Court Opinion

ID: 1036127
Source: CourtListenerOpinion
Date Created: 2013-08-01 21:08:42.609709+00
Date Added: 2024-06-11T15:16:36.619005
License: Public Domain

UNPUBLISHED

                   UNITED STATES COURT OF APPEALS
                       FOR THE FOURTH CIRCUIT

                              No. 12-1590

PETR BOCEK, M.D., PHD,

                 Plaintiff − Appellant,

           v.

JGA ASSOCIATES,    LLC;    JOSEPH   P.   AMATO;    A2   MEDICAL   GROUP,
INC.,

                 Defendants – Appellees,

           and

ALLERGY CARE CENTERS, VIRGINIA, INC.,

                 Defendant,

           v.

LENKA BOCEK,

                 Movant.

Appeal from the United States District Court for the Eastern
District of Virginia, at Alexandria.    Claude M. Hilton, Senior
District Judge. (1:11-cv-00546-CMH-JFA)

Argued:   March 19, 2013                          Decided:   August 1, 2013

Before TRAXLER, Chief Judge, and WILKINSON and NIEMEYER, Circuit
Judges.
Affirmed in part, reversed in part, and remanded by unpublished
opinion. Chief Judge Traxler wrote the opinion, in which Judge
Niemeyer concurred in part and concurred in the judgment. Judge
Niemeyer wrote a separate opinion concurring in part and
concurring in the judgment.    Judge Wilkinson wrote a separate
opinion concurring in part and dissenting in part.

ARGUED: S. Micah Salb, LIPPMAN, SEMSKER & SALB, PLLC, Bethesda,
Maryland, for Appellant.    David Edward Sher, SHER, CUMMINGS &
ELLIS, Arlington, Virginia; Brian Christopher Athey, WEBSTER
BOOK, LLP, Alexandria, Virginia, for Appellees. ON BRIEF: Mary
E. Kuntz, Ph.D., Judah Katz, Jeff J. Kim, LIPPMAN, SEMSKER &
SALB, PLLC, Bethesda, Maryland, for Appellant.         Mark D.
Cummings, SHER, CUMMINGS & ELLIS, Arlington, Virginia, for
Appellees JGA Associates, LLC, and Joseph P. Amato.

Unpublished opinions are not binding precedent in this circuit.

                                2
TRAXLER, Chief Judge:

      Petr Bocek brought this action against business consultant

Joseph Amato and two companies associated with Amato after the

defendants purchased a medical practice for themselves rather

than for Bocek.             The district court granted summary judgment in

favor of the defendants, and Bocek appeals.                             We affirm in part,

reverse in part, and remand for further proceedings.

                                                   I.

      Plaintiff Petr Bocek is a medical doctor specializing in

the   treatment        of    allergies.             Defendant        Joseph      Amato    is    the

manager    and    sole       member      of   defendant         JGA    Associates,        LLC,    a

business consulting firm.

      Bocek contacted Amato seeking assistance with the formation

and   financing        of    a    new    allergy         care     medical       practice.        On

November    10,    2010,         the    parties         entered    into     a   contract       (the

“Consulting Agreement”) through which JGA agreed “to review and

report    on     the    feasibility           of       the   proposed     allergy        medicine

practice and prepare a business proposal for funding a start-up

medical    practice”         and    “render         such     other    services      as    may    be

agreed upon by the Client and the Consultant.”                              J.A. 64.        Under

the terms of the Agreement, JGA would be compensated through

“development fees” (hourly billing for consulting services) and

                                                   3
a “completion fee” of two percent of the face amount of any

business loan arranged by JGA.

     A few days after signing the Consulting Agreement, Bocek

asked Amato about the feasibility of buying an existing medical

practice rather than starting a new practice.                     Bocek told Amato

that Allergy Care Centers (“ACC”), where Bocek had previously

worked, was being offered for sale by the administrator of the

estate (the “Estate”) of ACC’s owner, who had died two years

earlier.        Amato   responded      positively,       explaining      that    “[t]he

acquisition of an existing operating practice is always more

attractive if the price and the historic financial performance

make sense.”       J.A. 68.       After Bocek raised the possibility of

buying    ACC,    there    were       no    further    discussions       about    Bocek

starting    a    new    practice;      the   relationship       between       Bocek    and

Amato focused exclusively on acquiring ACC’s assets.

     Bocek      told    Amato   that       his   acquisition     of     ACC    might   be

complicated because he had been fired from ACC and was in the

process    of    negotiating      a    severance      package,    and    Bocek    asked

Amato to pursue the purchase of ACC without revealing Bocek’s

identity    as    the    buyer.        To    keep     Bocek’s    name    out     of    the

negotiations, Amato and Bocek ultimately settled on a “straw

purchase” approach by which JGA (or an alternate holding company

set up by Amato) would buy ACC and transfer it to Bocek after

closing.

                                             4
        Emails show that by the end of December 2010, the parties

were in general agreement on the overall structure and ultimate

goal of the deal – ownership of the practice by Bocek – and what

needed to be done to move forward with the transaction.                There

was, however, no agreement as to the structure or mechanics of

the transfer from JGA to Bocek.           For example, in a December 23

email, Amato told Bocek that while there were still open issues,

Amato    “intend[ed]   to   move   forward”   with   the   purchase   of   ACC

“based on a few specific parameters,” including:

          1. That our firm (or an alternate holding
     company) intends to initially purchase the practice
     with the direct intention of selling the practice (or
     the holding company) to you.

          2. That you will commit to work with our firm
     during the due diligence process with the sole
     intention of becoming the eventual owner of ACC. The
     timing of the change in ownership would be automatic
     and agreed to by our firm and yourself before we
     execute the Purchase Agreement. The transfer of
     ownership to you will depend on your ability to fund
     the purchase of the practice from our firm and how
     quickly “we” are able to secure third-party financing
     for you to buy the practice from our firm; or if
     third-party financing is not immediately available,
     our firm would hold a seller-held note until such time
     that conventional funding can take out our note. The
     bottom line is that we would intend on transferring
     ownership to you as soon as all parties agree we can,
     that is after our firm’s purchase of the practice from
     the estate.

