Ospta v. Summit Group Properties

724 S.E.2d 718, 283 Va. 777
CourtSupreme Court of Virginia
DecidedApril 20, 2012
Docket110849
StatusPublished
Cited by20 cases

This text of 724 S.E.2d 718 (Ospta v. Summit Group Properties) is published on Counsel Stack Legal Research, covering Supreme Court of Virginia primary law. Counsel Stack provides free access to over 12 million legal documents including statutes, case law, regulations, and constitutions.

Bluebook
Ospta v. Summit Group Properties, 724 S.E.2d 718, 283 Va. 777 (Va. 2012).

Opinion

724 S.E.2d 718 (2012)
283 Va. 777

ORTHOPEDIC & SPORTS PHYSICAL THERAPY ASSOCIATES, INC., et al.
v.
SUMMIT GROUP PROPERTIES, LLC.

Record No. 110849. No. 110849.

Supreme Court of Virginia.

April 20, 2012.

*719 William E. Glover (Glover & Dahnk, Fredericksburg, on briefs), for appellants.

Margaret F. Hardy, Fredericksburg (Sands Anderson, on brief), for appellee.

Present: All the Justices.

Opinion by Justice CLEO E. POWELL.

In this appeal, Orthopedic & Sports Physical Therapy Associates, Inc. ("OSPTA") argues that the trial court erred in granting Instruction 15, offered by Summit Group Properties, LLC ("Summit"), because it misstated the law by instructing the jury that a limited liability company ("LLC") could not be liable for any fraudulent activity unless the fraud was approved by the members of the LLC. We agree with OSPTA that Instruction 15 was misleading because it was not a complete statement of the law, and hold that the trial court erred in giving the instruction.

*720 I. FACTS AND PROCEEDINGS

Brian P. D'Orazio, Barbara D. Ehman, and Marshall A. Rennie were partners in OSPTA. Together, they approached Doctors Kurt Larson, Raymond Chung, and Raymond Kirchmier of Orthopedic Specialty Clinic ("OSC") and five other individuals from Cardiology Associates of Fredericksburg ("CAF") to form Massaponax Medical Properties, L.L.C. ("MMP"). D'Orazio was the first president of MMP and Dr. Larson was its first treasurer. MMP intended to purchase land in the Massaponax area of Spotsylvania County, build a medical office building, and then sell the finished property to a third party with OSPTA, OSC, and CAF as tenants.

On October 18, 2007, the five members of CAF submitted an offer to MMP to purchase the property. After that offer was submitted, the three members of OSC approached CAF and asked to join them in purchasing the property. The eight then formed Summit on December 28, 2007, to purchase and operate the building.

OSPTA executed a lease with MMP on January 31, 2008. OSC and CAF entered into identical leases. Summit eventually purchased the building and assumed the leases from MMP in September of 2008.

Prior to opening the Massaponax office building, OSC was the largest referral source for OSPTA as OSC did not have its own physical therapy practice. Ehman testified that she spoke with the OSC doctors about their plans and the needs of OSC upon expansion to the Massaponax office. She also admitted that OSPTA did not discuss any referral/rent arrangement with OSC. However, because OSC did not have physical therapists, OSPTA made its decision to enter into a long term lease based on its assumption that it would continue to receive referrals from OSC.

During 2007, Dr. Larson decided that OSC would begin offering physical therapy at the new Massaponax office. To do this, OSC hired two physical therapists from OSPTA in 2007.[1] Ehman and D'Orazio contend that Dr. Larson made this decision on behalf of OSC. The opening of OSC's Massaponax office had a significant, negative effect on OSPTA's practice. On August 15, 2009, OSPTA vacated its office space, thereby breaching its lease.

Summit sued OSPTA and its partners for breach of the lease and damages. OSPTA filed a counterclaim in which it alleged fraud in the inducement and damages. At trial, OSPTA offered the following instruction that the trial court gave as Instruction 13:

An act of a member, including the signing of an instrument in the limited liability company name, for apparently carrying on in the ordinary course the limited liability company business or business of the kind carried on by the limited liability company, binds the limited liability company, unless the member had no authority to act for the limited liability company in the particular matter and the person with whom the member was dealing knew or had notice that the member lacked authority.

