Linda K. Avery v Virginia Retirement System

COURT OF APPEALS OF VIRGINIA
Present: 	Chief Judge Fitzpatrick, Judges Benton, Coleman, Elder,
Bray, Annunziata, Bumgardner, Frank and Humphreys
Argued at Richmond, Virginia
LINDA K. AVERY
OPINION BY
v. 	Record No. 2325-98-4 	JUDGE JAMES W. BENTON, JR.
AUGUST 15, 2000
VIRGINIA RETIREMENT SYSTEM
UPON A REHEARING EN BANC
FROM THE CIRCUIT COURT OF PRINCE WILLIAM COUNTY
William D. Hamblen, Judge
R. Scott Oswald (Noto & Oswald, P.C., on
brief), for appellant.
Brian J. Goodman, Assistant Attorney General
(Mark L. Earley, Attorney General, on brief),
for appellee.
This appeal arises under the Administrative Process Act
from the trial judge's order remanding to the Virginia
Retirement System a case decision for the purpose of awarding
relief to Linda K. Avery. 	A panel of this Court held that the
trial judge erred in denying Avery's application for attorney
fees. 	In response to the Retirement System's cross-appeal,
contending that "the circuit court did [not] have subject matter
jurisdiction" over the controversy, the panel held that the
circuit court had subject matter jurisdiction. 	See Avery v.
Virginia Retirement System, 31 Va. App. 1, 3, 520 S.E.2d 831,
833 (1999). 	We granted the Retirement System's petition for a

rehearing en banc on the issue of jurisdiction. 	For the reasons
that follow, we affirm the trial judge's denial of the demurrer.
I.
This matter commenced in the circuit court when Avery
appealed a case decision rendered by the Retirement System. 	See
id. 	The Retirement System demurred to Avery's petition for
appeal, alleging that Avery's petition was not properly before
the circuit court because "there is no showing that to date
[Avery] has complied with the proper procedure to effect service
. . . [and] that [Avery has not] take[n] the steps necessary
within the thirty days to cause a copy of the Petition for
Appeal to be served on [the Retirement System]." 	Specifically,
the Retirement System contended in its memorandum in support of
the demurrer that "Avery cannot show that she complied with Rule
2A:4 by requesting service of process, paying a service fee and
providing a service copy of the Petition for Appeal on or prior
to the deadline."1 The demurrer and memorandum advance the
1 Rule 2A:4(a) provides as follows:
Within 30 days after the filing of the
notice of appeal, the appellant shall file
his petition for appeal with the clerk of
the circuit court named in the first notice
of appeal to be filed. 	Such filing shall
include all steps provided in Rules 2:2 and
2:3 to cause a copy of the petition to be
served (as in the case of a bill of
complaint in equity) on the agency secretary
and on every other party.
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argument that the Rule requirements "are mandatory and
jurisdictional." 	Succinctly put, the Retirement System
"argue[d] that Avery did not timely take all steps required
under Rules 2:2 and 2:3 to effect service of process."
In reply to the demurrer, Avery stated the following:
Avery responds that [Rule] 2:2 does not
mandate that Avery ask the Clerk's Office
for service to be made on a defendant in
order for her case to be properly filed.
Avery further asserts that neither [Rule]
2:2 nor 2:3 require[s] Avery to pay a fee
for service. 	Finally, contrary to the
[Retirement System's] contention, Avery
asserts that she did provide an extra copy
of her petition for service to the Court
Clerk as part of her April 30, 1998 filing.
While Avery does concede that she did not
request the Court Clerk to issue a subpoena
in chancery and that thus no subpoena in
chancery was mailed to the [Retirement
System] on April 30, 1998, Avery contends
Rule 2:2 provides, in pertinent part as follows:
A suit in equity shall be commenced by
filing a bill of complaint in the clerk's
office. 	The suit is then instituted and
pending as to all parties defendant thereto.
The statutory writ tax and clerk's fees shall
be paid before the subpoena in chancery is
issued. . . . 	Without more it will be
understood that all the defendants mentioned
in the caption are made parties defendant and
required to answer the bill of complaint;
that proper process against them is
requested.
Rule 2:3 provides, in pertinent part as follows:
The plaintiff shall furnish the clerk
when the bill is filed with as many copies
thereof as there are defendants upon whom it
is to be served. . . . 	A deficiency in the
number of copies of the bill shall not
affect the pendency of the suit.
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that the [savings] Clause of [Rule] 2:3
applies to her case.
Following a hearing, the trial judge entered an order denying
the demurrer.
