UNPUBLISHED
UNITED STATES COURT OF APPEALS
FOR THE FOURTH CIRCUIT
No. 12-2244
GENERAL ASSURANCE OF AMERICA, INC.,
Plaintiff - Appellant,
v.
OVERBY-SEAWELL COMPANY,
Defendant - Appellee.
Appeal from the United States District Court for the Eastern
District of Virginia, at Alexandria. T. S. Ellis, III, Senior
District Judge. (1:11-cv-00483-TSE-JFA)
Argued: May 15, 2013 Decided: July 17, 2013
Before NIEMEYER and KEENAN, Circuit Judges, and HAMILTON, Senior
Circuit Judge.
Affirmed by unpublished per curiam opinion.
ARGUED: J. Randolph Evans, MCKENNA, LONG & ALDRIDGE, LLP,
Washington, D.C., for Appellant. J. Kevin Fee, MORGAN, LEWIS &
BOCKIUS, LLP, Washington, D.C., for Appellee. ON BRIEF: Shari
L. Klevens, MCKENNA, LONG & ALDRIDGE, LLP, Washington, D.C., for
Appellant. Jessica M. Zetwick, Erik M. Kosa, MORGAN, LEWIS &
BOCKIUS, LLP, Washington, D.C., for Appellee.
Unpublished opinions are not binding precedent in this circuit.
PER CURIAM:
Plaintiff General Assurance of America (GAA) brought this
action against Overby-Seawell Company (OSC), alleging breach of
contract and related claims. GAA, a licensee of certain
software owned by OSC, alleged that OSC breached the parties’
confidentiality agreement and violated various common law and
statutory duties when OSC allegedly contacted three of GAA’s
customers. The district court awarded summary judgment in favor
of OSC on all claims. Upon our review, we affirm the district
court’s judgment.
Factual Background
GAA, a Virginia corporation, and OSC, a Georgia
corporation, both provide “collateral tracking services” to
banks. OSC owns collateral tracking software that is designed
to help banks monitor the insurance status of the collateral
securing their loans. In November 1999, in anticipation of
entering into a business relationship, GAA and OSC entered into
a confidentiality agreement.
As relevant to this case, the confidentiality agreement
provided in part:
As a condition to GAA furnishing such information
[regarding “GAA’s clients, program design, policy
forms, coverage parameters, application, etc.”], OSC
agrees to treat confidentially such information
furnished to OSC by GAA or on GAA’s behalf (the non-
disclosure provision). . .
2
It is further understood that OSC will not solicit GAA
clients for CPI [collateral protection insurance] or
other services once identified as clients or potential
clients of GAA (the non-solicitation provision). . .
The confidentiality agreement also stated that “any documents,
reports, forms or financial information, which OSC may provide
to GAA or GAA to OSC, will be used for review and evaluation of
the CPI or other program(s) and will be kept confidential by
GAA, OSC, their employees, and representatives.”
Shortly after they signed the confidentiality agreement,
GAA and OSC entered into a software licensing agreement in which
GAA paid various fees to use OSC’s collateral tracking software.
To utilize the licensed OSC software, GAA stored on OSC’s
database servers “every single piece of data, every certificate,
[and] every master policy” related to GAA’s business. Also,
during the parties’ decade-long relationship, OSC occasionally
assisted GAA in marketing its services to potential clients by
participating in GAA’s sales presentations.
GAA contends that OSC violated the confidentiality
agreement by generally abusing its access to GAA’s business
information and by “luring” three particular clients away from
GAA to become clients of OSC. The first such client, Macon Bank
(Macon), had a long-standing relationship with Gil Swaim, a
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“sub-agent” of OSC. 1 Swaim met with Macon personnel in 2010 at
Macon’s office in North Carolina. During that meeting, Swaim
advised Macon’s assistant vice president that GAA was not
providing to Macon all available collateral tracking services.
