About The Health Care Experience

legal matters facing health care clientsJust as health care is becoming increasingly complex, so are the legal matters facing health care clients. At DurretteCrump, our attorneys provide individualized, innovative counsel regarding general corporate matters including acquisitions and reorganizations, tax matters and tax-exempt issues, real estate and facility construction matters, capital finance and reimbursement issues, and compliance with federal and state health laws. Our attorneys also have extensive experience representing health care clients in litigation and regulatory matters including government investigations, civil and criminal fraud prosecutions and payment disputes.

Kenneth D. McArthur, Jr. is the Chairman of the Health Care Practice Group.

Practice Area Experience

Our experienced legal team has represented a variety of health care industry clients including:

  • Associations
  • Buying groups
  • Durable medical equipment suppliers
  • Emergency services providers
  • Health plan sponsors (self-insured and fully-insured)
  • Health-related businesses
  • Health systems
  • Home health care providers
  • Hospice providers
  • Hospitals
  • Long-term care facilities
  • Managed care organizations
  • Medical practices
  • Nurse practitioners
  • Nurses
  • Pharmacies
  • Pharmacists
  • Physician Assistants
  • Physicians
  • Physical therapists
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Details About Bankruptcy

Bankruptcy LawCurrent economic times are making bankruptcy issues more complex—and more common. Whether you are a business owner, unsecured creditor, bankruptcy trustee or financial institution, our attorneys understand you need strategic solutions and innovative, individualized counsel to guide you through the legal process and help you achieve your goals.

At DurretteCrump, our experienced team of professionals represents individuals and corporations in bankruptcy proceedings including informal workouts, Chapter 11 bankruptcy reorganizations and complex Chapter 7 bankruptcy liquidations for businesses and solo practitioners. We also have experience bringing and defending adversary proceedings for recovery of preferences and determining of discharge ability. Our attorneys regularly appear in the bankruptcy courts of the Eastern and Western Districts of Virginia as well as jurisdictions outside the Commonwealth to properly represent your interests.

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Practice Area Experience


  • Pre-bankruptcy planning and consulting
  • Representation of debtors, creditors, governmental entities, trustees and committees in Chapter 7 and 11 cases
  • Contested matters, adversary proceedings and appellate proceedings
  • Preferential transfer and fraudulent conveyance actions
  • Debtor-in possession financing and leasing
  • Dischargeability contests

Creditors’ Rights and Related Areas

  • Financing, restructuring and acquisition of troubled businesses
  • Commercial, real estate and equipment lending, financing and leasing Secured transactions
  • Accounts receivable, financing and factoring
  • Loan workouts
  • Attachment, repossession, collection, deficiency and detinue (replevin)
  • Foreclosures and liquidations
  • Contests involving negotiable instruments
  • Tax matters
  • Landlord and tenant matters
  • Mechanics’ lien and other lien contests

Bankruptcy issues

Representative Clients & Services

The firm’s lawyers provide regular counseling and representation to a diverse group of clients in many industries in this practice area. Representative clients range from individuals to governmental entities and Fortune 500 companies. The firm often serves as local counsel and receives many conflict referrals from national law firms.

Examples of clients and cases include:

  • Chapter 11 debtor’s counsel in reorganization of real estate development company involving over $40 million in secured claims.
  • Represented 40 creditors holding approximately $40 million in claims in the LandAmerica 1031 Exchange Services, Inc.
  • Represented various creditors including former employees in Circuit City Stores, Inc. Chapter 11.
  • Defended major national mortgage lender in a $5.2 million fraudulent conveyance action brought by Chapter 11 trustee.
  • Represented numerous Chapter 7 trustees in adversary proceedings brought to recover assets for the benefit of creditors.
  • Defended debtor in an adversary proceeding seeking to have $700,000 claim deemed non-dischargeable.
  • Represented various banks’ interests in bankruptcy proceedings including seeking relief from stay from the automatic stay.
  • Chapter 11 debtor’s counsel in reorganization of state-wide mattress retailer.
  • Represented various debtors’ interest in Chapter 7 and 11 in the healthcare, agribusiness, and construction industries.
  • Represented equity holders in the Chapter 11 bankruptcy of the nation’s largest furniture retailer
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Proposed HB 465

