in the courtroom with me today by prior arrangement with this court student at the university of georgia miss crystal johnson will present our opening argument i will remain a counsel table both to present our rebuttal and to answer any question at any time the court wishes to pr the court judge when judge diaz justice o'connor my name is crystal johnson and i represent the appellant mr james done this case is about the destruction of mustard on the thirty year investment into whether he adequately allege the unlawful element of virginia's business conspiracy set if the court agrees with mr dunlap on either these issues the reversal is proper turning first the statute of limitations virginia's supreme court just last year reiterated a principle it declared it was well settled over half a century ago and that is that contract rights are property and in virginia where the statute of limitations is determined by the type of injury alleged an action for injury to contract rights falls within a five year statute of limitation this principle is the very reason that the virginia supreme court recognizes the common law cause of action for tortious interference with contracts and although this may run counter contrary to what your intuition of what property is that is where virginia law stands indeed in willard b many to building supply the virginia supreme court in a case very much like this one found that willard and unbroken line of precedent the virginia supreme court has held that contract rights are property and willard the court clarified that views property rights are part of the bundle of sticks contained and in that case the shareholders agreement which is a form of contract and those rights can be created either by statute or by the contract agreement itself and an injury to one of those rights is an injury to property under the five years statute of limitations well i mean the specific case that you mentioned deals with the center of rights in the context of shares of stock what is the particular property right that's at issue here separate and apart from your clive's disappointed economic expectations which in fact that's all there is to it is not governed by the facts expect a limited well to clarify the concern with disappointing economic expectations is that economic expectations are the measure for contract remedies and the case finding that contract is the proper remedy for just one economic expectations was dealing with the line between actions for contract and actions in tort not in the line between actions were injured a person or injury to property  economic expectations of the measure for contract damages because contract damages are limited to the damages that are reasonably foreseeable when the contract is entered into but you're saying that that doesn't really address  correct that that concern is not relevant here the concern is whether the action is for an injury to property and turns only on the fact that contract rights are property rights and injury to contact rights are injury to property rights and just like in willard where the loss of the ability to exercise the dissenters right was an action for injury to property here the contract contains not only itself as a whole one big property right but individual rights that are contained in that outer detract from the value of the overall contract and each of those rights is an injury to each of those rights is injury to property and the district court relied on a mis reading of station number two that interpret station number two as overruling this line of precedent that found the contacts for the property however station number two did not go so far station number two did not address property or worry both the case that it was modifying and worry bebo's is the house and two year old precedent that has since that has been relied on since to find that contract rights are property in virginia and indeed not even the apple personal record on the property you know they would regard this as an injury to property because the injury was to his contract rights and his franchise and those are property rights well it seemed to me that he claim for disappointed economic expectations and that all it was injured was that expect page to clarify first declared this economic expectations issue it was dealing with the difference between contracts and torts and in that case its concern was with the measure of damages well it certainly is an issue  certification of this question is not necessary because if you look to if you look back doesn't involve really a federal interest and i just it's purely state and i wonder if we should just ask virginia if this court finds that this is not governed by willard and that analogy to sanders rights then yes certification may be proper but the analogy just under his rights is very much on point here the apple don't even contend that the district court's interpretation of station over two was correct and under it the line of reasoning in willard and this principle that was actually reiterated sensation of virtue was decided that than the actual underlying breach about the tort tortious interference clause largest think it's close question and maybe the thing to do is to ask virginia supreme court or the answer well would like us to do it we're going to lean toward it being a disappointing economic expectation ok well yes well actually it will come out differently on no we don't think that the supreme court would come out differently but we don't think that the delay is necessary here because disappointed with we we did lie on willard them the allegation here is just nothing more than disappointing of economic expectations and that's not a injury to disappoint economic expectations as interpreted by the virginia supreme court is is the measure of damages for breaches of contract yes they would have l law of contracts and breaches of contract are governed by the five year by a separate five year statute of limitations under virginia law so finding that the tort of interference with a contract is also subject to the  tortious interference in line with the breach of contract cause of action if there are no further questions i'll turn to the conspiracy issue and considering this it is important to keep a few facts in mind dunlop's life work was his thirty year investment in these two am co franchises this relationship continued successfully over three decades until his presence in the market became inconvenient to the applebee's and then a common executive declared their intent to quote squash him out of the market to make room for new common franchisees that are converted into the amoco brand the plot that ensued designed solely to put  business violated three duties each of which independently satisfies the unlawful act element of the virginia business conspiracy statute as