UNPUBLISHED

UNITED STATES COURT OF APPEALS

FOR THE FOURTH CIRCUIT

No. 11-2327

JAMES M. DUNLAP,

Plaintiff - Appellant,

v.

COTTMAN TRANSMISSIONS SYSTEMS, LLC; TODD P. LEFF,

Defendants - Appellees.

Appeal from the United States District Court for the Eastern 

District of Virginia, at Norfolk. Arenda Wright Allen, District 

Judge. (2:11-cv-00272-AWA-DEM)

Argued: May 14, 2013 Decided: August 21, 2013

Before Sandra Day O’CONNOR, Associate Justice (Retired), Supreme 

Court of the United States, sitting by designation, and WYNN and 

DIAZ, Circuit Judges.

Unpublished Order of Certification to the Supreme Court of 

Virginia.

ARGUED: Crystal M. Johnson, UNIVERSITY OF GEORGIA SCHOOL OF 

LAW, Appellate Litigation Clinic, Athens, Georgia, for 

Appellant. James C. Rubinger, PLAVE KOCH PLC, Reston, Virginia, 

for Appellees. ON BRIEF: Peter B. Rutledge, Paula Briceno, 

Brittany Cambre, UNIVERSITY OF GEORGIA SCHOOL OF LAW, Appellate 

Litigation Clinic, Athens, Georgia, for Appellant. Benjamin B. 

Reed, PLAVE KOCH, PLC, Reston, Virginia, for Appellees.
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PER CURIAM:

I. Questions Certified

The United States Court of Appeals for the Fourth Circuit, 

exercising the privilege afforded it by the Supreme Court of 

Virginia through its Rule 5:40 to certify questions of law to 

the Supreme Court of Virginia when a question of Virginia law is 

determinative in a pending action and there is no controlling 

Virginia precedent on point, requests the Supreme Court of 

Virginia to exercise its discretion to answer the following 

questions:

1. May a plaintiff use tortious interference with contract or 

tortious interference with business expectancy as the 

predicate unlawful act for a claim under the Virginia 

business conspiracy statute, Va. Code §§ 18.2-499, 18.2-

500?

2. Does a two-year or five-year statute of limitations apply

to claims of tortious interference with contract and 

tortious interference with business expectancy under Va. 

Code § 8.01-243?

We acknowledge that the Supreme Court of Virginia may restate 

these questions. See Va. Sup. Ct. R. 5:40(d).
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II. Nature of the Controversy and Statement of Relevant Facts

AAMCO Transmissions, Inc. is a nationwide transmission and 

automobile repair company that operates through local 

franchises. This case involves a dispute between an AAMCO 

franchisee named James Dunlap and various parties related to 

AAMCO and its recent attempt to eliminate certain local 

franchises with overlapping business areas in Virginia.

Dunlap, the plaintiff-appellant, has operated a pair of 

AAMCO franchises for over 30 years. In 2006, AAMCO was acquired 

by an asset-management company that already held a large share 

of Cottman Transmission Systems, LLC, an AAMCO competitor. 

Because of the substantial overlap among the businesses – and 

the potential for competition among local franchisees – the new 

AAMCO owners attempted to convert Cottman franchises to AAMCO 

franchises and then close some existing franchises. Dunlap 

found himself among the disfavored franchisees. See J.A. 5-8, 

11-14.

