Fox v. Encounters Intl

UNPUBLISHED

UNITED STATES COURT OF APPEALS
FOR THE FOURTH CIRCUIT

No. 05-1139

NATALIYA MIKHAYLOVNA FOX,

Plaintiff - Appellee,

versus

ENCOUNTERS INTERNATIONAL; NATASHA SPIVACK,

Defendants - Appellants,

and

JAMES M. FOX, II,

Defendant,

IRENA LIEBERMAN; DENNIS SCHEIB; TAHIRIH
JUSTICE CENTER; DEPARTMENT OF HOMELAND
SECURITY, Citizenship and Immigration
Services,

Parties in Interest.

No. 05-1404

NATALIYA MIKHAYLOVNA FOX,

Plaintiff - Appellee,

versus
ENCOUNTERS INTERNATIONAL; NATASHA SPIVACK,

Defendants - Appellants,

and

JAMES M. FOX, II,

Defendant,

IRENA LIEBERMAN; DENNIS SCHEIB; TAHIRIH
JUSTICE CENTER; DEPARTMENT OF HOMELAND
SECURITY, Citizenship and Immigration
Services,

Parties in Interest.

Appeals from the United States District Court for the District of
Maryland, at Greenbelt and Baltimore. William D. Quarles, Jr.,
District Judge. (CA-02-1563-WDQ)

Argued: March 15, 2006 Decided: April 13, 2006

Before LUTTIG and SHEDD, Circuit Judges, and HAMILTON, Senior
Circuit Judge.

Affirmed by unpublished per curiam opinion.

ARGUED: Paul Howard Zukerberg, Washington, D.C., for Appellants.
Randall K. Miller, ARNOLD & PORTER, L.L.P., Washington, D.C., for
Appellee. ON BRIEF: David M. Orta, Ross S. Goldstein, ARNOLD &
PORTER, L.L.P., Washington, D.C., for Appellee.

Unpublished opinions are not binding precedent in this circuit.
See Local Rule 36(c).

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PER CURIAM:

This is a tort case brought by a Ukranian woman, under

Virginia law, against an international matchmaking agency

headquartered in Maryland and also against such agency’s founder

and sole owner. As a recruit of the agency, plaintiff was matched

for marriage with an American citizen who began mentally abusing

her only two months after the couple married and began physically

abusing her approximately five months after the couple married.

The case went to trial before a jury on various tort theories, and

the jury found in favor of the plaintiff on all claims, awarding

her $92,000 in compensatory damages and $341,500 in punitive

damages. The international matchmaking agency and its founder have

appealed with respect to all claims. We affirm.

I.

The defendants are Encounters International (EI) and Natasha

Spivack (Spivack) (collectively the Defendants).1 EI is a Maryland

corporation with offices in Rockville, Maryland; Moscow, Russia;

Yaroslavl, Russia; and Kiev, Ukraine. American male clients of EI

pay a membership fee of $1,850 plus additional fees for various

1
Because the defendants/appellants are asking us, inter alia,
to reverse the district court’s denial of their motion for judgment
as a matter of law filed pursuant to Federal Rule of Civil
Procedure 50(b), we consider the evidence in the light most
favorable to the plaintiff. Reeves v. Sanderson Plumbing Prods.,
Inc., 530 U.S. 133 (2000); Bryte v. American Household, Inc., 429
F.3d 469, 475 (4th Cir. 2005).

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matchmaking services. At all times relevant to this case, EI

distinguished itself from other matchmaking agencies by claiming a

95% success rate with matches and claiming to establish a personal

relationship with each woman who joined. EI uses its 95% success

rate as one of its core marketing tools.

In April 1998, in Kiev, EI introduced then Nataliya Derkach

(Plaintiff) to EI member Geoffrey Hermesman (Hermesman). For a fee

paid to EI by Hermesman, EI contacted Plaintiff, who was then a

member of the Wind of Wanderer matchmaking agency. Then,

consistent with representations on EI’s website, EI assisted

Hermesman in bringing Plaintiff to the United States, including by

telling Plaintiff how to complete immigration paperwork to gain

entry into the United States.2 Indeed, EI’s website states:

There is immigration paperwork that we will help your
woman to complete while you are still in Moscow or Kiev.
Step by step we’ll guide you and your fiance[e] through
the bureaucratic hurdles of the immigration process
. . . at no extra charge.

