Petr Bocek v. JGA Associates, LLC

UNPUBLISHED

UNITED STATES COURT OF APPEALS
FOR THE FOURTH CIRCUIT

No. 14-1208

PETR BOCEK, M.D., PHD,

Plaintiff - Appellant,

v.

JGA ASSOCIATES, LLC; JOSEPH P. AMATO,

Defendants – Appellees,

and

ALLERGY CARE CENTERS, VIRGINIA, INC.; A2 MEDICAL GROUP,
INC.,

Defendant,

LENA BOCEK,

Movant.

Appeal from the United States District Court for the Eastern
District of Virginia, at Alexandria. Claude M. Hilton, Senior
District Judge. (1:11-cv-00546-CMH-JFA)

Argued: March 24, 2015 Decided: June 18, 2015

Before TRAXLER, Chief Judge, and WILKINSON and NIEMEYER, Circuit
Judges.

Reversed and remanded by unpublished opinion. Chief Judge
Traxler wrote the opinion in which Judge Niemeyer joined. Judge
Wilkinson wrote a separate concurring opinion.
ARGUED: S. Micah Salb, LIPPMAN, SEMSKER & SALB, LLC, Bethesda,
Maryland, for Appellant. Kristen Michelle Kanaskie, SHER,
CUMMINGS AND ELLIS, PLLC, Arlington, Virginia, for Appellees.
ON BRIEF: Mary E. Kuntz, Ph.D., LIPPMAN, SEMSKER & SALB, LLC,
Bethesda, Maryland, for Appellant. David E. Sher, Mark D.
Cummings, SHER, CUMMINGS AND ELLIS, PLLC, Arlington, Virginia,
for Appellees.

Unpublished opinions are not binding precedent in this circuit.

2
TRAXLER, Chief Judge:

Petr Bocek brought this action against business consultant

Joseph Amato and two companies associated with Amato after the

defendants purchased a medical practice for themselves rather

than for Bocek. Following a bench trial, the district court

granted judgment in favor of the defendants, and Bocek appeals.

We reverse and remand for a new trial.

I.

Plaintiff Petr Bocek is a medical doctor specializing in

the treatment of allergies. Defendant Joseph Amato is the

manager and sole member of defendant JGA Associates, LLC, a

business consulting firm.

Bocek contacted Amato seeking assistance with the formation

and financing of a new allergy care medical practice. On

November 10, 2010, the parties entered into a contract (the

“Consulting Agreement”) through which JGA agreed “to review and

report on the feasibility of the proposed allergy medicine

practice and prepare a business proposal for funding a start-up

medical practice” and “render such other services as may be

agreed upon by [Bocek] and [JGA].” J.A. 221. The agreement

provided that JGA would have “the right to act [as] an agent

representing [Bocek] to Interested Parties during the term of

this Agreement.” J.A. 221. (Amato clarified that “Interested

Parties” in that context referred to prospective lenders.) The

3
agreement also provided that JGA would be compensated through

“development fees” (hourly billing for consulting services) and

a “completion fee” of two percent of the face amount of any

business loan that JGA arranged.

On November 15, five days after signing the Consulting

Agreement, Bocek asked Amato about the feasibility of buying an

existing medical practice rather than starting a new practice.

Bocek told Amato that Allergy Care Centers (“ACC”), where Bocek

had previously worked, was being offered for sale by the

administrator of the estate of ACC’s owner, who had died two

years earlier. Bocek noted that the Estate was burdened with

taxes and that the practice was profitable, and he suggested

that reductions in offices and staff could make it even more so.

Amato responded positively, explaining that “[t]he acquisition

of an existing operating practice is always more attractive if

the price and the historic financial performance make sense.”

J.A. 225.

Bocek informed Amato in an email on December 1 that ACC was

currently owned by the estate of Charles M. Valentine (the

“Estate”) and that Peter Klenk was the lawyer handling the

Estate. The email stated that Bocek was unsure how to confirm

that ACC was for sale and, if it was, what price the estate was

asking, but that Bocek would want an independent appraisal

regardless. Bocek also told Amato that his acquisition of ACC

4
might be complicated because he had been fired from ACC and was

in the process of negotiating a severance package, and Bocek

asked Amato to pursue the purchase of ACC without revealing

Bocek’s identity as the buyer.