            . . .

          4. That you commit to buying the practice and/or
     running the practice (as owner or lead physician, your
     choice) under contract with the new company as a
     condition of us purchasing ACC. There may be a reason

                                      5
      you do not want to own the practice immediately after
      our purchase of the firm; if so, we need to understand
      specifically what you want and we need to be sure that
      if we purchase the practice, day one you will be the
      company's lead physician (either as the owner or key
      employee).   You will need to understand that we will
      not go through with the purchase of ACC if you are not
      a direct part of our exit strategy.

J.A. 75.    An email sent by Amato a few days later, after Bocek

had passed along questions from his attorney about the purchase,

reconfirmed the basic plan:

      We are not purchasing the business on the behalf of an
      undisclosed   purchaser;   JGA  “is”   purchasing  the
      business.   Our intentions with the business after the
      deal is consummated will not be a concern for the
      Seller; we will be sure that nothing precludes us from
      selling the business once we have purchased [it]. . .
      .   But please understand our only intention once we
      own the business would be to sell the business to you;
      and as I said before I do not think the estate could
      care less.
J.A. 81 (emphasis added).

      On January 22, 2011, Amato sent Bocek an invoice for his

services.      The invoice reflected Bocek’s prior payment of $3,800

and   sought    an   additional      $4,574.40   “for   expanded    hours   and

third-party costs associated with the project development and

acquisition negotiations for the purchase of the Allergy Care

Center business operation on behalf of JGA Associates and Dr.

Petr Bocek.”     J.A. 1048.

      On February 3, Amato sent the Estate a Letter of Intent

(“LOI”)    through   which    “JGA    Associates,   LLC,   or    its   assigns”

offered to purchase ACC’s assets for $1,000,000.                J.A. 102.   The

                                        6
LOI obligated the parties to negotiate in good faith, but the

LOI was otherwise not binding; until the execution of a mutually

agreeable asset purchase agreement, either side could walk away

from the transaction without penalty.                   The Estate accepted the

offer and returned an executed copy of the LOI to Amato late in

the afternoon on February 8, 2011.

       Earlier that same day (February 8), Amato had visited one

of the ACC offices to meet with Margaret Crook, ACC’s practice

manager.      During the meeting, Crook told Amato that Bocek had

been fired after he sexually harassed employees and used another

doctor’s prescription pad to forge prescriptions for himself.

This was the first Amato had heard of these issues; Bocek had

told Amato that he had been fired, but he never provided any

details     about   what    happened,     and     Amato   never     asked.     After

meeting with Crook, Amato stalled and put off Bocek’s various

inquiries until he could verify what he had learned.

       On   February       15,   the     Estate       filed   a    petition    in   a

Pennsylvania “Orphan’s Court” seeking approval for the sale of

ACC.    Bocek was then unaware that the sale was moving forward --

Amato had not informed Bocek that he submitted the LOI to the

Estate on February 3 or that the LOI had been accepted.

       On   February   17,       2011,    after       reviewing    documents    that

confirmed    Crook’s   information,           Amato    sent   a   letter   notifying

Bocek of his intent to terminate their contractual relationship

                                          7
in    10   days,       in    accordance         with       the    terms       of    the        Consulting

Agreement.            Amato explained the termination in general terms,

stating     that           during    the       due    diligence         process,              “it   became

apparent         .     .     .   that      your       involvement             in        any     potential

transaction would . . . sour the deal.                                 It also became evident

that we could not move forward with your participation in any

potential            transaction        without            the    possibility             of        serious

repercussions thereafter.”                     J.A. 118.

       Counsel for Bocek responded on February 22.                                        Among other

things,     counsel          noted      that     Amato,          as    Bocek’s          agent,       had   a

continuing duty of loyalty to Bocek and that Amato would be

breaching his contractual and fiduciary duties “if [he] were to

turn the acquisition of ACC into a deal which is of benefit to

[him].” J.A. 1084.                  At the time of this letter, counsel was

unaware of evidence showing that Amato did not take his duty of

loyalty     seriously.              For    example,          while      Bocek       was        under    the

impression that JGA would buy ACC and then sell it to Bocek at

cost, Amato and potential investors were emailing each other

about      the       possibility          of    buying           ACC    for        $1     million      and

immediately flipping it to Bocek for $2 million.                                        See J.A. 1021-

22.     In addition, Amato repeatedly told Bocek that when a letter

of    intent         was    submitted      to        the    Estate,       the       purchase         price

offered would be $1.2 million, even though Amato had already

                                                     8
submitted    multiple    draft    LOIs       with    a    purchase      price   of   $1

million to the Estate.      See J.A. 1059-68.

     On   March   2,    2011,   Amato    incorporated         a   new    company,    A2

Medical Group, Inc., to serve as the purchaser of ACC’s assets.

JGA at some point assigned its interests in the transaction to

A2, 1 and the Estate and A2 executed an asset purchase agreement

on May 13, 2011.        Ten days later, the Orphan’s Court approved

the sale of ACC to “JGA Associates, LLC and its assigns in

accordance with the purchase amount and terms set forth in the

May 13, 2011 Asset Purchase Agreement.”                    J.A. 1129.        The sale

closed on June 22, 2011.          At no time between the February 17

termination of the Consulting Agreement and the closing of the

sale did Bocek make an offer to purchase ACC.