(E.A. 17).

When Hermesman and Plaintiff decided not to pursue a

relationship two weeks after she arrived in the United States,

Defendants induced Plaintiff to remain an EI member and introduced

her to EI member James Fox. EI’s website contained Spivack’s

2
Plaintiff officially joined EI at some point and, according
to the EI website, EI posted her picture in its database of
recruits.

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following description of the events leading to Defendants’

introduction of Plaintiff to James Fox:

Although I introduced James Fox of Virginia and Natalia
Derkach from Kiev a few days before they came to EI
Saturday Club, I believe that this event solidified their
mutual attraction. A couple of months ago James was
briefly engaged to another EI woman client from Kiev but
that relationship did not feel right for either one of
them when this woman came to the United States. More
mature of the two of them James was determined to work
out the differences; therefore he was very disappointed
when Lena decided to leave for the Ukraine after a couple
of weeks together in order to remain “just friends.”
Natalia’s story was not a happy one either. She came as
a fiancee of one of EI clients who did not feel that she
was the right woman for him after spending with her one
day in Kiev and a couple of weeks in Virginia. By pure
accident she missed the plane which would have taken her
back to Kiev. Trying to calm her down when she was
crying in my office I told her that I’ll introduce her to
other EI clients. “They are the most serious about
commitment and family, financially and mentally stable,
they are not cheap -- the horror stories about cheap
Americans do not apply to EI clients -- they are the best
of the best single men on the ‘market’ -- I told her --
because they joined EI showing their trust that we have
the best women like you. Don’t worry, you are in the
right place to be and I’ll take care of you.” Natalia
raised her big, red from tears eyes at me and smiled with
appreciation.

(E.A. 31-32).

During the trial in this case, Plaintiff testified as follows

regarding Spivack’s representations to her about James Fox:

Well, James was the best man. He was her favorite
client. He was very good. She said that he will be so
good that I was so lucky that I was there at that time,
because otherwise he would be married to that other
woman, and I would never knew [sic] about him. She said
that she has her favorite other client who [was] going to
come from some picture book and she is planning to
introduce James, but now that -- of course if I’m with
him, then of course she wouldn’t, but she says that he’s

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 her best client, he’s the youngest client, and he’s -- he
has everything. He is ready. He’s ready to settle down
to -- he just need[s] a good wife.

(J.A. 1946). According to Spivack, EI’s screening process of its

male clients consists of her interviewing the male client about his

expectations and why previous romantic relationships had failed.

Spivack, on behalf of herself and EI, spoke to Plaintiff in

her native tongue and undertook to advise her about many matters

including American customs and legal requirements, relationship

counseling, prenuptial agreements, and the qualities of the male

client to whom EI was introducing her. At all times relevant to

this case, Defendants knew that Plaintiff was a Ukrainian national

who was unfamiliar with the language, laws, and customs of the

United States. Defendants also expressly held themselves out on

EI’s website as relationship counselors:

If you ever need someone to talk to, we’ll be available
to advise you . . . or her . . . with any suggestions for
adjusting to your new life together.

(E.A. 17). EI links its counseling services to its 95% success

rate.

Just two months after James Fox and Plaintiff were married in

November 1998, James Fox began to subject Plaintiff to emotional

abuse. Such abuse began with small instances of cruel name calling

and escalated over time to his angrily throwing a cooked potato

past her head and smashing a full glass of Pepsi Cola against the

kitchen wall when Plaintiff refused to drink from it after he had

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spit in it, all resulting in Plaintiff being in an increasingly

terrorized state.

In May 1999, James Fox began to physically abuse Plaintiff by

chasing her into a bedroom closet, pinning her against the wall,

screaming loudly in her ear that she is a stupid idiot, and then

biting her finger so hard that her finger showed bite and bruise

marks for two weeks. Over time the physical abuse escalated. For

example, on the evening of December 29, 1999, James Fox threw

Plaintiff, then four months pregnant, on the bed, violently grabbed

her leg with both hands in his expressed attempt to break it, and

hit Plaintiff in the face causing her lip to bleed when she

screamed in pain about her leg.