Dunlap fought AAMCO to stay in business, and the parties 

eventually litigated and settled cross-disputes for trademark 

infringement and wrongful termination of Dunlap’s franchise 

agreements. Subject to conditions not particularly relevant 

here, this settlement allowed Dunlap to continue to operate his 

AAMCO franchises. Then, as now, Dunlap maintained that AAMCO 

tried to terminate his franchises for minor or trumped up 
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violations of their franchise agreements as a pretext to force 

him out of business. See J.A. 11-14; AAMCO Transmissions, Inc. 

v. Dunlap, 2011 WL 3586225 (E.D. Pa. Aug. 16, 2011). Because 

AAMCO was the contracting party, and its duties were resolved in 

the prior litigation, Dunlap’s present complaint is not directed 

to AAMCO itself. Instead, Dunlap now asserts that the decision 

to force him out of business was a conspiracy for personal 

profit among new AAMCO principal Todd Leff, Cottman Transmission 

Systems, and certain of Dunlap’s local competitors who would 

benefit from his exit. J.A. 11-20. He maintains that AAMCO’s 

actions, precipitated by these other parties, caused irreparable 

harm to his business by depriving him of marketing benefits that 

typically flow from a franchise arrangement. The present 

complaint thus names Leff and Cottman as defendants in an action 

for: (1) violation of Virginia’s business conspiracy statute, 

(2) tortious interference with contract, and (3) tortious 

interference with business expectancy. J.A. 4-5, 20-24.

The district court dismissed the business conspiracy count 

for failure to allege a valid “unlawful act” as a predicate for 

the conspiracy. It relied on a recent Virginia Supreme Court 

decision called Station #2, LLC v. Lynch, 280 Va. 166 (2010), 

which held that “a conspiracy merely to breach a contract that 

does not involve an independent duty arising outside the 

contract is insufficient to establish a civil claim under [the 
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Virginia business conspiracy statute].” Id. at 174. The 

district court then found that “[a]ll of the duties involved in 

this case arise out of and the damages flow from contractual 

obligations” – namely, the franchise agreements between Dunlap 

and AAMCO. J.A. 43-44. Accordingly, the district court 

concluded that applying the business conspiracy statute in this

case would risk exactly what the Virginia Supreme Court had 

tried expressly to avoid: “turning every breach of contract into 

an actionable claim for fraud.” Station #2, 280 Va. at 174

(citation omitted). In dismissing this claim, it joined another 

district court from this Circuit that recently rejected a 

tortious interference allegation as the predicate for a business 

conspiracy count under the rule announced in Station #2. See

J.A. 43 (discussing Zurich Am. Ins. Co. v. Turbyfill, 2010 WL 

4065527 (W.D. Va. Oct. 15, 2010)).

Next, the district court dismissed both of the independent 

common-law tort claims as untimely. Virginia has a five-year 

statute of limitations for injuries to property rights, see Va. 

Code § 8.01-243(B), but a two-year statute of limitations for 

actions related to personal injuries, id. § 8.01-243(A). 

Relying on Willard v. Moneta Bldg. Supply, Inc., 262 Va. 473 

(2001), the district court noted that “an allegation of nothing 

more than disappointed economic expectations does not amount to 

an injury to property” because “the law of contracts provides 
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the sole remedy for such a loss.” J.A. 45 (quoting Willard, 262 

Va. at 480). Having already characterized the common-law tort 

claims as flowing from breach of contract for purposes of the 

conspiracy count, the district court again relied on Station #2

to classify them as contract (and, thus, personal injury) claims 

for purposes of the two-year statute of limitations. J.A. 44-45 

& n.2. In other words, because the injury in this case went to 

Dunlap’s disappointed expectations about how AAMCO would perform 

and the profitability of Dunlap’s business – and not to a 

property injury as such – the district court applied the shorter 

statute of limitations, and dismissed.

III. Legal Discussion and Relevant Virginia Case Law

A. Business Conspiracy Issue

The reason to certify the first issue is straightforward: 

The Virginia Supreme Court’s recent decision in Station #2

signals obvious skepticism about business conspiracy claims 

predicated on contract disputes, but we are unable to ascertain 

with certainty how far that skepticism extends.