     After    unsuccessfully      seeking       an       injunction     to   prohibit

Amato and JGA from buying ACC, Bocek filed an amended complaint

     1
       No written assignment appears in the record, but emails
from Amato and his partner in A2 make it clear enough for
summary-judgment purposes that an assignment was effectuated in
a way that was acceptable to the parties. See J.A. 899 (March 8
email from Amato informing Estate that his corporate attorney
and his partner will “have the assignment document prepared that
will tie the transaction together”); id. (March 8 email to
Estate from Amato’s partner stating that the attorney will “get
me the assignment document to transfer the purchase from JGA to
A2 Medical Group, Inc. since that will be the formal acquisition
company”);   see  also   Amato  deposition,   J.A.  1102   (“JGA
eventually, as the Estate knew, was going to assign the purchase
to someone. A2 medical was eventually established as the entity
that would receive that assignment with the permission of the
Estate.”).

                                         9
asserting four causes of action against Amato, JGA, and A2:                            (1)

fraudulent    conveyance       and    constructive         trust;      (2)    breach    of

fiduciary    duties;    (3)    breach      of    contract;       and   (4)    breach    of

fiduciary duties as joint venturers.                 The district court granted

summary judgment in favor of the defendants and dismissed the

case.       Bocek    appeals,       arguing      that      he    presented     evidence

sufficient    to    preclude    summary         judgment    as    to   each    cause    of

action.

                                           II.

      Summary judgment is appropriate “if the movant shows that

there is no genuine dispute as to any material fact and the

movant is entitled to judgment as a matter of law.”                             Fed. R.

Civ. P. 56(a).       “We review a district court's decision to grant

summary judgment de novo, applying the same legal standards as

the     district    court     and    viewing       all     facts       and    reasonable

inferences     therefrom       in    the    light       most     favorable      to     the

nonmoving party.”           T-Mobile Northeast LLC v. City Council of

Newport News, 674 F.3d 380, 384-85 (4th Cir. 2012) (internal

quotation marks omitted).

                                           A.

      We begin with Count III, the breach of contract claim.                           The

amended complaint set out the relevant terms of the Consulting

Agreement, including the portion through which JGA agreed to

                                           10
“render such other services as may be agreed upon by the Client

and the Consultant.”              J.A. 26, 55.           Bocek also alleged that he

and JGA “agreed that JGA would purchase ACC’s assets as a ‘straw

purchaser’ and immediately transfer ownership thereof to Bocek.”

J.A.    55.      Bocek      alleged    that        JGA    breached      the   Consulting

Agreement by, inter alia, using information learned from Bocek

for JGA’s own benefit, and that JGA breached the contract by

entering into the LOI and transferring its rights to A2, “thus

ensuring that Bocek could not . . . acquire ACC’s assets.”                           J.A.

55.

        The district court granted summary judgment in favor of

the defendants.           In the district court’s view, Bocek was not

claiming that JGA breached the Consulting Agreement, see J.A.

1207 n.1, but was only alleging that JGA breached a separate,

oral agreement for the straw purchase and immediate re-transfer

of     ACC    (the   “Straw       Purchase        Agreement”).          And   with    that

understanding        of     the    claim,     the        court   then    rejected     it,

explaining that “there is no evidence that the oral contract

allegedly breached ever validly existed due to the absence of a

meeting of the minds on the issue of Dr. Bocek’s entitlement to

rights in [ACC] subsequent to the execution of the Consulting

Agreement.”          J.A.   1207.      The        defendants     approach     the    issue

similarly, contending on appeal that Bocek’s breach of contract

claim is premised not on the Consulting Agreement, but on “the

                                             11
untenable and unsupported notion that he had an oral agreement

with JGA to purchase a $1 million medical practice even though

there is no evidence that he and JGA ever agreed on any of the

material terms necessary to purchase [ACC].”           Brief of Appellee

at 43.

      While the Amended Complaint included allegations about the

Straw Purchase Agreement, it also very clearly alleged breaches

of the Consulting Agreement. 2      On appeal, however, Bocek focuses

on the Straw Purchase Agreement, not the Consulting Agreement.

Bocek does not identify the district court’s misreading of his

breach of contract claim as an issue on appeal, see Brief of

Appellant at 2, nor does he argue in the substantive portions of

his brief that the defendants’ actions amounted to breaches of

the   Consulting   Agreement.       To    the   contrary,   Bocek    states

throughout   his   brief   that   the    services   performed   by   JGA   in

connection with the ACC acquisition were not performed under the

Consulting Agreement but were instead performed under the Straw

      2
       See J.A. 26, ¶ 45 (referring to November 2010 Consulting
Agreement as “the Agreement”); J.A. 55, ¶ 305 (“JGA agreed, per
the terms of the Agreement, to ‘render such other services as
may be agreed upon by the Client and the Consultant from time to
time.”); id., ¶ 309 (“JGA breached the Agreement by utilizing
information learned from Bocek . . . to fully analyze the
desirability of purchasing ACC’s assets for JGA’s benefit and
not for the benefit of JGA’s client, Bocek.”); id., ¶ 310 (“JGA
breached the Agreement by . . . .”); id., ¶ 311 (“JGA further
breached the Agreement by . . . .”).

                                    12
Purchase Agreement. 3       Because Bocek’s position on appeal is that

the defendants’ ACC-related actions breached the Straw Purchase

Agreement, not the Consulting Agreement, we are constrained to

conclude   that     Bocek   has     waived      any   breach     of    contract   claim

premised on a breach of the Consulting Agreement.                          See, e.g.,

West Va. CWP Fund v. Stacy, 671 F.3d 378, 389 (4th Cir. 2011)

(arguments not raised in opening brief are waived).