By that afternoon, Amato had communicated with Klenk and

informed Bocek that ACC was in fact on the market. Amato told

Bocek that he would assemble a checklist of information that he

would need to review and he would include any special requests

from Bocek when he communicated again with Klenk. Amato also

told Bocek that the purchase would “be considered an asset-only

transaction.” J.A. 237. On December 15, JGA sent Bocek an

email containing a historical financial analysis, a preliminary

business valuation report, as well as an excel document he had

created regarding ACC’s accounting summaries. Bocek spoke to

Amato the next day regarding these documents.

The evidence regarding the conversations between Bocek and

Amato is somewhat in dispute. Nevertheless, it appears that

Bocek was concerned that he might not have the cash available to

make a sufficient down payment. Amato testified that for that

reason, and because Bocek wanted to keep his name out of the

transaction with the Estate, he was exploring a number of

different ways to structure the deal, including a mezzanine

lending structure. Under that structure, a lender would have

some rights to convert its loan to an ownership or equity

5
interest in the practice if the loan were not timely repaid in

full.

On December 23, Amato sent Bocek an email informing him

that JGA had “put in a closed bid to purchase ACC on Monday . .

. to attempt to secure a position in the possible acquisition of

ACC,” that the law firm Klenk had hired was considering the

offer, and that they “could begin a formal due diligence process

with ACC.” J.A. 265. Amato added that “there are still many

questions both our firm and you may have regarding the

transaction.” J.A. 265. For that reason, Amato stated that he

“intend[ed] to move forward based on a few specific parameters.”

J.A. 265. As is relevant here, Amato stated that “[JGA] (or an

alternate holding company) intends to initially purchase the

practice with the direct intention of selling the practice (or

the holding company) to” Bocek. J.A. 265.

In response, on December 27 Bocek sent Amato an email

confirming that he understood that he would “be the owner of ACC

from the day of purchase.” J.A. 267. However, he expressed

uncertainty regarding how the purchase would be structured and

who would provide the down payment. The next day Amato emailed

Bocek, once again confirming that JGA’s goal was to make Bocek

the owner of ACC from the day of purchase. In the end, however,

although Amato and Bocek discussed several options regarding how

the deal would be structured, they never resolved that issue.

6
 On January 22, 2011, Amato sent Bocek an invoice for his

services. The invoice reflected Bocek’s prior payment of

$3,800.00 and sought an additional $4,574.40 “for expanded hours

and third-party costs associated with the project development

and acquisition negotiations for the purchase of the Allergy

Care Center business operation on behalf of JGA Associates and

Dr. Petr Bocek.” J.A. 291. On January 31, Bocek sent an email

to JGA indicating that his lawyers would be in contact with JGA

to put in place a new written contract since the Consulting

Agreement was created under the assumption that Bocek would be

developing and obtaining financing for a new practice rather

than acquiring an existing one.

On February 3, Amato sent the Estate a Letter of Intent

(“LOI”) through which “JGA Associates, LLC, or its assigns”

offered to purchase ACC’s assets for $1,000,000. J.A. 301. The

LOI obligated the parties to negotiate in good faith, but it was

otherwise not binding; until the execution of a mutually

agreeable asset purchase agreement, either side could walk away

from the transaction without penalty. The Estate accepted the

offer and returned an executed copy of the LOI to Amato late in

the afternoon on February 8.

Earlier that same day (February 8), Amato had visited one

of the ACC offices to meet with Terri Crook, ACC’s practice

manager. During the meeting, Crook told Amato that Bocek had

7
been fired after he sexually harassed employees and used another

doctor’s prescription pad to forge prescriptions for himself.

This was the first Amato had heard of these issues; although

Bocek had told Amato that he had been fired, he had never

provided any details about what happened, and Amato had never

asked. After meeting with Crook, Amato stalled and put off

Bocek’s various inquiries until he could verify what he had

learned.

On February 15, the Estate filed a petition in a

Pennsylvania “Orphan’s Court” seeking approval for the sale of

ACC. Bocek was then unaware that the sale was moving forward −

Amato had not informed Bocek that he submitted the LOI to the

Estate on February 3 or that the LOI had been accepted.

