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DEFAULT JUDGMENT FOR COMPENSATORY AND PUNITIVE DAMAGES AGAINST ATTORNEY REVERSED BY SUPREME COURT OF VIRGINIA
The Supreme Court of Virginia set aside a default judgment against an attorney for professional negligence, actual fraud, constructive fraud, and breach of fiduciary duty, on the grounds of lack of personal jurisdiction due to insufficient service of process. In addition, the Supreme Court held that the plaintiff’s assertions of breaches of fiduciary duty and constructive fraud, while sounding in tort, are actions for breaches of the implied terms of the attorney-client contract, and that punitive damages may not be awarded for any such breaches in the absence of an independent, willful tort giving rise to such damages. In this case, the attorney had represented the plaintiff in a divorce suit filed in Virginia. The plaintiff discharged the attorney, obtained other counsel, and later filed this action against the attorney in Fairfax County, Virginia. Although the attorney maintained her office in the District of Columbia, plaintiff chose to serve process on her by service on the Secretary of the Commonwealth in Richmond, as statutory agent of the attorney, pursuant to the service provision of the Virginia Long-Arm Statute (Va. Code § 8.01-328.1). After the attorney failed to answer, the plaintiff obtained a default judgment. Later, there was a jury trial on damages, at which the attorney also did not appear, which returned an award of $400,000 in compensatory damages, and $350,000 in punitive damages. The attorney first learned of the action when called by a newspaper reporter for comment on the judgment. The Circuit Court denied a timely motion to vacate the judgment as to liability, but set aside the judgment as to damages. A new jury trial on damages was held, resulting in a verdict of $71,535.68 in compensatory damages, and $110,000 in punitive damages. The Supreme Court of Virginia granted an appeal. It held that the trial court lacked in personam jurisdiction because of plaintiff’s failure to file an affidavit setting forth the attorney’s last known address. Where a defendant has received personal service, irregularity will not defeat the court’s jurisdiction, but if a statute provides for constructive service, the terms of the statute must be strictly followed. There was no evidence, such as a return receipt, showing actual delivery of the papers to the attorney’s office. |
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