Virginia Does Not Recognize the “Good Faith Exception” for No Contest Clauses


August 2024

In the case of Butler v. Stegmaier, 77 Va. Ct. App. 115 (2023), the Virginia Court of Appeals declined to recognize a “good faith and probable cause” exception to “no contest clauses," also called “forfeiture clauses” and “in terrorem clauses."

Partner Will Sleeth litigated this significant case, which addressed a previously unresolved legal issue regarding whether Virginia recognized such an exception. The key case on the issue was the Virginia Supreme Court’s holding in Womble v. Gunter, 198 Va. 522 (1956). In that case, the Virginia Supreme Court discussed the rationales for and against a good faith and probable cause exception. Ultimately, it did not rule on the issue as it held that the issue had been waived because it was not preserved at the trial court. A few years prior, Sleeth litigated this issue before the Virginia Supreme Court in the case of Hunter v. Hunter, 298 Va. 414 (2020), when the court granted an assignment of error on that point. Still, the Virginia Supreme Court overruled the trial court on a different basis and, therefore, did not address that particular assignment of error at that time.

Interestingly, this particular issue had yet to be litigated to the extent of a formal ruling from the Virginia Supreme Court. Despite the prevalence of such cases in Virginia, as evidenced by the firm’s ongoing involvement in similar matters, it appears that the issue may not have been fully addressed due to a lack of focus from general litigators.

The ruling by the Court of Appeals discussed how the Virginia Supreme Court considered the issue in Womble and the rationales for and against the exception that the Supreme Court articulated in Womble. The Court of Appeals also recognized the fact that the exception is the majority rule in other states. The Court of Appeals then stated:

At present, there is no statutorily created good faith and probable cause exception to enforcement of no contest clauses in Virginia. Ultimately, it is the role of the General Assembly to evaluate and adopt or discard particular public policy changes as the elected representatives of Virginians directly accountable to the citizenry. Hence, we decline to adopt a good faith and probable cause exception based on policy considerations.

Butler, 77 Va. Ct. App. at 134.

This may not be the final chapter for the exception in Virginia. Litigants seeking to invoke the exception may try to argue in the future that the ruling by the Court of Appeals ignored an implicit holding in Womble that the decision of whether to recognize the exception is for the judiciary to make after weighing the policy rationales. In support of this view, litigants would argue that it would have made no sense for the Womble court to devote so much time to discussing the policy rationales for and against the exception if it did not presuppose that the decision was one that is properly for the judiciary to make. Under this theory, a future litigant could try to convince the Virginia Supreme Court to overrule the holding by the Court of Appeals in Butler as being inconsistent with Womble. The evolution of this issue will be of considerable interest to observe as it develops.

Please reach out to the author or a member of GRSM’s Estate & Trust Litigation practice group with questions or for more information on "good faith and probable cause" exceptions to "no contest clauses."

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