On February 17, after reviewing documents that confirmed

Crook’s information, Amato sent a letter notifying Bocek of his

intent to terminate their contractual relationship in 10 days,

in accordance with the terms of the Consulting Agreement. Amato

explained the termination in general terms, stating that during

the due-diligence process, “it became apparent . . . that your

involvement in any potential transaction would . . . sour the

deal. It also became evident that we could not move forward

with your participation in any potential transaction without the

possibility of serious repercussions thereafter.” J.A. 317.

8
 Counsel for Bocek responded on February 22. Among other

things, counsel noted that Amato, as Bocek’s agent, had a

continuing duty of loyalty to Bocek and that Amato would be

breaching his contractual and fiduciary duties “if [he] were to

turn the acquisition of ACC into a deal which is of benefit to

[him].” J.A. 629. Nevertheless, on March 2, Amato incorporated

a new company, A2 Medical Group, Inc. (“A2”), to serve as the

purchaser of ACC’s assets. Brian August, Jeffrey Renzulli, and

Amato were named as directors of A2, with Amato and Brian August

each owning 49 percent of A2’s shares and Carolyn August owning

two percent. JGA at some point assigned its interests in the

transaction to A2, and the Estate and A2 executed an asset

purchase agreement on May 13. Ten days later, the Orphan’s

Court approved the sale, and the sale closed on June 22.

Bocek testified that after Amato terminated the agreement,

Bocek simply wanted Amato to give Bocek the due diligence

documents and analysis that Amato had developed for him, and

that Bocek was prepared to purchase ACC himself. Bocek never

made an offer, however.

After unsuccessfully seeking an injunction to prohibit

Amato and JGA from buying ACC, Bocek filed an Amended Complaint

asserting four causes of action against Amato, JGA, and A2: (1)

fraudulent conveyance and constructive trust; (2) breach of

fiduciary duties; (3) breach of contract; and (4) breach of

9
fiduciary duties as joint venturers. The district court granted

summary judgment in favor of the defendants and dismissed the

case.

It is the breach-of-fiduciary-duties claim that is at issue

in this appeal. In his Amended Complaint, Bocek alleged that

Amato and JGA, as his agents, owed him various fiduciary duties,

including a duty of loyalty. Bocek alleged that he brought the

ACC business opportunity to JGA during the existence of the

agency relation, and that JGA was acting on behalf of Bocek when

it began negotiating with the Estate and conducting due

diligence. Bocek alleged that the defendants breached their

fiduciary duties by, inter alia, using information obtained on

Bocek’s behalf to pursue the acquisition of ACC for themselves,

refusing to return the due diligence materials to him, and, of

course, buying ACC for their own benefit rather than for Bocek's

benefit.

Regarding this claim, the district court held that because

the fiduciary duties at issue arose from the Consulting

Agreement, not independently of it, Bocek was precluded as a

matter of law from recovering in tort for the

breach. See Augusta Mut. Ins. Co. v. Mason, 645 S.E.2d 290, 293

(Va. 2007) (where single act can support a claim for breach of

contract and a claim for breach of a duty arising in tort, “in

order to recover in tort, the duty tortiously or negligently

10
breached must be a common law duty, not one existing between the

parties solely by virtue of the contract” (internal quotation

marks omitted)); see also Station #2, LLC v. Lynch, 695 S.E.2d

537, 540 (Va. 2010) (“[A]n omission or non-performance of a duty

may sound both in contract and in tort, but only where the

omission or non-performance of the contractual duty also

violates a common law duty.”).

On appeal, we affirmed regarding the breach-of-contract,

fraudulent-conveyance, and joint-venture claims. See Bocek v.

JGA Assocs., LLC, 537 F. App’x 169, 179 (4th Cir. 2013).

However, we reversed concerning the claim for breach of

fiduciary duties, with Chief Judge Traxler and Judge Niemeyer

articulating slightly differing rationales for their decisions,

and with Judge Wilkinson dissenting. See id. at 176-77

(Traxler, C.J.); id. at 179-80 (Niemeyer, J., concurring in part

and concurring in the judgment); id. at 180-82 (Wilkinson, J.,

concurring and dissenting).

Chief Judge Traxler observed that

Bocek alleged that he brought the ACC business
opportunity to JGA during the existence of the agency
relation, and that JGA was acting on behalf of Bocek
when it began negotiating with the Estate and
conducting due diligence. Bocek alleged that the
defendants breached their fiduciary duties by, inter
alia, using information obtained on Bocek’s behalf to
pursue the acquisition of ACC for themselves, refusing
to return the due diligence materials to him, and, of
course, buying ACC for their own benefit rather than
for Bocek’s benefit.