On three separate occasions, once in January 2000, once in

March 2000, and once in April 2000, Plaintiff sought Spivack’s

counseling and advice with regard to the violent physical and

mental abuse that she was suffering at the hands of James Fox.

Plaintiff had occasion to be in the presence of Spivack during

these times because Plaintiff and James Fox attended the monthly

social event that Spivack hosted for EI clients and married couples

who met through EI. For example, during the January 2000 social,

Plaintiff told Spivack about the evening of December 29, 1999;

specifically that James Fox had beaten her and terrorized her while

pregnant, leaving her with a busted lip and bruises, and that she

was so afraid of him beating her again that once he left the

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apartment for a while, she fled on foot and spent the entire night

in a nearby Wal-Mart. At the April 2000 social, Plaintiff

specifically told Spivack that James Fox was becoming increasingly

abusive and had chased her with a broken piece of glass, put it on

her neck, and then told her he hated her, causing her to be “really

scared.” (J.A. 1126).

In response to Plaintiff’s repeated reports of abuse and

request for advice, Spivack always minimized the abuse Plaintiff

suffered, advising her that it was nothing to worry about. With

respect to the December 29th beating specifically, Spivack advised

Plaintiff that “‘All Americans--all American men are crazy.’”

(J.A. 1123). Spivack continued: “‘Maybe you just listen to him,

and do what he says.’” Id. Spivack repeatedly advised Plaintiff

that she had only two options, work things out with James Fox or be

deported back to the Ukraine. Based upon this advice, Plaintiff

remained in the marriage and awaited the birth of her daughter.

On July 6, 2000, approximately three weeks after Plaintiff

gave birth to her daughter Sophia, James Fox subjected Plaintiff to

a final violent episode. Specifically, James Fox physically and

verbally abused Plaintiff for approximately two hours, including

threatening to kill her while holding a gun to her head. Shortly

thereafter, Plaintiff called an ambulance because of severe chest

pain. The ambulance took Plaintiff to the local hospital where she

was treated by Air Force Lt. Col. Marilyn Perry, M.D. Plaintiff

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had numerous physical injuries including contusions and swelling on

her face; hand marks on her arms (indicating that she was violently

grabbed and/or shaken); a human bite to her hand; and contusions on

her chest. Dr. Perry -- board certified with substantial

experience with domestic abuse -- also testified that it was clear

to her that Plaintiff had been terrorized and was a victim of

domestic abuse.

Immediately after leaving the hospital, Plaintiff and her baby

moved into a battered women’s shelter at the urging of the hospital

staff. With one minor exception, Plaintiff and her newborn baby

lived at that shelter for seven months from July 2000 through

January 2001. The minor exception was when Plaintiff and her baby

stayed for a short time in a house on property owned by James Fox.

Plaintiff and her daughter moved back to the shelter because the

house was not appropriate for her or her baby. In early 2001,

James Fox obtained a divorce of Plaintiff in Haiti.

At trial, Plaintiff’s mental health counselor, Rebecca

Hamilton, and Giselle Hass, Psy.D., testified about the significant

psychological injuries that Plaintiff suffered as a result of the

abuse. Such injuries required Plaintiff to undergo professional

counseling for seven months.

Once safe at the battered women’s shelter, Plaintiff for the

first time learned about the battered spouse waiver. In general,

the battered spouse waiver allows an alien who validly resides in

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the United States based solely upon the sponsorship of her United

States citizen spouse to leave an abusive relationship with such

spouse without fear of being immediately deported. 8 U.S.C.

§§ 1154, 1229b(b)(2). On April 2, 2001, Plaintiff petitioned for

a battered spouse waiver, which the Immigration and Naturalization

Service (INS) granted on May 29, 2001. There was no appeal.

Subsequently, Plaintiff petitioned for adjustment of status as a

permanent resident of the United States, which petition was

granted.3 Plaintiff currently lawfully resides in Virginia and is

employed as a civil engineer.

