Case Review: Baker v. Elam, 833 D. Supp. 2nd 576 (E.D. Va. 2012)

By: John Scott, DVM, JD, Scott Veterinary Services
OWNER OF CHAMPION DOGS BROUGHT ACTION AGAINST VETERINARIAN UNDER MULTIPLE CAUSES OF ACTION ARISING FROM ALLEGED BREACH OF AGREEMENT TO COLLECT, STORE, AND PRESERVE 550 SEMEN SAMPLES FROM DOGS.
        Baker v. Elam, 833 D. Supp. 2nd 576 (E.D. Va. 2012)

BASIS OF THE COMPLAINT:
Baker contracted with Dr. Elam to collect, freeze, and store semen from Grady, a champion Labrador Retriever. Baker claims that the straws were ruined due to a mechanical failure but Dr. Baker failed to notify Baker of the loss for many months. Baker also claims that prior to reporting
the loss, Dr. Elam attempted to conceal the loss by encouraging Baker to transport one of the dogs for extraction of additional straws because the original samples were “bad” (not potent enough for breeding). Dr. Elam only confessed that the majority of samples had been destroyed due to his neglect after Baker ordered Dr. Elam to make further shipments to breeders. Baker further alleged that Dr. Elam had utilized methods utilized by reasonably prudent veterinarians to freeze semen for
breeding purposes.

LEGAL PROCEEDINGS:
Baker’s complaint alleged six counts: (1) Breach of Implied Contract; (2) Veterinary Malpractice; (3) Negligent Misrepresentation; (4) violation of the Virginia Consumer Protection Act (VCPA); (5) Breach of Bailment Duty; and, (6) Constructive Fraud. Baker also requested statutory attorneys’ fees and punitive damages. Dr. Elam moved to dismiss the claims for negligent misrepresentation, violation of the VCPA, constructive fraud, attorneys’ fees, and punitive damages.

DISCUSSION OF THE COURT:
Violation of the VCPA and Attorneys’ Fees:
After listing the requirements for a “consumer transaction” under the VCPA, the court ruled that the transaction at issue was not a consumer transaction and Baker was ineligible for relief under the VCPA. In his Complaint, Baker claimed he intended to sell 100% of the dogs’ semen for
breeding, that he is not a breeder, and Grady was in high demand as a sire. However, in response to Dr. Baker’s motions to dismiss, Baker contradicted his original statements and argued that the samples were for his “personal enjoyment”, that he is a “consumer”, and that he breeds dogs for his
personal enjoyment. The court reasoned that No one would create 550 samples of canine semen unless he intended to sell the samples, that such sales would not be a consumer transaction, and that the transaction between Dr. Elam and Baker was merchant-to-merchant and not encompassed within the scope of the VCPA. Therefore, Baker’s VCPA claim should be dismissed. Accordingly, Blake’s claim for statutory attorneys’ fees under the VCPA must also be dismissed.

Constructive Fraud:
A finding of constructive fraud requires clear and convincing evidence that one has represented as true what is really fact, in such a way as to induce a reasonable person to believe it, with the intent that the person will act on this representation. The claimant must plead, with particularity, facts to support all the elements, including the time, place and contents of the false misrepresentations as well as the identity of the person making the misrepresentation and what he obtained thereby. Mere allegations of fraud by hindsight will not satisfy the requirements. Since Baker simply pled bare contentions without stating the times, places, and substance of the misrepresentations, the court was bound to dismiss the claim for failure to satisfy the pleading requirements.
Negligent Misrepresentation:
Virginia courts fo not recognize negligent misrepresentation as a separate cause of action from that of constructive fraud. Therefore, the negligent misrepresentation claim must also be dismissed.
Punitive Damages:
Punitive damages are recoverable only where there is misconduct or malice, or such recklessness or negligence as evinces a conscious disregard for the rights of others. To survive a motion to dismiss, a complaint must contain a sufficient factual matter which, accepted as true, states
a claim to relief that is plausible on its face. Since Baker has stated a plausible claim for reckless activity in this case, dismissal would be improper at this time. The question of punitive damages should be reserved for summary judgment.
JUDGMENT:
The court grants Dr. Elam’s motions to dismiss with respect to Negligent Misrepresentation, violation of the VCPA, Constructive fraud, and attorneys’ fees and denies the motion for dismissal of Baker’s claims for punitive damages.