Court Opinion

ID: 4967679
Source: CourtListenerOpinion
Date Created: 2021-09-24 16:24:54.047139+00
Date Added: 2024-06-11T08:16:19.158532
License: Public Domain

REID, Senior Judge,
concurring:
Judge Easterly concludes that: “We need not determine whether the trial court properly applied Virginia law to all aspects of Ms. Barimany and Mr. Dove’s lawsuit in light of our determination that (1) the trial court properly applied the Virginia Condominium Act as it does not conflict with District of Columbia law, and (2) that statute shielded Urban Pace from liability.” I fully agree that the Virginia Condominium Act bars appellants’ action against Urban Pace LLC. I write separately to express my view that under our traditional choice of law approach, Virginia law governs this action.
First, I highlight certain aspects of the record before us. In the underlying litigation, the Virginia Circuit Court of Arlington (“the Virginia court”) determined that “[t]he central issue in the case was whether [Ms.] Barimany and [Mr.] Dove received the revised Public Offering Statement [“amended POS”], and if so when.” The Virginia court concluded that they did not receive the amended POS, and that some of the amendments were material. Consequently, Ms. Barimany and Mr. Dove, Virginia residents, prevailed in the breach of contract lawsuit filed against them by Abdo, a Virginia developer. The Virginia court ordered the return of appellants’ $58,750 deposit on a condominium unit in a Virginia condominium complex.
*971Appellants’ amended complaint lodged in the Superior Court of the District of Columbia against Abdo’s sales agent, Urban Pace, demanded damages in the form of attorney’s fees for the tort of wrongful involvement in litigation. Urban Pace’s principal place of business is the District of Columbia, but it also conducted business out of the onsite sales office for the Virginia condominium. The amended complaint alleged not only that Ms. Barimany and Mr. Dove did not receive the amended POS, but also that their signatures on the receipt for the amended POS had been forged.14 The place of forgery was not identified in the amended complaint.
Where the alleged forgery of the amended POS occurred — the District, Virginia, or some other geographical location — is not answered by the documents that comprise the record in this case. Deposition testimony revealed that some of Urban Pace’s sales agents “occupied” and worked out of the Virginia onsite sales center, “met clients there,” “provided tours for potential purchasers,” and “handled paperwork in terms of contracts, marketing materials.” The Virginia court found that an Urban Pace agent “advised [Ms.] Barima-ny that [she and Mr. Dove] had received a copy [of the amended POS] in April 2007 while in the sales office.” An email from Urban Pace Agent Karen Taylor forwarded to Ms. Barimany “a copy of the Condominium Documents Amendment that [she, meaning Ms. Taylor] received in this Office in April,” but the email does not indicate where the purported signatures of Ms. Barimany and Mr. Dove took place, or from which office the documents were sent to Ms. Barimany.
Both parties identify the following issue for resolution by this court: whether the trial court erred by deciding that Virginia law applies to the instant action concerning the tort of wrongful involvement in litigation, and the demand of appellants for attorney’s fees arising out of the Virginia litigation. I would answer that question directly by concluding that the trial court correctly decided that Virginia law applies to this case.
“We review questions of choice of law on a de novo basis.” District of Columbia v. Coleman, 667 A.2d 811, 816 (D.C.1995). We follow “the ‘governmental interests’ analysis, under which we evaluate the governmental policies underlying the applicable laws and determine which jurisdiction’s policy would be more advanced by the application of its law to the facts under review.” Id. (citation omitted). In addition, we consider factors set forth in § 145 of the Restatement (Second) of Conflict of Laws. Section 145(1) provides that:
The rights and liabilities of the parties with respect to an issue in tort are determined by the local law of the state which, with respect to that issue, has the most significant relationship to this occurrence and the parties....
Section 145(2) states that:
Contacts to be taken into account ... to determine the law applicable to an issue include:
(a) The place where the injury occurred,
(b) The place where the conduct causing the injury occurred,
(c) The domicile, residence, nationality, place of incorporation and place of business of the parties, and
(d) The place where the relationship, if any, between the parties is centered.
