Title: Hazel & Thomas v. Yavari
Citation: N/A
Docket Number: 950211
State: Virginia
Issuer: Virginia Supreme Court
Date: January 12, 1996

Present:  Carrico, C.J., Compton, Stephenson, Hassell, and 
Keenan, JJ., and Poff and Whiting, Senior Justices 
 
HAZEL & THOMAS, P.C., et al. 
                                           OPINION BY  
v.  Record No. 950211 
SENIOR JUSTICE HENRY H. WHITING 
                                         January 12, 1996 
SHAHRAM YAVARI, et al. 
 
 
FROM THE CIRCUIT COURT OF FAIRFAX COUNTY 
 
J. Howe Brown, Jr., Judge 
 
 
In this appeal in an attorney malpractice action, the 
dispositive issue is whether the client proved that the 
attorneys' negligence was a proximate cause of the client's loss. 
 Therefore, we recite only those facts relevant to this issue, 
and, in accordance with familiar appellate principles, we state 
those facts in the light most favorable to the client, the 
prevailing party in the trial court. 
 
In February 1990, Shahram Yavari asked Daniel H. Shaner, an 
attorney with the law firm of Hazel & Thomas, P.C. (Hazel & 
Thomas), to represent him in the negotiation of a sales contract 
for Yavari's $6.6 million purchase from James M. Kline of a 
6.4259-acre tract of commercial property in the City of 
Alexandria.  Since Yavari needed to quickly move his carpet sales 
and installation business from leased property, he told Shaner 
that he wanted to take possession of the Kline property 
immediately after signing the contract and to lease part of the 
property to tenants prior to closing on the contract, which was 
planned for September 1990. 
 
Accordingly, Shaner negotiated the contract to provide 
Yavari with these rights.  Pursuant to the contract, Yavari was 
to pay Kline a $1 million deposit that would be credited towards 
 
 
 
 
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the purchase price, but would be forfeited if Yavari failed to 
close on the property.  The contract also required Yavari to 
execute a purchase money note in which he agreed to pay Kline 59 
monthly payments of $60,500 in principal and interest, with a 
balloon payment of nearly $5 million 60 months after closing.  
The note was to be secured by a purchase money deed of trust on 
the property. 
 
The contract also gave Kline the right to convey the 
property subject to the liens of three deeds of trust Kline had 
previously placed on the property.  The total of the three liens 
was not to exceed $5.6 million at the time of closing.  If Kline 
exercised this right, he was obligated to obtain the three lien 
creditors' consent to the sale. 
 
The contract was signed on March 15, 1990 by Kline and by 
Yavari, Mehrdad Yavari, his wife, and his two corporations, 
Carpetland, Inc., and Mattress Land, Inc. (hereafter collectively 
Yavari).  Yavari took possession of the property and timely paid 
the $1 million deposit to Kline. 
 
After the contract was signed, Kline exercised his right to 
continue his existing financing and obtained the three lien 
creditors' consent to the sale.  Although not required to do so 
by the contract, Kline, at Yavari's request, also sought to 
extend the maturity dates on his preexisting notes to conform to 
the maturity date on Yavari's purchase money note.  General 
Motors Acceptance Corporation (GMAC), one of Kline's lien 
 
 
 
 
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creditors, agreed to extend the maturity date on the notes it 
held, but conditioned that consent on Kline continuing to be a 
franchised General Motors Corporation (GM) automobile dealer 
during the life of Yavari's purchase money note.  If Kline ceased 
to be a GM dealer, then Kline's obligations to GMAC would 
immediately become due. 
 
Yavari objected to this condition, fearing that if Kline 
ceased to be a GM dealer and defaulted on his obligations to 
GMAC, Yavari would have to pay in excess of $2 million prior to 
the due date of his balloon payment to protect his possessory 
rights in the property.  To assuage Yavari's fears, Kline 
negotiated an agreement with GMAC providing that the obligations 
to GMAC would not become due until one year after any termination 
of Kline's dealership.  However, this further agreement did not 
allay Yavari's concerns. 
 
Yavari was unable to lease part of the property to 
prospective tenants.  This inability arose because the parties 
with whom he was negotiating, large national companies such as 
Midas Muffler, Inc. (Midas), and National Tire Wholesalers (NTW), 
demanded nondisturbance agreements from Kline and the three lien 
creditors before leasing the property.  In general, a 
nondisturbance agreement is one in which a lienholder of leased 
property agrees that, in the event of the lessor's default on his 
obligation secured by the lien, the lienholder will not disturb 
the lessee's leasehold rights, provided the lessee continues to 
 
 
 
 
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tender performance to the party succeeding to the lessor's 
rights.  Kline refused to provide these agreements, asserting 
that the contract did not require him to do so, and that such 
agreements would place him at risk if Yavari defaulted on the 
contract. 
 
