Barnett v. Kite, 271 Va. 65

Summary

The Supreme Court of Virginia held that the business activities of a closely held corporation could not be attributed to its individual majority shareholder for purposes of establishing venue in an action against the shareholder personally, absent a finding that the corporation was his alter ego. Because the evidence did not show that Barnett personally regularly conducted business activities or affairs in the City of Richmond, the court reversed and remanded for a determination of proper venue and a new trial.

Holdings

1. A circuit court's decision overruling an objection to venue will not be disturbed absent an abuse of discretion, and the objecting defendant bears the burden of proving that the chosen venue is improper.
2. The phrase permitting venue where the defendant regularly conducts affairs or business activity refers to activity conducted by the defendant personally, not activity conducted by a corporation in which the defendant is a majority shareholder.
3. Activities of a corporation are not attributable to an individual shareholder for venue purposes merely because the shareholder owns a majority of the corporation's shares and actively supervises its business, absent a determination that the corporation is the shareholder's alter ego, alias, stooge, or dummy.
4. The record did not establish that Barnett personally conducted business activities or affairs on a regular basis in Richmond; therefore, Richmond was not a proper venue under former Code § 8.01-262(3).

Questions Presented

1. Whether Richmond was a proper venue under former Code § 8.01-262(3), which permitted venue where the defendant regularly conducted affairs or business activity.
2. Whether business activities conducted in Richmond by a closely held corporation could be attributed to its individual majority shareholder for purposes of establishing venue in an action against the shareholder personally.

Disposition

reversed_and_remanded