An accounting is, in essence, a remedy. Historically, accountings were equitable in nature. Today, the Code of Virginia prescribes various statutory modes of accounting. Virginia Code Section 8.01-31 affords a statutory right to an accounting “against any fiduciary,” for example. The Supreme Court of Virginia recently considered the extent of the relief provided by an accounting.
In a dispute arising from the dissolution of a partnership, the Supreme Court held the trial judge had not performed the two historical functions of an equitable accounting: (1) a determination of who owes what and (2) “settling” the account, that is, payment by the debtor of the money found to be owed. The Court’s decision comports well with the notion that the remedy of an accounting should not merely end as an academic exercise in ascertaining numbers, but that it also should provide for payment of the sums determined to be owed. In scrutinizing the Court’s opinion, however, scant case law authority mandates this particular result—and a sound argument could be made that the trial judge, having had to adjudicate the case in the absence of such affirmative Virginia precedent, adhered to principles of judicial conservatism in refraining from going any further than he did.
Indeed, in its analysis of Virginia Code Section 50-73.123, arising in the context of a partnership accounting, the Court conceded that the statute did “not explicitly direct the circuit court to perform the historical accounting as incident to a judicial dissolution….” But the Court held that the process of an accounting and its settlement required the trial judge to do so as part of winding up the partnership’s business incident to a judicial dissolution. In support of these principles, absent citations to binding Virginia precedent, the Court relied upon three treatises—Costello’s Virginia Remedies, Bryson on Civil Procedure, and Pomeroy’s Equity Jurisprudence. The case is Comtois v. Rogers (Va. 2011).
Comments