May v. R.A. Yancey Lumber Corporation

PRESENT: All the Justices
SARAH YANCEY MAY
OPINION BY
v. Record No. 171708 	JUSTICE S. BERNARD GOODWYN
January 10, 2019
R.A. YANCEY LUMBER
CORPORATION
FROM THE CIRCUIT COURT OF ALBEMARLE COUNTY
Cheryl V. Higgins, Judge
In this appeal, we consider whether the circuit court erred when it sustained a special plea
in bar and entered judgment in favor of a corporation based on the circuit court’s interpretation
of Code § 13.1-724.
BACKGROUND
R.A. Yancey Lumber Corporation (Corporation) has been a Virginia corporation since
1959. The Corporation has two principal businesses: its mill business (Mill Business) and its
timber property (Timber Business).
Through the Mill Business, the Corporation owns and operates a saw mill and lumber
yard in Yancey Mills, Virginia, and “purchases loblolly and short leaf pine logs from third
parties, and saws the logs into lumber, dries it in dry kilns and planes it for a finished product.”
Through the Timber Business, the Corporation owns about 2,500 acres of land in Albemarle,
Nelson, Louisa, and Greene Counties, from which the Corporation periodically sells timber to
third parties. None of the Corporation’s employees or machinery are solely dedicated to the
Timber Business.
As of August 2017, the Mill Business had a total assessed fair market value of
$2,738,400, and assessed land use value of $3,694,500. The Mill Business is not profitable

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every year, and uses the Timber Business to secure its credit line to help support its operation
during those unprofitable years.
The Timber Business had a fair market value of $7,639,500 and land-use value of
$1,631,600 as of August 2017. In 2016, the Timber Business generated $286,535 in revenue,
which represents 1.5% of the Corporation’s $18,545,666 total revenue—the Timber Business’s
highest percentage of the Corporation’s total revenue since 2012.
Dick Yancey (Dick), Dan Yancey (Dan), and Sarah Yancey May (Sarah) are siblings and
the Corporation’s only directors (Board). The siblings, Dick and Dan’s spouses, and Sarah’s ex-
spouse are the Corporation’s only six shareholders. Each couple owns about one-third of the
Corporation’s shares, but Dick, Dan, and their spouses do not collectively own “more than two-
thirds” of the total shares. Sarah and her ex-husband Bill May (Bill) own a fraction more than
one-third of the total shares.
In 2015, Dick and Dan knew that Sarah did not want to sell the Mill Business, so they
discussed how to structure something so that they could sell the Mill Business without Sarah’s
approval. Dick and Dan decided to use Article X of the Corporation’s bylaws, which permits
amendment to the bylaws by majority vote of the Board or shareholders.
On November 11, 2015, the Board approved an amendment (Amendment 1) to Article
XII of the Corporation’s bylaws by a vote of two to one, with Sarah being the director in
opposition. Amendment 1 revised Article XII of the Corporation’s bylaws to state:
Notwithstanding anything herein or any non-mandatory provisions of the
[Virginia Stock Corporation Act] to the contrary, either the Mill Business or the
Timber Business alone, without the other or any other business activity, shall
constitute a significant continuing business activity in the event such business is
retained by the Corporation following the sale, lease, exchange or other
disposition of the Corporation’s other assets if the fair market value of the
retained business assets constitutes at least twenty-five percent (25%) of the fair
market value of all of the Corporation’s assets in the aggregate prior to such sale,

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lease, exchange or other disposition, excluding for all purposes hereunder cash
and cash equivalents. For purposes hereunder, the most recent assessed value for
local tax purposes of real property owned by the Corporation shall be considered
its fair market value, absent the existence of a fair market value determination by
a qualified real estate appraiser made within one year prior to the relevant
determination date, in which case the most recent of such determinations shall be
used to establish fair market value. This Article XII is intended to operate in lieu
of the definition of “significant continuing business activity” set forth in Section
13.1-724(A) of the Code of Virginia (which statutory definition is provided for
use in the absence of a defined term in the applicable articles of incorporation or
bylaws).
On December 16, 2015, the shareholders approved Amendment 1 by majority vote, with Bill and
Sarah as the only shareholders in opposition.
By letter dated January 29, 2016, Sarah informed the Corporation that she was “opposed
to the amendment to Article XII” because it represented “a misconstruction of Virginia Code
§ 13.1-724 and an obvious attempt to circumvent the protection afforded to minority
shareholders” by that statute.
At a January 29, 2016 Board meeting, Dick’s attorney “raised concerns about the
phrasing of the third sentence of Article XII . . . due to the phraseology used on county real estate
tax bills,” and proposed another amendment to Article XII to resolve that issue (Amendment 2).
Amendment 2 only changed “the third sentence of Article XII” as noted here:
For purposes hereunder, the most recent assessed value gross land and
improvement values determined by local tax authority for local tax purposes
taxation of real property owned by the Corporation, irrespective of any land use
deferral, shall be considered its such real estate’s fair market value, absent the
existence of a fair market value determination by a qualified real estate appraiser
made within one year prior to the relevant determination date, in which case the
most recent of such determinations shall be used to establish fair market value.
The Board, with the exception of Sarah, approved Amendment 2. On March 25, 2016, all of the
shareholders except Sarah, who abstained, voted to approve Amendment 2.