Section 145 specifies that: “These contacts are to be evaluated according to their rela*972tive importance with respect to the particular issue.”
As I see it, the essential issue before us may be stated as follows: In a District of Columbia wrongful involvement in litigation tort lawsuit against a Virginia condominium developer’s sales agent (who is incorporated in the District of Columbia but who did business in Virginia at the site of the condominium), may appellants (Virginia residents who signed a contract in Virginia to purchase one of the Virginia developer’s Virginia condominium units) recoup legal fees incurred in successfully defending themselves in a Virginia court against the Virginia developer who sued them for breach of contract? To examine this issue, we set forth pertinent statutes and case law before considering the respective governmental interests.
Virginia Code § 55-79.80:1 of the Virginia Condominium Act provides in pertinent part: “An action for tort alleging a wrong done (i) by any agent or employee of the declarant ... or (ii) in connection with the condition of any portion of the condominium which the declarant ... has the responsibility to maintain, shall be brought against the declarant.... ” “Declarant” is defined, in part, as: “any person ... that (i) offers to dispose of his or its interest in a condominium unit not previously disposed of ..., or (iii) applies for registration of the condominium.” Va.Code § 55-79.41 (2008). As far as we can discern, the Virginia Supreme Court has not recognized the tort of wrongful involvement in litigation. Rather, for litigants seeking attorneys’ fees, Virginia has adhered to the general American rule that “in the absence of any contractual or statutory liability therefor, attorneys’ fees and expenses incurred by the plaintiff in the litigation of his claim against the defendant are not recoverable.” Rambus, Inc. v. Infineon Tech. AG, 164 F.Supp.2d 743, 758-9 (E.D.Va.2001) (internal quotation marks and citations omitted). In addition, Virginia long has followed the principle that “except where the injury is wanton or malicious and exemplary damages are recoverable, the allowance of fees paid counsel for defending the original proceeding is not proper.” Kemp v. Miller, 166 Va. 661, 186 S.E. 99, 106 (1936). Moreover, “where a breach of contract has forced the plaintiff to maintain or defend a suit with a third person, he may recover the counsel fees incurred by him in the former suit provided they are reasonable in amount and reasonably incurred.” Carlson v. Wells, 281 Va. 173, 705 S.E.2d 101, 109 (2011) (internal quotation marks and citations omitted); see also Fisher v. Virginia Elec. & Power Co., 258 F.Supp.2d 445, 453-54 (E.D.Va.2003).
In contrast, the District of Columbia recognizes the “wrongful involvement in litigation doctrine, which works an exception to the American Rule [that each party pay its own fees].” Rosenthal v. Sonnenschein Nath & Rosenthal, LLP, 985 A.2d 443, 458 (D.C.2009) (internal quotation marks and citation omitted); see also Safeway Stores, Inc. v. Chamberlain Protective Servs., Inc., 451 A.2d 66, 69 (D.C.1982) (under this exception to the American Rule, “a party must show that: (1) the plaintiff must have incurred attorney’s fees in the prosecution or defense of a prior action; (2) the litigation ordinarily must have been with a third party and not with the defendant in the present action; and (3) the plaintiff must have become involved in such litigation because of some tortious act of the defendant”) (citation omitted).
We turn now to the application of the Restatement factors governing the governmental interests analysis. First, as to the place of the injury, it is reasonably clear that the injury occurred in Virginia. The litigation between Abdo and appellants, which caused appellants to incur the legal fees they seek to recover in this litigation, *973took place in a Virginia court. Although Ms. Barimany and Mr. Dove retained a law firm based in the District, a Virginia firm also represented them,15 and appellants spent money in Virginia for services rendered in Virginia.16 We disagree with Urban Pace’s assertion that the place of injury is not critical in this case. The place of injury — Virginia—was not fortuitous as it was in Zhou v. Jennifer Mall Rest., 534 A.2d 1268 (D.C.1987). The contract between Abdo and appellants (Virginia residents), which had been executed in Virginia, concerned a Virginia condo unit. Thus the place of appellants’ injury was not fortuitous; rather it was readily predictable that a Virginia court would be selected for Abdo’s lawsuit.