11
Id. at 176 (Traxler, C.J.). Chief Judge Traxler reasoned that

if these factual allegations were proven at trial, the

defendants’ conduct would constitute a clear breach of fiduciary

duty. See id. (Traxler, C.J.). Chief Judge Traxler concluded

that Augusta Mutual, on which the district court had relied, did

not bar recovery on a breach-of-fiduciary-duty theory. He

further concluded that even if the fiduciary duty arose from

contract, “recovery in tort is permitted in cases [such as this

one] where the tort was committed after the termination of the

parties’ contract.” Id. at 177 (Traxler, C.J.).

In a separate opinion, Judge Niemeyer explained that the

actions Bocek alleged, if proven at trial, would “give rise to a

classic claim for breach of the duty of loyalty inherent in the

agency agreement that existed between Bocek and JGA.” Id. at

179 (Niemeyer, J., concurring in part and concurring in the

judgment). Judge Niemeyer also concluded that “[t]he fact that

JGA terminated the agency agreement before taking advantage of

the opportunity that came to it while it was an agent provides

no defense.” Id. at 179-80 (Niemeyer, J., concurring in part

and concurring in the judgment). 1

1
In dissent, Judge Wilkinson reasoned that the
defendants’ duty to refrain from using Bocek’s information arose
contractually, and thus that the defendants’ use of the
information they acquired from Bocek and on his behalf did not
give rise to a viable tort claim. See Bocek v. JGA Assocs.,
(Continued)
12
 On remand, following a bench trial, the district court

granted judgment to the defendants. For reasons that we will

discuss, the district court ruled that Bocek did not prove that

the defendants had an agency relationship with him such that

fiduciary obligations would arise and that, even if they had

breached fiduciary duties owed to Bocek, Bocek failed to prove

damages from any breach.

II.

On appeal, Bocek challenges both the ruling that Amato was

not acting as Bocek’s agent with regard to the possible purchase

of ACC and the ruling that Bocek failed to prove any damages

even if he did prove that the defendants breached fiduciary

duties they owed to him. We consider these rulings seriatim.

A.

We begin by addressing the district court’s analysis of the

agency issue. The district court stated that “[i]n seeking to

demonstrate an agency relationship, Bocek seemingly attempts to

implicate two different ‘agreements’: (1) the written

Consulting Agreement; and (2) an oral straw-purchase agreement

for the purchase of Allergy Care Centers.” J.A. 654. The court

determined that the written agreement did not demonstrate that

LLC, 537 F. App’x 169, 180-82 (4th Cir. 2013) (Wilkinson, J.,
concurring and dissenting).

13
the defendants agreed to act as Bocek’s agent to purchase the

ACC because that agreement provided for JGA’s services in

conjunction with a new, not an existing, medical practice. And,

regarding a possible oral agency agreement, the district court

noted that there was no meeting of the minds between the parties

such as would be necessary to create a binding contract for the

defendants to make a straw purchase of ACC. The district court

observed that while the parties had discussed a number of

options of how such a purchase might be accomplished, they had

not agreed upon any particular method, and thus they had formed

only a nonbinding agreement to agree regarding a straw purchase.

For both of these reasons, the district court concluded that

“Bocek did not carry his burden to establish an agency

relationship between himself and JGA or Amato, and therefore he

fail[ed] to establish that JGA or Amato owed him a fiduciary

obligation.” J.A. 660.

On appeal, Bocek does not specifically challenge either

premise of the district court’s conclusion that he failed to

establish the agency relationship. Rather, Bocek’s position is

that the district court erred in concluding that, in attempting

to demonstrate the agency relationship, he relied only on the

existence of the written agreement and on a binding oral

contract for Amato to purchase ACC on Bocek’s behalf. Bocek

maintains that the parties’ conduct after they entered into the

14
written agreement clearly demonstrated the existence of the

agency relationship. 2 And Bocek claims that he was not required

to show the formation of an oral agency contract in order to

show that Amato actually became Bocek’s agent regarding the

possible purchase. Rather, Bocek maintains he needed only to

show that the parties each consented to Amato’s acting on

Bocek’s behalf and under his control with regard to the efforts

to purchase ACC. Bocek contends that he clearly made that

showing based on the undisputed facts proven at trial. We agree

with Bocek on all of these points.