Because a transcript is not included in the record, we have
only the pleadings and exhibits upon which to discern the nature
of the arguments in the circuit court. 	In addition to the
pleadings, the record contains copies of three decisions by
other circuit court judges in other cases regarding the
requirements of Rules 2A:4, 2:2 and 2:3. 	For example, a copy of
a letter opinion in Farris v. Virginia Retirement System, Case
No. HI-1532-4 (Va. Richmond Cir. Ct. Jan. 28, 1998), was
presented to the trial judge as persuasive authority for his
decision on the demurrer. 	Apparently, this was done because
when this matter was pending in the circuit court, no appellate
court had decided the issue whether a petitioner was required by
Rules 2:2 and 2:3 to specifically request that the clerk's
office issue service of process. 	We note, however, that since
that time, we have decided that issue. 	See Kessler v. Smith, 31
Va. App. 139, 521 S.E.2d 774 (1999). 	In any event, the trial
judge denied the demurrer without specifying the issues argued.
On its cross-appeal to this Court, the Retirement System's
written argument to the panel consisted of the following two
paragraphs:
On June 23, 1998, [the trial judge]
overruled a demurrer that [the Retirement
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System] filed. 	[The Retirement System]
asserted in its demurrer that the Circuit
Court lacked subject matter jurisdiction to
hear this case because Avery failed to
properly perfect her appeal pursuant to Part
Two A of the rules of the Virginia Supreme
Court. 	There is a split of authority among
the circuits on this issue. 	Moreover, a
case addressing this very issue is now
pending before this Court.
[The Retirement System] hereby reasserts
its position that the Circuit Court lacked
subject matter jurisdiction to hear this
case, and it should be dismissed.
(Citations omitted).
A panel of this Court held that "the Retirement System's
contention that the circuit court lacked subject matter
jurisdiction is meritless." 	Avery, 31 Va. App. at 10, 520
S.E.2d at 836. 	We granted this petition for rehearing to review
that ruling.
II.
The Supreme Court has held that "[s]ubject matter
jurisdiction is the authority granted to a court by constitution
or by statute to adjudicate a class of cases or controversies."
Earley v. Landsidle, 257 Va. 365, 371, 514 S.E.2d 153, 156
(1999). 	An important distinction exists between "the power of a
court to adjudicate a specified class of cases, commonly known
as 'subject matter jurisdiction,' and the authority of a court
to exercise that power in a particular case." 	David Moore v.
Commonwealth, 259 Va. 431, 437, 527 S.E.2d 406, 409 (2000). 	The
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Administrative Process Act confers upon the circuit court the
power to review agency case decisions. 	See Code § 9-6.14:16;
Virginia Bd. of Medicine v. Virginia Physical Therapy Ass'n, 13
Va. App. 458, 466, 413 S.E.2d 59, 64 (1991), aff'd, 245 Va. 125,
427 S.E.2d 183 (1993).
"A court's authority to exercise its subject matter
jurisdiction over a case may be restricted by a failure to
comply with statutory requirements that are mandatory in nature
and, thus, are prerequisite to a court's lawful exercise of that
jurisdiction." 	Dennis Moore v. Commonwealth, 259 Va. 405, 409,
527 S.E.2d 415, 417 (2000) (emphasis added). 	When the failure
to comply with a statutory requirement is merely procedural,
however, it is subject to cure or waiver. 	See David Moore, 259
Va. at 439, 527 S.E.2d at 410 (holding that failure to provide
written notice to parents is cured by actual presence of
juvenile's parents at the transfer hearing) (citing Turner v.
Commonwealth, 216 Va. 666, 670, 222 S.E.2d 517, 520 (1976)). 	A
defect in service is precisely such a procedural error. 	See
Hewitt v. Virginia Health Services Corp., 239 Va. 643, 645, 391
S.E.2d 59, 60 (1990) (holding that "[t]he failure to serve the
notice of [tort] claim properly does not affect the trial
court's subject matter jurisdiction").
Discussing the variety of reasons for which a court may
lack the requisite "jurisdiction" to proceed to an "adjudication
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on the merits" of a case, the Supreme Court has decided the
following:
The term jurisdiction embraces several
concepts including subject matter
jurisdiction, which is the authority granted
through constitution or statute to
adjudicate a class of cases or
controversies; territorial jurisdiction,
that is, authority over persons, things, or
occurrences located in a defined geographic
area; notice jurisdiction, or effective
notice to a party or if the proceeding is in
rem seizure of a res; and "the other
conditions of fact must exist which are
demanded by the unwritten or statute law as
the prerequisites of the authority of the
court to proceed to judgment or decree."
