Please ensure Javascript is enabled for purposes of website accessibility

Issue: Apr. 3 2023

Disloyalty torts against former employee proceed

Employees working together in office

An insurance broker’s good faith, duty of loyalty, tortious interference and conspiracy claims against a former employee alleged to have diverted several existing and prospective client accounts to competitors have survived dismissal in the Eastern District of Virginia.

The employee claimed the broker’s tort claims either didn’t create an independent cause of action or were grounded in his employment agreement and therefore barred by the economic loss doctrine.

Senior U.S. District Judge John A. Gibney Jr. disagreed.

“Although the other claims may prove to be little more than window dressing on a suit for breach of contract, they plausibly state claims that can survive a motion to dismiss,” the judge said.

The ruling is USI Insurance Services LLC v. Ellis (VLW 023-3-095).

Diverted accounts

USI Insurance Services acquired Wells Fargo Insurance in 2017. Dwight Ellis II worked for Wells Fargo for about 10 years as a “Commercial Risk [Insurance] Producer” and his employment agreement was assigned to USI.

Ellis’ agreement contained a two-year non-solicitation and non-service clause for “Client Accounts” and six-month clauses for “Active Prospective Accounts.” He worked for USI in the same position for four years before he was terminated for unspecified conduct in January 2021.

USI claims it later discovered that Ellis had diverted several small accounts to a competitor named Brandon Chisolm, conspired with a former Wells Fargo employee named Barbara Bailey to divert four significant client accounts to her competitor employer and “parked” some former USI clients with another competitor.

USI sued Ellis for breaches of his employment agreement, the implied covenant of good faith and fair dealing and the duty of loyalty, as well as unjust enrichment, tortious interference with contractual relations and statutory business conspiracy. They claimed damages of at least $340,000.

Ellis moved to dismiss all but USI’s breach of employment agreement claims.

Implied covenant

Ellis said USI’s claim for breach of the covenant of good faith and fair dealing merely duplicated its breach of contract claims and didn’t create an independent cause of action.

Although contained in every Virginia contract, Gibney explained that the implied covenant of good faith and fair dealing “‘cannot be a vehicle for rewriting an unambiguous contract in order to create duties that do not otherwise exist.’”

Rather than a claim in tort, a breach of the implied duty of good faith and fair dealing must be raised in a claim for breach of contract, the judge said, adding that USI correctly plead its claim when it alleged bad faith and unfair dealing.

USI asserted that Ellis committed two ongoing acts of bad faith and unfair dealing: solicitation of four significant clients to move their business to Bailey and diversion of several small clients to Chisolm. It also characterized Ellis’ actions as willful and wanton because he was aware or should have been aware that his actions were improper.

Gibney said these allegations were sufficient.

“Although USI makes identical allegations in Counts One and Two, it asserts a separate theory of how Ellis breached the employment agreement in Count Three,” the judge wrote. “Accordingly, USI states a claim upon which relief may be granted.”

Duty of loyalty

Ellis argued that the economic loss doctrine barred USI’s duty of loyalty claim because they failed to identify a source of the duty outside the employment agreement. USI, however, said its claim was grounded in the “common law duty of loyalty.”

Gibney agreed with USI.

“Virginia courts ‘have long recognized that under the common law an employee, including an employee-at-will, owes a fiduciary duty of loyalty to his employer during his employment.’ Subsumed within this general duty of loyalty is the more specific duty that the employee not compete with his employer during his employment.”

— Senior U.S. District Judge John A. Gibney Jr.

“Virginia courts ‘have long recognized that under the common law an employee, including an employee-at-will, owes a fiduciary duty of loyalty to his employer during his employment,’” Gibney pointed out. “Subsumed within this general duty of loyalty is the more specific duty that the employee not compete with his employer during his employment.”

Some conduct — including solicitation of an employer’s clients before termination of employment — plainly constitutes a breach of the duty of loyalty an employee owes to his employer.

“Because USI has identified the common law as the source of Ellis’s duty of loyalty to USI, the economic loss doctrine does not prevent USI’s recovery in tort,” Gibney wrote. “Viewed in the light most favorable to the plaintiff, the amended complaint adequately pleads a breach of Ellis’s duty of loyalty to USI because it identifies instances in which Ellis competed with USI.”