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On May 3, 2017, the Corporation—pursuant to the direction of a majority of the Board—
executed a letter of intent (LOI) to sell the assets of the Mill Business to a third party buyer for
$10 million (Proposed Sale). Sarah called the buyer and told it that she objected to the sale. The
buyer then asked for a $250,000 break-up fee if the Proposed Sale did not close. “Over [Sarah’s]
objection, the LOI was amended [by the Board] on June 21, 2017 to include a ‘breakup fee’ of
up to $250,000.”
On July 18, 2017, Sarah, through counsel, notified the Corporation of her objections to
the LOI and Proposed Sale, warning that she would “challenge legally if necessary.” On August
7, 2017, Sarah, through counsel, notified the Corporation of her intent to bring a legal action to
enjoin the Proposed Sale.
On August 11, 2017, Sarah filed a complaint in the Circuit Court of Albemarle County
seeking a declaratory judgment that Amendments 1 and 2, the approval of the Proposed Sale, and
the execution and amendment of the LOI “are null and void.” She asserted that these actions
violate Code § 13.1-724, which requires more than two-thirds shareholder approval for a
disposition of corporate assets that leaves a corporation without a significant continuing
business. She also sought a “preliminary injunction” to “preserve the status quo” pending the
outcome of the action, and a permanent injunction enjoining the Proposed Sale. On the same day
as the complaint’s filing, Sarah filed an emergency motion for temporary injunctive relief “to
stop the [Proposed Sale] until the [circuit court] can address the merits of the Complaint.”
After Sarah filed the complaint, the Board approved the Proposed Sale on August 24,
2017 by majority vote, with Sarah objecting. The shareholders subsequently considered the
Proposed Sale. On September 11, 2017, Dick and Dan and their spouses voted to approve the
Proposed Sale, while Sarah and Bill voted against it.

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The Corporation responded to Sarah’s circuit court complaint by filing an answer,
demurrer, and special plea in bar on September 5, 2017. In the Corporation’s plea in bar, it
argued that Sarah’s case should be dismissed because the Proposed Sale left the Corporation with
the Timber Business, which is a “significant continuing business activity” under Code § 13.1-
724 because of the terms of the Corporation’s amended bylaws, so Sarah’s “consent is not
required” for the sale of the Mill Business. It also argued that Sarah’s “claims are barred by the
doctrines of laches and unclean hands.”
The circuit court held a hearing on the plea in bar and emergency motion on September
15, 2017. At the hearing, Sarah testified that income from the Timber Business was not
consistent and “hasn’t been significant.” She also claimed that Amendment 1 was a “blatant
attempt” by Dick and Dan to eliminate the two-thirds shareholder approval required by Code
§ 13.1-724 regarding the disposition of the Mill Business. She further stated that Amendment 2
was presented as a clarification of the “assessed value versus the land use value,” and not as a
ratification of Amendment 1.
Sarah additionally testified that she did not file the lawsuit earlier because she “thought
[she] had the two-thirds vote” requirement in her favor and that the buyer’s $250,000 break-up
fee would “scare away Dick and Dan.” She said she would suffer irreparable harm from the
Proposed Sale because “the business has been part of [her] family” and “the price is not fair.”
Bill testified that he always opposed the Proposed Sale, and that he expressed this
opposition to the Proposed Sale to Dick and Dan. Bill also stated that he understood
Amendment 1 as a step towards selling the Mill Business. He testified that he asked the
Corporation’s counsel whether Amendment 2 was just a “housekeeping amendment.” Counsel