In a “follow-up” email, Swaim requested a copy of Macon’s
contract with GAA “so that OSC could assist Macon [] in the
termination of the contract with GAA.” Swaim arranged a meeting
with Macon representatives at OSC’s offices in Georgia, which
later was cancelled. Macon remains a GAA client and has not
advised GAA that it intends to terminate its contract with GAA.
The second client at issue, Capital City Bank (Capital
City), was contacted in 2010 by a different OSC sub-agent,
Securitas Financial Services, after Capital City had become
dissatisfied with GAA’s collateral tracking services. Like the
relationship between Macon and Swaim, Capital City and Securitas
had an ongoing, longstanding association.
Securitas coordinated two meetings between OSC and Capital
City regarding OSC’s collateral tracking services. One of these
1
The “Sub-Agent’s Agreement” between Swaim and OSC stated
that the parties created “a contractual relationship under which
they will, from time to time utilize each other’s experience,
expertise, and resources in connection with the placement of
Collateral Protection and related coverage for banks and other
lending institutions.” The agreement authorized Swaim, as sub-
agent, “to solicit those insureds as may be from time to time
specifically designated or agreed to by [OSC] for the placement
of collateral protection insurance.”
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meetings was held at OSC’s offices, and the other meeting took
place at Capital City’s offices in Florida. Despite these
efforts, Capital City never signed a contract with OSC.
Although Capital City indicated its intent to terminate its
contract with GAA, the contract remained in effect at the time
of the summary judgment proceedings in the district court.
In 2008, the third bank at issue, Yadkin Valley Bank
(Yadkin Valley), purchased another bank that was a client of
GAA. During the consolidation and transition process, Yadkin
Valley invited GAA and other companies, but not OSC, to make
sales presentations regarding servicing options for Yadkin
Valley’s loans. GAA gave a presentation to Yadkin Valley in
which an OSC employee participated. Yadkin Valley later orally
notified GAA that it had been selected to provide collateral
tracking services for all Yadkin Valley’s loans.
Shortly after making this verbal commitment to GAA, Yadkin
Valley became interested in leasing the OSC software directly
from OSC, rather than subleasing the software through GAA.
Yadkin Valley relayed this interest to Swaim, who had been doing
business with Yadkin Valley for several years, and who only
later became a sub-agent of OSC. Swaim contacted OSC on behalf
of Yadkin Valley, and invited OSC to give Yadkin Valley a sales
presentation.
5
OSC made a presentation to Yadkin Valley personnel in June
2009, highlighting the differences between OSC’s and GAA’s
services. Following this presentation, Yadkin Valley decided to
hire OSC at a price slightly less than the previous contract
with GAA. Yadkin Valley thereafter terminated its contract with
GAA.
In May 2011, GAA filed the present lawsuit against OSC,
alleging breach of the parties’ confidentiality agreement,
breach of fiduciary duty, tortious interference with contractual
relations, and business conspiracy under Virginia statutory law.
GAA also requested an accounting and the imposition of a
constructive trust based on OSC’s contacts with GAA clients.
After hearing extensive oral argument, the district court
awarded OSC summary judgment on all of GAA’s claims. 2 GAA timely
appealed.
2
On appeal, GAA does not challenge the district court’s
award of summary judgment to OSC on GAA’s request for an
accounting and the imposition of a constructive trust. GAA
maintains, however, that it has preserved a “reviv[al]” of those
claims in the event that we conclude that OSC owed a fiduciary
duty to GAA.
6
District Court Holdings
Applying well-settled principles of Georgia law, 3 the
district court concluded that the non-solicitation provision of
the confidentiality agreement was unenforceable because that
provision was not limited in time. See Cox v. Altus Healthcare
& Hospice, Inc., 706 S.E.2d 660, 664 (Ga. Ct. App. 2011) (non-
solicitation provisions in an agreement are unenforceable on
their face when they do not contain a time limitation or a
geographic limitation). The district court further concluded
that it could not add such a time limitation to the parties’
contract.