‘Improper methods’

Ellis said USI didn’t sufficiently allege that he employed improper methods, a necessity for a tortious interference claim.

Gibney was unpersuaded because improper methods may include misuse of inside or confidential information or breach of a fiduciary relationship.

“USI has alleged improper methods, specifically that Ellis misused confidential information and USI’s resources (including Ellis’s USI email account) to help a competitor prepare a quote for a Significant Client Account’s business,” the judge pointed out.

Finally, Virginia recognizes an independent duty not to interfere in other’s contractual relations. And USI said Virginia courts haven’t applied the economic loss doctrine in cases involving intentional torts.

“USI has adequately pleaded tortious interference with contractual relations because it has detailed Ellis’s alleged improper methods and identified an independent duty not to interfere with contractual relations,” Gibney said. “The economic loss doctrine does not prevent USI from pleading this claim.”

As such, USI’s amended complaint stated a claim upon which relief may be granted.

Ex-judge’s free speech retaliation claim survives

Microphones for press conference

A former magistrate judge’s First Amendment retaliation claim against her employers in their official capacities has survived dismissal in the Eastern District of Virginia.

Elizabeth Fuller was fired after she made comments on the city’s bail practices in a local newspaper.

Judge Patricia Tolliver Giles said Fuller’s “statements are ‘not the kind of “individualized” internal workplace complaints “significant chiefly to the parties involved” that we have declined to find implicate matters of public concern.’”

“While there are serious governmental interests in, for example, ensuring the public’s confidence in a fair and impartial judicial system, the Court is unable to say, at this early stage of litigation, that Plaintiff will be unable to show that her interest in First Amendment expression outweighs Defendants’ interest in the operation of the judicial system,” the judge added.

However, qualified immunity barred Fuller’s First Amendment claims against the defendants in their personal capacities, and her 14th Amendment claim was dismissed because she “lacked a protectible property interest in continued employment and thus the requirements of procedural due process do not apply.”

The decision is Fuller v. Hade (VLW 023-3-098).

Complaint filed

Elizabeth Fuller was hired as a magistrate judge for the Eighteenth Judicial District in Alexandria. As an at-will employee bound by the Canons of Conduct for Virginia Magistrates, she was to “abstain from public comment about a pending, impending or concluded proceeding in any court or magistrate’s office.”

Fuller issued an arrest warrant for Ibrahim Bouaichi in 2019 for an alleged rape and refused bail. Another judge released Bouaichi and ordered him to stay at his parents’ home in Maryland. Bouaichi later murdered his intended victim and then died of a self-inflicted gunshot wound.

In August 2020, Fuller filed a complaint with Virginia’s Department of Criminal Justice, or DCJS, claiming a bondsman named Man Nguyen violated rules and regulations of his license when he bailed out Bouaichi.

After the murder, Fuller learned from a police officer that the gun and vehicle Bouaichi used belonged to Nguyen. The officer said Nguyen had bailed out and brought Bouaichi home to live with him. Bouaichi then used Nguyen’s car and unlocked guns to commit the murder.

Potential violation

The Bouaichi murder fueled public debate about Virginia’s bail practices. In 2021, the Alexandria Times published an article about Bouaichi and later interviewed Fuller.

The judge criticized her city’s bail system saying, “How did everybody in this whole process drop the ball?”

In the article, Fuller also said “[t]here’s no justice in this. It was something that was entirely preventable if anybody in the process had been doing their job effectively.… Every step along the way, the system completely failed this woman.”

Days later, the chief magistrate placed Fuller on administrative leave because her statements to the newspaper potentially violated the Canons of Conduct, namely Canon 3(B)(6) . After she was fired, Fuller filed a grievance but it was denied.

Fuller filed a complaint alleging that three of her employers retaliated against her for exercising free speech and denied her due process in violation of the First and 14th Amendments.

She sued the defendants in their individual capacities for retaliation and in their official capacities for her due process claims. The defendants moved to dismiss.

Official capacity

Determining whether a restriction on a public employee’s speech violates the First Amendment requires “‘a balance between the interests of the [employee], as a citizen, in commenting upon matters of public concern and the interest of the State, as an employer, in promoting the efficiency of the public services it performs through its employees,’” Giles explained.