The record is undisputed that Spivack knew about the battered

spouse waiver during the times that Plaintiff had confided in her

about the physical and mental abuse that James Fox inflicted upon

her. The record is also undisputed that Spivack, nor any other

agent or employee of EI, ever informed Plaintiff about the battered

spouse waiver. Notably, at all times relevant to this case, EI was

governed by the Mail Order Bride Act (MOBA), 8 U.S.C. § 1375. As

part of this 1996 legislation, Congress found that there was a

heightened risk of domestic abuse in relationships formed by

international matchmaking agencies and that women who used such

services are “unaware or ignorant of United States immigration

3
The Department of Homeland Security appealed the IJ’s grant
of Plaintiff’s petition to adjust her status on the ground that she
initially filed improper immigration forms shortly after her
marriage to James Fox. The Board of Immigration Appeals affirmed,
without opinion, on March 21, 2005.

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law.” 8 U.S.C. § 1375(a). MOBA required that “[e]ach

international matchmaking organization doing business in the United

States shall disseminate to recruits, upon recruitment, such

. . . information as the [INS] deems appropriate, . . . including

information regarding . . . the battered spouse waiver.”4 8 U.S.C.

§ 1375(b)(1) (emphasis added).

Finally, the record is undisputed that EI’s website featured

Plaintiff’s name and likeness throughout the relevant time period,

including through trial. Defendants used Plaintiff’s name and

likeness to portray her as a happy and satisfied customer even

after Defendants had actual knowledge that James Fox physically and

mentally abused Plaintiff and that Plaintiff was decidedly not a

happy customer. Indeed, Defendants placed a picture of Plaintiff

taken when she was either six or seven months pregnant (taken in

4
We note that on January 5, 2006, President George Bush signed
into law the “International Marriage Broker Regulation Act of
2005,” H.R. 3402, Public Law No. 109-162, Title VIII, Subtitle D,
with an effective date of March 6, 2006. The new law seeks to
extensively regulate the international matchmaking industry. Among
other things, it requires all United States citizens who petition
for a fiancee or spousal visa to provide more personal background
information to United States Immigration Officials and the State
Department than ever before. 8 U.S.C. § 1375a. The new law also
puts significant obligations on international matchmaking agencies
to investigate the background of its clients. For example, such
agencies will be required to search the National Sex Offender
Registry or State sex offender public registry for the names of its
United States clients. 8 U.S.C. § 1375a(d)(2)(A)(I).

Notably, the law repeals 8 U.S.C. § 1375. Pub. L. 109-162,
Title VII, § 833(g). However, the repeal does nothing to affect
the issues before us on appeal.

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March or April 2000) on the EI website. It is undisputed that EI

never obtained written consent as required by the relevant Virginia

statute to place any of these pictures on its website. Virginia

Code § 8.01-40(A).

Plaintiff subsequently sued Defendants and James Fox in the

United States District Court for the District of Maryland. James

Fox settled with Plaintiff for $115,000. Plaintiff’s claims

against the Defendants went to trial before a jury on November 8,

2004. The jury considered the following claims against Defendants:

(1) actual or constructive fraud under Virginia common law; (2)

deceptive and unfair trade practices under Virginia statutory law;

(3) unauthorized appropriation of name and likeness under Virginia

statutory law; (4) negligence/breach of fiduciary duty under

Virginia common law; and (5) defamation under Virginia common law.5

Defendants had two counterclaims: (1) actual or constructive fraud

under Virginia common law; and (2) conspiracy to injure business

under Virginia common law.

5
The defamation claim was based upon Spivack’s telling other
EI clients during the course of this litigation that Plaintiff had
been convicted of drug crimes in the Ukraine and Turkey. During
discovery in this case, James Fox produced what the governments of
Ukraine and Turkey have certified are counterfeit criminal records.
Defendants defended against the defamation claim on the ground that
they had a reasonable belief that the documents were authentic. In
response, Plaintiff argued that given the fact that James Fox was
being criminally charged with domestic abuse and had a huge
incentive to discredit his wife, Defendants were unreasonable in
telling third parties that Plaintiff had been convicted of drug
crimes in the Ukraine and Turkey.

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 Defendants moved for judgment as a matter of law pursuant to

Federal Rule of Civil Procedure 50 at all appropriate times. The

district court denied the motions.

The trial ended on November 18, 2004. After considering all

of the evidence, the jury found in favor of Plaintiff on all claims

and awarded her $92,000 in compensatory damages and $341,500 in

punitive damages. The jury also found in favor of Plaintiff with

respect to Defendants’ counterclaims. Following the jury’s

verdict, Defendants renewed their motion for judgment as a matter

of law, which the district court again denied. This timely appeal

followed, in which Defendants raise numerous assignments of error.