Proposed HBA rather surprising bill made early strides before the House this session. The House Courts of Justice Civil Subcommittee recommended approval of HB 465. The Bill as introduced was as follows:

Jury verdict; excess damages; amendment of pleadings. Allows a court, in the event a jury returns a verdict for damages in excess of the amount requested, to amend the pleadings to conform them to the amount awarded and enter a judgment for such damages

Such a bill would have dramatically changed the state of law in Virginia. Not only would the ad damnum have been effectively rendered superfluous, but runaway verdicts could abound under such a rule. On January 27, 2010 the bill was Passed by indefinitely in the Courts of Justice Committee.

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Remora Shows Court on Consistent Path

In a recent decision by the Virginia Supreme Court, the Court continues to limit the assertion of claims for breach of fiduciary duty. The Court in Remora Investments, LLC v. Orr, 277 Va. 316, 673 S.E. 2d 845 (2009) held that managers have no fiduciary duty to members of an LLC; only to the LLC itself. This appears to be a consistent trend the Court has followed in legal malpractice cases beginning with O’Conner v. Bean, 263 Va. 176, 556 S.E. 2d 741 (2002) determining that an attorney malpractice action sounds in contract thereby excluding the ordinary attorney-client relationship claim for breach of fiduciary duty. Recalling the Court’s earlier refusals to “turn every contract into a tort,” the examination of whether a breach of fiduciary duty claim would lie was focused on how the duty was created and to whom the duty was owed. Remora evidences the Court has continued that focus.

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An Example of Administrative Exemption Error

Administrative ExemptionA few posts below, we discussed employer’s periodic over-reliance on the overtime exemption for administrative employees under the Fair Labor Standards Act. As noted, among the four primary exemptions under that act, we have found that employers most frequently misapply this exemption.

A recent federal appeals court decision highlights this point. In Whalen v. J.P. Morgan Chase & Co., the U.S. Court of Appeals for the Second Circuit held that a loan underwriter at J. P. Morgan Chase was not exempt from overtime entitlement under the administrative exemption.

J.P. Morgan Chase maintained that its loan underwriters were covered by this exemption because they met the minimum salary requirement, performed office work directly related to the general business operations, and exercised the requisite discretion and independent judgement. The trial court agreed, but the appeals court reversed that decision.

Central to the appeals court’s decision, the loan underwriter performed his duties according to detailed guidelines provided by the employer. He had no meaningful discretion to depart from those guidelines on his own. Thus, the appeals court said that the loan underwriter exercised no real independent judgment and discretion, which are key components of the exemption. Instead, the appeals court concluded that he was primarily involved in the “production” of the employer.

An employee primarily involved in the employer’s production of goods or its provision of the services it offers, in most cases, will not meet the requirements of the administrative exemption.

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Social Media: Who Owns The Rights?

Social MediaIt is no surprise that companies today actively encourage their employees to engage in marketing and business development through use of social media outlets like Twitter and LinkedIn. But when an employee decides or is asked to leave the company, a dispute can, and with increasing frequency likely will, ensue over who owns these social media accounts. They were created and developed on company time with company resources, seemingly making them a company asset. The followers (or connections in the case of LinkedIn) of such accounts are, however, unique to the individual employee. They follow the tweets of the employee typically without regard for the identity of that employee’s company. It is these followers and connections that are the real essence of social media from a marketing perspective. So, who gets the rights to these accounts? Are they an asset belonging to the company simply because the company provided the capital? Or are they really the personal goodwill of the individual employee? These issues are at the center of two unrelated lawsuits, filed only days apart, now pending in the federal courts of Pennsylvania and California.

