knowledge that might affect Augusta Mutual’s decision on whether to insure the insureds, and to
avoid withholding any material information relating to . . . the application for insurance.”16 Despite
Augusta Mutual’s allegation that these fiduciary duties existed by virtue of the agent-principal
relationship between Augusta Mutual and the agent (and his agency), the Supreme Court held that
“but for the existence of the Agency Agreement, neither the agent nor the agency would have
owed any fiduciary duty to Augusta Mutual. That certain of those fiduciary duties arose by
implication does not alter the result.”17 In the court’s view, “any fiduciary duty allegedly breached
by the agent . . . existed solely because of the contractual relationship between Augusta Mutual
and the agency, and in turn,” the individual agent.18 The Supreme Court therefore held that
Augusta Mutual had also failed to assert a valid claim for breach of fiduciary duties.
More recently, the Supreme Court has also held that a defendant’s alleged breach of a
contractual duty cannot support an allegation of conspiracy to damage the plaintiff’s business as
prohibited under Virginia Code sections 18.2-499 and 18.2-500.19 There, the court concluded that “a
conspiracy merely to breach a contract that does not involve an independent duty arising outside
the contract is insufficient to establish a civil claim under” section 18.2-500.20 “The duty of
performance under a contract springs solely from the agreement; the duty is not imposed
extrinsically by statute . . . or independently by common law. Thus, non-performance of a
contractual duty, without more, is not an ‘unlawful act’” sufficient to support a conspiracy claim
16 Id.
17 Id. at 207, 645 S.E.2d at 295 (emphasis supplied). But see Abi-Najm v. Concord
Condo., LLC, 280 Va. 350, 362, 699 S.E.2d 483, 489 (2010) (holding that a plaintiff’s allegation
that the defendant, a condominium developer, had violated the Virginia Consumer Protection
Act by making certain misrepresentations concerning a condominium unit which were
addressed by the statute, the claim should not have been dismissed merely because the unit
was also the subject of a written contract between the parties).
18 Augusta Mut., 274 Va. at 207, 645 S.E.2d at 295 In Cook, however, the Western
District of Virginia – while acknowledging Augusta Mutual’s holding – reached a contrary
conclusion, holding that the alleged breach of fiduciary duty by a financial advisor whom the
court deemed an insurer’s agent pursuant to Code section 38.2-1801 was actionable, because
“both the alleged fiduciary duty, as well as a duty not to misrepresent facts concerning
insurance policies in their sale, exist regardless of the contract.” Cook, 2015 U.S. Dist. LEXIS
4318, *42 (emphasis supplied). The Cook decision does not attempt to distinguish Augusta
Mutual’s facts; the only material difference between them appears to be that in Augusta Mutual
it was the insurer asserting a fiduciary duty claim against the agent, whereas in Cook it was the
insured pursuing that claim. While Cook is not controlling authority, it nevertheless could serve
as a possible ground for questioning how broadly Augusta Mutual should be construed.
19 See Station #2, LLC v. Lynch, 280 Va. 166, 171-72, 695 S.E.2d 537, 540 (2010); see also
Va. Code Ann. §§ 18.2-499 & 18.2-500.
20 Station #2, 280 Va. at 174, 695 S.E.2d at 541.
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