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responded affirmatively, and Bill believed that he was just voting for “how to value the land”
when he voted for Amendment 2.
Dan testified that he believed the value of the Mill and Timber Businesses were
equivalent, and always considered the Timber Business a significant part of the Corporation.
Dan admitted, however, that the Timber Business only represented 1.5% of the Corporation’s
revenues in 2016, and that 1.5% is “not that significant.”
The circuit court explained its ruling to the parties at a hearing on September 21, 2017.
In interpreting Code § 13.1-724, the circuit court acknowledged that the second sentence of Code
§ 13.1-724 contains a safe harbor provision that provides a threshold definition of a “significant
continuing business activity,” but concluded that it also allows a corporation’s “bylaws or
articles of incorporation [to] define that [threshold] provision differently.” Noting that the statute
does not require “more than two-thirds” vote to amend a bylaw, the circuit court concluded that
the amended bylaw was valid and, according to Article XII’s definition, the Timber Business,
which would remain after the Proposed Sale, was a “significant continuing business activity.”
Thus, “the sale of the [Mill Business] does not require additional shareholder approval.”
The circuit court also stated:
I understand that there is an argument tha[t] if the [c]ourt follows the
interpretation that I am following, the corporations will create their own safe
harbor provisions and gut the statute. To a certain extent the [c]ourt’s
interpretation does open the door for unscrupulous businesspeople to take
potential advantage. However, the [c]ourt would note that the law has stated that
corporate officers and directors have a fiduciary duty in dealing with shareholders
which require exercising good faith in such dealings.
On the laches argument, the court also found in favor of the Corporation. Although
Sarah filed her injunction one month before the shareholder vote on the Proposed Sale, the court
found that Sarah knew of Dick and Dan’s intentions behind the bylaw amendment as early as

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December 2015, but took no action. The circuit court understood that Sarah “may not have
wanted to incur legal fees if the sale was not going forward, but even if that is her analysis, the
[c]ourt finds that her willingness to wait, when the [c]ourt is looking at a preliminary injunction,
weighs in favor of [the Corporation].”
The circuit court found that enjoining the Proposed Sale would result in prejudice to the
Corporation because it began soliciting offers in July 2015 and that “it is not a simple process to
find a buyer for a sawmill.” The court denied “the preliminary injunction, finding the equities
way [sic] on the merits of the case and on the doctrine of laches in favor of [the Corporation].”
On September 27, 2017, the circuit court entered an order denying Sarah’s emergency
motion for an injunction, denying the demurrer, granting the plea in bar, and entering judgment
in favor of the Corporation.
Sarah appeals. This Court has granted four assignments of error:
1. 	The trial court erred in granting the Company’s Special Plea in Bar and
entering judgment against Sarah on the ground that the Proposed Transaction
was not approved by the affirmative vote of more than two-thirds of the
Company’s shares as required by Va. Code § 13.1-724, nor does it satisfy the
criteria of the safe harbor set forth in Va. Code § 13.1-724(A).
2. 	The trial court erred in granting the Company’s Special Plea in Bar and
entering judgment against Sarah on the ground that a mere majority of the
Company’s shareholders may not amend or redefine the statutory safe harbor
of Va. Code §13.1-724, nor create its own safe harbor, through the
amendment of the Company’s bylaws.
3. 	The trial court erred in granting the Company’s Special Plea in Bar and
entering judgment against Sarah on the ground that the general fiduciary duty
owed by corporate directors and officers as recognized in Virginia caselaw,
does not justify and is not a substitute for the protection to minority
shareholders afforded by Va. Code §13.1-724.
4. 	The trial court erred in denying Sarah’s Motion for Emergency Injunctive
Relief on the ground that it is based on its misinterpretation of Va. Code
§ 13.1-724 and the erroneous finding of laches which is not supported by the
evidence.

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ANALYSIS
Sarah argues that the circuit court erred in entering judgment against her because Code
§ 13.1-724(A) requires approval by the shareholders if a disposition would leave the Corporation
without a significant continuing business activity, and Code § 13.1-724(E) requires that such
dispositions must be authorized by “an affirmative vote of more than two-thirds of the
corporation’s shareholders.” She contends that the circuit court erred in determining that Code
§ 13.1-724 allows a majority of shareholders to obviate the need for shareholder approval of a
disposition, as required by Code § 13.1-724(E), by redefining the safe harbor threshold stated in
Code § 13.1-724(A) by a majority vote on a corporate bylaw amendment. Sarah asserts that the
circuit court’s interpretation of Code § 13.1-724 leads to a result contrary to the intent to protect
minority shareholders expressed in the plain language of the statute. She also argues that the
circuit court erred in denying her request for a temporary injunction because the circuit court
based its denial on its misinterpretation of Code § 13.1-724 and upon laches which is not
applicable in this instance.
The Corporation argues that the phrase, “unless the articles of incorporation or a
shareholder-approved bylaw otherwise provide” in the safe harbor provision of Code § 13.1-
724(A), offers corporations a mechanism to use to redefine “significant continuing business
activity.” The Corporation also asserts that “shareholder-approved,” as stated in the phrase,
refers to a majority of shareholders—otherwise the General Assembly would have explicitly
provided a “more than two-thirds” threshold. It further asserts that this interpretation is
consistent with Virginia’s approach to flexible corporate governance. The Corporation also
contends, alternatively, that it achieved the “more than two-thirds” of the votes required for