Courts have to look at the “content, form, and context of a given statement, as revealed by the whole record” when assessing if an employee’s speech addresses a matter of public concern. Matters of “personal interest” aren’t protected by the First Amendment.

“Courts must assess whether an employee’s speech is ‘intended “to evaluate the performance of the office” — which would merit constitutional protection — or merely “to gather ammunition for another round of controversy” with superiors — which would not,’” Giles wrote.

Fuller’s statements, according to the defendants, were best described as her speaking as an employee on a matter of personal interest.

“Making statements to the press does not fall under plaintiff’s official duties as a magistrate. Thus, Plaintiff’s limited prior involvement in Bouaichi’s case does not cause this court to conclude that Plaintiff was speaking within the scope of her duties when she provided comments to the Alexandria Times.”

— U.S. District Judge Patricia Tolliver Giles

But Giles found that while Fuller was identified in the newspaper as “Alexandria Magistrate Elizabeth Fuller,” there was no evidence she intentionally used the title in making her statements.

The judge also said that neither Fuller’s use of the pronoun “we” nor the fact that she was involved with Bouaichi’s arrest supported an inference that she was speaking to the newspaper on behalf of her employer or in her official capacity.

“This is because ‘[t]he critical question … is whether the speech at issue is itself ordinarily within the scope of an employee’s duties, not whether it merely concerns those duties,” she said.

And even though Fuller’s prior duties involving Bouachi might make her statements inappropriate, Giles pointed out that Fuller wasn’t involved with Bouaichi’s release or with any pending matters related to him or Nguyen.

“Moreover, making statements to the press does not fall under plaintiff’s official duties as a magistrate,” she wrote. “Thus, Plaintiff’s limited prior involvement in Bouaichi’s case does not cause this court to conclude that Plaintiff was speaking within the scope of her duties when she provided comments to the Alexandria Times.”

Giles also rejected the defendants’ argument that Fuller’s comments were based on a matter of “personal interest.”

“It is clear from the newspaper article that her statements extended beyond the factual information included in the DCJS complaint,” the judge wrote. “Nevertheless, accepting all facts from the Complaint as true, Plaintiff’s comments to the Alexandria Times facially concern a matter of public interest.”

Accepting the allegations as true, Giles said Fuller’s statements are “not the kind of ‘individualized’ internal workplace complaints ‘significant chiefly to the parties involved’ that we have declined to find implicate matters of public concern.’”

As such, Giles found Fuller’s comments credibly raised concerns in the public interest, rather than her private interest.

Font choice exposes fabricated document

Expert reviewing document with magnifying glass

A probate judge has dismissed a man’s claims against his parents for breach of contract, unjust enrichment, and conversion after ruling that a business record he attempted to admit at trial was typed in a font that did not exist when it was allegedly produced.

Michael Dorman sued his mother Linda Dorman and the estate of his late father, Harold Dorman, in 2021 over a dispute involving a payment he made on behalf of his parents.

While contested probate proceedings often pit family members against each other, what made this case from Michigan unique was an evidentiary ruling.

Taylor

Loan

In Dorman v. Dorman, plaintiff Michael Dorman alleged that on Dec. 14, 2000, he loaned $110,000 to his parents at 3% compounded interest to pay off the mortgage on their home. The payment was made from Oasis Properties, Inc., a company under Michael’s control.

According to Michael, repayment of the loan with interest was due upon the sale of the home. Linda acknowledged receiving the benefit of the payment but denied that she or Harold ever agreed to Michael’s repayment terms.

Harold died in 2019. In 2021, Michael discovered that Linda sold the Dryden home in November 2020 and demanded immediate repayment of the $110,000 principal, interest of over $100,000 and treble damages due to conversion. In total, Michael requested more than $600,000 in damages against his mother and father’s estate.

Linda claimed Michael’s payment was initially made as a gift and she never agreed to repayment. However, Linda conceded that sometime after the payment was complete, Michael insisted on repayment and Harold reluctantly agreed to treat the payment as a loan with simple interest due upon both Harold and Linda’s deaths.