While these elements are necessary to
enable a court to proceed to a valid
judgment, there is a significant difference
between subject matter jurisdiction and the
other "jurisdictional" elements. 	Subject
matter jurisdiction alone cannot be waived
or conferred on the court by agreement of
the parties. 	A defect in subject matter
jurisdiction cannot be cured by reissuance
of process, passage of time, or pleading
amendment. 	While a court always has
jurisdiction to determine whether it has
subject matter jurisdiction, a judgment on
the merits made without subject matter
jurisdiction is null and void. 	Likewise,
any subsequent proceeding based on such a
defective judgment is void or a nullity.
Even more significant, the lack of
subject matter jurisdiction can be raised at
any time in the proceedings, even for the
first time on appeal by the court sua
sponte. 	In contrast, defects in the other
jurisdictional elements generally will be
considered waived unless raised in the
pleadings filed with the trial court and
properly preserved on appeal. 	Rule 5:25.
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One consequence of the non-waivable
nature of the requirement of subject matter
jurisdiction is that attempts are sometimes
made to mischaracterize other serious
procedural errors as defects in subject
matter jurisdiction to gain an opportunity
for review of matters not otherwise
preserved.
Morrison v. Bestler, 239 Va. 166, 169-70, 387 S.E.2d 753, 755-56
(1990) (citations omitted) (emphasis added).
Because the Retirement System raised before this Court the
issue of subject matter jurisdiction, that is the issue we
decide.2 We hold that the circuit court had subject matter
jurisdiction to adjudicate Avery's appeal from a case decision
issued by the Retirement System. 	Accordingly, we affirm the
order denying the demurrer, and we reverse and remand the issue
of attorney fees. 	See Avery, 31 Va. App. at 11-16, 520 S.E.2d
at 836-38.
Affirmed, in part,
reversed and remanded,
in part.
2 In its brief on rehearing en banc, the Retirement System
states that "[t]he issue before the full Court in this rehearing
en banc is whether Avery obtained valid process and caused
service of process on [the Retirement System] within 30 days of
filing her notice of appeal in order to perfect her appeal." 	We
have decided that issue in Kessler, 31 Va. App. at 144, 521
S.E.2d at 776, a case that the Retirement System did not discuss
in its brief. 	Furthermore, that issue does not raise a question
regarding the circuit court's subject matter jurisdiction.
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Bumgardner, J., dissenting.
I respectfully dissent because I conclude the trial court
lacked active jurisdiction to hear the appeal. 	The Virginia
Retirement System demurred to the petition for appeal and
stated, "without proper service of process this Court has no
jurisdiction." 	That raised the issue that the parties briefed
and argued to this Court en banc: 	Is delivery of process by
Federal Express service of process?
Avery never served process on the agency. 	She mailed a
copy of the petition for appeal. 	After the demurrer raised the
issue of lack of service, she had process issued but had it
delivered by Federal Express. 	Avery argues that delivery by
Federal Express was service of process as required by the
Administrative Process Act and Rule 2A:4.
As the majority opinion defines "subject matter
jurisdiction," it is referring to what is also called "potential
jurisdiction." 	That is, "the power granted by the sovereignty
creating the court to hear and determine controversies of a
given character." 	Edwin B. Meade, Lile's Equity Pleading and
Practice 5 (3d ed. 1952). 	It is distinguished from "active
jurisdiction" which is the right to exercise potential
jurisdiction in a particular case. 	"We may therefore, define
active jurisdiction as the right to exercise the potential
jurisdiction in a given case. 	In other words, active
jurisdiction connotes potential jurisdiction, plus such
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conditions of fact in the particular case, as are necessary to
enable the court, under existing rules, to hear and determine
that cause." 	Id. at 6 (emphasis in original).
"Where potential jurisdiction exists, active jurisdiction,
which . . . is the right actually to exercise the judicial
function of hearing and determining a particular cause, may be
acquired two ways: 	(1) By valid and compulsory process of the
court; and (2) By the voluntary submission of the parties." 	Id.
at 10. 	See W. Hamilton Bryson, Bryson on Virginia Civil
Procedure 107 (3d ed. 1997).3 The issue in this case is not
whether the trial court had the authority to hear appeals from
administrative agencies, but whether it had active jurisdiction
to hear this particular appeal.
