Tuesday, February 12th, 2019
Gentry Locke for the Defense
Roanoke City General District Court
Our client, a national restaurant chain, was sued by a creditor seeking garnishment of an employee’s wages to satisfy the employee’s debt.
When a creditor receives a judgment against a person, the creditor will send a garnishment summons to the employer, resulting in the employer paying a portion of the employee’s wages to the court. In this case, the Restaurant did not have to pay any of the employee’s wages into the court because under the garnishment statute, the employee did not make enough money. The creditor then tried to include tips as part of the employee’s wages. Because the Restaurant cashed out its employee at the end of each shift, meaning she left with her tips, the tips did not pass through the hands of the employer and were not subject to garnishment.
Tuesday, October 23rd, 2018
Gentry Locke for the Plaintiff
Bedford County Circuit Court
On Mother’s Day in 2015, our client learned that her husband had been shot in the back of his head and killed. The shooter was taken into police custody and acknowledged that he had been drinking alcoholic beverages over the last 30 hours and had been burning brush in a barrel, having had little sleep. The shooter alleged that he saw his victim driving too fast and decided to confront the man.
The shooter acknowledged a heated confrontation, but he claimed he acted in self-defense and that the victim acted as an aggressor. Specifically, the shooter alleged the victim charged him with something in his hand. The shooter reacted by pulling out a gun to defend himself, which he said resulted in an accidental discharge.
Investigation revealed that the shooter’s story did not match up with the facts. The shooter unzipped a holster on the way to the victim’s house, told the victim he had a gun, pulled the gun out once to frighten or intimidate the victim, and cocked the hammer back before firing it. Cocking the hammer back was significant because it is consistent with aiming a shot, as opposed to accidentally discharging a firearm.
The victim left behind a wife and two adult children. He had one grandchild and another on the way.
After filing suit, Gentry Locke attorneys retained a firearm safety expert to explain how and why the shooter’s actions were inconsistent with self-defense and consistent with being the aggressor. Gentry Locke also produced safety literature establishing how the shooter acted irresponsibly in regards to his use of a firearm.
Shortly before trial, the case settled for $255,000. Attorney David Lawrence served as co-counsel on the matter.
Sunday, July 1st, 2018
Gentry Locke for the Defense
Supreme Court of Virginia
Gentry Locke attorney Monica Monday represented FCi Federal, Inc., the appellee, in an appeal involving a dispute between government contractors. On June 27, 2018, the Supreme Court of Virginia affirmed the circuit court’s decision to set aside a multi-million dollar jury verdict. This case provides guidance on breach of contract claims arising out of teaming agreements. Additionally, the Supreme Court also addressed a question of first impression, holding that lost profits for fraudulent inducement are not recoverable when they are based on the terms of an unenforceable agreement.
CGI Federal, Inc. entered into a teaming agreement to help FCi Federal, Inc. prepare a proposal for a government services contract with the United States Department of State. The teaming agreement provided that FCi would submit a proposal as the prime contractor, and include CGI as a subcontractor. It further provided that “subject to the final solicitation requirements, CGI will receive 45% workshare of the total contract value, but the work share commitment may not be exactly 45% each year.” If FCi was awarded a prime contract, the teaming agreement stated that the parties would negotiate in good faith for a subcontract for CGI. The agreement contemplated that the subcontract was subject to numerous conditions, including the inclusion in the prime contract of CGI’s statement of work and the parties’ agreement to the statement of work, financial terms, and reasonable subcontract provisions. If the parties could not agree to a subcontract within 90 days of the award of the prime contract, then under the terms of the teaming agreement, that agreement would expire. The teaming agreement included exclusions for lost profits for breach of contract, and acknowledged that the parties would bear their own costs, expenses, risks and liabilities arising out of performance of the teaming agreement.
FCi submitted a proposal to the State Department that gave CGI a 38% workshare. During an evaluation of the government’s response to the initial proposal, FCi later agreed to revise the teaming agreement to provide CGI with a 41% total contract value work share and ten management positions. The parties then executed an amendment to the teaming agreement to reflect these changes. The next day, FCi submitted a revised proposal to the State Department that allocated only a 35% workshare to CGI and reserved all management positions for FCi.
FCi was later awarded the prime contract, but there were several bid protests. To resolve the bid protests, FCi agreed to give part of CGI’s workshare to others. In its final revised proposal to the government, FCi gave CGI an 18% workshare.
FCi was awarded the prime contract valued at $145 million, and the parties began negotiations for a subcontract. As work on the contract was underway, the parties entered into a Letter Subcontract for CGI’s work until their subcontract negotiations could be finalized. CGI was paid over $2 million for work it performed under the temporary agreement. Due to a staffing dispute, FCi later terminated CGI, and the parties never entered into a subcontract.