‘Discovered’ document

All parties agreed that there was no written agreement. During discovery, Michael did not produce or identify any written evidence supporting his claims. However, just three days before trial, Michael produced a corporate resolution from Oasis Properties dated Dec. 13, 2000, that he claimed to have just found in his records. If admitted into evidence, the resolution supported Michael’s allegations and would lend credibility to his claims.

But defense counsel noticed something peculiar.

The nearly 23-year-old resolution, which was not produced in discovery and only presented on the eve of trial, appeared to be drafted using the Calibri font. Although use of Calibri is ubiquitous now, Linda’s counsel questioned whether it was available for public use at that time.

As most attorneys and users of Microsoft Office’s suite of products may already know, when opening Microsoft Word for the first time the application is preloaded with default settings. Among them is a default font, type size and margin spacing. According to the New York Times, Calibri font was first introduced in 2007 when it dethroned Times New Roman as Word’s default font, where it has remained ever since.

The font — created by Dutch type designer Lucas De Groot in 2004 — was not available to the public until Microsoft Office’s release of Word 2007. Needless to say, a document created in December 2000 could not have been typed in Calibri font.

Two days before trial, Linda’s attorney and his paralegal recreated the resolution word-for-word using Microsoft Word’s current default settings. What resulted was a document whose font, spacing and sentence justification aligned nearly perfectly with Michael’s newly rediscovered corporate resolution.

Trial

Trial was conducted on Feb. 16, 2023.

At trial, Michael attempted to introduce a copy of the corporate resolution as his “smoking gun.” During voir dire from Linda’s attorney, Michael testified that he drafted the document himself in December 2000 and maintained it in his corporate records ever since. He even recited the computer and printer model he allegedly used to produce it more than 22 years ago.

Defense counsel objected to the admission of the corporate resolution as a fraudulent document that was in fact drafted and signed by Michael within days or weeks of trial, not 22 years ago as he testified.

Without the benefit of time to hire a document expert, counsel asked the court to take judicial notice of a federal case from California where a similar issue was decided. That court acknowledged that the Calibri font was created in 2004 and not released until 2007, disproving the authenticity of a similar record.

In this case, Macomb County Probate Judge Sandra Harrison took a short recess to compare Michael’s corporate resolution to the exemplar prepared by the defense team using Word’s default 11-point Calibri font and margin settings. Held up together to light, the “old” and new documents were identical duplicates, with the font, spacing and last word of every sentence matching perfectly.

Judge Harrison denied admission of Michael’s proposed exhibit and ruled that the corporate resolution was drafted in Calibri font, which did not exist at that time Michael claimed he drafted it.

The only witnesses to testify at trial were Michael and Linda, each with their own version of events. And without any documentary evidence of the nature of the payment, this was a case that hinged on the credibility of the parties. At the conclusion of the proofs, Judge Harrison ruled from the bench finding that Linda’s testimony was credible whereas Michael’s testimony was not.

‘Smoking gun’

In a Shakespearean twist, Michael had been hoisted with his own petard. The corporate resolution was the smoking gun, but not as Michael anticipated. His credibility vanished along with any hope of recovering against his parents.

The court ruled that an agreement existed on the terms described by Linda, that no repayment on the loan was currently due and dismissed all claims in Michael’s complaint with prejudice.

Michael Dorman’s attempt to deceive the court by introducing an old document using a new font is a cautionary tale to lawyers and clients alike. Lawyers should be reminded not to accept everything our clients produce to us at face value — especially when self-serving records appear out of thin air immediately before trial.

And clients should be forewarned against fabricating evidence. But if they do fabricate documents and testify to their authenticity under oath, they would be wise to confirm that the font they use existed at the time the document was allegedly produced!

Michael C. Taylor, an attorney with Kirk, Huth, Lange & Badalamenti in Michigan, represented Linda Dorman and the Estate of Harold Dorman. He never imagined that his disdain for the Calibri font could be put to such beneficial use for his clients. He can be reached at [email protected].