When Yavari and Kline could not reach an agreement on these 
two issues, Yavari refused to close on the property.  Kline then 
evicted him from the premises, retained the $1 million deposit, 
and instituted an action at law in the Circuit Court of the City 
of Norfolk for the recovery of additional damages because of 
Yavari's refusal to close.  Following a bench trial, the court 
held that (1) Kline had performed all his contractual 
obligations, (2) Yavari had breached the contract by failing to 
close on the transaction, and (3) Kline suffered additional 
damages of $773,413.12.  Accordingly, the court entered judgment 
against Yavari in that amount, and that judgment is now final. 
 
In an amended motion for judgment, Shahram Yavari and his 
two corporations later sought damages for attorney malpractice 
against Hazel & Thomas, Shaner, and Frederick K. Roseman, another 
Hazel & Thomas attorney, who assisted Shaner in the transaction. 
 At a jury trial, William R. Van Buren, III, qualified as an 
expert witness for Yavari on the issue of attorney malpractice in 
the fields of business and real estate transactions.  Van Buren 
testified that the defendants violated the standard of care 
required of attorneys practicing in these fields in a number of 
 
 
 
 
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respects.  Those violations included a failure to negotiate 
provisions in the contract requiring Kline to obtain (1) 
unconditional extensions of the maturity dates of his preexisting 
notes to match the maturity date on Yavari's purchase money note, 
and (2) nondisturbance agreements from Kline and the three lien 
creditors.  The defendants offered expert testimony that they 
were free of negligence. 
 
Following instructions on the issues of negligence and 
proximate cause, the jury returned a verdict in favor of Yavari 
against Hazel & Thomas and Shaner in the amount of $500,000.  
Hazel & Thomas and Shaner (hereafter collectively the defendants) 
appeal.
1
 
The defendants raise a number of issues on appeal.  Since 
the issue of proximate cause is dispositive, we only consider 
that issue and the contentions and facts relating thereto.
2
 
Ordinarily, the fact finder decides whether a plaintiff has 
shown that the defendant's negligence was a proximate cause of 
 
     
1Yavari does not assign cross-error to the judgment in favor 
of Roseman.  Thus, that judgment is not before the Court. 
     
2The defendants also argue that the evidence is insufficient 
to show that Shaner breached the standard of care.  Since we 
conclude that the evidence is insufficient to show proximate 
cause, we will assume, without deciding, that the evidence is 
sufficient to show the alleged breaches of the standard of care. 
 
 
 
 
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the plaintiff's loss.  Parham v. Albert, 244 Va. 73, 77, 418 
S.E.2d 866, 868 (1992).  When, however, the evidence is such that 
reasonable minds could not differ as to the outcome, the issue of 
proximate cause should be decided by the court, not the jury.  
Id.  This rule applies equally in attorney malpractice cases, in 
which the client bears the burden of producing evidence that the 
attorney's negligence proximately caused the client's loss.  
Campbell v. Bettius, 244 Va. 347, 352, 421 S.E.2d 433, 436 
(1992); Duvall, Blackburn, Hale & Downey v. Siddiqui, 243 Va. 
494, 497, 416 S.E.2d 448, 450 (1992).  Thus, Yavari had the 
burden of showing either that Kline would have agreed to include 
the above-listed provisions in the contract or that Yavari would 
not have signed the contract if Kline had refused to include 
them. 
 
Recognizing this burden, Yavari relies on the following 
testimony from Kline: 
 
Q: 
 
. . . .  Back in February and early 
March, before the Purchase Agreement was 
signed, if Mr. Yavari's lawyers had requested 
at that time of you inclusion of a 
nondisturbance provision in the contract, 
would you have granted it? 
 
 
A: 
 
I don't know.  It's problematical, but I 
certainly would have found a way to make the 
deal happen. 
 
However, the defendants note Kline's testimony that he would not 
grant a nondisturbance agreement to Midas or NTW just before the 
proposed closing since they were leasing only parts of the 
property and that he did not want to be bound by the leases in 
 
 
 
 
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the event that Yavari defaulted on his note.  In our opinion, 
Kline's testimony is insufficient to support the inference that 
he would have agreed to a nondisturbance provision before signing 
the contract when he refused to agree to such a provision several 
months after signing the contract. 
 
Furthermore, Yavari is unable to point to any evidence 
indicating that Kline would have agreed to bind himself to obtain 
his lien creditors' unconditional consent to extend the maturity 
dates on his preexisting notes to match the maturity date on 
Yavari's purchase money note.  More importantly, Yavari never 
testified that he would not have signed the contract without the 
inclusion of the two provisions specified above had his attorneys 
insisted on them and had Kline refused to agree to them. 
 
Accordingly, we conclude that Yavari has failed to introduce 
sufficient evidence that his former attorneys' purported 
negligence was a proximate cause of his loss.  Therefore, we will 
reverse the judgment of the circuit court and enter final 
judgment for the defendants. 
 
Reversed and final judgment.