The district court also held that the record lacked any
evidence that OSC actually had solicited GAA’s clients. The
court concluded that, instead, OSC merely had responded to
offers of business upon contacts initiated by Yadkin Valley and
Capital City themselves, and that Swaim did not reach out to
Macon at OSC’s direction. With respect to the non-disclosure
provision, the court explained that although the absence of a
time limitation did not render the provision unenforceable per
se, the record lacked any evidence that OSC had made improper
disclosures of confidential information. Accordingly, the
3
The parties agree that the breach of contract claim is
governed by Georgia law pursuant to the choice of law provision
contained in the confidentiality agreement.
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district court awarded summary judgment to OSC on the breach of
contract claim.
The district court next addressed GAA’s claims of tortious
interference with contract, breach of fiduciary duty, and
conspiracy under the Virginia business conspiracy statutes. The
district court began its analysis by rejecting GAA’s contention
that its tort claims were governed by Virginia law. Applying
Virginia’s choice of law rules, the district court reasoned that
the law of the states in which OSC’s allegedly wrongful conduct
occurred governed those claims. Accordingly, the district court
held that the different tort claims were subject to the law of
the respective states in which GAA’s clients were located.
The district court ultimately concluded that GAA had failed
to establish that OSC had a fiduciary relationship with GAA and,
therefore, that OSC’s alleged misconduct could not support a
claim for breach of fiduciary duty. Regarding the tortious
interference claim, the district court held that OSC did not
induce the termination of GAA’s contract with Macon, which still
remains a GAA client. The court also concluded that OSC had not
wrongfully interfered with GAA’s contract with Yadkin Valley,
because OSC’s contacts with Yadkin Valley were “reasonably
related to a legitimate business interest,” and the evidence
failed to show that OSC acted maliciously or without
justification. The court similarly rejected the tortious
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interference claim regarding Capital City, stating that the
“record is devoid of evidence that OSC employed improper methods
in its interactions with Capital City.”
Finally, relying on the constitutional principle that
states may not regulate commerce occurring entirely outside
their borders, the district court concluded that GAA’s claim of
a statutory business conspiracy under Virginia Code §§ 18.2-499
& -500 failed as a matter of law, because none of the allegedly
conspiratorial acts occurred in Virginia. The district court
accordingly awarded summary judgment to OSC on the business
conspiracy claim.
Issues on Appeal
We review de novo the district court’s award of summary
judgment. Hardwick v. Heyward, 711 F.3d 426, 433 (4th Cir.
2013). Upon our consideration of the record, the briefs, and
the parties’ oral argument, we affirm the district court’s
judgment. In reaching this result, we agree substantially with
the district court’s reasoning set forth in its thorough
opinion, and disagree only with respect to the court’s choice of
law analysis regarding the tortious interference with contract
and breach of fiduciary duty claims. Additionally, we decide
GAA’s business conspiracy claim on a different basis than the
one chosen by the district court.
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Contract Claims
In rejecting GAA’s breach of contract claims, the district
court, as required by Georgia law, correctly applied the
principle of strict scrutiny to the non-solicitation and non-
disclosure provisions of the confidentiality agreement.
Applying such strict scrutiny, we likewise hold that the non-
solicitation provision is unenforceable because it lacks any
time limitation, and a court is not permitted to read into a
document such a critical term that is plainly absent. See Ga.
Code Ann. § 13-2-2 (parol evidence rule under Georgia law);
Northside Hosp., Inc. v. McCord, 537 S.E.2d 697, 699 (Ga. Ct.
App. 2000) (restrictive covenants subject to strict scrutiny may
not be “blue penciled”).
