Westlake Legal Group v. Flynn, 798 S.E.2d 187

Background

Flynn retained Plofchan & Associates (later Westlake Legal Group) in 2008 under a written fee agreement that included a confessed-judgment clause and an 18% default interest provision.
The firm billed Flynn $9,460.07 (combined) in April–June 2014; on June 6, 2014 the firm’s principal, as Flynn’s attorney-in-fact, filed a confessed judgment in Loudoun Circuit Court listing an incorrect/misspelled street address for service.
The clerk issued the confessed-judgment order; the sheriff returned the certified copy “not found” and noted the misspelled address; the record shows the debtor (Flynn) was never served and the judgment became void by operation of Code § 8.01-438 after 60 days.
In March 2015 the firm filed a garnishment suggestion to collect the (now-void) confessed judgment; the garnishment summons was served on Flynn and her employer and funds were held by the clerk.
Flynn obtained new counsel, moved to quash the confessed judgment and for sanctions; the firm moved for a voluntary nonsuit; on Sept. 4, 2015 the circuit court granted nonsuit, quashed the judgment nunc pro tunc, ordered release of garnished funds, and awarded Flynn $1,805 in sanctions under Code § 8.01-271.1.
The firm appealed only the sanctions order (and other issues); the Virginia Supreme Court affirmed and remanded with directions to consider additional sanctions for the appeal expenses.

Issues

Issue	Plaintiff's Argument (Flynn)	Defendant's Argument (Firm)	Held
Whether circuit court lost jurisdiction after defendant’s voluntary nonsuit, rendering garnishment moot and barring sanctions	Court retained authority to remedy harm; sanctions proper	Voluntary nonsuit dismissed underlying action and deprived court of jurisdiction to impose sanctions	Court held jurisdiction to impose sanctions existed because confessed judgment was void by operation of law before nonsuit; nonsuit did not divest court of sanction authority
Whether sanctions could be imposed under Code § 8.01-271.1 for filing garnishment based on a void confessed judgment	Sanctions warranted: counsel failed reasonable inquiry and caused needless expense	Firm argued no basis for sanctions because garnishment was valid procedure	Court held sanctions statute applies; attorney’s signature certifies reasonable inquiry and merits; filing garnishment despite facts in clerk’s file was sanctionable
Preservation of appellate arguments regarding abuse of discretion and sanction quantum	Flynn: trial court properly exercised discretion; affidavit supported fees	Firm raised abuse-of-discretion and fee-quantum arguments on appeal	Court held the firm failed to preserve some arguments (not presented below or in a heard motion to reconsider); thus many appellate challenges barred
Whether the amount of sanctions was unsupported	Flynn submitted counsel affidavit of hours/fees	Firm asserted pleadings not grounded and fees unsubstantiated	Court found no abuse of discretion: Flynn’s counsel submitted affidavit and court reasonably relied on it

Key Cases Cited

Glasser & Glasser, PLC v. Jack Bays, Inc., 285 Va. 358, 741 S.E.2d 599 (discussing de novo review of jurisdictional claims)
Shebelskie v. Brown, 287 Va. 18, 752 S.E.2d 877 (standard of review for sanctions under § 8.01-271.1; abuse of discretion based on objective reasonableness)
Wetlands Am. Trust, Inc. v. White Cloud Nine Ventures, L.P., 291 Va. 153, 782 S.E.2d 131 (statutes in derogation of common law are strictly construed)
Chacey v. Garvey, 291 Va. 1, 781 S.E.2d 357 (same)
Isbell v. Commercial Inv. Assocs., Inc., 273 Va. 605, 644 S.E.2d 72 (same)
Lansdowne Dev. Co., L.L.C. v. Xerox Realty Corp., 257 Va. 392, 514 S.E.2d 157 (same)
Chesapeake & Ohio Ry. Co. v. Kinzer, 206 Va. 175, 142 S.E.2d 514 (same)
Safrin v. Travaini Pumps USA, Inc., 269 Va. 412, 611 S.E.2d 352 (characterizing confessed-judgment remedy as extraordinary)
Brandon v. Cox, 284 Va. 251, 736 S.E.2d 695 (motion to reconsider does not preserve issues unless the court had opportunity to rule)