842 S.E.2d 379
Va.2020Background
- Nelson Mackey was a partner in a law firm until 1995; the remaining partners continued the business and filed a new partnership certificate without him.
- In 1997 Trigon demutualized and issued 683 shares in the name “Dodson, Pence, Viar, Woodrum & Mackey,” which later became WellPoint shares plus merger cash.
- Mackey discovered documents about the stock in 2002–2003, told Michael Quinn (handling Viar’s estate) in 2003 that the stock was essentially worthless, and did not notify the partners’ executors.
- Mackey instructed Computershare to sell the shares in 2009 and deposited the proceeds to his account; the Viar estate only learned of the stock’s true 2002 value in 2015.
- The three estates sued Mackey for conversion in December 2015; the trial court found conversion, tolled the limitations period under Va. Code § 8.01-229(D), awarded damages, and applied tolling to all estates.
- The Supreme Court affirmed conversion and tolling as to the Viar estate, reversed tolling as to the Dodson and Pence estates, and remanded.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Whether Va. Code § 8.01-229(D) can toll the limitations period when the obstructive act occurred before accrual | Tolling applies if defendant used direct or indirect means to obstruct filing even if obstruction predates accrual | Statute cannot toll before a cause of action exists; filing cannot be obstructed where no cause has accrued | § 8.01-229(D) can toll pre-accrual obstructive acts if defendant intended to prevent inquiry or hinder discovery (intent, not timing, is decisive) |
| Whether tolling applied to all three estates | Plaintiffs: Mackey’s concealment hid the conversion from each rightful owner so tolling should run for all estates | Mackey: his conduct (misrepresentation) was directed only to Quinn/Viar estate; no obstructive intent toward Dodson or Pence estates | Tolling applied only to the Viar estate (Mackey’s misrepresentation was directed to Quinn); no evidence of obstructive intent toward Dodson or Pence estates |
| Whether the executors proved conversion and had right to immediate possession | Executors: as estate representatives they had a documented intangible (stock) and right to immediate possession to administer estate assets | Mackey: claimed partnership ownership/continuing interest in the stock and thus a right to possess it | For Viar, executor had immediate possessory right and conversion was proven; Mackey had no right to possess the stock proceeds |
| Whether Mackey’s statements/omissions amounted to affirmative concealment | Plaintiffs: Mackey’s misrepresentation that the stock was worthless was an affirmative act intended to prevent inquiry | Mackey: at most silence or non-action; no intentional misrepresentation to obstruct claims | Court found an affirmative misrepresentation to Quinn that reasonably deterred inquiry and thus sufficed to toll the statute as to Viar |
Key Cases Cited
- Culpeper Nat. Bank v. Tidewater Improvement Co., 119 Va. 73 (Va. 1916) (defines concealment/tolling: affirmative acts, not mere silence, required to prevent discovery)
- Grimes v. Suzukawa, 262 Va. 330 (Va. 2001) (tolling requires an affirmative act intended to obstruct filing)
- Newman v. Walker, 270 Va. 291 (Va. 2005) (misrepresentation that deters filing can toll limitations)
- Wood v. Carpenter, 101 U.S. 135 (U.S. 1879) (fraud/deceit enabling wrong may precede the wrong; concealment must be an artifice to exclude suspicion)
- Evans v. Trinity Indus., 137 F. Supp. 3d 877 (E.D. Va. 2015) (pre-accrual concealment may toll limitations in products-liability context; intent-focused analysis)
- United Leasing Corp. v. Thrift Ins. Corp., 247 Va. 299 (Va. 1994) (conversion of documented intangibles requires immediate right to possession)
- Hoover v. Bowers, 146 Va. 84 (Va. 1926) (partnership dissolution/winding up principles relevant to partnership assets)