"If service of process was not proper or if its issuance
was faulty, the court without more does not have active
jurisdiction over the parties, and all proceedings in the case
are void. 	Objections to service of process and active
3 "In addition to having authority over the subject of the
litigation, a court must have jurisdiction over the parties to
or the property of a particular lawsuit. 	Jurisdiction over
persons is called active jurisdiction. 	It presupposes potential
jurisdiction; it is the ability of a court to exercise its
general subject matter jurisdiction in a particular cause
between the parties before the court. 	Active jurisdiction is a
matter giving the defendant notice that his rights are going to
be adjudicated so that he may appear in court and present his
defenses. 	The essence of active jurisdiction is fairness to the
defendant. 	Active jurisdiction is acquired by a court by either
service of process on the defendant or by the voluntary
appearance of the defendant in court." 	Bryson, at 107.
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jurisdiction can be raised at any time before a general
appearance, in any manner, and by anyone including the judge.
The sooner the matter is raised, however, the better." 	Bryson,
at 138. 	"Objections to process must be made prior to or
simultaneously with a pleading to the merits. 	If they are made
afterwards, the pleading to the merits, which constitutes a
general appearance, will be considered a waiver of the
objection." 	Id.
"Pleading to the merits of a case without raising the
process point will constitute a waiver of defective service of
process, as will any appearance by a party, other than for the
purpose of objecting to process." 	Kent Sinclair and Leigh B.
Middleditch, Jr., Virginia Civil Procedure 364 (3d ed. 1998)
(footnote omitted). 	The Virginia Retirement System objected to
the service of process in its initial pleading. 	Thus, it did
not voluntarily submit to the active jurisdiction of the trial
court. 	If service of process was not proper, the trial court
did not have active jurisdiction entitling it to exercise its
potential jurisdiction to hear this appeal.
In Mayo v. Dep't of Commerce, 4 Va. App. 520, 358 S.E.2d
759 (1987), this Court held that the time limitation in Rule
2A:4 for filing a petition for appeal was mandatory and the
trial court was not authorized to extend the limitation. 	The
court made an analogy between the rules governing appeals to the
Supreme Court and the time requirements for appeals to circuit
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courts from decisions of administrative agencies. 	"Generally,
rules governing appeal procedures are mandatory and 'compliance
with them is necessary for the orderly, fair and expeditious
administration of justice.'" 	Id. at 522, 358 S.E.2d at 761
(citation omitted).
Sours v. Virginia Bd. for Architects, et al., 30 Va. App.
313, 321, 516 S.E.2d 712, 716 (1999), held, "Rule 2A:4 requires
that the petition for appeal be filed and that the filing
include all steps required to cause the petition to be served on
the necessary parties." 	Because the petition for appeal was
actually served, failure to pay the writ tax did not defeat
jurisdiction.
Avery never served the Virginia Retirement System with
process. 	The delivery by Federal Express did not comply with
Code §§ 8.01-293(A)(2)4 and -325,5 which specify how a qualified
4 Code § 8.01-293. Who to serve process.
A. 	The following persons are authorized to
serve process:
1. 	The sheriff within such territorial
bounds as described in § 8.01-295; or
2. 	Any person of age eighteen years or
older and who is not a party or otherwise
interested in the subject matter in
controversy.
5 Code § 8.01-325. Return by person serving process.
Unless otherwise directed by the court, the
person serving process shall make return
thereof to the clerk's office within
seventy-two hours of service, except when
such return would be due on a Saturday,
Sunday, or legal holiday. 	In such case, the
return is due on the next day following such
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person other than the sheriff serves process. 	See Harrell v.
Preston, 15 Va. App. 202, 206, 421 S.E.2d 676, 678 (1992)
(nothing in record established that process server was qualified
to serve process, so the trial court did not acquire personal
jurisdiction over defendant).
The trial court did not have active jurisdiction entitling
it to exercise its potential jurisdiction (subject matter
jurisdiction) to hear Avery's appeal because she did not serve
process on the Retirement System and it did not voluntarily
submit to the authority of the court. 	Accordingly, I conclude
the trial court had no authority except to dismiss the appeal.
See Commonwealth ex rel. Duvall v. Hall, 194 Va. 914, 918, 76
S.E.2d 208, 211 (1953).
Saturday, Sunday, or legal holiday. 	The
process shall state thereon the date and
manner of service and the name of the party
served.
Proof of service shall be in the following
manner:
1. 	If service by sheriff, the form of the
return of such sheriff as provided by the
Rules of the Supreme Court; or
2. 	If service by any other person qualified
under § 8.01-293, whether service made in or
out of the Commonwealth, his affidavit of
such qualifications; the date and manner of
service and the name of the party served;
and stamped, typed, or printed on the return
of process, an annotation that the service
was by a private server, and the name,
address, and telephone number of the server
. . . .
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