On consideration of an appeal following a bench trial, we

review the district court’s factual findings for clear error and

its legal conclusions de novo. See Universal Furniture Int’l,

Inc. v. Collezione Europa USA, Inc., 618 F.3d 417, 427 (4th Cir.

2010) (per curiam). A factual finding is clearly erroneous

“when although there is evidence to support it, the reviewing

court on the entire evidence is left with the definite and firm

2
Indeed, the proposed conclusions of law Bocek
submitted to the district court following the trial included the
legal conclusion that “The Defendants were Bocek’s agents for
purposes of acquiring ACC. Extensive email exchanges between
Dr. Bocek and Mr. Amato establish that Amato undertook steps
toward the purchase of ACC on behalf of, and at the direction
of, Bocek. JGA’s billing for these services to Dr. Bocek
confirm the relationship.” Plaintiff’s Proposed Findings of
Fact and Conclusions of Law 13-14, Docket No. 206, Civil Action
No. 1:11-cv-00546 (E.D. Va. Dec. 16, 2013).

15
conviction that a mistake has been committed.” United States v.

United States Gypsum Co., 333 U.S. 364, 395 (1948).

In Virginia, “[a]gency is a fiduciary relationship

resulting from one person’s manifestation of consent to another

person that the other shall act on his behalf and subject to his

control, and the other person’s manifestation of consent so to

act.” Reistroffer v. Person, 439 S.E.2d 376, 378 (Va. 1994).

Such a fiduciary relationship is found 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.” H-B Ltd. P’ship v. Wimmer,

257 S.E.2d 770, 773 (Va. 1979). Regarding the right to control,

“direct evidence is not indispensable – indeed frequently is not

available – but instead circumstances may be relied on, such as

the relation of the parties to each other and their conduct with

reference to the subject matter of the contract.” Acordia of

Va. Ins. Agency v. Genito Glenn, L.P., 560 S.E.2d 246, 250 (Va.

2002) (alteration and internal quotation marks

omitted); see Royal Indem. Co. v. Hook, 157 S.E. 414, 419 (Va.

1931) (“Frequently [agency] is established and has, of

necessity, to be established by circumstantial evidence.”).

“Agency may be inferred from the conduct of the parties and from

the surrounding facts and circumstances.” Drake v. Livesay, 341

S.E.2d 186, 189 (Va. 1986). “Whether an agency relationship

16
exists is a question to be resolved by the fact finder unless

the existence of the relationship is shown by undisputed facts

or by unambiguous written documents.” Acordia of Va. Ins.

Agency, 560 S.E.2d at 250 (alteration and internal quotation

marks omitted); see also Schwartz v. Brownlee, 482 S.E.2d 827,

829 (Va. 1997) (explaining that “[w]hen there is no substantial

conflict in the facts and circumstances disclosed by the

evidence, it becomes a question of law to be decided by the

court whether one party was the agent of another” (alterations

and internal quotation marks omitted)).

There can be no doubt as to the existence of an agency

relationship after the point that the parties entered into the

Consulting Agreement. At that point, Bocek was paying JGA for

Amato’s services. Amato himself conceded that he understood

that, at least initially, “what [he was] to be doing, [he would

be] doing it for Dr. Bocek” and “acting subject to his

instructions and his directions.” J.A. 88. And, the agreement

plainly established JGA’s authority to act as his agent with

regard to the lenders from whom Bocek sought financing.

It is certainly true, as the district court observed, that

the parties entered into the Consulting Agreement with the

intention that JGA would provide services relating to the

formation of a new medical practice. However, five days after

entering into that agreement, Bocek raised the possibility that

17
he might purchase ACC or that Amato might advise him or assist

him in so doing. Amato immediately undertook to help Bocek

determine the feasibility of the idea, including communicating

with the trustee responsible for the sale and obtaining

information about ACC’s assets on Bocek’s behalf. The only

conclusion to be drawn from the record is that the parties both

assented to JGA’s acting as Bocek’s agent in their dealings with

the Estate selling ACC just as they had contemplated JGA

representing Bocek to possible lenders.

Indeed, Amato himself testified that, at least initially,

he was “doing the due diligence work regarding ACC at Dr.

