Construction Law Insights

Ware v. Commonwealth, 2019 Va. App. LEXIS 212, 2019 WL 4777251 (Va. Ct. App. Oct. 1, 2019)

In 2004, Walker W. Ware, IV (“Ware”) subdivided a parcel of land and recorded subdivision documents, including a “Road Dedication and Maintenance Agreement” and Addendum 1 (the “Agreement”). The Agreement provided that each lot owner would be assessed $200 per year for maintenance and upkeep of the right-of-way. In 2009, Ware unilaterally modified the Agreement by executing and recording Addendum 2, which increased the annual assessment from $200 to $5,000, but discounted $4,800 if Ware received the owner’s payment on time. From 2006 to 2014, Ware performed minimal repairs and kept the payments in a segregated account. In 2014, Ware transferred $3,000 from the segregated account to his business account for road repairs. In 2014, Stephen and Susan Cabiroy as trustees of a family trust (the “Cabiroy”) sent a check for $356.10 to Ware for two parcels, deducting the cost of gravel Cabiroy put on the road. Ware returned the

partial payment and claimed that Cabiroy owed $10,000 for the two lots because payment was not received on time. On September 2, 2015, Ware sent Cabiroy a letter stated a memorandum of lien on the Cabiroy’s lots would be filed with the clerk’s office. The letter included a $10,000 invoice for 2014 maintenance fees plus interest and fees and a $10,000 invoice for 2015 maintenance fees. The invoice totaled more than $30,000. Ware was convicted of attempted extortion and embezzlement. Ware appealed his convictions. The Virginia Court of Appeals reversed his convictions and found the evidence was insufficient to convict Ware.

Embezzlement requires proof that the accused wrongfully appropriated to his benefit, with the intent to deprive the owner thereof, the property entrusted to him by virtue of his employment or office. The Commonwealth must prove that the defendant was entrusted with the property of another. A defendant wrongfully appropriates the entrusted property of another when he exercises unauthorized and wrongful dominion and control over it, to the exclusion of or inconsistent with the rights of the owner. Here, the annual road maintenance fees were paid to Ware, not entrusted to Ware. Ware’s dominion and control over the money was not unauthorized or wrongful because the fees paid to Ware became his property and were not the property of another for purposes of embezzlement. Because the road maintenance fees were not the entrusted property of another, the court erred in denying Ware’s motion to strike the embezzlement charge.

Extortion is to gain by wrongful methods; to obtain in an unlawful manner, as to compel payments by means of threats of injury to person, property, or reputation. A threat to exercise a lawful method of enforcement rights, without more, does not constitute extortion. Here, Ware’s letter providing notice of intent to place a lien on Cabiroy’s property was part of a judicial proceeding. The judicial proceeding included both the perfecting of a lien on Cabiroy’s property and the enforcement of the lien. To perfect a lien, Ware had to give notice to the property owner, Cabiroy, that a memorandum of lien would be filed in the clerk’s office. The letter also contained seven items required by Virginia Code § 55-516(B). Ware’s notice to Cabiroy was part of a judicial process of perfecting a lien. The relevant and material statements in the notice were thereby covered by absolute privilege and were not a wrongful threat in the context of an extortion charge.

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