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Amendment 1 because Bill’s vote for Amendment 2 constituted approval of Amendment 1,
which defined “significant continuing business activity.”
The Corporation also argues that the circuit court did not abuse its discretion in denying
the injunction based upon the court’s interpretation of Code § 13.1-724 and the application of
laches because Sarah lacked diligence in bringing her claim by waiting 20 months before filing
the complaint on the “eve” of the Proposed Sale. It asserts that Sarah’s intent was to scare away
the buyer, which prejudiced the Corporation, and thus the equities did not favor her.
Statutory Interpretation of Code § 13.1-724
“[A]n issue of statutory interpretation is a pure question of law” which this Court reviews
de novo. Conyers v. Martial Arts World of Richmond, Inc., 273 Va. 96, 104 (2007).
“When the language of a statute is unambiguous, we are bound by the plain meaning of
that language. And if the language of the statute is subject to more than one interpretation, [this
Court] must apply the interpretation that will carry out the legislative intent behind the statute.”
Cuccinelli v. Rector & Visitors of the Univ. of Va., 283 Va. 420, 425 (2012) (citations and
internal quotation marks omitted).
To ascertain its plain meaning, this Court evaluates a statute in its entirety “to place its
terms in context” in order to “interpret the several parts of a statute as a consistent and
harmonious whole so as to effectuate the legislative goal.” Id. (citations and internal quotation
marks omitted); see also Chesapeake & Ohio R.R. v. Hewin, 152 Va. 649, 653-54 (1929) (“It is
one of the fundamental rules of construction of statutes that the intention of the legislature is to
be gathered from a view of the whole and every part of the statute taken and compared together,
giving to every word and every part of the statute, if possible, its due effect and meaning.”
(citation and internal quotation marks omitted)). This Court “presume[s] that every part of a

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statute has some effect, and [] will not consider any portion meaningless unless absolutely
necessary.” Logan v. City Council, 275 Va. 483, 493 (2008).
Article 13 of the Virginia Stock Corporation Act (Act) regulates the sale and disposition
of corporate assets, and divides those dispositions into two groups: (1) those that do not require
shareholder approval, and (2) those that require a specific threshold of shareholder approval. See
Code §§ 13.1-723; -724.
Dispositions conducted “in the usual and regular course of business” do not require
shareholder approval, “[u]nless the articles of incorporation otherwise provide.” Code § 13.1-
723.
By contrast, under Code § 13.1-724, certain dispositions do require shareholder approval:
A. A sale, lease, exchange or other disposition of the corporation’s assets,
other than a disposition described in § 13.1-723, requires approval of the
corporation’s shareholders if the disposition would leave the corporation without
a significant continuing business activity. Unless the articles of incorporation or a
shareholder-approved bylaw otherwise provide, if a corporation retains a business
activity that represented at least 20 percent of total assets at the end of the most
recently completed fiscal year, and 20 percent of either (i) income from continuing
operations before taxes or (ii) revenues from continuing operations for that fiscal
year, in each case of the corporation and any of its subsidiaries that are
consolidated for purposes of federal income taxes, the corporation will
conclusively be deemed to have retained a significant continuing business activity.
. . . .
E. Unless the board of directors, acting pursuant to subsection C, requires
a greater vote, the disposition to be authorized shall be approved by the holders of
more than two-thirds of all the votes entitled to be cast on the disposition. The
articles of incorporation may provide for a greater or lesser vote than that provided
for in this subsection or a vote by separate voting groups so long as the vote
provided for is not less than a majority of all the votes cast on the disposition by
each voting group entitled to vote on the disposition at a meeting at which a
quorum of the voting group exists.
(Emphases added.)