Bocek’s request” pursuant to their agreement “to help [Bocek]

with the medical practice.” J.A. 104-05. See also J.A. 221

(language in Consulting Agreement stating that JGA, in addition

to the services specified in the agreement, would “render such

other services as may be agreed upon by” Bocek and JGA). And it

is undisputed that Amato reported to Bocek regularly regarding

his progress and billed Bocek for work regarding the possible

purchase of ACC. It is also undisputed – and unsurprising –

that Bocek continued to provide instruction to Amato regarding

the work that Amato was performing on his behalf. That

instruction included Bocek’s directive that Amato not disclose

his identity in the course of Amato’s communications with ACC.

18
 When the defendants shifted toward actually negotiating for

the purchase of ACC, the parties’ communications and conduct

continued to point unmistakably toward the conclusion that

Amato’s actions with regard to that purchase were made in the

context of the parties’ established plan for Amato to act on

Bocek’s behalf to obtain the practice for Bocek. Although

possible issues regarding Bocek’s ability to come up with

sufficient capital complicated the question of how the deal

would be structured, the parties’ communications and conduct

unmistakably demonstrated that their work, including Amato’s

placing of a closed bid to purchase ACC, continued to be part of

the defendants’ efforts on Bocek’s behalf to obtain the practice

for Bocek, as the parties’ emails of December 23, 27, and 28,

2010, plainly reflect.

The only reasonable inference that can be drawn from all of

these facts, none of which are in dispute, is that Amato and

Bocek, by their conduct and communications with each other, both

assented to Amato’s acting on Bocek’s behalf and subject to his

control in helping Bocek evaluate the feasibility of purchasing

ACC and in working toward actually obtaining the practice for

Bocek. And this fact, in turn, establishes the legal conclusion

that Amato was acting as Bocek’s agent.

The district court’s analysis notwithstanding, there was no

reason that Bocek was required to show that an agency

19
relationship was established by a separate contract in order to

show that the parties both assented by their conduct to Amato’s

acting as Bocek’s agent regarding Bocek’s possible

purchase. Cf. Bloxom v. Rose, 144 S.E. 642, 644 (Va. 1928)

(concluding that evidence was sufficient to support finding of

agency even though facts did not suggest that the parties had

agreed to any specific contractual terms). That the parties

never reached a meeting of the minds as to the manner in which

ACC would ultimately be transferred to Bocek simply does not

bear on the question of whether the parties had both assented to

the agency relationship.

Moreover, the undisputed facts proven at trial clearly

demonstrate that this situation is one in which “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.” H-B Ltd.

P’ship, 257 S.E.2d at 773. Bocek paid JGA – and JGA accepted

payment – for Amato’s expertise and assistance in determining

the worth of a business opportunity that Bocek had identified

for Amato for that purpose. Under such facts, the law precludes

Amato in equity and good conscience from appropriating the

opportunity for himself once he determined that it in fact

carried with it the very potential for substantial profit that

Bocek had hoped it would. See Bocek, 537 F. App’x at 176-

20
77; id. at 180 (Niemeyer, J., concurring in part and concurring

in the judgment) (“The law would be a buffoon if it allowed JGA

to take Bocek’s opportunity simply by ending the agency

relationship and proceeding thereafter in furtherance of its own

interest.”).

The defendants take the position that at some point after

their initial work regarding the ACC purchase, they ceased

acting on Bocek’s behalf. However, as we explained in our prior

opinion, once the defendants’ duty of loyalty toward Bocek

arose, they could not extinguish it simply by terminating the

agency relationship. See Bocek, 537 F. App’x at 177 (Traxler,

C.J.); id. at 179-80 (Niemeyer, J., concurring in part and

concurring in the judgment).

For all of these reasons, we hold as a matter of law that

Bocek proved that the defendants breached their fiduciary

obligations to Bocek by appropriating the ACC opportunity for

themselves. 3 In so doing, we certainly acknowledge the district

3
In the prior appeal, Bocek appealed the grant of
summary judgment against him, and we determined that the facts
alleged, if proven at trial, would establish that the defendants
breached their fiduciary obligations to Bocek. We were not
called upon to decide whether the evidence was sufficiently one-
sided that Bocek would have been entitled to summary judgment on
that issue had he sought it. See Appellees’ brief at 27 (noting
“the dissimilar postures between the First Appeal and the
instant appeal” in that the facts that Bocek claims he proved at
trial were “mere allegations” in the prior appeal).

