Virginia Business Litigation Lawyer Blog

A Swedish law firm has failed in its effort to sue a director of a former client for "misrepresentation" in Virginia federal court after the court ruled the claim was barred by Virginia's two-year statute of limitations applicable to negligence claims. The law firm had conceded that it would be unable to maintain a cause of action for fraud under the laws of Virginia, and the court opted to analyze the viability of the claim as a negligence action.

The law firm, Andersson Gustafsson Advokatbyra KB, sued eSCRUB Systems, Inc., a Virginia company, and three people associated with the company, claiming that eSCRUB had failed to pay the firm's legal bills after it hired the law firm in 2007 to help it resolve a dispute. The law firm alleged that John Packard, a former director of eSCRUB, committed fraud in that he breached a "continuing obligation to notify Andersson of the risks of non-payment it ran in performing services for eSCRUB." The allegation was essentially that Packard was part of a scheme to induce the law firm to provide legal services to eSCRUB with the full knowledge that the company would never pay the firm's legal fees.

In Virginia, negligence claims carry a two-year statute of limitations. Virginia follows the general rule that the event that starts the limitations clock ticking is the negligent act itself. There is no "discovery exception" that starts the clock at a later date, such as the date the plaintiff actually discovers that the alleged negligence occurred or that he has been damaged. Statutes of limitation can expire before a potential plaintiff even learns of the grounds for a lawsuit.

The judge found that the alleged injury occurred in December 2007, when the law firm's invoices first came due and eSCRUB refused to pay. The law firm contended that the injury occurred even earlier, in November 2007, when the law firm first started working for eSCRUB. The judge said that an alternative date would be May 8, 2008, when the law firm terminated its services to eSCRUB. But any of those dates are more than two years before the lawsuit was filed on June 8, 2010, so the claim was deemed time-barred and the court entered summary judgment for the defendant.

The United States Supreme Court recently held that a foreign manufacturer that places a product into the stream of commerce in the United States does not automatically subject itself to jurisdiction in each of the states where the product might foreseeably end up. Relying on this decision, a Roanoke Circuit Court judge has dismissed a Japanese manufacturing company from a product-liability case brought against it in Virginia.

Janet May was employed by Progress Press in 2006 and was operating a stitching machine made by Osako & Co., a Japanese company. She alleged that she was injured because the machine had an improper conveyor belt. She sued Osako and others for negligence and breach of warranty.

Osako sold its products in the United States through Consolidated International Corp., its exclusive distributor, which was a company independent of Osako. Osako knew that its products would be sold in the United States generally and made some product changes for the U.S. market but did not take any actions to specifically target Virginia. Osako has no physical locations in the United States. On these facts, Osako moved to dismiss May's suit for lack of jurisdiction.

Judge Charles N. Dorsey of the Circuit Court granted the motion. He relied heavily on J. McIntyre Machinery v. Nicastro, a U.S. Supreme Court ruling that was decided June 27, 2011. In the Nicastro case, which was a product-liability case with very similar facts to this one, the Supreme Court reversed the New Jersey Supreme Court and found that New Jersey lacked jurisdiction over a British company that sold a piece of machinery in that state. The high court rejected the New Jersey court's theory that placing the product into the "stream of commerce" conferred jurisdiction on that state's courts.

May had relied heavily on the Nicastro case - before it was reversed. Indeed, she had contended that her case and that case were "so similar that this Court has no way to find differently than the New Jersey court," Judge Dorsey wrote. In view of the reversal in Nicastro, the judge concluded, he had no choice but to apply the U.S. Supreme Court's ruling and to find that Virginia courts lack jurisdiction over Osako.

