Phillips v. Rohrbaugh ( 2021 )

PRESENT: All the Justices
SUSAN E. PHILLIPS
OPINION BY
v. Record No. 200840 JUSTICE D. ARTHUR KELSEY
OCTOBER 21, 2021
JOHN MARK ROHRBAUGH, JR., IN HIS
INDIVIDUAL CAPACITY AND IN HIS
CAPACITY AS CO-EXECUTOR OF THE
ESTATE OF JOHN MARK ROHRBAUGH, SR., ET AL.
FROM THE CIRCUIT COURT OF MADISON COUNTY
Lon E. Farris, Judge Designate
John Mark Rohrbaugh Sr. died in 2016. Two years later, his daughter filed claims
seeking both an equitable and a statutory accounting from her brother in his former capacity as
an agent managing their father’s financial affairs pursuant to a power of attorney and in his
present capacity as co-executor of their father’s estate. She also filed a claim against the other
co-executor of her father’s estate, seeking an equitable accounting. The circuit court granted
demurrers as to all claims and dismissed the action because, under the facts pleaded, neither
theory of accounting applies to this case. We agree and affirm.
I.
“Because this appeal arises from the grant of a demurrer, we accept as true all factual
allegations expressly pleaded in the complaint and interpret those allegations in the light most
favorable to the plaintiff.” Tingler v. Graystone Homes, Inc., 298 Va. 63, 72-73 (2019) (citation
omitted). “To survive a challenge by demurrer,” factual allegations must be made with
“sufficient definiteness to enable the court to find the existence of a legal basis for its judgment.”
Squire v. Virginia Hous. Dev. Auth., 287 Va. 507, 514 (2014) (citation omitted).
In 2004, John Mark Rohrbaugh Sr. executed a durable power of attorney (“POA”)
naming his son, John Mark Rohrbaugh Jr., as his agent. 1 In relevant part, the POA provided:
Pursuant to the provisions of section 11-9.6 of the Code of Virginia
of 1950, as amended, it is my intention that, except as specifically
provided for herein, my agent shall never be required to make
disclosure or inspection of my affairs, or their actions as my agent,
either under this instrument or otherwise, to any third party. I
authorize my agent to refuse any request for disclosure or
inspection, and they have the sole discretion to determine the
scope, if any, of disclosure or inspection they may wish to permit.
I authorize my agent as an expense of the agency to resist any
proceeding to compel such disclosure or inspection. . . . Without
limitation of the foregoing sentences in this paragraph, I
specifically intend that my agent shall never be required to make
disclosure of their actions or permit inspection of my affairs under
this instrument, pursuant to section 11-9.1, section 11-9.6, section
37.1-134.22 of the Code of Virginia of 1950, as amended, or any
other statute.
J.A. at 158-59 (emphasis in original).2
The POA granted authority to the agent to make gifts to Rohrbaugh Sr.’s descendants or
spouses of his descendants, including a descendant who is serving as his agent, “only if (a)
[Rohrbaugh Sr.] ha[d] not excluded and disinherited such donee as a beneficiary of my estate in
my will as it is written at the time of such gift(s), or (b) any gift to such donee shall be approved
by at least one adult beneficiary under my will.” Id. at 156. Rohrbaugh Jr. also had a joint
money market account with Rohrbaugh Sr. that Rohrbaugh Jr. used to facilitate Rohrbaugh Sr.’s
care. Rohrbaugh Jr. never contributed to the account and claimed no interest in it.
1
The POA also named German P. Culver Jr. as Rohrbaugh Sr.’s agent and John J. Davies
III as a successor agent in the event that Rohrbaugh Jr. or Culver were not able or willing to
serve. Both Culver and Davies, however, never exercised any authority under the POA and
resigned as agents in December 2008, leaving Rohrbaugh Jr. as the sole agent.
2
The statutes mentioned in this provision have been replaced by the Virginia Power of
Attorney Act. See 2010 Acts ch. 632, at 1130-32; 2012 Acts ch. 614, at 1271-73. Former Code
§ 11-9.6 correlates to current Code § 64.2-1612(I), and former Code § 37.1-134.22 correlates to
current Code § 64.2-1614(B).
2
In 2006, a full-time caregiver began living with Rohrbaugh Sr., and in early 2009,
Rohrbaugh Jr. began assisting with the management of his father’s finances because he “was
diminished in capacity and not capable of managing his finances on his own.” Id. at 135-36.
