to pay Gavigan the sum of $19,000 on his CTRA claim.
Gavigan entered into a written contract on March 2, 2006 with Larry Pippen, trading as "Affordable Home Repairs," for the construction of a basement apartment in Gavigan's Campbell County residence for the sum of $45,000. At that time, Pippen held a Class C contractor's license from the Board. After work under the contract began, Gavigan learned that Pippen needed a Class B contractor's license to do the construction, he became dissatisfied with Pippen's work, and he terminated the contract. Gavigan filed suit against Pippen in circuit court for Pippen's actions in relation to the contract.
In his complaint, Gavigan claimed Pippen's actions constituted fraud, breach of contract, and a violation of the Virginia Consumer Protection Act. Central to all of his claims were allegations that, "[a]s a direct result of defendant's poor workmanship and performance below building code requirements, plaintiff [was] required to remove, rework and replace at great expense much of what little defendant did accomplish" and that "[t]he defendant [had] not earned and [was] not entitled to the moneys advanced to him, and the defendant... failed and refuse[d] to return the plaintiff's money to him." Specifically as to his claim under the VirginiaConsumer Protection Act (Code §§ 59.1-196 through-207), Gavigan alleged that "[d]efendant... misrepresent[ed] the nature and quality of the services offered to the plaintiff, knowingly and intentionally" and that "[p]laintiff... rel[ied] on such misrepresentations to his detriment and entered into a contract with the defendant that he never would have entered into absent the fraud proximately resulting in damage to the plaintiff." Gavigan then stated in his request for relief:
WHEREFORE, plaintiff prays that this Court find the Defendant in violation of the Virginia Consumer Protection Act, that the Defendant has committed actual fraud on the Plaintiff, that the Defendant has committed constructive fraud on the Plaintiff, that the Defendant breached his contract with the Plaintiff and that judgment be awarded him [sic] against the Defendant in the amount of $28,000.00, trebled as the law may allow to the sum of $84,000.00, his attorneys fees incurred herein and his costs incurred, all bearing interest from August 2, 2006 at the judgment rate. Plaintiff also prays that this Court find such actions by the Defendant as described herein constitute "improper or dishonest conduct" as defined in Section 54.1-1118 of the Code of Virginia.2
The circuit court ruled in Gavigan's favor in his suit against Pippen, as set forth in the court's order entered on June 5, 2008. The order provided as follows:
Following unsuccessful efforts to satisfy his judgment against Pippen, Gavigan filed a verified claim4 with the Board, pursuant to the CTRA, seeking payment upon the judgment for his actual damages in the sum of $14,000, and attorney's fees in the sum of $5,000.5
The Virginia Department of Professional and Occupational Regulation (Department) conducted an investigation into Gavigan's CTRA claim and held an "informal fact-findingconference."6 A Board member conducted the hearing and received documentary evidence from the Department, Gavigan, and Pippen, and heard testimony from both Gavigan and Pippen. The Board member subsequently issued a report to the full Board containing a summary of the hearing, her findings of fact, and her recommendation to the Board to deny the claim. In support of the recommendation, the Board member found, inter alia, the following: (i) the money paid to Pippen under his contract with Gavigan for the construction of the basement apartment at Gavigan's residence came from Gavigan's mother-in-law, not Gavigan; and (ii) Gavigan's claim included a request for "reimbursement of [his] personal time" expended toward "complet[ing] the project"; and (iii) Gavigan's circuit court judgment was not an award of damages "constituting] actual monetary loss to [him]," as required by Code § 54.1-1123(C) to establish a compensable claim under the CTRA. A majority of the Board voted to accept the Board member's findings and recommendation, and entered an order on October 6, 2009 denying Gavigan's claim.
Gavigan appealed the Board's decision to the circuit court, asserting the decision was "not supported by substantial evidence," and "not within the scope of legal authority of the [Board]." On the record presented, Gavigan argued, the Board had a duty to "issue a directive ordering payment [to him] from the fund," as provided under Code § 54.1-1122, because he had complied with the requirements of the CTRA and presented a compensable claim for payment of$14,000 for actual monetary loss, and $5,000 in attorney's fees, on his unsatisfied judgment against Pippen.
In response, the Board argued it made a finding that "no amount of Gavigan's judgment constituted actual monetary loss to Gavigan" because "Gavigan's mother-in-law... paid for the work performed by Pippen," and the court was bound by that finding, which negated Gavigan's claim.
By order dated April 8, 2010, the circuit court reversed the Board's decision and ordered the matter remanded to the Board for payment to Gavigan. As explained in the order, the court determined from the record presented on appeal that Gavigan's unsatisfied judgment from the underlying litigation against Pippen did "not present interest, punitive damages, exemplary damages, or any amounts that [did] not constitute actual monetary loss to [Gavigan]." The court further determined that the judgment represented an award for (i) actual monetary loss in the sum of $14,000, described in the judgment as "compensatory damages," arising from Pippen's "improper conduct" as defined in the CTRA, and (ii) attorney's fees in the sum of $5,000, both of which sums were compensable under the CTRA. Also, the court specifically rejected the Board's conclusion that Gavigan did not suffer any loss under his contract with Pippen based on the Board's finding that Gavigan's in-laws, and not Gavigan, paid Pippen. The court concluded the evidence was undisputed that "the in-laws were providing financing only." In other words, "[t]hey were acting as the bank for construction financing, but the house belonged to Gavigan."
The Board's appeal to this Court followed.
The Virginia Administrative Process Act authorizes judicial review of agency decisions. See Code § 2.2-4027. Under settled principles, the burden is upon the party appealing such adecision to demonstrate error. Avante at Roanoke v. Finnerty, 56 Va. App. 190, 197, 692 S.E.2d 277, 280 (2010); Carter v. Gordon, 28 Va. App. 133, 141, 502 S.E.2d 697, 700-01 (1998). "Our review is limited to determining (1) '[w]hether the agency acted in accordance with law;' (2) '[w]hether the agency made a procedural error which was not harmless error;' and (3) '[w]hether the agency had sufficient evidential support for its findings of fact.'" Avante at Roanoke, 56 Va. App. at 197, 692 S.E.2d at 280 (quoting Johnston-Willis, Ltd. v. Kenley, 6 Va. App. 231, 242, 369 S.E.2d 1, 7 (1988)).
On factual issues, the determination to be made by the reviewing court is " " John Doe v. Virginia Bd. of Dentistry, 52 Va. App. 166, 175, 662 S.E.2d 99, 103 (2008) (quoting Johnston-Willis, Ltd., 6 Va. App. at 242, 369...
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