In the Pennsylvania case, Linda Eagle filed suit against her former company, Edcomm, Inc., and a group of its new owners and employees for a variety of business torts stemming from being locked out of her LinkedIn account after she was fired. Eagle claims Edcomm hijacked her LinkedIn account, changing the password and account profile to display the new CEO’s name and picture, but maintaining Eagle’s honors, awards, recommendations and connections. Defendants responded with a counterclaim against Eagle also asserting a variety of business tort claims, including conversion, misappropriation, violation of the Pennsylvania Unfair Trade Secrets Act, tortious interference with business, and numerous others. Eagle moved to dismiss the counterclaim. As it relates to the LinkedIn account, the federal court in Pennsylvania ruled that the LinkedIn account connections are not trade secrets under the Pennsylvania statute, but declined to dismiss the common law count of misappropriation of an idea. According to the court, there was a dispute of fact regarding the role Edcomm versus Eagle played in developing and maintaining the LinkedIn account that influenced the viability of misappropriation claim. Eagle v. Morgan, Civil Action No. 11-4303, 2011 U.S. Dist. LEXIS 147247 (E.D. Pa. Dec. 22, 2011).

Owns Rights

The California case is the reverse of Eagle. Noah Kravitz was employed by PhoneDog, a mobile phone review site. While there, he created a Twitter account gradually amassing nearly 17,000 followers. Kravitz decided to leave PhoneDog and changed his Twitter handle from @PhoneDog_Noah to @noahkravitz. PhoneDog sued Kravitz for misappropriation of trade secrets, conversion and other business torts, all arising out of his departure with the Twitter account. Kravitz’s followers were likened by PhoneDog to a customer list since PhoneDog requires its employees to tweet links to PhoneDog’s website in hopes of directing traffic to the site and thereby create advertising revenue. Unlike Eagle, the Kravitz court has declined to dismiss the trade secrets and conversion counts on motion to dismiss finding the claims to be adequately pled. In another order entered on January 30, the Kravitz court also refused to dismiss PhoneDog’s intentional interference and negligent interference with prospective economic advantage claims. The court acknowledged Kravitz’s concern that Twitter followers may not be “economic relationships” for purposes of these business tort claims, but declined to rule on this issue. The court held that because PhoneDog had also pled economic relationships with its advertisers, the claim was adequately pled and the issue regarding the status of the Twitter followers was one more appropriately left for summary judgment. PhoneDog LLC v. Kravitz, 11-cv-03474 MEJ (N.D. Calif.).

The outcome in both these cases will be instructive to businesses hoping to maintain ownership of their social media accounts. One thing is already clear, however. The more engaged the company is with developing and maintaining the content for such accounts and the more a company does to track revenue derived from such accounts, the better the company’s chances are for having a viable claim to the accounts later.

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The Military Spouse’s Residency Relief Act

Military SpousesThe new Military Spouse’s Residency Relief Act may raise questions for many employers about the tax treatment of wages for the spouses of active duty military personnel. The MSRRA could have a particularly notable impact in military heavy states like Virginia.

In short, the MSRRA exempts from state income tax the wages of the spouses of military personnel who move into a state to be with their service member spouse, even if that state otherwise would impose an income tax on the employee. The wages the employee earns will be exempt from state withholding. Additionally, even if the military spouse is outside the United States, the employee’s earnings are exempt from state withholding so long as the service member’s absence is in compliance with military orders.

The Act, as we understand it, is effective for any state or local income tax return beginning with a tax year that covers November 11, 2009.

(To ensure compliance with IRS requirements, readers are advised that any tax advice contained in this overview of the MSRRA was not intended to be used, and cannot be used, for the purpose of avoiding penalties under the Internal Revenue Code or applicable laws, or promoting, marketing or recommending to another party any matter addressed herein.)

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