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EE Mart F.C., L.L.C. v. Delyon

Supreme Court of Virginia

February 26, 2015

EE MART F.C., L.L.C.
v.
SUZANNE DELYON, ET AL

FROM THE CIRCUIT COURT OF FAIRFAX COUNTY. Brett A. Kassabian, Judge.

PRESENT: Lemons, C.J., Goodwyn, Millette, Mims, McClanahan, and Powell, JJ., and Koontz, S.J. OPINION BY JUSTICE CLEO E. POWELL.

OPINION

Page 431

[289 Va. 283] CLEO E. POWELL, JUSTICE.

EE Mart F.C., L.L.C. (" EE Mart" ), appeals the judgment of the trial court ordering it to pay sanctions under Code § 8.01-271.1. [289 Va. 284] Specifically, EE Mart takes issue with the trial court's award of attorney's fees that were incurred as a result of actions filed by EE Mart in other jurisdictions.

I. BACKGROUND

EE Mart is a Virginia limited liability company that owned and operated an international grocery store in Merrifield, Virginia. Suzanne Delyon (" Delyon" ) is the former chief financial officer of EE Mart. She is also the owner of SDES, LLC; Expo Emart, LLC; Expo Emart I, LLC; and Expo Emart III, LLC (collectively the " Other LLCs" ).

On May 24, 2010, EE Mart brought an action against Delyon and the Other LLCs in Fairfax County Circuit Court alleging wrongful conversion and other claims (the " Original Action" ). These claims related to insurance proceeds paid to Delyon by Traveler's Insurance Company (" Traveler's" ). On the eve of trial, EE Mart nonsuited the case.

In October 2011, EE Mart brought an action against Traveler's in the Circuit Court of Carroll County, Maryland (the " Maryland Action" ). This action related to Traveler's payment of the insurance proceeds to Delyon. Traveler's subsequently removed the case to federal court. After the case was removed to federal court, EE Mart amended its complaint to add Delyon and the Other LLCs as defendants. The claims brought by EE Mart against Delyon and the Other LLCs were, for the most part, the same as the claims it brought against them in the

Page 432

Original Action. However, EE Mart also brought a civil RICO claim against Delyon and the Other LLCs to avoid losing federal jurisdiction over the matter because of a lack of diversity. Delyon and the Other LLCs filed a motion to dismiss the RICO claim, and the motion was sustained by the district court. The case was transferred back to the Circuit Court of Carroll County, where it is still pending.

On June 15, 2012, Delyon and the Other LLCs filed the present action in Fairfax County Circuit Court (the " Present Action" ), seeking to enjoin EE Mart from proceeding with the Maryland Action and seeking declaratory judgment that the Maryland Action was without merit. On November 6, 2012, EE Mart filed a counterclaim against Delyon and the Other LLCs, reasserting the same claims it had pled in the Original Action. In their answer to [289 Va. 285] the counterclaim, Delyon and the Other LLCs sought sanctions under Code § 8.01-271.1 on the grounds that the assertions in the counterclaim were frivolous and based on false statements.

On August 23, 2013, EE Mart's attorneys were granted leave to withdraw from the case. EE Mart failed to engage new attorneys. As a result, EE Mart did not file a witness list or exhibit list prior to trial or otherwise participate in pretrial activities. Accordingly, the trial court determined that EE Mart had abandoned its counterclaim. After hearing the evidence presented by Delyon and the Other LLCs, the trial court ruled in their favor. The trial court also entered a judgment order dismissing EE Mart's counterclaim with prejudice, finding that the counterclaim was " frivolous and without support in law or fact."

Delyon and the Other LLCs then made an oral application for sanctions against EE Mart, claiming that the Original Action, Maryland Action and the counterclaim to the Present Action were frivolous. In their motion, they sought the total amount of attorney's fees that they had expended in defending against the Original Action and the Maryland Action, as well as the attorney's fees expended in the Present Action. ...


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