Rohrbaugh Jr. acted as his father’s agent until his father’s death in January 2016. Rohrbaugh Sr.
was survived by Susan E. Phillips, his daughter, and his son. Rohrbaugh Sr.’s will named
Phillips and Rohrbaugh Jr. as beneficiaries and named Rohrbaugh Jr. and John J. Davies III as
co-executors of his estate.
In September 2017, Phillips sent a letter to counsel for the co-executors of Rohrbaugh
Sr.’s Estate, requesting information about transactions that Rohrbaugh Jr. had made under the
POA, including gift transfers to Rohrbaugh Sr.’s descendants, his descendants’ spouses, or any
entity in which a descendant or descendant’s spouse held an interest. Phillips alleged that
Rohrbaugh Jr. had engaged in suspicious or self-dealing activity in his capacity as Rohrbaugh
Sr.’s agent, and her 2017 letter listed numerous transactions for which she was seeking additional
information. The letter concluded that Phillips’s requests should be taken “at face value” as
simply seeking “the facts necessary to understand these various related transactions and not as an
assertion that any improper actions were taken by Rohrbaugh Jr. in any capacity.” Id. at 173.
After Rohrbaugh Jr. provided Phillips with some of the information that she had sought,
Phillips deemed his responses to be unsatisfactory. In December 2018, Phillips sent counsel for
the co-executors a demand letter to protect all her interests in Rohrbaugh Sr.’s Estate. Phillips
also sent Rohrbaugh Jr. a letter in 2019 requesting information “about various unexplained and
questionable transactions” in the joint money market account between the years of 2010 and
2015. Id. at 141. These transactions included (1) compensation payments to Rohrbaugh Jr. and
his wife; (2) payments to credit card companies, various other companies, Rohrbaugh Sr.’s
3
family members, and non-family members; and (3) transactions related to Rohrbaugh Sr.’s real
properties that were used by Rohrbaugh Jr. Phillips alleges that Rohrbaugh Jr. has not satisfied
her request for clarification and information regarding the joint-account transactions.
Phillips filed a complaint in January 2018 against Rohrbaugh Jr. in his individual
capacity and against Rohrbaugh Jr. and Davies in their capacities as co-executors of the
Rohrbaugh Sr. Estate. After the circuit court granted demurrers, Phillips filed an amended
complaint in December 2019. The amended complaint asserted two counts. The first count
requested a statutory accounting under Code § 64.2-1614(A) from Rohrbaugh Jr. concerning his
actions pursuant to his father’s POA. The second count requested an equitable accounting from
both co-executors under Code § 8.01-31. The amended complaint sought the repayment of funds
due to the Estate if the circuit court later discovered that Rohrbaugh Jr. had inappropriately taken
funds from Rohrbaugh Sr. or otherwise violated his fiduciary duties.
No allegation in the amended complaint, however, specifically asserted that Rohrbaugh
Jr. or Davies had breached any fiduciary duties. 3 Instead, the amended complaint alleged only
that Rohrbaugh Jr. had conducted several “suspect transactions,” including among other things
failing to collect a debt he owed to his father, making unsecured loans, and purchasing real
property for more than its fair market value. J.A. at 136. The amended complaint named the
Rohrbaugh Sr. Estate as “an interested party because of the Co-Executors’ refusal and/or
inability to investigate the matters raised in this Complaint” and because the relief sought by
Phillips would benefit the Estate. Id. at 133. Because Phillips alleged that the suit would benefit
3
This was not an oversight. Throughout the trial court proceeding and while on appeal,
Phillips has asserted that under her theory of recovery no such allegations were necessary. See
J.A. at 362, 411, 413, 456; see also Oral Argument Audio at 13:44 to 13:49.
4
the Estate, she also requested reimbursement of her expenses, including attorney fees, under the
common-fund doctrine.
Rohrbaugh Jr. and Davies again filed demurrers to the amended complaint. As to both
counts, Rohrbaugh Jr. and Davies argued that Rohrbaugh Sr.’s POA specifically forbade his
agent from making disclosures to anyone under specific disclosure statutes “or any other statute,”
id. at 158-59. Rohrbaugh Sr. had a right to make that determination, Rohrbaugh Jr. and Davies
contended, because the Virginia Power of Attorney Act expressly recognizes it. In response,
Phillips argued that the Act authorized a judicial proceeding to obtain these disclosures despite
the principal’s expressed intent to the contrary.
The circuit court agreed with Rohrbaugh Jr. and Davies, holding that Phillips had no
statutory right to obtain an accounting from her brother concerning his management of their
father’s affairs under the POA. The court also found no legal basis for Phillips’s claim against
Rohrbaugh Jr. and Davies in their capacities as co-executors of Rohrbaugh Sr.’s Estate. For
these reasons, the circuit court granted both demurrers and dismissed the amended complaint
with prejudice.