     The question, then, is whether a breach of contract claim

based on the putative Straw Purchase Agreement is viable.                           See

Progressive Constr. Co. v. Thumm, 161 S.E.2d 687, 691 (Va. 1968)

(To be binding and enforceable, a contract “must identify the

subject    matter    and    spell    out     the      essential       commitments   and

agreements    with    respect     thereto.”).            Bocek    argues     that   the

evidence in the record shows a meeting of the minds on all

material terms of the Straw Purchase Agreement -- the identity

of the parties, the nature of the work to be performed, the

     3
       See, e.g., Brief of Appellant at 38-39 (“The acquisition
of ACC was not envisioned by the Parties in the making of the
[Consulting] Agreement and so the terms of that Agreement do not
extend to the acquisition of an existing practice.”); id. at 42
n.15 (“[T]he [Consulting] Agreement cannot be read to govern the
acquisition of ACC because there is no evidence in the record of
any agreement between the parties to expand the scope of work.
Furthermore, the work necessary for the ACC acquisition was the
subject of a separate agreement in which the Parties addressed,
inter alia, JGA’s compensation for those services and its role
as straw purchaser.”); id. at 45 n.17 (“The agreement for JGA’s
assistance to acquire ACC was clearly not envisioned . . . or
done pursuant to the [Consulting] Agreement.”).

                                           13
duration of the agreement, and the compensation to be paid.                    See

Reid v. Boyle, 527 S.E.2d 137, 145 (Va. 2000) (listing essential

terms of a contract for services).                 According to Bocek, the

district      court   improperly      focused      on    the   asset    purchase

agreement that the parties intended to enter into after JGA’s

straw purchase of ACC rather than the Straw Purchase Agreement.

In Bocek’s view, the mechanics of the transfer from JGA to Bocek

is not a material term of the ACC acquisition deal, and the

absence    of   agreement     over    those    details    does   not    preclude

enforcement of the contract.          We disagree.

      The record shows that the parties were considering a number

of ways to structure the transfer, including: (1) Bocek being

made a minority partner in the entity actually purchasing ACC;

(2)   Bocek     running     the     practice    under     contract     with    the

purchasing entity; (3) Bocek obtaining a loan to cover the full

purchase    price,    which       would   permit   the    transfer     to     Bocek

immediately after the ACC purchase was completed; and (4) JGA or

Amato holding the note for the purchase price and Bocek repaying

with the proceeds of the allergy practice, with the expectation

that Bocek could re-finance with an institutional lender and pay

off the loan within 18-24 months.              The ultimate transfer of ACC

from JGA to Bocek was the whole point of the ACC transaction,

and the various ways contemplated by the parties to accomplish

that transfer have widely varying costs and consequences.                     Under

                                          14
these circumstances, it is difficult to describe the structure

and terms of that transfer as anything but essential to the

purported contract.         And because the transfer from JGA to Bocek

is an essential term, an agreement to agree in the future is not

sufficient.       See Allen v. Aetna Cas. & Sur. Co., 281 S.E.2d 818,

819   (Va.    1981)       (per    curiam)        (“[A]n    agreement    to    make    a

settlement,       without        specifying       more,    constitutes       only    an

agreement    to    negotiate       at   a    later    date.”);    1    Williston     on

Contracts    §    4:29    (4th     ed.)     (“[I]f    an   essential      element    is

reserved for the future agreement of both parties, as a general

rule, the promise can give rise to no legal obligation until

such future agreement.”).

      The parties “must assent to the same thing in the same

sense, and their minds must meet as to all the terms,” and those

terms “must be sufficiently definite to enable a court to give

it an exact meaning, and must obligate the contracting parties

to matters definitely ascertained or ascertainable.”                         Smith v.

Farrell, 98 S.E.2d 3, 7 (Va. 1957); see Restatement (Second) of

Contracts    §    33(2)    (contract        terms   must   be   certain    enough    to

provide “a basis for determining the existence of a breach and

for giving an appropriate remedy”).                  In this case, the parties

never agreed on the structure of the transfer from JGA to Bocek,

an essential part of the deal, and the Straw Purchase Agreement

is therefore not enforceable.                    See R. K. Chevrolet, Inc. v.

                                            15
Hayden, 480 S.E.2d 477, 480 (Va. 1997) (“A contract will be

enforced     if    its    obligations       are     reasonably         certain.”).            And

because the Straw Purchase Agreement is now the sole basis for

Bocek’s breach of contract claim, the district court properly

granted    summary        judgment    in    favor     of    the      defendants       on     that

count.

                                            B.

      We turn next to the breach of fiduciary duty claim.                               In his

Amended    Complaint,        Bocek    alleged       that    Amato      and     JGA,     as    his

agents, owed him various fiduciary duties, including a duty of

loyalty.          Bocek    alleged     that      he   brought         the    ACC      business

opportunity to JGA during the existence of the agency relation,

and   that   JGA     was    acting     on    behalf        of   Bocek       when   it      began

negotiating with the Estate and conducting due diligence.                                  Bocek

alleged that the defendants breached their fiduciary duties by,

inter    alia,     using    information       obtained          on    Bocek’s      behalf      to

pursue the acquisition of ACC for themselves, refusing to return

the due diligence materials to him, and, of course, buying ACC

for their own benefit rather than for Bocek’s benefit.

      The evidence in the record is more than sufficient, for

summary-judgment          purposes,    to    support       the       factual    allegations

outlined above, and there is little question that, under the

general law of agency, the conduct Bocek alleges is a clear

breach of fiduciary duty.             Agents are fiduciaries and owe their

                                            16
principals a strict duty of loyalty.               See Restatement (Third) of

Agency § 8.01 (“An agent has a fiduciary duty to act loyally for

the principal’s benefit in all matters connected with the agency

relationship.”).          An    agent   breaches    his       fiduciary    duties   by

purchasing for himself property that he was to purchase for his

principal.    See Rowland v. Kable, 6 S.E.2d 633, 642 (Va. 1940)

(“One who is entrusted with the business of another cannot be

allowed to make that business an object of interest to himself.