Several are worthy of our addressing separately.

II.

Defendants challenge the district court’s denial of their Rule

50(b) motion for judgment as a matter of law with respect to

Plaintiff’s negligence/breach of fiduciary duty claim on the basis

that, inter alia, there was insufficient evidence to establish that

Defendants and Plaintiff had a fiduciary relationship, and,

therefore, they cannot be liable for breach of fiduciary duty.

This challenge is without merit.

We review the denial of a motion for judgment as a matter of

law de novo. Bryte v. American Household, Inc., 429 F.3d 469, 475

(4th Cir. 2005). In reviewing the evidence in the record, we must

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draw all reasonable inferences in favor of the non-moving party and

we may not make credibility determinations or weigh the evidence.

Reeves v. Sanderson Plumbing Prods., Inc., 530 U.S. 133, 149-150

(2000). Although we should review the record as a whole, we must

disregard all evidence favorable to the moving party that a jury

would not be required to believe. Id. at 151. “That is, [we]

should give credence to the evidence favoring the nonmovant as well

as that evidence supporting the moving party that is uncontradicted

and unimpeached, at least to the extent that that evidence comes

from disinterested witnesses.” Id. (internal quotation marks

omitted).

Under Virginia law, the elements of a negligence cause of

action are: (1) a legal duty on the part of the defendant; (2)

breach of that duty; (3) a showing that such breach was the

proximate cause of injury; and (4) such injury resulted in damage

to the plaintiff. Blue Ridge Service Corp. of Va. v. Saxon Shoes,

Inc., 624 S.E.2d 55, 62 (Va. 2006). Plaintiff sought to prove her

negligence cause of action, inter alia, on the theory that

Defendants and she had a common law fiduciary relationship under

which they owed her fiduciary duties which they breached,

proximately causing her injury and resulting in her suffering

damages.

Under Virginia law, whether a fiduciary relationship exists is

a question of fact. Allen Realty Corp. v. Holbert, 318 S.E.2d 592,

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595 (Va. 1984). A fiduciary relationship exists “when special

confidence has been reposed in one who in equity and good

conscience is bound to act in good faith and with due regard for

the interests of the one reposing the confidence.” Id. (internal

quotation marks omitted). Based upon this duty, the fiduciary is

obligated to tell his principal about “anything which might affect

the principal’s decision whether or how to act.” Id. (internal

quotation marks omitted). See also State Farm Mut. Auto. Ins. Co.

v. Floyd, 366 S.E.2d 93, 97 (Va. 1988) (“A fiduciary owes total

fidelity to the interests of his principal. While the relationship

continues, he may engage in no self-dealing which may have any

adverse effect on the interests of his principal.”). Critically,

Plaintiff did not need to prove that Defendants had a fiduciary

relationship with all of EI’s female recruits, just Plaintiff.

Here, viewing the evidence in the light most favorable to

Plaintiff, as we must, sufficient evidence was before the jury for

it to reasonably find that Defendants had a fiduciary relationship

with Plaintiff. Spivack testified that she holds herself out as an

expert in the field of matchmaking. Specifically, Spivack told

Plaintiff that she was a psychologist and screened very carefully

the men who EI recommended their foreign female clients marry.6

Spivack always spoke to Plaintiff in Russian, which comforted

6
Spivack testified that she is not actually a psychologist,
but has taken many courses in psychology.

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Plaintiff. She also undertook, through her actions and words, to

advise Plaintiff, as a client of EI, regarding prenuptial

agreements, immigration matters, relationship counseling, and

American/Eastern Europe cultural/language issues. Finally, EI’s

website touted that Spivack established a relationship of trust

with Plaintiff:

Natalia’s story was not a happy one either. She came as
a fiancee of one of EI clients who did not feel that she
was the right woman for him after spending with her one
day in Kiev and a couple of weeks in Virginia. By pure
accident she missed the plane which would have taken her
back to Kiev. Trying to calm her down when she was
crying in my office I told her that I’ll introduce her to
other EI clients. “They are the most serious about
commitment and family, financially and mentally stable,
they are not cheap -- the horror stories about cheap
Americans do not apply to EI clients -- they are the best
of the best single men on the ‘market’ -- I told her --
because they joined EI showing their trust that we have
the best women like you. Don’t worry, you are in the
right place to be and I’ll take care of you.” Natalia
raised her big, red from tears eyes at me and smiled with
appreciation.