II.
On appeal, Phillips asserts eight assignments of error that cluster around two main
arguments. First, Phillips argues that she has asserted a viable claim for an equitable accounting
under Code § 8.01-31. Second, she contends that the circuit court misconstrued the Virginia
Power of Attorney Act and that properly understood, the Act granted her a statutory right to an
accounting. We disagree with both of these arguments. 4
4
Phillips also argues that her accounting claims, had they been successful, would have
entitled her to an award of attorney fees under the common-fund doctrine. See generally duPont
5
A.
1.
We begin with an analysis of Phillips’s equitable accounting claim. “The action of
account-render was one of the most ancient actions known to the common law.” 3 John Norton
Pomeroy, A Treatise on Equity Jurisprudence § 1420, at 2193 (2d ed. 1899). “The common-law
action of account, or account-render,” was used to “adjust and settle mutual accounts where there
was some privity or mutual confidence existing between the parties, and its object was to recover
the balance ascertained to be due.” Martin P. Burks, Common Law and Statutory Pleading and
Practice § 101, at 210 (T. Munford Boyd ed., 4th ed. 1952); see also 4 John B. Minor, Institutes
of Common and Statute Law 1216-17 (1879).
The common-law accounting action, however, fell into disuse as chancery courts began
entertaining “bills for account,” William Minor Lile, Notes of Lectures on Equity Jurisprudence
264, 271 (1921), that covered a wider range of fiduciary relationships and offered a greater range
of remedies. The General Assembly codified this shift from common law to equity when it
abolished the statute providing for an “action for account” in 1954, see 1954 Acts ch. 593, at
765, and replaced it with the “accounting in equity” action in 1956, see 1956 Acts ch. 160, at
163. See also T. Munford Boyd, Virginia Procedural Legislation of 1954, 40 Va. L. Rev. 1097,
1099-1100 (1954); Burks, supra, § 101, at 38 & n.7 (1961 Supp.). Incorporating equitable
principles, the statute establishes “a two-stage process”: “First, the account is to be stated; this is
the determination of who owes what. Second, the account is to be settled; this is the payment by
the debtor of the money found to be owing.” Bryson, supra note 4, § 12.03[2][c], at 12-13.
v. Shackelford, 235 Va. 588, 594-95; W. Hamilton Bryson, Bryson on Virginia Civil Procedure
§ 14.04, at 14-15 (5th ed. 2017). The circuit court, she contends, erred in not granting this relief.
Given our holdings in this case, we need not address this argument.
6
Historically, the first stage was initiated by an “interlocutory order,” and the second stage ended
with a “final order.” Id.
An equitable accounting should not be misunderstood as merely a judicially managed
discovery proceeding in anticipation of a possible lawsuit. 5 It is best understood as a means to
enforce an implied duty of disclosure and reckoning arising out of an equitable relationship.
“Traditionally, an accounting in equity could be had against any agent, trustee, guardian,
committee, partner and many others, fiduciaries or not, because the relationship is ‘equitable.’”
Kent Sinclair, Virginia Remedies § 44-1, at 44-1 to -2 (5th ed. 2016). Unless excused by the
principal, an agent has “a duty to keep, and render to his principal, an account of money or other
things which he has received or paid out on behalf of the principal.” Bain v. Pulley, 201 Va. 398,
402 (1959) (emphasis added) (citation omitted). “It is upon the principle of trust mainly, that
equity takes jurisdiction at the instance of the principal to compel his agent to account.” Huff v.
Thrash, 75 Va. 546, 548 (1881). Thus, the very nature of an equitable accounting action
presupposes that the party seeking the accounting has an equitable right to demand an account
and a corresponding right to settle a disputed account in the courts. “Every bill for an account,”
as Dean Langdell succinctly said, “must be founded upon an obligation to render an account.”
C.C. Langdell, A Brief Survey of Equity Jurisdiction, 2 Harv. L. Rev. 241, 242 (1889); see also
Lile, supra, 271-72.
In the context of a principal-agent relationship, therefore, an equitable accounting claim
necessarily arises out of a discrete cause of action — the agent’s breach of his fiduciary duty to
5
Though subject to various limitations, such a discovery proceeding existed in another
form in historical chancery practice, see French v. Stange Mining Co., 133 Va. 602, 614-18
(1922) (discussing the “bill of discovery”), but its utility has been greatly diminished by modern
discovery rules of procedure, see Bryson, supra note 4, § 9.06[1][a], at 9-61 to -62; Burks,
supra, § 257, at 459-60.