Patient sustained labral tear in auto accident — $257,185 verdict

Type of action: Personal injury

Injuries alleged: Left shoulder labral tear

Name of case: Davis v. Rexinis

Court: Albemarle Circuit Court

Case no.: CL-21-801

Tried before: Jury

Name of judge or mediator: Judge Cheryl Higgins

Date resolved: 11/10/2022

Special damages: $25,498.37 in past medical specials

Offer: $35,000

Byrne

Verdict or settlement: Verdict

Amount: $257,185

Attorneys for plaintiff: Lauren M. Byrne and Robert E. Byrne Jr., Charlottesville

Description of case: Plaintiff was driving on 250 West in Charlottesville when the 94-year-old defendant pulled directly in front of plaintiff and caused a collision. Plaintiff complained of shoulder pain and had his shoulder wrapped at the scene by emergency responders. He then went to the emergency room three days after the crash.

Plaintiff started a physical therapy regimen for an unrelated hip labral tear the day after his emergency room visit. His records during that therapy did not mention a shoulder injury or shoulder pain. Then, approximately four months after the crash, plaintiff visited his PCP for the first time to complain about

Byrne Jr

shoulder pain. Plaintiff had a shoulder MRI shortly thereafter that showed a labral tear with surrounding edema. Plaintiff had shoulder surgery.

The defense did not perform a DME or present any witnesses at trial. Plaintiff’s case was presented in one day with only plaintiff, plaintiff’s sister and Dr. Clark Baumbusch testifying.

Plaintiff’s counsel Robert E. Byrne Jr. provided case information.

[022-T-203]

Plaintiff T-boned in Arlington intersection — $492,564.94 verdict

Type of action: Personal injury

Injuries alleged: Fractured distal radius, with a scapho-lunate ligament tear in right hand

Court: Arlington Circuit Court

Tried before: Jury

Name of judge or mediator: Judge Louise DiMatteo

Date resolved: 2/16/2022

Special damages: $72,000 in medicals

J Curcio

Demand: $275,000

Offer: $225,000

Verdict or settlement: Verdict

Amount: $492,564.94 (plus interest from date of crash)

Attorneys for plaintiff (and city): Thomas J. Curcio and Justin W. Curcio, Alexandria

Description of case: Plaintiff was T-boned by a large sedan that drove into an intersection on Lee Highway in Arlington against a red light thinking that he had the green. An eyewitness stopped at the red light, testified that defendant ran the red light and entered the intersection with no evidence of

T Curcio

braking. X-rays showed fractured distal radius, with suspicion for a scapho-lunate ligament tear in right hand. Referred by E.R. to follow-up with Dr. Frederick Scott, an orthopedic surgeon specializing in hand surgery. Client saw Dr. Scott the day after the crash and he ordered an MRI which confirmed the tear, and recommended surgery to repair the ligament tear, with radius fracture treated non-operatively. Dr. Scott recommended against another surgery as did not think it would help her symptoms and gave her a 25-30% permanent impairment of her right hand/wrist, which is likely to worsen with age. Client, now 63, has a 21-year life expectancy. GEICO defended the case, with a $500,000 UM policy, $400,000 of which was exposed as client settled with the liability carrier for $100,000 per 38.2-2206. GEICO offered $120,000 on top of liability carrier’s $100,000 already tendered. Defense hired Dr. John Aldridge to do a records review. Dr. Aldridge, based on his reading of the MRI taken the day after the crash, testified that the ligament tear pre-existed the crash and had to have been caused by a previous injury the client suffered. There was no evidence presented of a previous injury. Jury returned a verdict for $492,564.94 + interest from date of crash.

Justin Curcio, counsel for plaintiff, provided case information.

[022-T-207]

Unauthorized use: Photographer can seek actual damages

Camera lens

A photographer who sued for unauthorized use of his photograph of a landmark University of Virginia building can seek actual damages on his copyright infringement claim.

Senior U.S. District Judge Norman K. Moon noted the photographer didn’t disclose his actual damages in his Rule 26 disclosures, but the defendant was aware the photographer was seeking such damages, had information regarding such damages well before trial and could not show it was prejudiced.

“Given the circumstances of this case, statutory damages and attorney’s fees are not available to [plaintiff] on his copyright infringement claim, but he is entitled to seek actual damages,” Moon wrote.

Moon authored the opinion in Proimos v. Marotta Wealth Management Inc. (023-3-089) for the U.S. District Court for the Western District of Virginia, Charlottesville Division.

Background

This copyright infringement matter stems from a photograph that Australian commercial photographer Alex Proimos took of the Rotunda at the University of Virginia.