We also agree with the district court that the record lacks
any evidence that OSC breached either the non-solicitation
provision or the non-disclosure provision of the confidentiality
agreement. GAA’s president and corporate designee could not
identify in his deposition testimony any confidential
information that OSC allegedly had disclosed. GAA’s unsupported
speculation that such information “must have been disclosed” is
insufficient to create a genuine dispute of material fact to
prevent the entry of summary judgment. See Othentec Ltd. v.
Phelan, 526 F.3d 135, 142 (4th Cir. 2008).
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Virginia Business Conspiracy Claim
To establish a civil conspiracy under Virginia Code §§
18.2-499 & -500, a plaintiff must prove by clear and convincing
evidence that the defendant acted “for the purpose of []
willfully and maliciously injuring another” in his business,
that is, “the defendant[] acted intentionally, purposefully, and
without lawful justification, and [] such actions injured the
plaintiff’s business.” Id. § 18.2-499; N. Va. Real Estate, Inc.
v. Martins, 720 S.E.2d 121, 133 (Va. 2012) (citation omitted).
In support of its business conspiracy claim, GAA asserts that it
presented sufficient evidence to establish OSC’s willful and
malicious motive to injure GAA in its business. We disagree.
The evidence on which GAA relies consists of deposition
testimony given by GAA’s president, which simply repeated a
statement made to him by a former OSC employee, who in turn was
repeating a statement allegedly made by OSC’s president at an
OSC company meeting. In that statement, the OSC president
allegedly indicated that he intended to “go out, take [GAA’s]
business and put [GAA] out of business.” Plainly, as the
district court concluded, this evidence was inadmissible
hearsay. The balance of the record fails to establish that OSC
acted with malice and intended to injure GAA’s business, but
merely shows that OSC acted to promote its legitimate business
interests. Thus, OSC’s permissible motivation for its actions,
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standing alone, negates GAA’s business conspiracy claim. 4 Va.
Code Ann. § 18.2-499 (a conspiracy requires that the defendant
acted for “the purpose of [] willfully and maliciously injuring
another”) (emphasis added); see also Advanced Marine Enters. v.
PRC, Inc., 501 S.E.2d 148, 154-55 (Va. 1998) (the conspiracy
statutes do not require that the defendant’s “primary and
overriding purpose is to injure another,” but rather that the
defendant acted with “legal malice”). Given this lack of
evidence of improper motive, we conclude that the district court
did not err in awarding summary judgment to OSC on the business
conspiracy claim.
Other Tort Claims
We turn to consider GAA’s remaining claims of tortious
interference with contract and breach of fiduciary duty.
Although we affirm the district court’s award of summary
judgment to OSC on these claims, we first clarify the choice of
law analysis applicable to the resolution of the claims.
We apply the choice of law rules of Virginia, the forum
state. Klaxon Co. v. Stentor Elec. Mfg. Co., 313 U.S. 487, 496
4
Because the record wholly fails to support a business
conspiracy claim under the Virginia statutes, we need not
address GAA’s argument that the district court erred in
declining to apply the Virginia statutes to the out-of-state
conduct at issue in this case.
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(1941). Based on these choice of law principles, we apply to
tort actions the law of the place where the wrong occurred.
Milton v. IIT Research Inst., 138 F.3d 519, 521 (4th Cir. 1998).
Under Virginia law, the “place of the wrong” is the place where
“the last event necessary to make an [actor] liable for an
alleged tort takes place.” Quillen v. Int’l Playtex, Inc., 789
F.2d 1041, 1044 (4th Cir. 1986) (citation omitted). For claims
of tortious interference with contract and breach of fiduciary
duty, the occurrence of the plaintiff’s injury marks the last
event necessary to establish liability. See Collelo v.
Geographic Servs. Inc., 727 S.E.2d 55, 62-63 (Va. 2012)
(citation omitted) (explaining elements of tortious interference
with contract claim); Carstensen v. Chrisland Corp., 442 S.E.2d
660, 666 (Va. 1994) (breach of fiduciary duty requires proof of
“duty, breach, and resulting damage”).