. . . The rule applies alike to agents, partners, guardians,

executors and administrators . . . .”); Horne v. Holley, 188
S.E. 169, 172 (Va. 1936) (“It is well settled that where one

person    sustains    a    fiduciary       relation      to    another    he   cannot

acquire an interest in the subject matter of the relationship

adverse to such other party.”).                An agent likewise breaches his

fiduciary duty by using confidential information belonging to

the   principal     for   the    agent’s    own   benefit.        See     Restatement

(Third) of Agency § 8.05(2) (“An agent has a duty . . . not to

use or communicate confidential information of the principal for

the agent’s own purposes or those of a third party.”).

      The district court nonetheless granted summary judgment for

the defendants, concluding that Bocek could seek recovery for

those    breaches    of    fiduciary      duty    only    through    a     breach   of

contract cause of action.               Noting that a claim for breach of

fiduciary duty can sound in contract or tort, see Augusta Mut.

                                          17
Ins. Co. v. Mason, 645 S.E.2d 290, 293 (Va. 2007), the district

court held that the fiduciary duties at issue in this case arose

from the Consulting Agreement, not independently of it.                                   The

court therefore concluded that “the recovery in tort Dr. Bocek

seeks is proscribed as a matter of law,” J.A. 1204, and that the

defendants were entitled to summary judgment on Count II.                                 See

Augusta Mutual, 645 S.E.2d at 293 (where single act can support

a claim for breach of contract and a claim breach of a duty

arising    in    tort,    “in    order       to        recover    in    tort,     the    duty

tortiously or negligently breached must be a common law duty,

not one existing between the parties solely by virtue of the

contract” (internal quotation marks omitted)); see also Station

#2, LLC v. Lynch, 695 S.E.2d 537, 540 (Va. 2010) (“[A]n omission

or non-performance of a duty may sound both in contract and in

tort,    but    only   where    the    omission          or   non-performance       of    the

contractual duty also violates a common law duty.”).

     Many of Bocek’s challenges to this ruling are unpersuasive,

as they appear to rest on a misapprehension of the principles

underlying       the     legal        rule    applied            in     Augusta     Mutual.

Nevertheless, we find ourselves in agreement with Bocek that the

timing    of    the    breach    of    duty       in    this     case    makes    the    rule

inapplicable.

     As the decision in Augusta Mutual demonstrates, Virginia

courts vigilantly police the border between tort and contract

                                             18
law so as “[t]o avoid turning every breach of contract into a

tort.”        Augusta         Mutual, 645 S.E.2d          at    293.       Nonetheless,

recovery      in    tort       is   permitted           in   cases        where    the    tort     was

committed after the termination of the parties’ contract.                                          See

Condominium Servs., Inc. v. First Owners’ Ass’n, 709 S.E.2d 163,

171 (Va. 2011) (rejecting defendant’s assertion that plaintiff

could not proceed on tort claim and breach of contract claim:

“Because the Management Agreement had terminated [when the tort

was     committed],            CSI’s       alleged           acts        did     constitute        the

independent,        willful         tort      of    conversion,            separate       from     the

contract.” (internal quotation marks omitted)); cf. Today Homes,

Inc.    v.    Williams,         634 S.E.2d 737,       744       (Va.     2006)    (agent’s

liability         for     breach        of     fiduciary            duty        continues        after

termination of the agency relationship only for “transactions

completed after termination of the officer’s association with

the corporation, but which began during the existence of the

relationship or that were founded on information gained during

the relationship” (internal quotation marks omitted)).

       The agency relation terminated on February 27, 2011, ten

days    after      Amato       gave     Bocek      the       notice       required       under     the

Consulting Agreement, well before the breaches of fiduciary duty

alleged      in    this       case.      Because         the    contractual          relationship

ended     before        the     torts      were         committed,         Bocek’s       breach    of

fiduciary         duty     claims        are       therefore             independent        of    the

                                                   19
Consulting Agreement, and Bocek is entitled to proceed on and

recover for those claims in tort. 4                   See Condominium Servs., 709
S.E.2d    at    171.        Accordingly,        the    district    court   erred     by

granting summary judgment against the breach of fiduciary duty

claim asserted in Count II of the amended complaint.

                                           C.

      We turn now to Bocek’s fraudulent conveyance claim.                       Under

Virginia law,

      [e]very gift, conveyance, assignment or transfer of .
      . . any estate, real or personal, . . . with intent to
      delay, hinder or defraud creditors, purchasers or
      other persons of or from what they are or may be
      lawfully entitled to shall, as to such creditors,
      purchasers or other persons, their representatives or
      assigns, be void.

Va.   Code     Ann.    §   55-80.    The    district       court   granted    summary

judgment     against       the   claim   because        Bocek   could   not   show    a

conveyance of ACC assets by JGA:

      Plaintiff   cannot   establish  the  existence  of   a
      conveyance by JGA because JGA never owned [ACC’s]
      assets to convey them. [ACC] did not bind itself when
      it executed the Letter of Intent with JGA, nor did JGA
      bind itself to acquire the assets.      The Letter of
      Intent served to permit JGA or its assigns to purchase
      [ACC’s] assets.    In the end, A2 purchased the assets

      4
       Our determination that Bocek waived his right to proceed
on any breach of contract based on the Consulting Agreement has
no bearing on the breach of fiduciary duty claim.         Bocek’s
failure to argue on appeal that the defendants breached the
Consulting Agreement amounted to a waiver of that claim, but it
cannot be viewed as a waiver of facts alleged in the complaint
and separate theories argued below and pursued on appeal.

                                           20
      of [ACC] directly from the Estate. JGA never acquired
      [ACC’s] assets, and therefore JGA never had any legal
      right or entitlement to those assets. Having no legal
      interest in [ACC], JGA could not legally have conveyed
      or assigned any rights to the assets of [ACC].

J.A. 1200.