(E.A. 31-32) (emphasis added). Also, Spivack testified that

Plaintiff was not her friend, and, therefore, she did not give

Plaintiff advice as a friend. Finally, Plaintiff’s vulnerabilities

while in the United States, including language barriers, being very

far from her friends and family in the Ukraine, and being subject

to the complexities of immigration laws were all known to Spivack,

and, therefore, support the existence of a fiduciary relationship.

Cf. Delk v. Columbia, 523 S.E.2d 826, 831-32 (Va. 2000)

(defendant’s knowledge of plaintiff’s particular vulnerabilities is

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evidence of special relationship under Virginia law). See also

Snortland v. State, 615 N.W.2d 574, 578-79 (N.D. 2000) (fiduciary

relationship generally arises when there is an unequal relationship

between the parties; the party reposing the confidence must be in

a position of inequality, dependence, weakness, or lack of

knowledge).

We hold that, when all of this evidence is woven together, the

reasonable juror could find that Spivack, on behalf of herself and

EI, engaged in intentional efforts to gain Plaintiff’s trust,

confidence, and loyalty in order that Plaintiff would marry James

Fox, continue to be married to James Fox, and create another EI

success story.

We also hold the jury had sufficient evidence before it to

find by a preponderance of the evidence that Defendants breached

their fiduciary duties to Plaintiff. Spivack admitted at trial

that she knows that some women stay in abusive relationships for

fear of being deported. Spivack also testified that she knew about

the battered spouse waiver in 1999, prior to Plaintiff confiding in

her about James Fox’s physical and mental abuse. The record is

undisputed that, despite this knowledge, when Plaintiff repeatedly

complained to Spivack about such abuse and sought advice about the

situation, Spivack never told Plaintiff about the battered spouse

waiver. From this evidence, the jury could have reasonably found

that Defendants withheld knowledge of the battered spouse waiver

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from Plaintiff because they wanted to keep up EI’s 95% matchmaking

success rate, which rate happened to be, as Spivack herself

testified at trial, one of EI’s core promotional selling points.

A divorce between Plaintiff and James Fox would have negatively

affected EI’s 95% success rate.

As for the analytically intertwined elements of proximate

cause and damages, Plaintiff testified that had she known about the

battered spouse waiver prior to James Fox’s brutal physical and

mental attack in July 2000, she would have left him prior to that

time, and, therefore, would not have suffered the physical and

mental injuries that she did as the result of such attack. From

this testimony, the jury could reasonably find that had Defendants

informed Plaintiff of the battered spouse waiver prior to James

Fox’s July 2000 attack, Plaintiff would not have suffered the

physical and mental injuries that she did from the attack.

Defendants’ primary argument in challenge to the jury’s

finding of proximate cause is that Plaintiff was not legally

entitled to a battered spouse waiver at the time she complained to

Spivack about James Fox’s abuse, and, therefore, she would have

been subjected to James Fox’s brutal attack even if she had known

about the waiver prior to the attack. In support, Defendants

specifically claim that Plaintiff committed immigration fraud, and,

therefore, was ineligible for the battered spouse waiver. See 8

U.S.C. §§ 1154(a)(1)(B)(ii), 1229b(b)(2)(A)(iii) (alien must be

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person of good moral character). Defendants argued before the jury

that Plaintiff committed immigration fraud by: (1) entering the

United States in March 1998 with Hermesman on a fiancee visa with

no intent to marry him, and (2) in early 1999, knowingly using

immigration paperwork from James Fox’s previous fiancee in applying

for adjustment of her immigration status with the intent to defraud

the INS.