CGI sued FCi for breach of contract, fraudulent inducement, and unjust enrichment. The jury returned a $12 million verdict for CGI on the first two claims. The circuit court set aside those verdicts, and later granted summary judgment on the unjust enrichment claim. The Supreme Court affirmed.
First, on the breach of contract claim, the Supreme Court held that teaming agreement did not create a promise for FCi to enter into a subcontract with CGI for a 41% workshare and 10 management positions. The teaming agreement was an unenforceable agreement to agree because the post-award provisions of the agreement did not create any enforceable obligation for FCi to extend work to CGI. Under the teaming agreement, the parties would have to negotiate in good faith the terms of a subcontract. The “statement of work” provision in the teaming agreement for a 41% workshare was expressly subject to and dependent on the parties’ successful negotiation of a final subcontract, which never occurred.
Second, on the fraudulent inducement claim, the Court found that CGI could not recover any lost profits based upon its promise that CGI would get a 41% workshare and 10 management positions. This promise did not create an enforceable obligation for FCi to extend a subcontract to CGI with these terms. Instead, all CGI had was a promise to negotiate for a future subcontract. In a matter of first impression, the Court held that “lost profits are not recoverable for a fraudulent inducement claim when they are based on the provisions of an unenforceable contract.”
Third, there was no error in awarding FCi judgment on the unjust enrichment claim, which sought to recover expenses CGI incurred in helping FCi win the prime contract and to disgorge FCi of its profits. Unjust enrichment is an implied contract action based on the principle that one person may not enrich himself unjustly at the expense of another. The existence of an express contract covering the same subject matter of the parties’ dispute precludes a quasi-contract claim for unjust enrichment. Here, the teaming agreement governed the parties’ relationship, and required them to bear their own costs of performance. Thus, it was an express contract covering the subject matter of the parties’ dispute. And, although the post-award provisions of that contract were not enforceable, when CGI elected to sue for tort and contact damages, it affirmed the teaming agreement and bound itself to its provisions.
This decision underscores the importance of carefully drafting agreements, and the challenges of pursuing a fraud claim. The teaming agreement here failed because it did not contain an enforceable promise. Instead, it was merely an agreement to agree in the future. Thus, all that CGI had was a promise to negotiate in good faith for a future subcontract. CGI Federal, Inc. v. FCi Federal, Inc., 814 S.E.2d 183 (2018)
Friday, June 29th, 2018
Gentry Locke for the Defendant
City of Winchester Circuit Court
The City of Winchester circuit court has reduced a $125,000 jury verdict to $50,000 due to a defect in the plaintiff’s Complaint. The Complaint contained an ad damnum seeking the amount of damages sought. It specifically sought “not less than $50,000” in compensatory damages, “plus punitive damages.” The jury returned a verdict in favor of the plaintiff for $50,000 in compensatory damages and $75,000 in punitive damages.
The defendant retained Gentry Locke after the jury verdict to handle post-trial motions. The defense moved the court to set aside the entire verdict or to reduce the verdict to conform to the only amount sought in the Complaint – $50,000. The defense argued that, under Virginia law, the ad damnum was defective because it did not put a ceiling on the maximum recovery for compensatory damages, and did not plead any amount for punitive damages.
Under Rule 3:2(c)(ii), a claim for damages in a complaint filed in a Virginia Circuit Court must specify an amount sought. That rule provides that “[e]very complaint requesting an award of money damages shall contain an ad damnum clause stating the amount of damages sought.” This rule applies to claims for compensatory and punitive damages. See Town & Country Properties v. Riggins, 249 Va. 387, 399-400 (1995) (the trial court erred in refusing to reduce the punitive damage award to conform to the ad damnum). Further, it is black letter law that a plaintiff may not recover more than he demands in his Complaint. Lee v. Spoden, 290 Va. 235, 253 (2015) (“plaintiff ought to know what are the damages he has sustained, and if he [claims] none, he cannot say that he has sustained any”).
The circuit court agreed with our defense. It ruled that the plaintiff could not recover more than it sued for, which was a total of $50,000 in damages. Therefore, the court reduced the jury verdict to $50,000 to conform the verdict to the Complaint, and entered judgment in this amount. The plaintiff did not appeal.
