The Virginia Business Litigation Blog
Earlier this month, Judge Hilton of the Eastern District of Virginia tossed claims against Tysons Law Group, Vienna Law Group, and affiliated attorneys for “vicarious liability” and “negligent hiring, retention and supervision.” Virginia does not recognize an independent cause of action for vicarious liability or negligent supervision. While it does recognize negligent hiring and negligent retention as actionable torts, a plaintiff cannot pursue such claims without alleging a physical injury. The plaintiff in this particular case failed to do that, so the claims were dismissed.
The plaintiff hired Vienna Law Group for immigration related services. Michael Oveysi worked for Vienna Law Group, supervised by Ronald Coleman. According to the plaintiff’s contentions, Oveysi advised him to transfer investment funds and legal fees totaling $566,000 to a bank account that Oveysi controlled. Oveysi, he claims, then made off with the money. The complaint alleges that Oveysi was not subjected to a background investigation prior to his employment and that a background check would have revealed Oveysi’s financial problems. That plaintiff argued that it was negligent to allow Oveysi to work with clients and their money under these circumstances. The defendants moved to dismiss.
In Virginia, vicarious liability is a theory of liability rather than a separate cause of action. The court noted that the purpose of pleading is to facilitate a proper decision on the merits rather than to multiply the causes of action. Here, the theory of vicarious liability was addressed in another claim. Accordingly, the court found the separate claim for vicarious liability was improper and dismissed it.
Virginia does recognize the tort of negligent hiring, but an employer is liable only if he negligently places an unfit person in an employment situation involving an unreasonable risk of harm to others. The Supreme Court of Virginia has held that an 
employer is liable when it does not exercise reasonable care in placing an individual with known propensities, or propensities that should have been discovered by reasonable investigation, in an employment position in which it should have foreseen that the hired person posed a threat of injury to others. Failure to investigate a potential employee’s background is not sufficient to establish liability for negligent hiring.
The Virginia Supreme Court has upheld causes of action for negligent hiring when the injury to the plaintiff was physical, but it has not addressed whether financial injury alone will support a claim. The court has noted however, that an “unreasonable risk of harm” requires the threat of serious and significant physical injury. Here, because the complaint contained no allegations of physical injury and because there was no reason to think that hiring Oveysi would create a risk of physical harm, the federal court dismissed the negligent hiring claim.
Virginia also recognizes a cause of action for negligent retention. Where an employer retains an employee whom the employer knew or should have known was dangerous, the employer may be liable for any resulting harm. Here, the employer never discovered that Oveysi had mishandled money, and the plaintiff presented no evidence that the employer knew or should have known that Oveysi was dangerous. Additionally, the court held that physical injury is a necessary element of a negligent retention claim and dismissed the cause of action because of the lack of any allegations of physical harm.
The court also dismissed the negligent supervision claim because Virginia does not recognize such a cause of action.
The case will continue only on the plaintiff’s claims for breach of contract, negligence, and breach of fiduciary duty.