The jury obviously rejected Defendants’ argument. At trial,

Plaintiff gave her version of what happened when she first applied

for adjustment of status in early 1999. Plaintiff’s explanation

showed that she did not commit immigration fraud and that she

answered all of the INS’s questions honestly. The jury obviously

credited Plaintiff’s version of her actions in applying for

adjustment of her immigration status, which we must accept on

appeal. To summarize, from the evidence before the jury, the jury

could have reasonably found that Defendants owed Plaintiff

fiduciary duties which they breached by failing to inform her of

the battered spouse waiver when she put them on notice about James

Fox’s physical and mental abuse, which breach proximately caused

Plaintiff to suffer emotional and physical injuries at the hands of

James Fox. Accordingly, we reject Defendants’ challenge to the

district court’s denial of their motion for judgment as a matter of

law on the basis that the evidence does not support a fiduciary

relationship or the remaining elements of Plaintiff’s claim

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alleging negligence based upon fiduciary duty. We have also

considered Defendants’ remaining assignments of error with respect

to Plaintiff’s negligence/breach of fiduciary duty claim and find

them to be without merit.

III.

Defendants next challenge the district court’s denial of their

Rule 50(b) motion for judgment as a matter of law with respect to

Plaintiff’s claim under Virginia law for actual or constructive

fraud. Their challenge is without merit.

The elements of a claim for actual fraud under Virginia law

are: “(1) a false representation, (2) of a material fact, (3) made

intentionally and knowingly, (4) with intent to mislead, (5)

reliance by the party misled, and (6) resulting damage to the party

misled.” Evaluation Research Corp. v. Alequin, 439 S.E.2d 387, 390

(Va. 1994). Constructive fraud under Virginia law differs from

actual fraud under Virginia law “in that the misrepresentation of

material fact is not made with the intent to mislead, but is made

innocently or negligently although resulting in damage to the one

relying on it.” Id. The elements of either actual fraud or

constructive fraud must be proven by clear and convincing evidence.

Id. Thus, “[a] finding of either actual or constructive fraud

requires clear and convincing evidence that one has represented as

true what is really false, in such a way as to induce a reasonable

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person to believe it, with the intent that the person will act upon

this representation.” Id.

Defendants contend that, inter alia, the district court should

have granted their motion for judgment as a matter of law with

respect to Plaintiff’s fraud/constructive fraud claim due to lack

of evidence. We disagree.

Among other misrepresentations, Plaintiff sought to prove that

Spivack, on behalf of herself and EI, committed actual or

constructive fraud by falsely telling her on several occasions

that, in light of her complaints of James Fox’s physical and mental

abuse, she only had two courses of action available to her: (1)

remain married to and living with James Fox; or (2) return to the

Ukraine. From the evidence set forth in detail in Part II supra,

a reasonable jury could find, by clear and convincing evidence,

that Spivack, on behalf of herself and EI, intentionally withheld

knowledge regarding the battered spouse waiver from Plaintiff in an

effort to preserve one of EI’s core promotional selling points,

i.e., EI’s 95% success rate. The record also shows by clear and

convincing evidence that Plaintiff reasonably relied upon Spivack’s

explanation of her two courses of action to her physical and mental

detriment. We have also considered Defendants’ remaining

assignments of error with respect to Plaintiff’s fraud/constructive

fraud claim and find them to be without merit. Accordingly, we

hold the district court did not err in denying Defendants’ Rule

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50(b) motion for judgment as a matter of law with respect to

Plaintiff’s fraud/constructive fraud claim.

IV.

Turning to the topic of damages, Defendants make several

arguments in challenge of the jury’s compensatory and punitive

damages award. We will address two--(1) Defendants’ argument that

they deserve credit for James Fox’s $115,000 settlement with

Plaintiff; and (2) Defendants’ argument that the punitive damage

award is excessive in violation of the Due Process Clause.

A. Credit for Settlement.

Relying upon Virginia Code § 8.01-34, Defendants moved post-

verdict to receive credit for James Fox’s $115,000 settlement with

Plaintiff on the basis that James Fox was a joint tortfeasor and

Plaintiff suffered indivisible injury. Virginia Code § 8.01-34

provides: “Contribution among wrongdoers may be enforced when the

wrong results from negligence and involves no moral turpitude.”

Id. (emphasis added). On appeal, Defendants contend the district

court erred by denying their motion.

We affirm the district court on this issue. Defendants’ moral

turpitude, and thus their nonentitlement to relief under § 8.01-34,

is substantiated by the jury’s award of punitive damages, because

the jury was instructed that it could only award punitive damages

if it found “by the greater weight of the evidence that the

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opposing party acted with actual malice toward that party or acted

under circumstances amounting to a willful and wanton disregard of

that party’s rights . . . .” (J.A. 2130).