Proimos published the photograph on Flickr.com, a website photographers use to showcase their work, sometime between June 2011 and September 2013.

Marotta Wealth Management used the photograph in a blog post on its website in December 2019. Later that month, Proimos registered the photograph with the copyright office and made several demands to Marotta Wealth Management to remove the photograph from its website.

In May 2022, Proimos filed suit against Marotta Wealth Management, alleging copyright infringement.

Cross motions for summary judgment were filed by the parties in December 2022, with the defendant seeking a ruling that Proimos “is barred from recovering statutory damages (and a reasonable attorney’s fee), as well as actual damages.”

‘Southern States’ factors

Moon evaluated the issues individually, beginning with statutory damages or reasonable attorneys’ fees. Proimos acknowledged neither were available here.

The photograph was published on Flickr.com “no later than 2013” and Marotta Wealth Management began using the photograph before Proimos registered the photograph with the copyright office.

“Therefore, because Defendant first commenced his use of the Photograph years after its first publication and before the date of its registration, and because such registration was not ‘made within three months after the first publication of the work,’ statutory damages and attorney’s fees are not available to Plaintiff,” Moon wrote.

Actual damages, however, was a different matter.

“There is no dispute that Proimos’ Rule 26(a)(1)(A)(iii) disclosures did not contain any computation of actual damages claimed by Proimos, nor did they include documents, materials or information upon which Proimos’ actual damages claim is now based,” Moon noted.

Rather, Proimos’ disclosures provided to Marotta in July 2022 merely stated statutory damages sought in the action.

The judge then considered the Southern States factors and whether the nondisclosure of Proimos’ actual damages calculation and evidence was “substantially justified or harmless.”

“Even though Proimos’ disclosures should have provided information about calculation of actual damages, the record in this case demonstrates that there was little, if any, surprise to Marotta, by either Proimos’ demand for actual damages or the evidence supporting actual damages,” Moon wrote. “Indeed, it was clear from the outset of the case that Proimos sought an award of ‘actual and/or statutory damages for Defendant’s copyright infringement in an amount to be determined at trial.’”

“The record in this case demonstrates that there was little, if any, surprise to Marotta, by either Proimos’ demand for actual damages or the evidence supporting actual damages. Indeed, it was clear from the outset of the case that Proimos sought an award of ‘actual and/or statutory damages for Defendant’s copyright infringement in an amount to be determined at trial.”

— Senior U.S. District Judge Norman K. Moon

Proimos’ counsel also provided the range for license fees of the photograph was communicated to Marotta 26 days prior to the close of discovery, adding that that figure was used in Proimos’ motion for summary judgment to calculate the actual damages sought.

“[N]otwithstanding Proimos’ failure to reference actual damages or the basis for its calculation thereof in his initial disclosures, Marotta can claim little if any surprise by Proimos’ request for actual damages at this time or the basis for such damages,” Moon wrote.

The second Southern States factor — dealing with the ability to cure — also weighed in Proimos’ favor.

“Marotta should have long had a copy of the apparently one exhibit Proimos intends to introduce on the issue of actual damages,” Moon wrote. “Proimos identified that exhibit well in advance of trial in his pre-trial disclosures — filed just over three weeks before trial.”

The judge noted the third and fourth Southern States factors — “the extent to which allowing the evidence would disrupt the trial” and “the importance of the evidence” — were crucial for Proimos.

“Without the availability of statutory damages in this case, Proimos’ ability to present evidence of actual damages is the only way he may secure monetary relief should Marotta be found liable,” Moon wrote. “While evidence of actual damages appears discrete and relatively limited in scope, it is quite important to Proimos’ case, without which he would secure at most nominal damages.”

While the final Southern States factor, dealing with the “non-disclosing party’s explanation for its failure to disclose the evidence,” weighed in Marotta’s favor, evaluating all the factors led the court to conclude that Proimos’s failure to provide the calculations in his disclosure was “harmless.”

As such, Moon denied that portion of Marotta’s summary judgment motion, allowing claims for actual damages to proceed.

Coda

According to court records, Moon denied Proimos’ motion for summary judgment two days after the case was referred to mediation before U.S. Magistrate Judge Joel C. Hoppe. The case ultimately settled and was dismissed with prejudice prior to a scheduled jury trial.

