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COURT OF APPEALS OF VIRGINIA

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." The demurrer and memorandum advance the

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

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

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

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

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.



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. 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.





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

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). 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

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

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) and -325, which specify how a qualified

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).

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.



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.

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.



"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.



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.

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

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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