7
provide the required disclosures to his principal. See John Adams Jr. et al., The Doctrine of
Equity 475-76 (4th Am. ed. 1859); Dan B. Dobbs & Caprice L. Roberts, Law of Remedies
§ 4.3(5), at 416 (3d ed. 2018). For purposes of asserting a successful equitable accounting claim,
it is unnecessary (but permissible) for a principal to go further and allege that stage one of the
proceeding would provide evidence of other fiduciary breaches warranting a stage-two award of
damages, an order of equitable rescission and restitution, or similar compensatory remedies. See
Dobbs & Roberts, supra, § 4.3(5), at 417-18.
2.
In this case, Phillips and Rohrbaugh Jr. were never in a principal-agent relationship with
each other. In his capacity as his father’s agent, Rohrbaugh Jr. owed no fiduciary duty to
account to his sister concerning his management of their father’s financial affairs. She thus has
no cause of action in her personal capacity for an equitable accounting against her brother.
Apparently realizing this, Phillips claims that she has a right to file an equitable accounting claim
against him on behalf of their deceased father. We do not agree.
An equitable accounting claim survives the death of the principal, and thus, a claim on
behalf of a decedent’s estate for equitable accounting may be asserted against inter vivos
fiduciaries of the decedent. See Code § 8.01-25; Campbell v. Harmon, 271 Va. 590, 597-98
(2006). As a general rule, the personal representative of an estate has exclusive standing to sue
on behalf of an estate. See Platt v. Griffith, 299 Va. 690, 692 (2021); Reineck v. Lemen, 292 Va.
710, 722 (2016); Burns v. Equitable Assocs., 220 Va. 1020, 1028 (1980); see also Code § 1-234
(defining “personal representative”). Phillips nevertheless contends that she fits within a narrow
exception to the general rule that enables certain beneficiaries to serve as ad hoc representatives
of an estate under special circumstances. See generally John Mitford et al., Mitford’s and
8
Tyler’s Pleadings and Practice in Equity 251-52 (1890); Joseph Story, Commentaries on Equity
Pleadings § 514, at 394-95 (2d ed. 1840). Affirming the circuit court, we find that the general
rule — not the exception — applies to this case.
Although we have recognized that “there is no fixed and rigid rule by which to determine
what constitutes such special circumstances,” Jeffries v. Antonsanti, 142 Va. 218, 227 (1925), the
exception may apply if the allegations in the complaint, “so far as they are well pleaded,” Beaty
v. Downing, 96 Va. 451, 454-55 (1898), at least approximate the typical scenarios. These
scenarios include a showing of “fraud” or the “refusal to sue,” Bane v. Adair, 116 Va. 587, 595
(1914), as well as “the insolvency of the personal representative, collusion between him and the
debtor, the fact that the debtor was . . . a trustee holding property for, or an agent of, the
decedent.” Saunders v. Bank of Mecklenburg, 113 Va. 656, 659-60 (1912) (citation omitted). 6
“A [complaint] which fails to charge these or other special circumstances which will take the
case out of the general rule is bad on demurrer.” Id.; cf. George Cooper, A Treatise of Pleading
on the Equity Side of the High Court of Chancery 176 (1813) (observing that the typical
recitation of special circumstances omits “mere negligence” of the personal representative as a
special circumstance).
Here, Phillips does not accuse her brother of fraud or claim that Davies has turned a
collusive blind-eye to any wrongdoing. Nor has she alleged any factually supportable cause of
action that the Estate could assert against her brother. At best, the complaint speaks of
“suspicious transactions,” see J.A. at 137, in which Phillips claims that Rohrbaugh Jr. engaged.
Phillips identifies various “questionable transactions,” Appellant’s Br. at 34, but does not allege
6
The ellipses in the quote from Saunders, 113 Va. at 660, omits the phrase “a partner of
the decedent” because we rejected that “dictum” in Conrad’s Adm’r v. Fuller, 98 Va. 16, 19
(1900).
9
that he violated any fiduciary duties by participating in these transactions. Several of these
specific “suspicious” circumstances associated with his handling of their father’s finances
involve actions that the POA arguably does not forbid and, in some cases, appears to authorize.
Compare J.A. at 137-42 (questioning gifts in the amended complaint) with J.A. at 156
(authorizing certain gifts in the POA “for any purpose or for no purpose, without limitation as to
the amount of such gifts”). In the end, Phillips’s argument appears to be no more than an
assertion that the “insufficiency of the information,” Appellant’s Br. at 35, provided by her
brother — when considered along with his status as agent, co-executor, and debtor — warrants
her reliance on the special-circumstances doctrine.
