LEGAL BLOG & NEWS

New SCOVA Case on the Voluntary-Payment Doctrine

Just before Thanksgiving, the Supreme Court of Virginia issued a new opinion dealing with the voluntary-payment doctrine, Sheehy v. Williams. It’s worth reading for two reasons. First, the voluntary-payment doctrine trips up litigants and ends appeals. Second, Sheehy is just a well-researched and cleanly written opinion.

Background. The trial court entered a judgment of about $50,0000 against Sheehy. (Let’s not talk about why. Just trust me on this one.) Williams apparently did not start collection proceedings, and Sheehy appealed. But when Sheehy entered a contract to sell some real estate, the title search turned up the judgment against her. The buyer’s lawyer asked Williams’s lawyer for payoff information, which he provided. Williams’s lawyer then received a check in that exact amount. Memo line: “Judgment Payoff.” The check was attached to a copy of the lawyer’s letter with the payoff amount circled and apparently initialed by Sheehy. Williams moved to dismiss. Sheehy’s lawyer argued that the payment was issued on behalf the buyers, not Sheehy herself. At oral argument, Sheehy’s lawyer conceded that he did not know if Sheehy had authorized the payment.

Analysis. The voluntary-payment doctrine means that a litigant can’t demand that a court return money that he voluntarily paid unless he shows fraud or some other misconduct: “[I]f one voluntarily makes a payment which the law would not compel him to make, he cannot afterwards assign his ignorance of the law as a reason why the state should furnish him with legal remedies to recover it.” To render a payment compulsory–and thus recoverable–the payor must show that the compulsion illegal, unjust, or oppressive.

In the appellate context, voluntarily paying a judgment deprives the payor of the right to appeal. There is, after all, nothing wrong with declaring litigation to be over when the litigants themselves have ended it. And the Court specifies that “involuntary” does not simply mean “inconvenient”:

[A]bsent a showing of fraud or other tortious conduct by a judgment creditor, a payment of a civil judgment for a fixed monetary sum made by or on behalf of a judgment debtor with her knowledge and consent becomes involuntary only when the payment is made after the judgment creditor has initiated execution proceedings.

(That said, in the domestic-relations context, a support order–unlike a civil judgment–is self-executing. Noncompliance is punishable by contempt. So the analysis is different there.)

The wrinkle in Sheehy is that the Court did not have access to the facts relevant to the voluntary-payment doctrine, because all of those transactions took place outside the record. Instead of fact-findings it had the proffers of counsel. So the Court used its authority under Rule 1:1B to temporarily remand the case for fact findings on eight specific points. Upon receipt of those fact-findings, the Court will rule on the motion to dismiss.