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Here, under the plain meaning of Code §§ 13.1-724(A) and (E), dispositions that leave a
corporation without a “significant continuing business activity” require “more than two-thirds”
shareholder approval. The first sentence of subsection (A) requires shareholder approval for
such dispositions, and subsection (E) specifies that such approval “by the holders” requires
“more than two-thirds of all the votes” entitled to be cast. Accordingly, the supermajority voting
threshold of subsection (E) applies to any disposition that leaves a corporation without a
“significant continuing business activity.” The apparent purpose of the statute is to protect
minority shareholders.
Code § 13.1-724 does not define “significant continuing business activity.” It does,
however, provide a safe harbor threshold definition of “significant continuing business activity.”
The safe harbor provision states that if a corporation retains a business activity that represented
at least 20% of total assets at the end of the most recently completed fiscal year and 20% of
income or revenue from continuing operations for that fiscal year, the corporation will
conclusively be deemed to have “retained a significant continuing business activity.” In such an
instance, the disposition does not require a “more than two-thirds” shareholder vote.
The safe harbor provision also provides for an exception to the statutory threshold by use
of the language, “unless the articles of incorporation or a shareholder-approved bylaw otherwise
provide.” Thus, the statute allows a corporation to opt out of the statutory safe harbor threshold.
The plain language of the statute does not support the Corporation’s claim that the
exception in the safe harbor provision permits a corporation to adopt a bylaw that redefines the
meaning of “significant continuing business activity” to be anything that the majority designates
it to be. The safe harbor provision simply states a default threshold, and the plain language of
the statutory exception to the application of that threshold only allows a corporation to accept or

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reject that threshold. There is no statutory language that states or implies that an alternative
threshold stated in an article of incorporation or a bylaw should be deemed sufficient to satisfy
the “significant continuing business activity” requirement as a matter of law. Stated differently,
the language in the safe harbor provision providing for an exception to the statutory threshold
does not give a corporation the authority to amend or create a new threshold that will be deemed
sufficient as a matter of law to constitute a “significant continuing business activity.”
The statute’s context supports this plain meaning interpretation. Allowing a simple
majority of a corporation’s shareholders to redefine “significant continuing business activity”
would render Code §§ 13.1-724(A) and (E) meaningless. Such an interpretation would allow a
majority of shareholders to approve any disposition without the “more than two-thirds”
shareholder approval required by statute by changing its bylaws with a simple majority vote of
its shareholders. If a majority of shareholders could approve of any disposition it desired by
merely changing its bylaws to create any whimsical definition of what constitutes a “significant
continuing business activity,” subsections (A) and (E) would be rendered unnecessary.
Additionally, Code § 13.1-724(E) explicitly permits a corporation to create a lower
voting threshold, but only by amending the articles of incorporation. It is noteworthy that
subject to some exceptions, the Act only allows a corporation to amend its articles of
incorporation by a vote of “more than two-thirds” of the shareholders. See Code § 13.1-707(D).
Thus, if shareholders want to downgrade a supermajority voting threshold to a simple majority,
they must amend the articles of incorporation by that same supermajority. The circuit court erred
in its interpretation of Code § 13.1-724.
The Corporation’s alternative argument that it had “more than two-thirds” of shareholder
votes because Bill ratified Amendment 1 with his vote for Amendment 2, is unavailing. First,

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Code § 13.1-724 requires “more than two-thirds” vote for a disposition or sale that leaves a
corporation without a “significant continuing business activity.” Thus, whether the Corporation
received “more than two-thirds” vote for Amendments 1 or 2 is irrelevant because such a voting
threshold only applies to the Proposed Sale, which Bill did not vote for. Second, voting to
amend one sentence in a bylaw does not ratify the entire bylaw; it only ratifies the change to that
bylaw voted upon. Bill did not approve of Amendment 1, and Amendment 2 altered only “the
third sentence of Article XII,” which does not mention “significant continuing business activity.”
Amendment 1 stated a safe harbor threshold different from that approved by the General
Assembly, which is evidence of the Corporation’s intent to opt out of the statutory threshold
stated in Code § 13.1-724(A). Even if the Corporation satisfied its arbitrary threshold created by
Amendment 1, satisfaction of that threshold would not necessarily be sufficient to satisfy, as a
matter of law, the “significant continuing business activity” requirement in Code § 13.1-
724(A). The circuit court needed to take evidence to determine whether the Proposed Sale
factually left the Corporation without a “significant continuing business activity.” It did not do
so. Thus, the circuit court erred in granting the special plea in bar and entering judgment in favor
of the Corporation.*
Temporary Injunction
In general, a court may not grant injunctive relief unless a party has shown that party
would suffer irreparable harm without the injunction, and that the party has no adequate remedy
at law. Wright v. Castles, 232 Va. 218, 224 (1986). Granting or denying a temporary injunction
is a discretionary act arising from a court’s equitable powers. Manchester Cotton Mills v. Town
* Given this conclusion, we need not reach the issue of whether fiduciary duties provide
substitute protection for minority shareholders.