We hold that the allegations in Phillips’s complaint, “so far as they are well pleaded,”
Beaty, 96 Va. at 454-55, do not demonstrate that the circuit court erred by refusing to permit
Phillips to serve as a de facto representative of the Rohrbaugh Estate for the purposes of seeking
an equitable accounting from Rohrbaugh Jr., either in his capacity as his father’s inter vivos
agent or as co-executor of the Estate. We similarly see no special circumstances pleaded in
Phillips’s complaint that warrant an accounting claim against Davies in his capacity as co-
executor. We thus affirm the circuit court’s grant of the demurrers challenging Phillips’s
equitable accounting claims asserted on behalf of the Rohrbaugh Estate.
3.
Phillips also claims that as a beneficiary of her father’s estate she has a right to assert
equitable accounting claims against her brother and Davies in their capacities as co-executors.
We agree that she has standing to assert such claims but disagree that she has a right to demand
their adjudication in a collateral action that is ancillary to the probate proceeding.
10
“Equitable relief is discretionary and hence — even if a party makes a valid showing of
the required elements for any given form of relief — there is no assured right to exercise of the
court’s discretion in his or her favor.” See generally Sinclair, supra, § 42-1[A], at 42-4
(emphasis in original). If a court of law has “concurrent jurisdiction” over a dispute, for
example, the disputant seeking equitable remedies generally must show that legal remedies are
either unavailable or inadequate — thereby establishing the “prerequisite to the exercise of
equitable jurisdiction.” See Oglesby Co. v. Ould Co., 117 Va. 546, 554-55 (1915) (citation
omitted). “The test of the chancellor’s jurisdiction was, from the beginning, as the test of equity
jurisdiction has remained substantially to this day, the absence of a plain and adequate remedy at
law.” Lile, supra, at 4 (emphasis in original). This limiting principle explains why Code § 8.01-
31 provides that an equitable accounting “may be had” rather than “shall be had” in Virginia
courts.
In Virginia, the equitable accounting remedy, as applied to personal representatives of
probate estates, has been codified in a comprehensive series of statutes. A probate court appoints
an executor of a will, see Code §§ 64.2-500 to -508, and the executor remains under the court’s
supervision and control throughout the administration of the probate estate. Under Code
§§ 64.2-1300(A) and -1304, a personal representative must account for estate property in an
initial inventory of assets and thereafter make periodic accounts to a “commissioner of accounts”
shortly after a will is presented to a probate court. 7 “The commissioner of accounts shall state,
settle, and report to the circuit court an account of the transactions of a fiduciary, as provided by
law.” Code § 64.2-1312. “Any interested person,” under Code § 64.2-1209,
7
Under certain circumstances not applicable here, a will can waive a personal
representative’s duty to file accountings with the commissioner of accounts. See Code § 64.2-
1302.
11
may, before the commissioner of accounts, insist upon or object to
anything which could be insisted upon or objected to by such
interested person if the commissioner of accounts were acting
under an order of a circuit court for the settlement of a fiduciary’s
accounts made in a suit to which such interested person was a
party.
The commissioner has the power to issue witness subpoenas and compel document production,
see Code § 64.2-1203, for purposes of conducting “a hearing on either an inventory or an
account,” 2 Frank O. Brown, Jr., Virginia Practice Series: Probate Handbook § 2:11, at 67 (2020-
2021 ed.). If any interested party files an exception to the commissioner’s report to the probate
court, the court may conduct its own hearing and, if requested, empanel a jury to resolve
disputed facts. See Code § 64.2-1212(B). In addition, Code § 64.2-1213 allows for suits to
surcharge or falsify a report even after it has been confirmed by the circuit court.
After surveying these statutes, the Judicial Council of Virginia has explained the quasi-
judicial role served by commissioners of accounts as follows:
The precedent can be traced to the origins of the office of
commissioner of accounts. The present office of commissioner of
accounts evolved from the established office of commissioner in
chancery. . . . Thus, most circuit courts generally treat the
commissioner of accounts as having the same general authority as
a commissioner in chancery, in addition to the statutory duties and
responsibilities of the commissioner of accounts.
The Standing Comm. on the Comm’rs of Accts. of the Jud. Council of Va., Manual for
Commissioners of Accounts 293-94 (6th ed. 2019) (footnotes omitted). Based upon these
background principles, the Judicial Council concluded that “the circuit court may refer any
matter it deems appropriate to the commissioner of accounts pursuant to its general referral
powers to commissioners in chancery.” Id. We agree with this view.