B. Due Process Clause.

Defendants argued below and argued on appeal that the jury’s

punitive damages award is excessive in violation of the Due Process

Clause of the Fifth Amendment, and, therefore, the district court

erred in denying its motion to reduce it. Defendants’ argument is

without merit.

Compensatory damages are intended to redress the concrete loss

that plaintiff has suffered by reason of the defendant’s wrongful

conduct. State Farm Mut. Auto. Ins. Co. v. Campbell, 538 U.S. 408,

416 (2003). In contrast, punitive damages are aimed at deterrence

and retribution. Id.

Defendants argue that the jury’s award of punitive damages is

excessive under the guideposts set forth in BMW of North Am., Inc.

v. Gore, 517 U.S. 559, 562 (1996). We disagree. BMW sets forth

three guideposts to consider de novo in reviewing a punitive damage

award for excessiveness under the Fourteenth Amendment7: “(1) the

7
We note that BMW involved an excessiveness challenge to a
punitive damage award under the Due Process Clause of the
Fourteenth Amendment, while Defendants’ challenge to the punitive
damage award here is properly brought under the Due Process Clause
of the Fifth Amendment, given that the governmental action
challenged involved a federal tribunal. Johnson v. Hugo’s
Skateway, 974 F.2d 1408, 1411 n.1 (4th Cir. 1992) (en banc)
(punitive damage award arising from federal tribunal is properly
challenged under the Due Process Clause of the Fifth Amendment).

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degree of reprehensibility of the defendant’s misconduct; (2) the

disparity between the actual or potential harm suffered by the

plaintiff and the punitive damages award; and (3) the difference

between the punitive damages awarded by the jury and the civil

penalties authorized or imposed in comparable cases.” State Farm

Mut. Auto. Ins. Co., 538 U.S. at 418 (citing BMW).

Here, after considering all of the evidence before it, the

jury awarded Plaintiff $92,000 in compensatory damages and $341,500

in punitive damages. Accordingly, the ratio of punitive damages to

compensatory damages--the focus of the second guidepost--is less

than four to one. Under the Supreme Court’s most recent

pronouncement on this issue, the four to one ratio is not

excessive. State Farm, 538 U.S. at 425 (“an award of more than

four times the amount of compensatory damages might be close to the

line of constitutional impropriety”) (emphasis added).

The first guidepost--i.e., the degree of reprehensibility of

the defendant’s misconduct--does not suggest excessiveness in this

case either. Defendants’ knowing allowance of this woman to remain

in such a physically and mentally abusive relationship while she

Because Defendants urge review of the punitive damage award under
BMW, Plaintiff does not object, and there appears no sound reason
to apply a different excessiveness test in the Fifth Amendment
context as opposed to the Fourteenth Amendment context, Morgan v.
Woessner, 997 F.2d 1244, 1255 (9th Cir. 1993) (“The two Clauses
should be applied in the same manner when two situations present
identical questions differing only in that one involves a
proscription against the federal government and the other a
proscription against the States.”), we apply BMW.

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was pregnant is highly reprehensible. Finally, the last guidepost-

-i.e., the difference between the punitive damages awarded by the

jury and the civil penalties authorized or imposed in comparable

cases--does not offer us much guidance one way or the other. For

example, while MOBA caps civil penalties at $20,000 for each

failure-to-disclose violation, 8 U.S.C. § 1375(b)(2)(A), a failure-

to-disclose violation of MOBA does not take into consideration the

willful and wantonness of Defendants’ conduct here. Neither party

has pointed to any other civil-penalty schemes for our comparison.

In the final analysis, we have no basis to hold that the

jury’s punitive damage award is excessive.

V.

We have carefully reviewed Defendants’ remaining assignments

of error and conclude they are without merit. Accordingly, we

affirm the judgment in favor of Plaintiff below in toto.8

AFFIRMED

8
Upon Plaintiff’s post-oral argument motion, we take judicial
notice that, on March 10, 2006, the United States issued Plaintiff
official notice approving her application to adjust to permanent
resident status and a Permanent Resident Card.

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