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of Manchester, 66 Va. 825, 827 (1875). A temporary injunction allows a court to preserve the
status quo between the parties while litigation is ongoing. Iron City Sav. Bank v. Isaacsen, 158
Va. 609, 625 (1932). “No temporary injunction shall be awarded unless the court shall be
satisfied of the plaintiff’s equity.” Code § 8.01-628.
When evaluating a circuit court’s decision for abuse of discretion, this Court defers to the
circuit court’s ruling and does not reverse “merely because it would have come to a different
result.” Martin v. Lahti, 295 Va. 77, 88 (2018) (citation and internal quotation marks omitted).
The circuit court does not abuse its discretion if the court remains within its “range of choice”
and “is not influenced by any mistake of law.” Id. (citation and internal quotation marks
omitted). However, “[a] court abuses its discretion if . . . its action or its decision was based on
erroneous legal conclusions.” Oprisko v. Director of the Dep’t of Corr., 293 Va. 87, 99 (2017).
It appears from the record that the ruling of the circuit court denying the temporary injunction
was predicated upon its interpretation of Code § 13.1-724 and the application of laches.
Laches is a defense against equitable claims where the plaintiff fails “to assert a known
right or claim for an unexplained period of time under circumstances prejudicial to the adverse
party.” Stewart v. Lady, 251 Va. 106, 114 (1996) (citation and internal quotation marks
omitted). The party asserting laches carries the burden of proof. Id. Although laches is within
the circuit court’s discretion, this Court “will not approve such finding if the party asserting this
defense fails to prove prejudice.” Id.
In addition, this Court has previously stated:
It is a well recognized rule in equity that laches cannot be applied against those
who are ignorant of their rights. They must first know their rights. This defense
is only permitted to defeat an acknowledged right on the ground that laches
affords evidence that the right has been abandoned.

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Meredith v. Goodwyn, 219 Va. 1025, 1028-29 (1979) (citation and internal quotation marks
omitted).
While a court must determine laches based on each case’s “particular circumstances,” it
is “well-established” that “in respect to the statute of limitations equity follows the law.”
Belcher v. Kirkwood, 238 Va. 430, 433 (1989) (citation and internal quotation marks omitted).
The statute of limitations for written contracts is five years. Code § 8.01-24; see also Kappa
Sigma Fraternity, Inc. v. Kappa Sigma Fraternity, 266 Va. 455, 467 (2003) (suggesting that a
declaratory judgment challenging corporate amendments is like a breach of written contract
claim).
Sarah knew as early as December 2015 that Dick and Dan wanted to sell the Mill
Business, and she informed the Corporation only one month later, on January 29, 2016, that
Amendment 1 was in violation of Code § 13.1-724. She also expressly warned the Corporation
in a letter dated July 18, 2017 that she would take necessary legal action if the Corporation
approved the sale. The Corporation approved the Proposed Sale after Sarah filed the complaint
in circuit court. Sarah thus never abandoned her claim given her continuous warnings to the
Corporation about the purportedly unlawful Proposed Sale. The Corporation was put on notice
as early as January 2016 regarding Sarah’s opposition to selling the Mill Business, and it could
have sought a declaratory judgment concerning its rights, just as easily as Sarah, before it had
significantly sought or acquired a buyer.
Although the circuit court properly considered the timing of the filing of the request for a
temporary injunction in weighing the equity of granting the injunction, it abused its discretion
when it found that laches barred Sarah’s request for a temporary injunction. Also, as explained
above, the circuit court misinterpreted Code § 13.1-724. To the extent the circuit court based its

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ruling regarding the temporary injunction upon laches and its misinterpretation of Code § 13.1-
724, it erred in doing so.
C ONCLUSION
Because the circuit court erred in its interpretation of Code § 13.1-724 and in finding that
laches barred Sarah’s motion for a temporary injunction, it erred in granting the plea in bar,
denying the temporary injunction, and entering judgment in favor of the Corporation. The
judgment of the circuit court sustaining the special plea in bar and denying the temporary
injunction is reversed, and this case is remanded to the circuit court for further proceedings
consistent with this opinion.
Reversed and remanded.