Our cases recognize that “[t]he Commonwealth established the office of the
Commissioner of Accounts ‘to afford a prompt, certain, efficient, and inexpensive method’ for
12
the settlement of fiduciaries’ accounts and the distribution of estates.” Gray v. Binder, 294 Va.
268, 276 (2017) (citation omitted). The position “evolved from the Commissioner in Chancery,
and is ‘one of the most important known in the administration of justice.’” Henderson v. Cook,
297 Va. 699, 712 (2019) (citation omitted). For good reason, we have recurred to the statutory
scheme to emphasize
how minute, how careful, and how sufficient is the provision made
by our statute law for the settlement of the accounts of fiduciaries.
It is full, ample, and complete. It guards and protects every
interest as amply as could be done by a formal suit in chancery.
By the death of the decedent the probate court acquires
jurisdiction. It appoints the administrator and commits the estate
to his control, and at every step of his administration the law
provides proper machinery by which the fiduciary can be
compelled to collect and distribute the funds committed to his care,
and to settle his accounts showing the manner in which his trust
has been executed.
Carter’s Adm’r v. Skillman, 108 Va. 204, 213 (1908) (emphasis added).
In the present case, the circuit court was keenly aware of this procedure. See J.A. at 451
(confirming that “not allowing her to have an accounting out of this suit doesn’t prevent her from
filing her complaints with the accounting in the estate itself with the commissioner”). Convinced
that its ruling would not prejudice Phillips’s ability to take her dispute to the proper forum, the
circuit court dismissed the equitable accounting claims. The chancellor did not abuse his
discretion in doing so. Both co-executors of Rohrbaugh Sr.’s Estate remained under the
supervisory power of the probate court and under the specific oversight of the court’s
commissioner of accounts. None of the allegations in Phillips’s complaint present factual issues
that could not be competently adjudicated during probate with the assistance of the
commissioner of accounts and, if desired, an advisory jury.
In short, while a chancellor could allow an equitable accounting suit to go forward as a
collateral proceeding, the circumstances in this case fall far short of compelling the chancellor to
13
do so. We thus affirm the circuit court’s dismissal of the equitable accounting claims against
Rohrbaugh Jr. and Davies in their capacities as co-executors of Rohrbaugh Sr.’s Estate.
B.
Phillips also argues that the Virginia Power of Attorney Act, Code § 64.2-1614(A), grants
her a right to file a statutory accounting claim even if she would not otherwise have standing to
do so under equitable principles. In one respect, she is quite right. Subsection A of Code § 64.2-
1614 grants standing to several categories of claimants, including a principal’s relatives, to
“petition a court to construe a power of attorney or review the agent’s conduct, and grant
appropriate relief.” If we were to stop reading there, we might presume (as Phillips does) that
she has an indefeasible right to an accounting. Four other provisions of the Virginia Power of
Attorney Act, however, make clear that such an assumption would be mistaken.
1.
“A cardinal rule of statutory construction is that a statute be construed from its four
corners and not by singling out a particular word or phrase.” Commonwealth Nat. Res., Inc. v.
Commonwealth, 219 Va. 529, 536 (1978); see also Virginia Elec. & Power Co. v. Citizens for
Safe Power, 222 Va. 866, 869 (1981). Our duty is to interpret “the entire statute — i.e., the
entirety of a single legislative enactment as it appears in the Acts of Assembly as a whole — to
place its terms in context” and to “interpret the several parts of a statute as a consistent and
harmonious whole so as to effectuate the legislative goal.” Eberhardt v. Fairfax Cnty. Emps.’
Ret. Sys. Bd. of Trs., 283 Va. 190, 194-95 (2012) (citation omitted).
2.
Guided by these principles, we begin with Code § 64.2-1612(H). It was adapted from
section 114(h) of a “Uniform Power of Attorney Act” proposed by the National Conference of
14
Commissioners on Uniform State Laws. See generally Andrew H. Hook & Lisa V. Johnson, The
Virginia Uniform Power of Attorney Act, 44 U. Rich. L. Rev. 107 (2009). Section 114(h)
“codifies the agent’s common law duty to account to a principal.” Unif. Power of Att’y Act
§ 114 cmt. (2006). In relevant part, Code § 64.2-1612(H) does the same thing while
emphasizing two important qualifications:
Except as otherwise provided in the power of attorney, an agent
shall disclose receipts, disbursements, or transactions conducted on
behalf of the principal if requested by the principal, a guardian, a
conservator, another fiduciary acting for the principal, or, upon the
death of the principal, by the personal representative or successor
in interest of the principal’s estate.