On the one hand, Station #2 clearly represents an important

change in Virginia’s business conspiracy law, and we agree with 

the district court that this case raises concerns of the kind 

addressed there. In Station #2, the Virginia Supreme Court at 

least partly rejected its established case law making it 

actionable to “conspire[] to procure the breach of a contract.” 
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See 280 Va. at 174 (rejecting Chaves v. Johnson, 230 Va. 112 

(1985), and Worrie v. Boze, 198 Va. 533 (1956)). The Court 

noted that, while it had previously approved such claims, it was 

now “of opinion that a conspiracy merely to breach a contract 

that does not involve an independent duty arising outside the 

contract is insufficient to establish a civil [conspiracy] 

claim.” Id. (emphasis added). The Court warned against 

allowing mere contract disputes to be transformed into claims of 

fraud and conspiracy. Id. And the standard that it announced 

appears to ask whether the duty that has been violated “aris[es] 

outside the contract,” id. – a standard one might think unmet by 

garden-variety claims of tortious interference with contract or 

with the business expectations that contract law protects.

On the other hand, there are plausible reasons to limit 

Station #2’s holding to actual breach of contract claims, and to 

distinguish tortious interferences with contract or business 

expectancy. As Dunlap points out, see Appellant’s Br. 15-16, 

the duty not to interfere with the agreements of others arises 

as a common-law corollary of the contract, not from the contract 

itself. Indeed, it cannot arise from the contract itself 

because the duty is one that falls upon third parties, not the 

parties to the agreement. According to Dunlap, this distinction 

is sufficient to place the violated duty “outside the contract” 

for purposes of Station #2.
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Whether (and when) this is a meaningful distinction is, we 

think, a question that is best posed to the Virginia Supreme 

Court, for it involves interpretation of its precedents and 

important questions of state law and policy. To begin, Station 

#2 does not definitively settle the question: It is true that 

the duty to avoid contractual interference does not flow 

directly from a party’s contractual agreements, but it is also 

true that the ultimate duty that is breached is contractual, and 

the set of harms redressed flows entirely from the contract. In 

other words, Station #2 poses a question of how to conceptualize 

tortious interference for the purpose of the conspiracy 

statute’s unlawful act requirement, but does not answer it.

Moreover, in typical cases alleging tortious interference the 

challenged conduct will – as here – involve discussions and 

negotiations among one contracting party and potential business 

partners about the possibility of breaching the old contract and 

starting a new relationship. Whether to view such negotiations 

as “conspiratorial” is an important question of state policy: 

Doing so elevates the sanctity of contract, but perhaps too far. 

A state court could easily conclude that it is adequate, and 

more likely to encourage efficient business decisions, to give 

the harmed party only the benefit of its contractual 

expectations through a simple breach of contract action against 

its counter-party. Cf. Station #2, 280 Va. at 174 (expressing 
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concern about “turning every breach of contract into an 

actionable claim for fraud”) (citation omitted).

Moreover, especially in light of these policy concerns, it 

may be that the right answer involves finer distinctions of the 

kind that the Virginia Supreme Court is better fit to make. For 

example, it is possible that tortious interference claims should 

sometimes constitute “unlawful acts” for purposes of the 

business conspiracy statute, but only in exceptional cases. Cf.

Advanced Marine Enters., Inc. v. PRC Inc., 256 Va. 106, 117-18

(1998) (allowing conspiracy claim predicated on tortious 

interference, before Station #2, in a case involving 

“outrageous” conduct such as theft of corporate files by 

breaching employees). The extent to which Station #2 preserves 

any such claim is unclear, however, and so we think it best to 

seek a definitive answer from the Virginia Supreme Court.

B. Statute of Limitations Issue

The reason to certify the second question is even more 

straightforward: The question which statute of limitations to 

apply to tortious interference claims is a pure legal issue that 

has not been settled by the Virginia Supreme Court. Virginia 

applies a two-year statute of limitations to claims regarding 

personal injuries and a five-year statute of limitations to 

claims regarding injuries to property. See, e.g., Willard, 262 

Va. at 478. But that distinction can be hard to draw, and the 
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Virginia Supreme Court has previously disagreed with how this 

Circuit has attempted to articulate it. See id. at 479 

(rejecting the test applied in Brown v. Am. Broad. Co., 704 F.2d 

1296, 1303-04 (4th Cir. 1983)). As with the previous issue, we 

believe that this question at bottom concerns an ambiguity in 

the Virginia Supreme Court’s recent precedent that is best 

resolved by that Court.