stated they tortious lee interfered with his contract for a relationship they tortur interfered with his business expectancy and they facilitated am caus breach of their statutory duty by cancelling his franchise agreement without reasonable cause but we have to look to virginia law here do we know legally protected relationship between third parties and that is all that station of or two relied on by the district court requires under virginia law to plead a claim for a statutory business conspiracy he must  least a violation of either a statutory or common law duty and mr dunlap alleges three such duties the duty not to interfere with a contractual relationship is a common law cause of action recognized by the virginia supreme court to protect parties from undue interference with seizing to protect their property interests in their contract as was earlier stated  ation ships and were in contract with the defendant and therefore the remedy there was in breach of contract rather than in statutory conspiracy and notably there the court recognized that non performance of contractual duty can can give rise to liability in both contract and in tort so the question is not whether the tort is completely you know can be completely severed from any any award tort damages for duties that you only affirmatively assume but rather limit those damages to the ones that are foreseeable at the outset of the contract we are out of to draw a line between injury to the person and an injury to property no i think you do and is there a virginia supreme court case directly important yes actually in advance what is that advancement enterprises which was still a law that case there's very few actually similar to this case there is the defendant knew of the existence of contractual relationships wanted to pull the rug out from under another business new that implemented a plan to essentially take over the business of two other of another of another party and one about that plan despite the fact that they knew that those actions would constitute actionable tortious interference here the apple knew that both cotman and am co had fourteen franchise agreements in the bridge in the tidewater area they declared their intent to close two of those two of those locations in order to come in compliance with their marking  which with each of those it's easy franchisees they knew that they would have to either be in breach of their marking agreement or in breach of two of their franchise agreements by canceling them they declared their intent to cancel two of those and then they with the contract and i see my time is a finished question the harm is interference with the contract and the purpose of the conspiracy statute is the damages incurred as a result of damages explicitly recognizes that that conspiracy to injure business is a particular type of evil that is not adequately addressed by the common law cause of action and here that tortious interference by elites a third party duty is the damage more than just the breach of contract thank you franchisees unhappiness with its franchise or the franchise or is not a part of this case the franchise in the franchise or have been in litigation almost constantly for the past six or seven years but in this case the franchisee has chosen respect that's correct and the reason they have not sued amoco arising out of these claims is because they already did sue and co arising out of these claims and they settled those claims back in two thousand and seven that was a breach of contract that was a breach of contract like this is dealing with which there's no contract it is a third party alleged to have interfered with the relationship your business relationship that's correct but i except for the point where you say there's no contract involved there's no privity but there absolutely is a contract involved there's tortious the claim is tortious interference with a contract and the station number two case i think the station number two case is absolutely dispositive i would do a cover breach of contract damages from a tortious interference with is that what you get or you get tort damages ok you get business expectancy damages and if it's appropriate punitive damages and all the r with respect to the to the business conspiracy statute or where there's back to the statue of limitations both ok the business conspiracy stache and think you have to reach that issue i do think that with respect to the business conspiracy statute station number two makes it very clear that and they the supreme court chose its language very carefully it doesn't say we're not going to allow claims if there's a breach of contract somewhere what it says it is and i  quoted in the brief a conspiracy merely to breach a contract that does not involve an independent duty arising outside the contract if there is no contract in this case there is no case if there is no franchise agreement between mr dunlap and am company there's no claim all the lies that you could you could read that language is simply stating that whatever duties arise between parties to a contract can't possibly be that bas a statutory conspiracy case that's different than saying that an outsider to a contract does not commit a statutory conspiracy by interfering with the contract rights of those parties that's what we have  i don't i don't think that that's i think that language and the context of station number two makes it very clear that what the supreme court is saying is you cannot cannot base your harm you cannot base your claim of a contract and the parties and parties to a contract we have a different set of facts here that perhaps the best course of action is this justice o'connor recommended having the virginia supreme court sort this out i think that station number two first involves parties to a contract that also involves a nonparty to the contract and i don't think it should make a difference to this case whether ampho was a party to this case or not and in fact the fact that info can't be a party access to its property such the repairs could be made and then refused to do it  relationship involving two other entities but i don't think that you can say that forces interference with a contract involves a duty that's independent of the contract it doesn't say different from the contract it sa independent from the contract and i think it's very clear that what they're what in station number two the supreme court was trying to do was to make it very clear that we're not going to count or statutory claims where the underlying harm is a mere breach of contract so so don't let have no contract or you can't sue these individual defendants on a breach of contract and you now you say there's no to ous interference action what could they do i didn't say there was no tortious interference act and this as i said there's no