Last year, the Virginia General Assembly adopted a new law that went into effect on July 1, 2014. Virginia Code Section 8.01-221.2. provides as follows:
“In any civil action to rescind a deed, contract, or other instrument, the court may award to the plaintiff reasonable attorney fees and costs associated with bringing such action where the court finds, by clear and convincing evidence, that the deed, contract, or other instrument was obtained by fraud or undue influence on the part of the defendant.”
In other words, the court has the option (note the use of the word “may”, as opposed to the use of the word “shall”) to award a plaintiff reasonable attorney’s fees if the plaintiff can successfully establish the presence of undue influence by the defendant. This law is potentially very significant to the field of estate litigation, since many will and trust contests are brought on the basis of claims of undue influence. Does this new law cover those actions?
The first issue is whether the phrase “other instrument” could be construed to apply to a will or trust. The next issue is whether a will or trust contest could be construed to be an action for “rescission” of that instrument. Virginia law provides for two mechanisms to challenge the validity of a will (a complaint “to impeach” the will pursuant to Virginia Code Section 64.2-448(A); and an “appeal” of an order of the clerk admitting the will to probate, pursuant to Virginia Code Section 64.2-445). Neither mentions “rescission” of a will, although both provide for effectively the same end result as rescission: declaring an instrument to be of no force and effect.
As attorneys seek to invoke this new statute in will and trust contests as a basis to recover attorney’s fees, we can anticipate Virginia courts grappling with the applicability of this new law to such contests. Stay tuned.