LaVay Corp. v. Dominion Federal Savings & Loan Ass'n

Summary

The Fourth Circuit reviewed a dispute arising from Dominion Federal Savings & Loan Association's refusal to finance a Florida real estate development. The court held that Virginia law governed following transfer under 28 U.S.C. § 1406(a), that the one-year statute of limitations barred punitive damages based on the alleged tortious breach of fiduciary duty, and that the RICO claim and lost-profit evidence were properly dismissed or excluded. The court affirmed the denial of expert witness fees, but remanded the Rule 11 sanctions and deposition-cost issues for further proceedings.

Holdings

1. A transferee district court receiving a case transferred from an improper venue under § 1406(a) applies the law of the state in which the transferee court sits, rather than the law of the transferor court.
2. Virginia's one-year limitation period for personal actions without another prescribed limitation, Va. Code § 8.01-248, barred LaVay's claim for punitive damages based on Dominion's alleged tortious breach of fiduciary duty.
3. The district court improperly denied Rule 11 sanctions without developing a record concerning the inquiry and factual or legal basis for the claims against Dorn; the sanctions ruling had to be vacated and remanded for further consideration.
4. Absent explicit statutory or contractual authority, expert-witness fees are not taxable as costs in excess of the statutory witness-fee limit.
5. Deposition-related costs may be awarded when the deposition was reasonably necessary for trial preparation at the time it was taken, even if the deposition was not introduced at trial.
6. The district court properly excluded evidence and declined to instruct the jury on lost profits for the proposed Florida mobile-home project because the profits were speculative and arose from a new business.
7. The dismissal of LaVay's RICO claim was affirmed because LaVay was precluded from asserting fraud in the Dominion transaction, and a single noncriminal breach of fiduciary duty cannot constitute a pattern of racketeering activity.
8. After accepting a remittitur instead of undergoing a new trial, LaVay could not challenge the amount of the remitted damages on appeal.

Questions Presented

1. Whether the transferee court was required under 28 U.S.C. § 1406(a) to apply Virginia law.
2. Whether Virginia's one-year statute of limitations barred punitive damages based on the alleged tortious breach of fiduciary duty.
3. Whether the district court properly denied Rule 11 sanctions against attorney William Dorn.
4. Whether expert-witness expenses exceeding the statutory witness-fee limit were taxable as costs absent explicit statutory or contractual authorization.
5. Whether costs for deposition transcripts not introduced at trial could be recoverable when the depositions were reasonably necessary when taken.
6. Whether the district court properly excluded speculative lost-profit evidence for the new Florida development project.
7. Whether dismissal of LaVay's RICO claim should be affirmed.
8. Whether LaVay could challenge the remittitur after accepting it.

Disposition

other