Ureter damaged during hysterectomy — $330,000 settlement

Type of action: Medical malpractice

Injuries alleged: Right ureteral injury

Date resolved: 3/16/2022

Verdict or settlement: Settlement

Amount: $330,000

Attorney for plaintiff: Mark J. Favaloro, Virginia Beach

Favaloro

Description of case: Plaintiff, age 51, went to see the defendant gynecologist with complaints of urinary retention and abdominal pain, and was diagnosed with primary rectocele and submucous leiomyoma of the uterus.

Thereafter, a Davinci Assisted Robotic Hysterectomy was planned. The procedure was performed without apparent complication and the plaintiff was discharged on the day following the procedure.

Plaintiff returned to the defendant’s office approximately six days post-operatively complaining of nausea, vomiting, high temperature and decreased voiding. A CT scan confirmed the presence of fluid in the plaintiff’s abdomen and hydronephrosis. It was ultimately determined that the plaintiff’s right ureter had been damaged during the hysterectomy and was leaking urine into her abdomen.

A catheter was placed and approximately a month thereafter later the plaintiff’s right ureter was re-implanted into her bladder with a Psoas Hitch procedure.

The plaintiff has suffered no serious complications since the re-implantation surgery.

Mark J. Favaloro, plaintiff’s attorney, provided case information. [022-T-206]

USPTO launches first-time filer expedited exam pilot program

Designing invented product

The United States Patent and Trademark Office launched the First-Time Filer Expedited Examination Pilot Program on March 9, 2023. The program is one of several initiatives developed by the USPTO and its Council for Inclusive Innovation, or CI2, to promote diversity within the innovation ecosystem.

Generally, under normal examination, non-provisional patent applications are examined in the order in which they were filed. Under normal examination, a first office action is typically issued between 16 to 20 months from the filing date of the non-provisional patent application. However, an application may be accorded special status and examined out of turn when an applicant’s petition to make special or request for prioritized examination is granted. This new program will reduce the time to a first office action.

Of the new program, Kathi Vidal, Under Secretary of Commerce for Intellectual Property and Director of the USPTO, stated, “This new initiative is another way we are working through our Council for Inclusive Innovation to lift independent inventors and small business owners — including those from underrepresented communities — who are new to the patent process and provide them with resources and assistance they need to protect patentable innovations.

“By accelerating the examination process, it is our hope that expedited feedback from the agency’s initial review of the application will allow them to make key business decisions at an earlier stage as we work together to bring more innovation to impact.”

Eligibility requirements

To qualify for the program, the applicant must make three certifications.

First, the applicant must certify that the inventor or inventors have not been named as an inventor on any other U.S. non-provisional application. This is more stringent than the related requirement to qualify for micro entity status, where the applicant and the inventor must not be named as inventor on more than four previously filed applications.

Second, the applicant must certify that the applicant and inventor or inventors qualify for micro entity status under the gross income basis requirement. Under the gross income basis, (a) the applicant must qualify as a USPTO-defined small entity; (b) neither applicant nor the inventor nor a joint inventor had a gross income in the previous year from when the fee(s) is paid of more than the “Maximum Qualifying Gross Income,” which is three times the median household income; and (c) neither the applicant nor the inventor nor a joint inventor has assigned, granted, or conveyed, nor is under an obligation to assign, grant, or convey, a license or other ownership interest to another entity that does not meet the same “Maximum Qualifying Gross Income” limit.

Third, the applicant must certify that the inventor or inventors are reasonably trained on the basics of the USPTO’s patent application process. A list of “exemplary training resources” are provided by the USPTO at https://www.uspto.gov/FirstTimePatentFiler.

Qualifying applications

The program is available for original, non-continuing, non-provisional utility applications filed under 3 U.S.C. §111(a). Further, a previously filed application may be eligible for this program if an office action has not yet been issued and the applicant, inventors and application otherwise meet all other requirements. Moreover, there is no additional filing fee for the petition to make special under this program.

A previously filed application may be eligible for this program if an office action has not yet been issued and the applicant, inventors and application otherwise meet all other requirements. Moreover, there is no additional filing fee for the petition to make special under this program.