claim under the business conspiracy statute that's very different there's no claim for trouble damages nobody's fees and criminal conduct when the underlying claims contract claim i think that's it said maintain an independent tortious interference sure action yet they brought it with an outside i would say asians yes they could have they could have raised the claim for torsos interference doesn't station number two suggest that and vance marine enterprises is interesting they they cited actually for a proposition that's not discussed in the case i understand why they cited it because the underlying facts are are are there but the issue wasn't raised  discussed in that case so i don't think that it's fair to say that the bridging supreme court held something that wasn't you think raiders of virginia supreme court case actually point on point in this case i think station number two is as close as you're ever going to find and i think it is very difficult to believe that the virginia supreme court given the language of station number two and the earlier cases sensenbrenner and even  that make it very clear that they are adamant about separating contract claims from tort claims it's very hard to believe that some virginia supreme court would decide this case differently than it decided station number two and that may well be the case but there is that factor he i think what they were genius supreme court was making quite clear in station number two was that when the underlying rights derive from a contract then the claims that there is no business conspiracy  claim that there is no unlawful act under the business conspiracy statute and if your breach of contract does not rise to the level of an unlawful act like what the court says in that case is there has to be a an independent toward or statutory claim and and while i understand what you're what the court is saying and what counsel was saying about there's also tortious interference here and maybe that's torn and maybe that's an independent duty similarly conspiracy as and there and you had the cool there sort of indicating that if there had been his contract involved here you may actually have a they found that pretty and it was but i again i think that's just the happenstance of what one of the defendants is a party to the contract and in this case wasn't any of us to speculate on virginia logging and it really is uncomfortable when we doing that and you know in this context because this is sort of developing as we're going along or and we're dealing with this instance where you've got these individuals involved they don't have a contract and the action is against them for interference of another relationship it seems like there's a if it you can clearly see why it doesn't fit you've got a contract as it fits within the breach of contract actually you don't want to make a breach of contract action a tortious interference will that's a whole different matter but it looks like it's a little cloudy at least what's going on here that's why i just was going to suggest that to the extent that maybe it might be something to certify well well let me talk about certification for a moment both with  then the notice of appeal was filed eighteen months ago so we been at this a long time and we'd like to get a resolution but let me say very briefly one other point with respect to the business against mr dunlap and i just want to address that in virginia the personal stake must be something that is independent of the corporation's interests and that's there's that word again independent  n this court's decision in the plus case three thirteen f third one sixty six the court made it very clear that the corporate officers interest had to be independent of the corporation's interest and that there's a district court case more recently than that that has a very lengthy explanation and holds that when the interest of the employee agent and the corporation are aligned there's no personal stake exception that's baylor versus comprehensive pain management two thousand and eleven west law one three two seven three nine six well i mean there's another reason though for having some concern about whether this document applies here we're not dealing with a wholly owned subsid that's correct you do have to take well that doesn't that does not apply which back to mr laugh but with respect to the wholly owned subsidiaries you write that are not aware of any case nor that you cited any case where a court has applied i don't complaint alleges that both are i believe seventy eight percent owned that's if that's not a controlling interest i don't know what is but i was really just addressing the issue with respect to mr latham and i'll make one more point  then move on in the baylor case that makes the point that there are a number of cases in virginia and it lists them that have held that the personal stake exception doesn't even apply to the business conspiracy statute in virginia and that there are no virginia cases holding that it does so we think that at a minimum that gets mr leff out of this case and with respect to the others we do have the wholly owned subsidiary case but i think that the rationale of the cases  certainly applies i have five minutes talk about the statute of limitations  is this an injury to the person or an injury to property i would suggest that it's an injury to the person and this conduct directed at the person just as in the case which was not discussed in in their presentation i think th of this one this is more like this than like that then then it is like willard in that case the court held that the action was directed to the person not to the property where is and will action was directed to the to the stock ownership rights and again and to get the court said that the damage was financial damage personal to the individual same situation here that the conduct was directed to mr dunlop is indicated by their complaint where they say that the motive of the defendants was to squash him like a bug not to damage to squash him like a bug furthermore i we come back to this dichotomy between tort and contract this is not a claim for breach of contract this is a claim for tortious interference the genius supreme court in the wyatt case defined the tort of tortious interference with as quote in the common law a right to be free from interference in contract not not a property right to be free from tortious interference there may be a property right in the contract but this is a tort it's a common law a right to be free from interference there no property right in the freedom from interfere if you're right about that this was not something that was brief but i'll ask it now before you write it does that mean that the statutory conspiracy claim would also be governed by two years that limitations because it rises and falls