Tuesday, June 19th, 2018
Gentry Locke for the Plaintiffs
Henry County Circuit Court
Our clients, a married couple, lost their home in a house fire. They entered into a written real estate contract to purchase another home. They would pay cash using their homeowners insurance payment from the fire loss. The parties signed the contract, set a closing date, and completed the home inspection. The sellers performed a septic cleaning and inspection and had a termite inspection done. The sellers then purported to terminate the contract. They cited a provision in the contract requiring the buyers to show proof of funds to close. They buyers had submitted a USAA bank statement showing they had sufficient cash to close. However, because the buyers first submitted the bank statement during contract negotiations, they had redacted some of the figures to avoid revealing how much they might ultimately offer to pay. The sellers never requested any additional documents beyond the redacted bank statement. Gentry Locke attorneys filed suit for specific performance of the contract and for reasonable attorneys fees (the contract had a fee-shifting clause) and court costs. After initial discovery and with our summary judgment motion pending, the sellers agreed to settle the case by performing the contract, selling the home to our clients at the contract price, and paying our clients 100% of their attorneys’ fees and court costs incurred, plus the costs of their having stored their remaining furniture and possessions for nine months.
Wednesday, April 4th, 2018
Gentry Locke for the Defendant
Campbell County Circuit Court
Gentry Locke attorneys Kevin Holt, Amanda Morgan and Glenn Pulley represented a crane, rigging and erection service company in a breach of contract and quantum meruit case.
The plaintiff, a former company vice president, alleged that our client breached a 1994 Split Dollar Life Insurance Agreement that involved $500,000 in life insurance coverage, plus the payment of monthly post-retirement benefits for 15 years based on the policy’s cash value. The written agreement was terminated pursuant to its terms in 2012, but then was allegedly reinstated in 2013 in a conversation between the company’s founder and board chairman and the plaintiff in which the chairman verbally promised to “make it right.” The company then bought a term policy of an equal coverage amount and paid the plaintiff monthly payments toward the amount of loans the company had taken against the original split dollar policy (as it was permitted to do). Three years later, the company terminated the plaintiff’s monthly payments after it discovered that the now-retired former executive was consulting for a competitor.
At the outset, the Gentry Locke team won a Motion Craving Oyer and Demurrer as to the alleged breach of the 1994 written agreement. The Court permitted discovery on a Plea in Bar of the Statute of Frauds they also filed, but then after discovery and a half-day evidentiary hearing denied the Plea in Bar, ruling that any verbal agreement, assuming there was one that was enforceable, could be performed in a year or less because the plaintiff could have died within that time, causing any agreement to be fully performed.
Having deposed the plaintiff, Gentry Locke attorneys called him as the first witness at the Plea in Bar hearing and got him to make critical admissions that established: (1) the alleged verbal agreement between himself and a former company officer, who had promised him more in 1994 than what was provided for in the written agreement, was barred by the written agreement’s integration clause; and (2) there was never any meeting of the minds between the parties that formed an enforceable verbal agreement in 2013 in the “make it right” conversation or, if there was, it violated the written agreement’s written amendment clause. Following the denied Plea in Bar, Gentry Locke attorneys filed a motion for summary judgment based on the plaintiff’s testimony at the Plea in Bar hearing.
The Court granted the summary judgment motion on both grounds and ruled, as the Supreme Court has, that Rule 3:20 does not bar the use of a plaintiff’s earlier sworn testimony from a plea hearing in support of a motion for summary judgment.
Read the Judge’s opinion letter (PDF)
Friday, March 2nd, 2018
Gentry Locke for the Defendant
United States District Court, Eastern District of Virginia
We represented a large national bank in a long-term disability (LTD) claim arising under the Employee Retirement Income Security Act (ERISA). The plaintiff was a bank employee until she ended her employment due to physical disabilities. She was paid LTD benefits until the results of an independent medical examination revealed that her current symptoms no longer supported a finding of total disability. Accordingly, her LTD benefits were terminated.
The plaintiff brought a claim for breach of fiduciary duty under ERISA against the bank in addition to a more traditional claim for allegedly improperly denied LTD benefits.
Gentry Locke attorneys asserted that in Count II of the complaint, the former employee was improperly characterizing a denial of benefits as a breach of fiduciary duty. In requesting identical relief from two different sections of the ERISA statute, she was in attempting to “repackage” a denial of benefits claim into an ERISA breach of fiduciary duty claim against our client. The Court agreed and granted our motion to dismiss the breach of fiduciary duty claim (Count II), holding that the plaintiff’s exclusive remedy, if any, was a claim for allegedly improperly denied LTD benefits (Count I). Read the Court’s Opinion (PDF)
Thursday, February 22nd, 2018
Gentry Locke for the Plaintiff
Roanoke City Circuit Court
There are two important rules in the practice of radiology: (1) a radiologist must communicate all pertinent anatomy and diagnoses on imaging studies; and (2) a radiologist must clearly and effectively communicate, leaving no room for misunderstandings by clinicians. If a radiologist does not do both of these things, patients will suffer misdiagnoses that will cause serious injury and/or death.