A highly sensational case filed recently against the prestigious Sidwell Friends School in Washington, D.C., may end up raising interesting legal questions about the responsibility of private schools to supervise the actions of their school psychologists. In the $10 million civil suit filed in D.C. Superior Court, Arthur Newmyer, father of a kindergarten student at Sidwell, alleges that Jack Huntington, while working as the school psychologist and counseling Newmyer's daughter, carried on a sexual affair with Newmyer's wife, Tara, a former associate attorney at Dickstein Shapiro LLP, a large Washington law firm. So far, at least three judges have recused themselves from the case, apparently due to their close ties to the prestigious institution.

Earlier this year, Huntington left the school. The lawsuit contends that he was fired after the school learned about sexually explicit e-mails that Huntington sent to Tara Newmyer from the school's computer system. According to the complaint, Huntington and Tara Newmyer arranged "play dates" for the girl so that they could meet and carry on their clandestine affair. The counseling sessions, the complaint says, occurred off school property.

A spokesman for Sidwell has said that the school will "vigorously defend" itself against allegations that he said were "completely without merit." The explosive allegations in the lawsuit filed by Arthur Newmyer, himself a Sidwell graduate who has been extremely active in supporting the school over the years, have become a major topic of discussion at the private school, whose students include President Obama's daughters Malia and Sasha.

Psychologists' ethics rules require them to put the needs of their clients first; in this case, that would be the kindergarten student. The ethics rules in Maryland and the District of Columbia, the relevant jurisdictions, prohibit a psychologist from having an affair with a parent of someone he is counseling.

So why sue the school? The complaint charges the school with "negligent supervision" -- claiming that the school had an obligation "to supervise the employees under its control in order to prevent them from harming students in its care." Thus, any emotional harm to Arthur Newmyer and to his daughter as a result of Huntington's actions could be legally placed at Sidwell's door. The complaint says that school officials knew that Huntington was counseling the girl, knew of the affair, and consented to the affair, continuing "to support his actions for nearly a year" until he left the school.

Expect the school to contest these allegations. Tara Newmyer's attorney has said that Huntington was not treating her daughter "in any professional capacity," and according to The Washington Post, the school sent a letter to parents asserting that it "does not believe that anyone it employed ever had a therapeutic relationship" with the girl. So this interesting and sad case will require some factual development before anyone can predict its end. Still, one has to wonder: if the situation described in the Complaint caused the young daughter so much "emotional distress, mental anguish, humiliation, [and] embarrassment," then is filing this high-profile lawsuit really the best thing for her?

As reported in the Washington Post, a jury trial in Fairfax County, Virginia, resulted in an award of $3.2 million in damages to a 36-year-old Arlington resident who was injured while shopping at IKEA's Potomac Mills store.  On July 28, 2006, as the shopper stopped near the store's exit to inspect the bargain bin, a display of countertops weighing over 350 pounds came crashing down on her, crushing her pelvis.  

Personal injury lawsuits based on theories of premises liability do not typically involve damages awards involving millions of dollars, especially in the conservative jurisdiction of Fairfax County, Virginia.  In 2008, for example, only 15 jury verdicts across the entire Commonwealth of Virginia were for one million dollars or more.  In this particular case, however, the jury was moved by the fact that the shopper was an athlete who frequently traveled to China, Europe, and across the United States to pursue hiking, biking, and climbing activities.  Since the accident, she can only walk about three blocks before the pain becomes unbearable.  In other words, IKEA's negligence resulted in effectively terminating her athletic pursuits and the joy she derived therefrom.  The jury decided to compensate her for this pain and suffering.

Business that invite customers to shop at their retail stores need to take precautions to ensure the safety of their shoppers.  An injured patron will generally have grounds to sue the business if the patron is injured by falling merchandise and the patron did not cause the objects to fall.  This would be true regardless of whether the business owner is guilty of active negligence or simply allowed a known dangerous condition to exist on the premises without taking steps to protect the store's customers.

Even if the business is negligent, however, it will not be held liable if the patron's injury was not causally related to that negligence or to a dangerous condition on the premises, or if the acts of a third party supersede the business owner's negligence.  IKEA was not found to be entitled to the benefit of any of these defenses.