      As    Bocek   points     out,       however,       his    fraudulent       conveyance

claim is not based on JGA’s conveyance of ACC’s assets to A2,

but on JGA’s conveyance of its right to purchase ACC’s assets.

See J.A. 49, ¶¶ 253-54.               While the district court’s focus on

ownership      rather   than        the    right     to        purchase    was    arguably

erroneous in light of the allegations in the Amended Complaint,

we find no error in the court’s ultimate disposition of Bocek’s

fraudulent conveyance claim.

      The    purpose    of    the    fraudulent          conveyance       statute    is    to

protect creditors from a debtor’s efforts to shield his property

from being used to satisfy his debts.                     See Buchanan v. Buchanan,

585 S.E.2d 533,    535    (Va.       2003)    (“The       essence    of     fraudulent

conveyance . . . is the diminution of the debtor’s estate to the

detriment of the creditor’s right of realization.”                                (internal

quotation marks omitted)).                As Bocek recognizes, see Brief of

Appellant at 26 n.7, a conveyance diminishes the debtor’s estate

and works to the detriment of creditors, however, only if the

property     conveyed    has    value.            See,    e.g.,     37    Am.     Jur.    2d,

Fraudulent Conveyances & Transfers § 72 (“If nothing of value is

transferred when property is transferred . . ., then there is

                                            21
nothing to avoid and recover and no fraudulent conveyance.”); 37

C.J.S. Fraudulent Conveyances § 9 (“A transfer of property of

little or no value will generally not be treated as fraudulent

as against creditors. . . .”); see also Balzer & Assocs., Inc.

v.   The   Lakes    on   360,   Inc.,   463 S.E.2d 453,   456   (Va.    1995)

(allowing     fraudulent        conveyance     claim    to    proceed       where

creditor’s evidence “support[ed] the reasonable inference of the

property having value at or above the established level of the

encumbrances upon it”).          In this case, however, there simply is

no evidence in the record showing that the property conveyed had

value.

      The JGA-to-A2 assignment is the only relevant conveyance,

and the property conveyed by that assignment was, in Bocek’s

words, JGA’s “right to acquire ACC.”             Brief of Appellant at 26.

At the time of the assignment, 5 however, the only rights JGA had

were those arising under the LOI accepted by the Estate.                   And as

previously noted, the LOI was not binding – neither JGA nor the

Estate had any obligation under the LOI to proceed with the sale

unless and until they agreed on the terms of the asset purchase

agreement.         The   LOI,   therefore,    was   nothing    more   than     an

      5
       The precise date of the assignment cannot be determined
from the record.      Nonetheless, because the asset purchase
agreement required by the LOI was executed by A2 rather than
JGA, the assignment must have taken place sometime before the
purchase agreement was signed on May 13, 2011.

                                        22
unenforceable agreement to negotiate, see Allen, 281 S.E.2d at

819, not an option contract, as Bocek insists.                  See, e.g., Hart

v. Hart, 544 S.E.2d 366, 373 (Va. 2001) (“An option is merely a

continuing offer to sell, irrevocable during the option period.”

(internal quotation marks omitted)). 6

      Because the LOI was not binding and enforceable, it gave

JGA no enforceable rights to purchase ACC.                 And because Bocek

can point to no evidence showing that these unenforceable rights

had value, the district court properly rejected the fraudulent

conveyance claim.

                                         D.

      Finally, we turn to the joint venture claim.                       “A joint

venture is established by contract, express or implied, where

two   or    more     persons   jointly    undertake   a    specific      business

enterprise for profit, with each to share in the profits or

losses and each to have a voice in the control and management.”

Ortiz      v.      Barrett,    278 S.E.2d 833,       840     (Va.     1981).

“Coadventurers stand in a fiduciary relation to each other, and

within the scope of the enterprise they are bound by the same

standards of good conduct and square dealing as are required

      6
       To the extent that Bocek argues that the Pennsylvania
court’s approval of the sale gave value to JGA’s right to buy
ACC, the court approval came after JGA assigned its interests to
A2. There simply is no evidence showing that JGA’s “right” had
value when assigned.

                                         23
between partners.”          Jones v. Galleher & Co., 47 S.E.2d 333, 337

(Va. 1948).

      Bocek argues (in the alternative to Counts II and III) that

if no principal-agent relationship existed between him and Amato

(through JGA), then the relationship was one of joint venturers,

and   that    the   defendants’        acquisition         of    ACC        for    their    own

benefit   violated      the      fiduciary       duties     they       owed       Bocek.     We

disagree.       As we have previously discussed, the parties never

reached agreement on how the transfer of ACC’s assets from JGA

to Bocek would be structured, and there simply is no evidence

showing   that      Bocek     and   Amato     ever    reached          an     agreement      to

operate   the    ACC   offices        together,      with       each    sharing        in   the

profits   and    having      a   say   in     management        and     control        of   the

business.       See Ortiz, 278 S.E.2d at 840.                      The district court

therefore     properly      granted     summary      judgment          in    favor     of   the

defendants on the joint venture claim.

                                         III.

      Accordingly, for the foregoing reasons, we hereby affirm

the district court’s grant of summary judgment in favor of the

defendants on Bocek’s breach of contract, fraudulent conveyance,

and   joint   venture       claims.      We      reverse     the      grant       of   summary

                                            24
judgment on the claim for breach of fiduciary duty and remand

for further proceedings on that claim.

                                             AFFIRMED IN PART,
                                             REVERSED IN PART,
                                                  AND REMANDED

                               25
NIEMEYER, Circuit Judge, concurring in part and concurring in
the judgment:

       I would allow the breach of fiduciary claim to proceed to

trial, and therefore I concur in the result reached in Part

II(B) of Chief Judge Traxler’s opinion.                    My reasoning for doing

so,    however,    differs    somewhat      from    that     relied   on     by   Judge

Traxler.