With respect to the second and third factors, the record does not substantiate Urban Pace’s implicit assumption that the forgery took place in the District because that is where Urban Pace is incorporated and has its principal place of business. Urban Pace also conducted business in an onsite location at the Virginia condominium complex. Furthermore, there is no allegation as to where the alleged forgery of appellants’ signatures took place, or where the receipt for the amended POS was created. Thus, no allegation points to a strong District governmental interest solely because Urban Pace is incorporated in the District and has an office here. Indeed Virginia has the stronger interest with regard to the particular question at issue: whether Urban Pace wrongfully caused appellants to incur legal expenses in the Virginia court litigation.
Application of the fourth factor shows that Virginia has the greater connection to this case. The parties dealings were centered in Virginia — the signing of the contract, the subject of the contract (the condominium unit), and Abdo’s lawsuit against appellants. In fact, there is no indication in the record that appellants ever visited Urban Pace’s District offices or otherwise dealt with Urban Pace in the District.
The comparison of Virginia’s and the District’s respective governmental interests clearly shows that Virginia has the most substantial interest. Virginia’s policy, embedded in its Condominium Act, requires a person to sue a “declarant,” in this case Abdo, for any alleged wrong on the part of Abdo’s agent, Urban Pace. Virginia’s Supreme Court has not interpreted the word “declarant” in its Condominium Act to include an agent. In contrast, the District’s policy allows a person to sue the agent under the District’s recognized tort of wrongful involvement in litigation.
Furthermore, Virginia generally does not permit recovery of attorney’s fees unless “the injury is wanton or malicious and exemplary damages are recoverable.” Kemp, supra, 186 S.E. at 106. Where there has been a breach of contract by the declarant, however, Virginia law would permit a person, appellants in this case, to seek “reasonable” attorney’s fees that have been “reasonably incurred.” Carlson, supra, 705 S.E.2d at 109. In short, Virginia has specific, longstanding policies regarding the recovery of attorney’s fees, and neither its legislature nor its Supreme Court has altered those policies by permitting persons to sue agents directly for legal fees under its Condominium Act, or *974by bringing an independent action against agents under the theory that they are embraced within the definition of “declar-ant.”
Under the circumstances of this ease, however, the District has a general interest in regulating the behavior of Urban Pace, not only in this city but also in nearby Virginia locations, because of Urban Pace’s incorporation in the District. But, Virginia has an interest in making sure that developers like Abdo hire agents, such as Urban Pace, who conduct their business properly in Virginia and with respect to Virginia residents.
In a case involving a choice of law issue between Maryland and the District, Estrada v. Potomac Electric Power Co., 488 A.2d 1359 (D.C.1985), we acknowledged that the District “has an interest in the manner in which its resident corporations conduct themselves outside our narrow boundaries.” Id. at 1365. We also made clear that “this court’s task is not to find that the District has an interest in the application of its law, but rather which jurisdiction has the most substantial interest in having its law applied to the issue,” id. (emphasis in original): in this case, whether an agent of a declarant (Virginia developer Abdo) caused appellants, Virginia residents, to incur legal expenses in a Virginia court while defending against a breach of contract lawsuit regarding a Virginia condominium unit.
On this record, I have no doubt that Virginia has the most substantial interest in having its law applied to this case. Therefore, like the trial court, I would resolve the issue directly and in favor of Virginia law.

. The Virginia court credited the testimony of Ms. Barimany and Mr. Dove, and the court declared that their “position was that they did not sign an acknowledgment of receipt of the revised POS.”

. How much of the $300,000 in legal fees went to the Virginia law firm is not clear from the record.

. Appellants also allege that they suffered other injuries, such as a delay in recovering the earnest money they provided Abdo under the contract, certain unspecified accounting and storage fees, and emotional distress. Because Abdo, Ms. Barimany, and Mr. Dove all were Virginia domiciliaries during the Virginia court litigation, these damages almost surely occurred in Virginia.