Summit offered an instruction informing the jury that to find it guilty of fraud, the jury was required to find that fraudulent activity was authorized by the members of the LLC. OSPTA objected and argued that Summit's instruction was an incorrect statement of the law because it omitted the "ordinary course of business" requirement. The court overruled the objection and gave the instruction as Instruction 15.

OSPTA argued that Summit's ordinary course of business was purchasing and leasing the Massaponax office building and that members of OSC who were also members of Summit concealed information and made material misrepresentations to induce OSPTA to sign the lease. OSPTA contended that by giving the jury a proper, amended instruction, the jury would be tasked with deciding whether OSC's actions were within the ordinary course of Summit's business.

Summit's theory of the case was that to the extent that misrepresentation and/or concealment occurred, it took place before Summit *721 was formed, certainly before it assumed the leases, and was done in the course of OSC's business.

After the case was given to the jury, the jury returned with a question: "In regard to Instruction 15, `Do the actions or non-actions of a minority portion of the group represent authority of the group.'" The trial court responded: "You must decide the case based upon the instructions and the evidence."

The jury returned a verdict in favor of Summit against OSPTA in the amount of $187,000 plus interest. It found for Summit on OSPTA's counterclaim.

In its post-trial motions, OSPTA argued that Instruction 15 conveyed to the jury that Summit could not be held liable unless all of the members of Summit approved the fraud and was therefore both legally and semantically wrong. OSPTA argued that because of this instruction, Summit erroneously argued to the jury that a majority of the members of Summit had to authorize the fraudulent activity. The trial court denied these motions. This appeal follows.

II. ANALYSIS

When we consider the propriety of giving an instruction to a jury,

our responsibility is to see that the law has been clearly stated and that the instructions cover all issues which the evidence fairly raises. [A] litigant is entitled to jury instructions supporting his or her theory of the case if sufficient evidence is introduced to support that theory and if the instructions correctly state the law. The evidence introduced in support of a requested instruction must amount to more than a scintilla.

Bennett v. Sage Payment Solutions, Inc., 282 Va. 49, 55, 710 S.E.2d 736, 740 (2011) (quoting Williams v. Cong Le, 276 Va. 161, 166, 662 S.E.2d 73, 76 (2008)). "We read the granted jury instructions together and consider them as a whole. The determination whether a jury instruction accurately states the relevant law is a question of law that we review de novo." Hawthorne v. VanMarter, 279 Va. 566, 586, 692 S.E.2d 226, 238 (2010) (citations omitted).

Free access — add to your briefcase to read the full text and ask questions with AI

Related

Marshall Travis Wootten v. Commonwealth of Virginia
Court of Appeals of Virginia, 2026
Terry Eugene Michel v. Commonwealth of Virginia
Court of Appeals of Virginia, 2025
Cheryl Lorraine Fitch v. Phantom Auto Group, LLC
Court of Appeals of Virginia, 2025
Hartnett v. Hardenbergh
E.D. Virginia, 2025
Kimberly Price Burch, etc. v. Jeff Sensenig, D.O.
Court of Appeals of Virginia, 2024
Makesha Johnson v. Commonwealth of Virginia
Court of Appeals of Virginia, 2018
Lindsey v. Commonwealth
795 S.E.2d 311 (Supreme Court of Virginia, 2017)
Deante Lamar Payne v. Commonwealth of Virginia
776 S.E.2d 442 (Court of Appeals of Virginia, 2015)
Alexander v. Colston
92 Va. Cir. 84 (Virginia Beach County Circuit Court, 2015)
Sarafin v. Commonwealth
Supreme Court of Virginia, 2014
Steven Joseph Blevins v. Commonwealth of Virginia
762 S.E.2d 396 (Court of Appeals of Virginia, 2014)
Dominguez v. Pruett
Supreme Court of Virginia, 2014
Linnon v. Commonwealth
Supreme Court of Virginia, 2014
Justin Sarafin v. Commonwealth of Virginia
748 S.E.2d 641 (Court of Appeals of Virginia, 2013)
Online Resources Corp. v. Lawlor
Supreme Court of Virginia, 2013
Lawlor v. Commonwealth
Supreme Court of Virginia, 2013

Cite This Page — Counsel Stack

Bluebook (online)
724 S.E.2d 718, 283 Va. 777, Counsel Stack Legal Research, https://law.counselstack.com/opinion/ospta-v-summit-group-properties-va-2012.