On August 16, 2016 our client presented to the LewisGale Medical Center Emergency Department with abdominal pain, nausea and vomiting after having undergone a colonoscopy the day before. Our client’s clinicians were worried that he may have a perforation of his bowel or appendicitis, among other things. A CT scan of the abdomen was performed. The CT scan was interpreted by a radiologist of the defendant (Radiology Associates of Roanoke, P.C.), who had only been practicing for two weeks since completion of his training. The radiologist interpreted the CT scan as showing no surgical emergency, although he was concerned that our client could have appendicitis. However, the radiologist never informed the clinicians of his concern of appendicitis, and he never mentioned our client’s appendix in his report. In the medical arena, not mentioning a piece of anatomy means that the anatomy is normal. As a result, our client’s clinicians ruled out any surgical emergency, such as appendicitis, and discharged him home.
Two days later, on August 18, 2016, our client returned to the LewisGale Medical Center Emergency Department in a greatly deteriorated condition. Another CT scan was performed and correctly interpreted by a different radiologist as showing a ruptured appendicitis. Our client’s ruptured appendicitis caused a severe infection known as sepsis (as a result of fecal material coming out of his ruptured appendix into his abdominal cavity), which resulted in him going into ventilator dependent respiratory failure, and suffering brain strokes, clots in his legs and lungs, damage to his kidneys, and permanent communication problems.
On that same day our client returned to the hospital with a ruptured appendicitis, the radiologist’s senior radiology partner confronted the radiologist about his interpretation of the August 16 CT scan. The senior radiology partner informed the radiologist that he had missed our client’s appendicitis on the August 16 CT scan and did not communicate the appendicitis to the clinicians, thereby causing a misdiagnosis.
Expert radiologists from the Commonwealth of Virginia and the University of Maryland concluded that the radiologist had misinterpreted and miscommunicated the results of the August 16, 2016 CT scan, thereby causing a two-day delay during which our client’s appendix ruptured, causing fecal material to fill his abdominal cavity. Additional expert witnesses in the specialties of general surgeon, surgical oncology, family medicine, emergency room medicine, and neurology from the Roanoke Valley, George Washington University, and Harvard University concluded that our client’s ruptured appendicitis caused his brain strokes, clots in his legs and lungs, damage to his kidneys, and permanent communication problems. If the radiologist had correctly interpreted and communicated the results of the August 16, 2016 CT scan, our client’s appendicitis would have been successfully treated before it ruptured, thereby avoiding his severe and permanent injuries.
After hearing evidence for five days from our client and the defendant and being instructed as to the law of the Commonwealth of Virginia by the Judge, a Roanoke City jury comprised of seven individuals unanimously found that the radiologist had committed malpractice, and that his malpractice caused our client’s severe and permanent injuries. The jury rendered a verdict for our client totaling $1.5 million for his past, present and future physical pain, mental suffering, humiliation, embarrassment, inconvenience, and medical expenses. The jury verdict not only compensated our client for his past, present and future harms and losses, but the verdict will also serve as a deterrent so that other patients and their families in our community will not be victims of malpractice.
Anthony “Tony” Russell and Charlie Calton of Gentry Locke were honored to have represented our client and our community in this matter.
Read the article published by The Roanoke Times here.
Saturday, February 17th, 2018
Gentry Locke for the Plaintiff
Warren County Circuit Court
In May of 2016, our client traveled northbound on Interstate 81 in Warren County, Virginia. When our client approached an interstate crossover, a work truck for an asphalt and paving company illegally used the crossover to go from I-81 South to I-81 North. This resulted in a substantial crash which caused our client’s vehicle to catch fire. The driver of the work truck was charged with reckless driving and illegal use of a crossover, and was ultimately found guilty of both charges.
Our client suffered a broken leg which required surgery, extensive physical therapy, and some orthopaedic care thereafter. Despite her injuries, our client was able to return to work as a veterinarian and her treating physicians did not anticipate the need for any future care.
The case resolved for $350,000.00 shortly after filing suit.
Wednesday, February 7th, 2018
Gentry Locke for the Defendant
United States District Court, Western District of Virginia
After being informed that our client intended to file a trade secret misappropriation case in Ohio on behalf of its business, the opposing company filed a declaratory judgment action in Franklin County Circuit Court seeking a ruling that it had not misappropriated any of our client’s trade secrets. Gentry Locke attorneys Kevin Holt and Alicha Grubb then removed the Virginia case to Federal Court and moved to have it dismissed. The Virginia Federal Court granted the motion, finding that the opposing company had improperly filed the declaratory judgment action first in “an improper attempt at forum shopping.” The Court declined to exercise jurisdiction and held that the substantive trade secret case in Ohio should proceed, even though our client’s case had not been filed first.
Read the Judge’s Opinion PDF Read the Court’s Order in PDF