Additional requirements include the following: (i) the application must be filed electronically via Patent Center; (ii) the abstract, specification, and claim(s) must be provided in DOCX format; (iii) the petition to make special under this program should be filed once the application is complete under 37 CFR 1.51(b); (iv) the claims may not include more than three independent claims, more than 20 claims total, or any multiple dependent claims; and (v) form PTO/SB/464 must be filed.

An application is considered complete under 37 CFR 1.51(b) if the submission to the USPTO includes (1) a specification, (2) drawings if necessary, (3) at least one claim, (4) an oath or declaration in compliance with 37 CFR 1.63, and (5) payment of all appropriate fees, including the basic filing, search, and examination fees, prior to or concurrently with filing the petition to make special under this program.

Opportunity to correct deficiencies

If a petition is found to not comply with the requirements, it will be dismissed. However, if each deficiency is correctable, the applicant has one opportunity to correct the deficiencies and file a new petition.

The deficiencies that are correctable include:

  • not using form PTO/SB/464;
  • not filing the petition via Patent Center;
  • not signing the petition according to 37 CFR 1.33(b);
  • filing more than 20 claims total;
  • filing more than three independent claims;
  • filing any multiple dependent claims; and
  • not properly establishing micro entity status using form PTO/SB/15A.

Examples of non-correctable deficiencies include:

  • the initial petition was not filed before a first Office Action was issued in the application;
  • the inventor or, where there are joint inventors, at least one joint inventor has been named as an inventor on a previously filed non-provisional application; and
  • the application was previously granted special status.

The USPTO will accept petitions to make special under this program until March 11, 2024, or until 1,000 patent applications have been granted special status under this program, whichever occurs earlier.

Christina E. Brule is an associate in the Albany Office of Heslin Rothenberg Farley & Mesiti P.C. Her experience includes patent prosecution, trademarks, copyrights and general IP counseling. She can be reached at (518) 452-5600 or [email protected].

VSB Disciplinary Actions: April 3, 2023, issue

Effective March 20, 2023, the First District Subcommittee of the Virginia State Bar issued a public reprimand without terms to Don Leonard Scott of Portsmouth for violating professional rules that govern fees and safekeeping property. This was an agreed disposition of misconduct charges.

**

Effective March 21, 2023, the Virginia State Bar Disciplinary Board issued a public reprimand with terms to Alisa Lachow Correa of Woodbridge for violating the professional rule that governs conflict of interest: general rule. This was an agreed disposition of misconduct charges.

**

Ordered March 20, 2023 and effective May 20, 2023, the Hanover County Circuit Court suspended Bruce Patrick Ganey of Ashland’s license to practice law in the commonwealth of Virginia for 90 days for violating professional rules that govern diligence, communication and safekeeping property.

**

Effective March 20, 2023, the Second District, Section II Subcommittee of the Virginia State Bar issued a public reprimand with terms to Matthew Taylor Morris of Virginia Beach for violating professional rules that govern the unauthorized practice of law. This was an agreed disposition of misconduct charges.

**

Ordered March 24, 2023 and effective April 24, 2023, the Virginia State Bar Disciplinary Board suspended Matthew Taylor Morris of Virginia Beach’s license to practice law in the commonwealth of Virginia for six months with terms for violating the professional rule that governs misconduct.

Woman injured in collision with light pole — $370,000 settlement

Type of action: Personal injury, motor vehicle accident

Injuries alleged: Three fractured ribs, broken bones and tears in right and left wrists, outpatient arthroscopic right wrist surgery

Special damages: Medical bills totaling $41,686.64

Verdict or settlement: Settlement

Amount: $370,000

Attorney for plaintiff (and city): W.F. Drewry “Drew” Gallalee, Richmond

Gallalee

Description of case: Plaintiff was a 47-year-old female who was operating her SUV when a truck pulled out in front of her and caused her to slam into a light pole. Plaintiff suffered three fractured ribs and fractures and tears in her right and left wrists. Her left wrist fully recovered without surgery. She underwent an outpatient arthroscopic procedure on her right wrist and probably was going to need another surgery on that wrist, which had not yet been scheduled. The case was settled at mediation with retired Judge Beverly Snukals a month before trial for $370,000.

Plaintiff’s counsel provided case information.

[022-T-202]