With regard to GAA’s claims of tortious interference and
breach of fiduciary duty involving OSC’s contacts with Yadkin
Valley, we conclude that GAA’s alleged injury occurred in North
Carolina, the place where Yadkin Valley terminated its contract
with GAA, which was the last event necessary to render OSC
liable for the alleged torts. In reaching this conclusion, we
reject GAA’s contention that Virginia, rather than North
Carolina, was the place of GAA’s alleged injury in the Yadkin
Valley matter. Virginia was merely the place where GAA
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ultimately suffered its financial losses, not the location where
the last event necessary to render OSC liable took place. We
will not apply the law of a state in which only the effect of
the wrongful act, such as economic impact, is felt. Milton, 138
F.3d at 522.
Rather than focusing on the location of the last event
necessary to establish liability on the part of OSC, the
district court instead made its choice of law determination
based on the location of “the alleged harmful contact between
OSC and GAA’s clients.” Regardless of this misplaced focus,
however, the district court’s ultimate application of the law of
North Carolina to the claims involving Yadkin Valley was
correct, because that was the location where the last event
necessary to establish liability occurred. Quillen, 789 F.2d at
1044.
We also hold that we need not decide what state’s law
applies to the tort claims involving Capital City and Macon,
because those claims cannot stand irrespective of the choice of
law. Even assuming that GAA adequately pleaded tortious
interference claims involving Capital City and Macon, those
claims fail as a matter of law. GAA did not prove that OSC
caused a termination of GAA’s relationships with these two
banks, which is a required element of the cause of action. See
Collelo, 727 S.E.2d at 62-63. The record before us is
14
undisputed that neither bank ever executed a contract with OSC,
and both remain clients of GAA.
Next, we conclude that despite GAA’s contentions to the
contrary, the claim of tortious interference involving Yadkin
Valley and all the claims of breach of fiduciary duty are merely
re-packaged versions of GAA’s claim for breach of the
confidentiality agreement, which we already have concluded is
without merit. The tortious interference claim involving Yadkin
Valley fails as a matter of law because the record is devoid of
evidence that OSC “acted with malice and for a reason not
reasonably related to the protection of [its] legitimate
business interest.” Cameron v. New Hanover Mem’l Hosp., Inc.,
293 S.E.2d 901, 916 (N.C. Ct. App. 1982) (citation omitted).
The record before us likewise fails to establish that OSC
owed a fiduciary duty to GAA. The record shows that GAA and OSC
entered into an arms-length business agreement, under which all
of OSC’s obligations to GAA were based. Thus, under either the
state law applied by the district court, or under Virginia law
as advocated by GAA, OSC did not owe a fiduciary duty to GAA.
See Crumley & Assocs., P.C. v. Charles Peed & Assocs., P.A., 730
S.E.2d 763, 767 (N.C. Ct. App. 2012) (“North Carolina courts
generally find that parties who interact at arms-length do not
have a fiduciary relationship with each other, even if they are
mutually interdependent businesses.”) (citation omitted); Taylor
15
Woodrow Homes Fla., Inc. v. 4/46-A Corp., 850 So.2d 536, 541
(Fla. Dist. Ct. App. 2003) (“When the parties are dealing at
arm’s length, a fiduciary relationship does not exist because
there is no duty imposed on either party to protect or benefit
the other.”); Augusta Mut. Ins. Co. v. Mason, 645 S.E.2d 290,
293-95 (Va. 2007) (explaining that no claim for breach of
fiduciary duty arises when the defendant’s only obligations
derive from a contractual relationship between the parties).
For these reasons, we hold that the district court properly
awarded summary judgment to OSC on all the claims of tortious
interference with contract and breach of fiduciary duty.
Conclusion
In sum, we hold that the district court did not err in
awarding summary judgment in favor of OSC on all of GAA’s
claims. We therefore affirm the district court’s judgment.
AFFIRMED
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