21
court’s role as the trier of fact as well as the deference we

must afford the district court’s factual findings. But the

material facts regarding the parties’ conduct are undisputed

(and the facts regarding the parties’ secret, subjective

intentions are immaterial to the agency issue). Whether those

undisputed facts establish the agency relationship is a legal

question for us to decide, see Acordia of Va. Ins. Agency, 560

S.E.2d at 250, and for the reasons we have explained, we

conclude that they did establish the agency relationship.

B.

Bocek also argues that the district court erred in

concluding that even assuming that the defendants’ appropriation

for themselves of the ACC opportunity constituted a breach of

their fiduciary obligations to Bocek, Bocek failed to prove any

damages from the breach. We agree.

In Bocek’s Amended Complaint regarding this cause of action

he requested, among other remedies, money damages in the amounts

of “the difference between the purchase amount set forth in the

Asset Purchase Agreement and the true value of ACC’s assets on

[the] date of the Asset Purchase Agreement or, in the

alternative, at the time that JGA transferred or assigned its

rights in the Asset Purchase Agreement to A2.” Verified Amended

Complaint 33, Docket No. 66, Civil Action No. 1:11-cv-00546

(E.D. Va. July 22, 2011). He also requested the “profits that

22
Bocek would have derived as the owner of ACC’s assets . . . for

such period of time in the future as can be calculated to a

reasonable degree of probability.” Id.

To recover damages for lost profits, a plaintiff “ha[s] the

burden of proving with reasonable certainty the amount of

damages and the cause from which they resulted; speculation and

conjecture cannot form the basis of the recovery.” Banks v.

Mario Indus. of Va., Inc., 650 S.E.2d 687, 696 (Va. 2007)

(internal quotation marks omitted).

Bocek testified that when he left ACC, he was earning a

salary of $450,000 per year and that the practice would have

paid him at least that amount in annual salary had he returned

as an owner. He also testified that that salary was within the

range that a doctor with Bocek’s research experience and years

of practice would be expected to earn. He testified that having

started a new medical practice in 2011 when he was not able to

purchase ACC’s assets, he had not yet been able to turn a

profit, but that he hoped to break even with the new business by

2015 and proceed from there.

Bocek also presented the report of Certified Public

Accountant Joseph S. Estabrook, who serves as a consultant in

the areas of business valuation, litigation, and dispute

resolution. Examining ACC’s financial documents through May

2011, Estabrook conducted a detailed analysis and projected the

23
practice’s net income would steadily increase from $478,271 in

2012 to $559,509 in 2016. Based on this and other factors,

Estabrook determined that ACC’s fair market value as of June 22,

2011, was $2,232,000. 4

On the other hand, Amato testified that although ACC had

been profitable in the past, under A2’s ownership, the practice

was not profitable in the tax years 2011 and 2012. He testified

that on A2’s 2011 tax return, “after taking into consideration .

. . interest, taxes, depreciation, and amortization,” A2

reported a loss of about $2,000. J.A. 67. Amato also testified

that near the end of 2011 an insurance audit revealed that the

billing practices of the prior management were inconsistent with

what the insurance companies required. He testified that “there

was going to be a drop of as much as 40 percent of top-line

revenue because [A2] sought to bring in proper billing as

opposed to what was done previously.” J.A. 68. And, he

testified that A2 reported a loss of about $152,000 on its 2012

tax return.

4
Although A2 actually purchased ACC’s assets for
$1,000,000, Estabrook opined that “due to the financial
difficulties experienced by the Valentine Estate, coupled with
the fact that the Estate apparently did not employ traditional
marketing and sales efforts to maximize the sales price of the
practice, the offers and ultimate sales price for the practice
was substantially and artificially depressed.” J.A. 365.

24
 Addressing the damages issue, the district court concluded

(1) that the direct and proximate cause of Bocek’s failure to

collect an income or prospective profits was Bocek’s termination

from ACC and the conduct that precipitated it, and (2) that A2

had not earned any profits since purchasing ACC that Bocek would

have earned had he purchased the business. Regarding the second

point, the district court referenced the tax losses A2 reported

for 2011 and 2012.

We conclude that neither of these reasons supported the

conclusion that Bocek had failed to prove damages. First of

all, whether Bocek was to blame for being terminated from his

position at ACC simply has no bearing whatsoever on his

entitlement to damages. Regardless of whether he harmed himself

financially by taking actions that brought about his termination

at ACC, any such conduct occurred prior to his dealings with

JGA. Bocek sought to prove that purchasing ACC’s assets was an

opportunity for him to turn his financial fortunes around and

that the defendants harmed him by appropriating that opportunity

for themselves.

