John E. Nestler, M.D. v. Tiziano Scarabelli, M.D.
77 Va. App. 440
Va. Ct. App.2023Background
- MCV Associated Physicians (MCVAP) hired Dr. Tiziano Scarabelli on a one‑year cardio‑oncology contract in June 2017; by early 2018 the employer received multiple complaints about his conduct and placed him on paid administrative leave (Feb–June 2018) and later did not renew his contract.
- Scarabelli sued several physicians (including Drs. Call and Nestler) and MCVAP for defamation, alleging statements that accused him of unprofessional and sexually inappropriate conduct; MCVAP counterclaimed for fraudulent inducement, asserting misrepresentations in Scarabelli’s CV and concealment of prior termination.
- At trial the jury rejected Scarabelli’s defamation claims against the named defendants and found for MCVAP on its fraudulent‑inducement counterclaim, awarding compensatory and punitive damages totaling $246,000.
- Post‑trial, Drs. Call and Nestler moved for sanctions under Va. Code § 8.01‑271.1; the trial court denied those motions and denied Scarabelli’s motions to set aside the fraud verdict or for a new trial.
- On appeal the Court of Appeals affirmed the judgment for MCVAP and the denial of sanctions as to Call, but held Scarabelli’s claim against Nestler was objectively baseless and reversed the denial of sanctions as to Nestler and Scarabelli’s counsel, remanding for a sanctions hearing.
Issues
| Issue | Plaintiff's Argument (Scarabelli) | Defendant's Argument | Held |
|---|---|---|---|
| Whether Scarabelli’s defamation claim against Dr. Call warranted sanctions under Va. Code § 8.01‑271.1 | Call’s January 2018 memorandum repeated allegations of sexual harassment and unprofessionalism and was defamatory and false | Call argued the memo repeated complaints and was either true, privileged, or lacked defamatory "sting" | Claim against Call was not objectively unreasonable; sanctions denial affirmed — the truth and sting were jury questions |
| Whether Scarabelli’s defamation claim against Dr. Nestler warranted sanctions under Va. Code § 8.01‑271.1 | Alleged Nestler made statements about multiple complaints and administrative leave that were defamatory | Nestler argued his statements were true, observational, and lacked defamatory sting; Scarabelli previously admitted he could not identify specific defamatory words | Claim was objectively baseless (no actionable defamatory sting or falsehood); trial court abused discretion in denying sanctions; reversal and remand for sanctions |
| Whether MCVAP’s fraudulent‑inducement counterclaim was barred by the source‑of‑duty rule, voluntary payment doctrine, the Virginia Wage Payment Act, or Gasque (bar on punitive damages in contract) | Scarabelli: counterclaim is effectively contractual; doctrines/precedent bar tort relief or punitive damages; damages just replicate contract value | MCVAP: claim is tortious fraudulent inducement (preexisting duty), fraud exception to voluntary payment, Wage Act inapplicable because wages were paid, punitive damages available in tort | Counterclaim sounds in tort; doctrines do not bar the claim or damages; jury’s compensatory and punitive awards affirmed |
Key Cases Cited
- Jordan v. Kollman, 269 Va. 569 (2005) (elements of actionable defamation)
- Schaecher v. Bouffault, 290 Va. 83 (2015) (defamatory "sting" and threshold for actionable meaning)
- N. Virginia Real Est., Inc. v. Martins, 283 Va. 86 (2012) (mandatory sanctions under Va. Code § 8.01‑271.1)
- Gasque v. Mooers Motor Car Co., 227 Va. 154 (1984) (punitive damages unavailable in pure contract actions absent independent tort)
- Tingler v. Graystone Homes, Inc., 298 Va. 63 (2019) (fraudulent inducement is an independent tort that can preexist a contract)
- Sheehy v. Williams, 299 Va. 274 (2020) (voluntary payment doctrine does not apply where fraud is alleged)
- Dunn Const. Co. v. Cloney, 278 Va. 260 (2009) (distinction between contract and tort damages)
- 21st Century Sys., Inc. v. Perot Sys. Gov't Servs., Inc., 284 Va. 32 (2012) (deference to jury verdicts)