The Lawletter Vol. 43 No. 2

Emily Abel, Senior Attorney, National Legal Research Group

     The Virginia Supreme Court recently reiterated its position that in Virginia, the source-of-duty rule prohibits suing in tort when the only basis for the duty breached lies in contract. In MCR Federal, LLC v. JB&A, Inc., 294 Va. 446, 808 S.E.2d 186 (2017) decided on December 14, 2017, the seller of a government contracting business brought breach of contract and fraud claims against the buyer of their firm. As part of the parties' agreement, the buyer warranted that there were no adverse suits, investigations, or government actions against it at the time the parties signed the contract. The contract also required that the buyer deliver to the seller a "bring down certificate" reaffirming those warranties at closing.

     While the warranties were accurate at the time of contracting, they were no longer accurate at the time of closing. In the period between contracting and closing, the United States Air Force launched an investigation into the buyer for their actions pertaining to a contract unrelated to the contract between seller and buyer and suspending the buyer from government contracting. Because of this investigation, the business did not meet earnings thresholds set forth in the contract, which resulted in the seller not receiving additional payments. The seller sued the buyer, claiming the "bring down certificate" produced at closing was a breach of contract and fraud because it did not reveal the Air Force investigation. After a lengthy bench trial, the circuit court found in favor of the seller on both the fraud and breach of contract claims.

The Lawletter Vol 42 No 6

Emily Abel, Research Attorney, National Legal Research Group

            On March 17, 2017, in Heneberry v. Pharoan, 232 Md. App. 468, 158 A.3d 1087 (2017), the Maryland Court of Special Appeals addressed the issue of what is required to prevail on a breach-of-contract claim in a medical malpractice action. The plaintiff, Valerie Heneberry ("Heneberry") who was suffering from acute appendicitis, received an appendectomy from Dr. Bashar Pharoan ("Dr. Pharoan"). During the surgery, Dr. Pharoan removed most of Heneberry's appendix, but left the "stump" of the appendix. Heneberry alleged that because of Dr. Pharoan's failure to remove her entire appendix, she experienced severe pain and was forced to undergo an additional surgical procedure to remove the remainder of her appendix.

            In addition to bringing claims for negligence and loss of consortium, Heneberry included in her medical malpractice complaint a count alleging that Dr. Pharoan had breached their contract. Specifically, Heneberry alleged that Dr. Pharoan had a "contractual obligation to perform an appendectomy, which is the removal of the appendix, not a portion of the appendix, and [there was] no testimony that he intended to leave a portion behind." Id. at ___, 158 A.3d at 1094.

The Lawletter Vol 42 No 1

Emily Abel, Senior Attorney, National Legal Research Group

      In a recent decision, the Virginia Supreme Court reiterated the importance of using due diligence and carefully examining the title when purchasing property. Washington v. Prasad, 791 S.E.2d 566 (Va. 2016), involved a suit by a purchaser against his neighbors to recover the funds the purchaser expended as a result of erroneously improving his neighbors' property instead of his own.

     After receiving notice of a public action, the purchaser, a retired chemical engineer turned house "flipper" accessed the County assessor's records and reviewed the property card for the Parcel 8-C, the parcel being auctioned. The property card correctly listed the street address as 17211 Shands Road, but incorrectly showed a picture of the neighbors' home, Parcel 9-A. The reason for the mix-up was that the neighbors' house on Parcel 9-A had previously been numbered as 17211, but the street number changed to 17201 years ago. However, the neighbors never changed the number at the front of the house or on the mailbox, thus, the neighbors' property appeared to be 17211 Shands Road to passers-by.