Additionally, the fact that A2 reported losses on its 2011

and 2012 tax returns also does not show that Bocek would not

have profited in those years from his purchase of ACC’s assets.

First, even assuming arguendo that the practice’s revenues did

not exceed its expenses in those years, there was no evidence

25
that the practice was not able to pay its expenses, including

doctor salaries. And one would certainly expect that the

reintroduction of Bocek to the practice would have reduced the

practice’s salary expenses for other physicians, increased its

ability to generate revenue, or both. In this regard, Bocek

testified that when he was working with ACC, he “carried 40

percent of the load of the practice because [he] was the only

board-certified allergist and the only full-time doctor.” J.A.

175. Accordingly, the fact that A2 reported tax losses without

Bocek does not undercut Bocek’s claim that had he been back at

ACC practicing medicine, the practice would have generated the

revenue necessary to at least provide him with the income to

which he was accustomed. 5

In light of these problems with the district court’s

analysis, we conclude that its finding that Bocek failed to

prove damages from the defendants’ alleged breach of their

fiduciary obligations was clearly erroneous and cannot serve as

a basis for affirming the judgment in the defendants’

5
Moreover, Amato himself conceded that the calculation
of A2’s tax losses included “paper losses” such as amortization
and depreciation that offset revenue that the business
generated. And, Amato conceded that he drew $75,000 from A2 as
salary in 2011.

26
favor. 6 See Wileman v. Frank, 979 F.2d 30, 38 (4th Cir. 1992)

(“In the unusual case where the district court[’s] . . .

reasoning from the evidence adduced is so flawed as to

constitute clear error, we, as a court of appeals, have a

responsibility to correct that error.). We therefore reverse

the judgment in favor of the defendants and remand for entry of

judgment in favor of Bocek on the issue of liability and for a

new trial on the issue of what, if any, remedies Bocek is

entitled to as a result of the defendants’ breach. 7

6
The defendants maintain that Bocek’s damages theories
that involve him returning to practice at ACC do not account for
the facts that (1) “he was prohibited from trespassing on the
four ACC locations in Maryland – pursuant to non-trespassing
orders issued by the Montgomery County, Maryland Department of
Police,” and (2) the entity that owned ACC could face liability
if it hired him with knowledge of his prior history. Appellees’
Brief at 32. However, there was no basis for concluding that if
Bocek owned or partly owned the practice, he still would have
been prohibited from entering ACC’s premises. There is likewise
no evidence suggesting that fear of negligent hiring liability
would have affected Bocek’s decisions regarding what role he
would assume.
7
We offer no view regarding Bocek’s entitlement to any
remedy he has requested, including the imposition of a
constructive trust.

We note that Bocek requests that this case be assigned to a
different district court judge on remand. We have previously
reviewed such requests by employing a three-factor test:

(1) whether the original judge would reasonably be
expected upon remand to have substantial difficulty in
putting out of his or her mind previously expressed
views or findings determined to be erroneous or based
on evidence that must be rejected,

(Continued)
27
 III.

For the foregoing reasons, we reverse the judgment in favor

of the defendants and remand for entry of judgment in favor of

Bocek on the issue of liability and for a new trial on the issue

of what, if any, remedies Bocek is entitled to in light of the

defendants’ breach of their fiduciary obligations to him.

REVERSED AND REMANDED

(2) whether reassignment is advisable to preserve the
appearance of justice, and

(3) whether reassignment would entail waste and
duplication out of proportion to any gain in
preserving the appearance of fairness.

United States v. Guglielmi, 929 F.2d 1001, 1007 (4th Cir. 1991)
(quoting United States v. Robin, 553 F.2d 8, 10 (2d Cir. 1977)).
Having considered these factors, we conclude that reassignment
would not be appropriate here.

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WILKINSON, Circuit Judge, concurring:

The reasoning in my earlier dissent, Bocek v. JGA Assocs.,

LLC, 537 F. App’x 169, 180-82 (4th Cir. 2013) (Wilkinson, J.,

concurring and dissenting), now being precluded by the law of

the case, I concur in the majority’s opinion.

29