       Bocek retained JGA Associates as his agent to assist him in

forming a new medical practice or in rendering other services,

as     the   parties       agreed.         Pursuant    to     their        “Consulting

Agreement,” JGA became actively involved in Bocek’s effort to

purchase an existing medical practice that he had learned was

for sale, Allergy Care Centers, and JGA’s services thereafter

related solely to purchasing Allergy Care Centers.                       JGA was paid

for these services as provided in the Consulting Agreement.

       During     the   course      of   providing     services       to    Bocek   in

connection       with   the   purchase      of   Allergy      Care    Centers,      JGA

wrongfully began planning to acquire Allergy Care Centers for

itself, and to that end, it terminated the Consulting Agreement

with    Bocek     and   thereafter,        through     an     affiliated        entity,

acquired Allergy Care Centers.

       In my judgment, these facts, if ultimately proved, give

rise    to   a   classic    claim    for   breach     of    the   duty     of   loyalty

inherent in the agency agreement that existed between Bocek and

                                           26
JGA.          See    Restatement            (Third)       of    Agency      §   8.01.         An   agent

clearly breaches this duty of loyalty by purchasing for itself

property that it was purchasing for its principal.                                       See, e.g.,

Rowland v. Kable, 6 S.E.2d 633, 642 (Va. 1940); Horne v. Holley,

188 S.E. 169, 172 (Va. 1936).

         The fact that JGA terminated the agency agreement before

taking advantage of the opportunity that came to it while it was

an agent provides no defense.                        The viable claim remains that JGA

came     upon        the    opportunity         to     purchase            Allergy     Care    Centers

during the course of its work for Bocek in assisting him to

purchase that practice and, in order to seize that opportunity

for itself, terminated the agency relationship.                                      The law would

be   a    buffoon          if    it    allowed    JGA          to   take     Bocek’s    opportunity

simply        by      ending          the     agency       relationship          and     proceeding

thereafter in furtherance of its own interest.

         It     is     well-established                that         various      duties        survive

contracts           even    after       the    contracts            have    ended.       Surely,     an

attorney could not breach a duty of loyalty or confidentiality

to a client after the lawyer had completed his service to the

client.        See Reese v. Va. Int'l Terminals, Inc., 894 F. Supp. 2d
665,     671        (E.D.       Va.   2012)     (explaining           that      Rule    1.9    of   the

Virginia Rules of Professional Conduct governs a lawyer’s duty

of loyalty to former clients).                         Similarly, an agent’s fiduciary

obligations do not disappear when the agency relationship ends.

                                                     27
See, e.g., Today Homes, Inc. v. Williams, 634 S.E.2d 737, 744

(Va. 2006) (stating that fiduciary obligations continue “after

termination of the officer’s association with the corporation”

for   transactions   that   “began    during   the   existence   of   the

relationship or that were founded on information gained during

the relationship” (internal quotation marks omitted)).

      I therefore join in the judgment to reverse the dismissal

of the breach of fiduciary duty claim and to remand that claim

for trial on the merits.     I also concur in the other portions of

Chief Judge Traxler’s opinion, as well as the judgment.

                                     28
WILKINSON, Circuit Judge, concurring and dissenting:

       Breach of contract is not a tort. Virginia law makes clear

that a plaintiff may not recover in tort for breach of a duty

that exists solely by virtue of a contract. See Augusta Mut.

Ins.       Co.    v.     Mason,   645 S.E.2d 290,    293     (Va.    2007).    Here,

appellant Petr Bocek entered into a contract (the “Consulting

Agreement”)         with    appellee    JGA    Associates         (“JGA”).    Under    that

agreement,         JGA’s    president,      appellee       Joseph    Amato,    agreed    to

provide Bocek with business consulting services in connection

with the development and purchase of an allergy care practice. 1

The relationship between Bocek and Amato later soured, and Bocek

commenced         this     litigation      alleging,       inter    alia,     that    Amato

breached his fiduciary duty by misappropriating a confidential

business opportunity that he learned about from Bocek in the

course of the consulting relationship. However, because Amato’s

duty   to        Bocek    arose   solely    from    the    Consulting       Agreement,   I

cannot conclude that Bocek is entitled to recover in tort for

the alleged breach. And because Bocek has expressly argued on

appeal      that       Amato’s    actions     did   not     violate    the     Consulting

       1
       Since Amato is the only relevant officer of JGA for
purposes of this appeal, I shall use “Amato” to refer to
appellees Amato and JGA collectively.

                                              29
Agreement, I cannot conclude that Bocek is entitled to recover

for breach of contract. I therefore respectfully dissent. 2

                                      I.

      As   the   lead   opinion    acknowledges,        a    plaintiff    may    not

recover in tort for breach of a duty that arises solely from a

contract. See Augusta, 645 S.E.2d at 293; see also Lead Op. at

18. The aim of this general rule is “[t]o avoid turning every

breach of contract into a tort.” Augusta, 645 S.E.2d at 293.

Here, the duty that Amato allegedly breached arose solely from

the Consulting Agreement, thus barring recovery in tort.

                                      A.

      The gravamen of Bocek’s tort claim is that Amato “breached

his   fiduciary   duties   to     Bocek    by   lying       to   Bocek   about   the

contemplated purchase price of ACC’s assets,” “failing to inform

Bocek about material aspects of his dealings with [ACC],” and

“using to [his own] advantage information [he] gained from Bocek

in the course of [the] agency by pursuing ACC’s assets for [his]

own financial gain.” J.A. 51-52. However, as a review of the

Consulting Agreement reveals, these allegations actually speak

to a breach of two contractual duties imposed on Amato.