on the merits of the tortious interference claim i mean that this your court didn't address that it is dismissed that for failing to state a claim but i'm curious as to whether that would be an independent ground to dismiss that claim it may be and i just i honestly don't recall whether there's a separate limitations period for statutory claims there may be but but there is and you can ask a question that wasn't brief i'll make a statement that wasn't very is cited in their reply brief i think that it's it's quite possible it's quite likely that the right analysis here is not to try to fit in a whole tortious interference in the injury to person or property but rather it's not provided for otherwise because it didn't exist when the statute was and acted so that we fall into a two year catch all and i will make one other point then i'll sit down for one and a half other points and then i'll sit down first of all counsel indicates that making tortious interference five year statute would be would make it would bring it in line with a breach of contract statute that would make regin to have the same statute of limitations for tort claim than it does for a breach of contract claim most states have much longer a breach of contract the statue of limitations west virginia for example has a two year tort statute would make bridging is probably the longest in the country and it's very hard to believe going back to station number two that there were supreme court would permit a tort claim arising essentially out of a contract to have such a long statute that's maybe that's one more reason to send it to that work i had a feeling you were going to say that your honor thank you we asked for the court to form that from the district court backs thank you very much for a time like yours really is just when you have a few minutes but i see the professor walking to us i have complete confidence in ms johnson judge when but i should alert all of you that she and her fellow students on this case not only are graduating in three days but just completed exams and we decided that for a variety of reasons perhaps my delivering the rebuttal with relieve a bit of the pressure with the court's permission i'd like to address two specific facts that were raised mr ruben to his argument go directly to the court's collective concern about certification and then close by explaining simply in a four paragraph opinion how this court can reverse the district court as t litigation between am co and mr dunlop mr dunlap did not raise the claims that are being brought here conspiracy claims tortious interference claims were not in the original litigation with second point judge when you were absolutely right in sitting often but it's nice to hear but it's the surface story there was not a nonparty in station number two there were t independent contracts and station number two there was a contract between the restaurant owner and the landlord to use the space and there was a contract between the restaurant owner and the neighboring tenant to install sound equipment as a consequence the plaintiff was in privity with both defendants and had a contractual remedy available to him which mr dunlop does not have as to these two apple leads now let me turn to the issue of certification has i can understand the court's instinct that there's enough concern here particularly after the virginia supreme court chided this court's brown decision you considering it's got to take of not making that mistake to be clear there is a harm to mr dunlap and certification harm to mr dunlap is that he has gone a number of years without receiving any relief without receiving a day in court and that's not to say certification should under no circumstances occur to be sure we would far  certification to affirm ns but i don't want the court to be misled into thinking that mr dunlap would be left without any harm suffered if it's certified mr dunlap has not recovered a dime for the wrongs that were allegedly done here the settlement that occurred in two thousand and seven which can be found in which is publicly available on the docket of the two thousand and eleven litigation that amoco also has brought against mr dunlap makes clear that mr dunlap has not received a dime for the wrong done to his company maybe he has to wait longer but we believe that he should not let me turn to the four paragraph opinion paragraph one this case arises on a twelve b six and therefore this court needs to take as a given all of the flacks properly pled that mr dunlap was in compliance with his franchise agreement when the terminations was attempted that the terminations post dated offers by mr left copied employees to convert top and franchises to amoco franchises that the alleged terminations occurred within days of this announcement that cotman and am co now under common ownership of a private equity company we're going to squeeze out this consolidated market paragraph two and this is the most important statement in mr rubin sure's argument mr rubin sure does not question tortious interference with contract in the tortious interference with business expectancy claims are properly pled that they are plausible under the supreme court's decisions in it ball into at docket number five entry of the district court doc case you can review the motion to dismiss and no where in that motion to dismiss this mr rubin's or seek dismissal of those two claims on the argument that they failed to allege sufficient facts paragraph three as a consequence of properly pled tortious interference claims they advance if they are timely that takes me to your question justice o'connor is there a virgin you supreme court decision that establishes unambiguously that these claims are timely my answer is yes and that answer is the virginia supreme court's decision in warri vs bows which held that where defendants were in contractual privity with the plaintive and breached that contract that or where there is an interference that contract that violates a property right constitution injury to property now it's true that in the willard case the picked up on the sensenbrenner decision which said disappointing economic expectations about injury to property but as miss johnson made clear when the court's talking about disappointed economic expectations it's not talking about statute of limitations it's talking about virginia's historic privity rule with respect to negligence actions against parties that are not improving he with the plaintive it's not talking about statute limitations had will or johnson and the university of virginia school of law appellate litigation climate thank you mr rubin jury and goes to court i'll take the privilege on behalf of myself and judge dia's and the rest of the members as quote a particular think justice o'connor or graciousness of sitting with us