L. Ed. 2d 457 (1985). Accordingly, the Court applies the choice of law rules utilized in the District of Columbia courts.
In resolving choice of law questions with regard to tort claims, the District of Columbia courts follow the governmental interest analysis adopted in the RESTATEMENT (SECOND) OF CONFLICT OF LAWS (1971) (hereinafter referred to as the SECOND RESTATEMENT). Godbey, 603 F. Supp. at 777 n.8; see also Estrada v. Potomac Electric Power Co., 488 A.2d 1359, 1361 n.2 (D.C. 1985); Myers v. Gaither, 232 A.2d 577, 583 (D.C. 1967). Under this approach, the strict rule of lex loci delictus ("place of the wrong") is abandoned in favor of a more flexible rule which considers the totality of the parties' contacts with the interested fora. Myers, 232 A.2d at 583; see generally SECOND RESTATEMENT § 145 (rights and liabilities determined by law of state with "most significant relationship").
With regard to fraud claims, if the plaintiff's action in reliance took place in the same state where the false representations were made, that state will provide the presumptive choice of law, subject to displacement if another state is shown to have a more significant relationship. SECOND RESTATEMENT § 148(1). Here, with the exception of some of Butler's conduct, all of the allegedly fraudulent conduct occurred in Virginia. Furthermore, Nelson's actions in reliance - the signing of the loan papers - also occurred in Virginia. Therefore, Virginia provides the presumptive choice of law. If additional contacts are considered, see SECOND RESTATEMENT § 148(2), the only factor weighing in favor of District of Columbia law is the fact that Nelson is domiciled there, and this is more than overcome by the fact that Nelson's performance under the contract - the periodic loan payments - was to occur in Virginia. The fact that the property securing the loan is located in the District of Columbia is irrelevant when, as here, the claim is based on the validity of the debt. See SECOND RESTATEMENT § 189 comment b; SECOND RESTATEMENT § 195 comment a. Finally, the Court cannot find that the District of Columbia has a demonstrably greater interest in protecting its residents from fraud than Virginia has in preventing its resident corporations and lawyers from perpetrating such torts. Thus, Virginia law will apply to Nelson's fraud claim.
Nelson seeks to hold Slocum liable for negligent execution of his duties as the settlement attorney. In selecting the law to apply to Nelson's negligence claim, the Court again is guided by the SECOND RESTATEMENT. Stancill, 744 F.2d at 864 n.16. In making this choice, the Court considers the site of the injury, the place where the negligent conduct occurred, the domicile of the parties, and the place where the parties' relationship "is centered." SECOND RESTATEMENT § 145(2). With the exception of Nelson's residence in the District of Columbia, every factor weighs in favor of Virginia. Thus, as with Nelson's fraud claim, the negligence claim must be tried under Virginia law.
C. Violation of the D.C. Consumer Protection Statute
Although both the District of Columbia and Virginia have enacted consumer protection statutes, see D.C. Code §§ 28-3901 to 3908 (Supp. 1986); Va. Code. Ann. §§ 59.1-196 to 207 (1982), the Court need not engage in a conflicts analysis here because it finds that even if Nelson's factual allegations are taken as true, the District of Columbia statute does not reach the conduct involved in this case. It is undisputed that both Nationwide and Family Federal are Virginia corporations, and that the relevant transactions occurred in Virginia. Consequently, the District of Columbia statute would have to be given broad extraterritorial effect if it were to apply here. Nothing in the statute or interpretative case law indicates such a legislative intent, and absent such affirmative evidence the court will not presume that the statute was intended to apply to every commercial transaction involving a District of Columbia resident, wherever and with whomever that transaction occurs.
In finding that the District of Columbia statute does not apply here, the Court grants Family Federal's motion for summary judgment, with respect to the third Claim of the amended complaint. The Court will, however, grant Nelson leave to amend her complaint to state a claim under the appropriate Virginia statute.
IV. Motions To Dismiss
A. Slocum's Motion To Dismiss the Complaint
Slocum moves to dismiss
on the grounds that the fraud claim is barred because Nelson did not rely on Slocum's representations and because Nelson has "unclean hands," and that the malpractice claim is barred because there was no attorney-client relationship between Nelson and Slocum.
With regard to the fraud claim, the Court finds that plaintiff has sufficiently alleged the elements of common law fraud, including detrimental reliance, and that it cannot be said that it is "beyond doubt that plaintiff can prove no set of facts in support of [her] claim that would entitle [her] to relief." Conley v. Gibson, 355 U.S. 41, 45-46, 2 L. Ed. 2d 80, 78 S. Ct. 99 (1957) (footnote omitted). Accordingly, she is entitled to an opportunity to prove that Slocum committed fraud.
Nelson's malpractice claim presents more difficulties.
Nelson alleges that Slocum failed to explain adequately her rights and the nature of the documents she was signing at the settlement conference. Slocum moves to dismiss on the premise that he owed no actionable duty to Nelson because she was not his client. Thus, the dispositive issue is whether Virginia law allows a malpractice claim against an attorney by a party not in contractual privity with the attorney.
The Supreme Court of Virginia examined the issue of an attorney's negligence liability to third parties in Ayyildiz v. Kidd, 220 Va. 1080, 266 S.E.2d 108 (1980), where the court refused to allow a successful defendant to sue the plaintiff's counsel for malicious prosecution. The court noted that "absent special circumstances," 266 S.E.2d at 112 (quoting Brody v. Ruby, 267 N.W.2d 902, 906 (Iowa 1978)), attorneys generally are liable only to their clients, and stated:
While it is true that the attorney owes a general duty to the judicial system, it is not the type of duty which translates into liability for negligence to an opposing party where there is no foreseeable reliance by that party on the attorney's conduct.