The first qualification states that the statutory duty to make accounting disclosures is
owed to a very short list of individuals: the principal and any fiduciaries acting on his behalf or
on behalf of his estate. The list does not categorically include any of the principal’s relatives.
The second qualification (“[e]xcept as otherwise provided in the power of attorney”) recognizes
the principal’s power to forbid his agent from making accounting disclosures to anyone but the
principal. Together, these aspects of subsection H “are consistent with the premise that a
principal with capacity should control to whom the details of financial transactions are
disclosed.” Unif. Power of Att’y Act § 114 cmt.
Making the same point, Code § 64.2-1614(D) states: “Upon motion by the principal, the
court shall dismiss a petition filed under this section [Code § 64.2-1614], unless the court finds
that the principal lacks capacity to revoke the agent’s authority or the power of attorney.” This
provision gives a principal (if alive and mentally competent) the right to unilaterally terminate an
accounting action initiated by his relatives or any other parties with standing to assert an
accounting action under subsection A. The court “shall” enforce the principal’s decision even if
15
the power of attorney does not expressly forbid the principal’s relatives from seeking a statutory
accounting.
The Virginia Power of Attorney Act also includes a provision not found in the Uniform
Power of Attorney Act that addresses accounting actions when the principal is believed to be
incapacitated or deceased, Code § 64.2-1612(I) provides, in relevant part:
Except as otherwise provided in the power of attorney, an agent
shall, on reasonable request made by a person listed in
subdivisions A 3 through A 9 of § 64.2-1614 who has a good faith
belief that the principal suffers an incapacity or, if deceased,
suffered incapacity at the time the agent acted, disclose to such
person the extent to which he has chosen to act and the actions
taken on behalf of the principal within the five years prior to either
(i) the date of the request or (ii) the date of the death of the
principal, if the principal is deceased at the time such request is
made, and shall permit reasonable inspection of records pertaining
to such actions by such person. In all cases where the principal is
deceased at the time such request is made, such request shall be
made within one year after the date of the death of the principal.
This provision expands the list of persons who may have standing to seek an accounting
from the agent. That expanded list includes relatives of the principal. Code § 64.2-1614(A)(4).
Subsection I, however, includes three limitations. First, those with standing to seek an
accounting can obtain one only if they allege “a good faith belief that the principal suffers an
incapacity or, if deceased, suffered incapacity at the time the agent acted.” Id. Second, like
subsection H, subsection I includes a proviso (“[e]xcept as otherwise provided in the power of
attorney”) which gives the principal the power to forbid account-rendering disclosures to anyone
but himself. Lastly, in cases in which the accounting is requested after the principal has died, the
request must be made within one year of his death.
Phillips’s argument must also contend with yet another provision of the Virginia Power
of Attorney Act. Code § 64.2-1614(B)(1) provides:
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Whether or not supplemental relief is sought in the proceeding,
where an agent has violated duties of disclosure imposed by
§ 64.2-1612, any person to whom such duties are owing may, for
the purpose of obtaining information pertinent to the need or
propriety of (i) instituting a proceeding under Chapter 20 (§ 64.2-
2000 et seq.); (ii) terminating, suspending, or limiting the authority
of the agent; or (iii) bringing a proceeding to hold the agent, or a
transferee from such agent, liable for breach of duty or to recover
particular assets or the value of such assets of a principal or
deceased principal, petition a circuit court for discovery from the
agent of information and records pertaining to actions taken
pursuant to a power of attorney.
This provision, like the others, has carefully drawn boundaries. The proceeding can only be
initiated by a “person to whom such [disclosure] duties are owing,” which would necessarily
exclude anyone barred by the power of attorney from receiving such disclosures. Even those
entitled to disclosures, moreover, must allege that the “purpose” of obtaining the agent’s
disclosures is to determine the “need or propriety” of litigation against the agent. See Code
§ 64.2-1614(B)(1).
3.
The underlying theme of all of these provisions is that courts should respect the personal
financial privacy of competent principals while at the same time providing opportunities for
others to initiate account-rendering litigation on behalf of incompetent or deceased principals.
The Prefatory Note of the Uniform Power of Attorney Act emphasizes this priority: “While the
Act contains safeguards for the protection of an incapacitated principal, the Act is primarily a set
of default rules that preserve a principal’s freedom to choose both the extent of an agent’s
authority and the principles to govern the agent’s conduct.” Unif. Power of Att’y Act prefatory
note (emphasis added).