Indeed, the Virginia Supreme Court’s decision in Willard

can be read to support either side in this case. Willard held 

that an infringement on the dissenters’ rights of corporate 

shareholders was an injury to property interests for purposes of 

the five-year statute of limitations. Id. at 481. In so doing, 

it made clear that “conduct . . . directed at [another’s] 

property, . . . constitutes an injury to property,” for purposes 

of the limitation periods whether the injury is direct or 

indirect. Id. at 480 (citation omitted). But it also 

emphasized that “disappointed economic expectations do[] not 

amount to an injury to property” because “the law of contracts 

provides the sole remedy for such a loss.” Id. Dunlap 

plausibly argues that the conduct here was directed at his 

property (that is, his franchises). The district court, 

however, plausibly viewed the injuries as flowing from Dunlap’s

disappointed expectations about those franchises’ profitability 

had AAMCO continued to perform under its contracts. As with the 
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previous issue, it is possible to conceptualize tortious 

interference as being fundamentally a part of the protections 

for business expectations provided by the “law of contracts,” 

id., or as a protection for contractually secured property 

rights that sounds most fundamentally in the law of torts. 

Accordingly, it may be wise judicial policy to impose the same 

limitations period for tortious interference as for the breach 

of contract that it ultimately addresses, or it may not. 

Especially given our decision to seek the guidance of the 

Virginia Supreme Court on the first issue in this case, we 

prefer to ask that Court to settle this related issue as well.

In sum, we find ourselves unable to predict with confidence 

how the Virginia Supreme Court would rule on the questions 

discussed above. As a result, we respectfully request that the 

Virginia Supreme Court answer our certified questions.

IV. Certified Questions Determine This Proceeding

We also note, briefly, that the two questions together 

determine the outcome of this case. If the district court’s two 

holdings regarding tortious interference are correct as a matter 

of Virginia law, we would affirm. If either is incorrect, we 

would reverse and remand for further proceedings because these 

were the sole rationales adopted by the district court in 

dismissing the case.
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V. The Parties and Their Counsel

A.

The Plaintiff–Appellant is James Dunlap. Counsel for the 

Plaintiff–Appellant is:

Peter B. Rutledge

Paula Briceno

Brittany Cambre

Crystal M. Johnson

University of Georgia School of Law

Appellate Litigation Clinic

100 Herty Drive,

Athens, GA 30602

(706) 542-1328 (Telephone)

(706) 542-5556 (Facsimile)

B.

The Defendants–Appellees are Todd P. Leff and Cottman 

Transmission Systems, LLC. Counsel for the Defendants–Appellees 

is:

James C. Rubinger

Benjamin B. Reed

Plave Koch PLC

12355 Sunrise Valley Drive,

Suite 230

Reston, VA 20191

(703) 774-1200 (Telephone)

(703) 774-1201 (Facsimile)
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VI. Conclusion

Pursuant to the privilege made available by Virginia 

Supreme Court Rule 5:40, we respectfully:

1) Certify the questions stated in Part I of this Order of 

Certification to the Supreme Court of Virginia for resolution;

2) Order the Clerk of this Court to forward to the Supreme Court 

of Virginia, under the official seal of this Court, a copy of 

this Order of Certification, together with the original or 

copies of the record before this Court to the extent requested 

by the Supreme Court of Virginia; and

3) Order that any request for all or part of the record be 

fulfilled by the Clerk of this Court simply upon notification 

from the Clerk of the Supreme Court of Virginia.

QUESTIONS CERTIFIED

FOR THE COURT

/s/ James A. Wynn, Jr.

Circuit Judge