      2
       I concur in the lead opinion’s disposition of Bocek’s
other claims.

                                      30
      Pursuant to that contract, Amato agreed to “make a diligent

effort to review and report on the feasibility of the proposed

allergy medicine practice” and “render such other services as

may be agreed upon by the Client and the Consultant from time to

time.”   J.A.   64.    As   relevant   here,     the    Consulting    Agreement

imposed two specific duties on Amato: (1) a duty to “update

[Bocek] on an ongoing and regular basis as to the [Amato’s]

progress   in   fulfilling     [his]   obligations       and   performing       the

services   contemplated”;      and   (2)    a   duty    to   “not   use   any    of

[Bocek’s] [i]nformation for [Amato’s] own account.” J.A. 64-65.

But for the Consulting Agreement, the two parties would not have

had any relationship whatsoever and, thus, Amato would not have

had the two aforementioned duties to Bocek.

      Notwithstanding Bocek’s labeling of his tort claim as such,

the duties Amato allegedly breached arose solely by virtue of

the contract, and any recovery by Bocek for Amato’s actions is

therefore limited to a contract claim. See Augusta, 645 S.E.2d

at 293. While tort law exists to “provide[] redress . . . for

the   violation   of    certain      common     law    and   statutory    duties

involving the safety of persons and property, which are imposed

to protect the broad interests of society,” Filak v. George, 594
S.E.2d 610, 613 (Va. 2004), those “broad interests of society”

are not at issue here because Amato and Bocek came together ex

                                       31
ante and bargained for certain terms that were to govern their

relationship.

                                                 B.

       The      lead       opinion       argues       that      although         Amato    had     a

contractual duty not to profit from Bocek’s information while

the     Consulting         Agreement          was     still     in       effect,    that        duty

terminated with the contract. However, given Amato’s ability to

unilaterally abrogate the Consulting Agreement while providing

only    10   days      notice,       this      contractual       duty       to    refrain      from

misusing     Bocek’s         information         survived       the       termination.         Under

Virginia law, a contract must be given a construction consistent

with     “the     intention         of     the      parties      as       disclosed       by    the

instrument in light of the surrounding circumstances.” Columbia

Realty Venture, LLC v. Dong Dang, 83 Va. Cir. 258, 261 (2011)

(quoting Kirschbaum            v.    Blair,         34 S.E. 895,      897    (Va.    1900)).

Although the Consulting Agreement does not explicitly indicate

that     Amato’s       duty    not       to     profit       from     Bocek’s       information

survived        the    contract’s             termination,          the     parties       plainly

intended        such       survival.       Consider       the        consequences         of    the

contrary        conclusion.         If     Amato’s       duty        terminated         with    the

contract,        he    would        have       been      able       to     obtain       valuable,

confidential information from his unsuspecting client and then

use that information to his own advantage whenever he chose to

do     so.   Such      a    scheme       would        eviscerate         the     very    contract

                                                 32
provision barring Amato from using his client’s information in

the first place.

       The sole case that the lead opinion cites in its support,

Condominium Services Inc. v. First Owners’ Ass’n, 709 S.E.2d 163

(Va. 2011), only underscores the difficulty with its position.

The test used by the Virginia Supreme Court for the tort of

conversion    requires     that   “the    duty     tortiously     or   negligently

breached must be a common law duty, not one existing between the

parties solely by virtue of the contract.”                Id. at 171 (internal

quotation marks omitted). See also Restatement (Second) of Torts

§ 222A (“Conversion is an intentional exercise of dominion or

control over a chattel” of another). The conversion in that case

existed irrespective of contract. It arose from the freestanding

duty of any citizen to respect the lawful property rights of

another. Here, as discussed above, the breach of duty was one

both   established   and    stemming      exclusively     from    the   contract.

Unlike   in   Condominium    Services,        in   this   case,    there   was   no

“independent, willful tort . . . separate from the contract.”

Id. (internal quotation marks omitted).

       Finally, the lead opinion holds that Bocek can advance his

breach of fiduciary duty claims in tort because Amato terminated

the Consulting Agreement “well before the breaches of fiduciary

duty alleged in this case.” Lead Op. at 19. As noted above, it

is my view that the contract’s requirement that Amato not profit

                                         33
from    information      provided      by    Bocek       survived     the   termination.

Furthermore, the lead opinion acknowledges that Amato had begun,

before    he     terminated     the     contract,          to   use    information      he

acquired from Bocek to contemplate the sale of ACC for his own

gain and that of his associates. See Lead Op. 8-9; J.A. 1021-22.

Although Amato did not purchase ACC until after the contract was

terminated, Bocek provided him with important information while

the    parties    were    under     contract.        Cf.    Today     Homes,    Inc.    v.

Williams,      634 S.E.2d 737,    744       (Va.    2006)     (“Liability       post-

termination      continues      only    for       those     transactions       completed

after    termination       of     the       officer's       association        with     the

corporation, but which . . . were founded on information gained

during   the     relationship”      (internal        quotation        marks   omitted)).

Amato’s breach of fiduciary duty arose from information gained

during and as a result of the contract. Bocek’s remedy should

lie in contract.

                                            II.

       The parties’ sole relationship arose from the contract. The

contract set the framework of that relationship. The contract

established the duties these parties owed to one another. The

contract afforded Amato the access to information he misused.

The alleged wrongdoing is only wrong because it stemmed from

that    contractual      understanding.           Bocek     cannot     circumvent      the

                                            34
origins of the relationship by declining to argue the relevant

contract claim on appeal and opting instead to press what may

seem    a    more    lucrative    claim   and   more   open-ended      recovery   in

tort.       This    blurs   the   line   Virginia   law   has   long   labored    to

maintain. I would affirm in toto and respectfully dissent. 3

       3
       Inasmuch as there is no single majority approach, I have
confined this dissent to Chief Judge Traxler’s lead opinion. As
to my friend’s concurring opinion, to the extent that it can be
read to advocate a free standing agency-based breach of
fiduciary duty tort to every contract violation, that view is of
further distance than the Chief Judge’s asserted temporal
limitation from my own.

                                           35