In this case, the principal’s intentions were not understated. Rohrbaugh Sr.’s POA
declares: “[I]t is my intention that, except as specifically provided for herein, my agent shall
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never be required to make disclosure or inspection of my affairs, or their actions as my agent,
either under this instrument or otherwise, to any third party.” J.A. at 158 (emphasis in original).
“I specifically intend,” he repeated, “that my agent[s] shall never be required to make disclosure
of their actions or permit inspection of my affairs under this instrument, pursuant to section 11-
9.1, section 11-9.6 [now § 64.2-1612(I)], section 37.1-134.22 [now § 64.2-1614(B)] of the Code
of Virginia of 1950, as amended, or any other statute.” Id. at 158-59 (emphasis added). There
can be no doubt, therefore, that Rohrbaugh Sr. intended that his son should not be required by
any “third party” or “any . . . statute,” id., to make account-rendering disclosures to Phillips. It
logically follows that Phillips cannot employ the statutory accounting procedure in Code § 64.2-
1614(A) to force Rohrbaugh Jr. to make the very disclosures that his father — exercising his
rights later recodified in Code § 64.2-1612(H) & (I) — expressly forbade his son from being
forced to make.
Subsection A of Code § 64.2-1614, lifted from § 116(a) of the Uniform Power of
Attorney Act, provides a list of “persons who have standing” to seek an accounting if the
claimant has a right to one. See Unif. Power of Att’y Act § 116 cmt. But it was not meant to
grant a right to an accounting when other provisions of the same Act expressly forbid it. If it
were meant to do so, as Phillips’s contends, subsection A of Code § 64.2-1614 would render
subsection B(1) superfluous and negate a competent principal’s expressed intent to prevent his or
her private financial affairs from being disclosed at the mere request of a host of individuals
whose only basis for making the claim is that they have “standing” to do so.
We acknowledge Phillips’s concern for the need for such information to be disclosed
when there is a good reason to believe the principal is incapacitated and possibly being taken
advantage of. But the remedy for that scenario was crafted into subsection B(1) of Code § 64.2-
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1614, and that issue-specific remedy does not apply when a principal makes clear in the power of
attorney (as Rohrbaugh Sr. did in his) that he does not want this protection and says so at a time
when he was fully competent to make that decision.
The General Assembly made a similar point in subsection I of Code § 64.2-1612. When
a competent principal does not expressly reject such disclosures in his power of attorney and
later becomes incapacitated or dies, subsection I authorizes relatives and others listed in Code
§ 64.2-1614(A)(3) to (A)(9) to obtain a statutory accounting under subsection A of Code § 64.2-
1614. This provision does not support Phillips’s claim, however, because Rohrbaugh Sr.’s POA
rejects this remedy, and even if it had not done so, Phillips did not make her request within the
applicable one-year period. See Code § 64.2-1612(I).
In short, it would never be necessary to meet the requirements of Code § 64.2-1614(B)(1)
or Code § 64.2-1612(I) if subsection A provided wholly unrestricted access to an even better
judicial remedy. Equally anomalous, under Phillips’s interpretation, it would never matter that a
principal declared his intent to keep his financial affairs private — a prerogative protected by
Code §§ 64.2-1612(H), -1612(I), Code § 64.2-1614(B)(1), and Code § 64.2-1614(D). It would
be also inconsequential that, even when no such declaration was made, the individual seeking to
obtain the accounting disclosures failed to make her request within the prescribed time frame
required by Code § 64.2-1612(H). For these reasons, Code § 64.2-1614(A) cannot bear the
interpretive weight Phillips places upon it.8
8
Focusing our decision on the “best and narrowest grounds,” Logan v. Commonwealth,
299 Va. 741, 748 n.4 (2021) (citation omitted), we leave several issues undecided — including
Rohrbaugh Jr.’s argument that only claimants with a viable cause of action asserting a breach of
fiduciary duty or statutory violation may seek judicial review of an agent’s conduct under Code
§ 64.2-1614(A) and Phillips’s counterargument that Code § 64.2-1614(A) authorizes judicial
review even in the absence of an assertion of a freestanding cause of action. We are also aware
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III.
In sum, the circuit court did not err when it dismissed on demurrer Phillips’s equitable
and statutory accounting claims. The equitable accounting claims should have been asserted, if
at all, in the probate proceeding, and the statutory accounting claim was barred by Rohrbaugh
Sr.’s expressly declared intent to prohibit it in his POA.
Affirmed.
that in between those two competing views is the possibility that allegations of egregious
circumstances, even if technically insufficient to constitute a viable cause of action, could
warrant review under Code § 64.2-1614(A) regardless of what the power of attorney might
otherwise provide. In this case, however, we need not and thus do not resolve these hypothetical
questions.
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