Virginia: Medical Malpractice – a Lawyer’s Third-Party

Virginia: Medical Malpractice – a Lawyer’s Third-Party

A third-party beneficiary patient must be “an intended beneficiary under the contract;” the contracting parties “clearly and definitely intended that the contract confer a benefit upon him”. Environmental Staffing Acquisition Corp. v. B&R Constr. Mgmt., Inc., 283 Va. 787, 793 (2012)(emphasis in original). Yet Virginia’s third-party beneficiary law is controlled by Va. Code §55-22, which is “highly remedial and should be liberally construed in order to accomplish the ends manifestly intended.” Montague Mfg. Co. v. Homes Copr., 142 Va. 301, 312 (1925)(emphasis added)(citing predecessor Code §5143).

 

Further, “legislative history of these statutory provisions [§55-22 and its predecessor] reveal that the statute was amended, in part, in order to enable one not a party to a contract but who is only a partial beneficiary rather than a sole beneficiary to directly sue the promisor.” Bankers Mortgage Comp. v. Jacobs, 613 F.Supp. 1579, 1581-82 (E.D. Va. 1985)(emphasis added)(citing Virginia cases). “Pursuant to Code §55-22, therefore, a third party who claims to be the beneficiary of a contract between others need not be named in the contract.” Kelley v. Griffin, 252 Va. 26, 29 (1996)(emphasis added)

 

Indeed, multiple Virginia and Federal cases show conclusively that large classes of unidentified – of even unidentiable – potential tort victims are in fact third-party beneficiaries. Specifically, any “injury party is a beneficiary under the tort-feasor’s liability policy from the moment of injury   . . .  and may maintain an action in his own name under Code §55-22, the third-party beneficiary statute, for the insurer’s breach of its contract of insurance with the tort-feasor”. USAA v. Nationwide Mutual Ins. Co., 218 Va. 861, 867 (1978)(emphasis added)(and cases cited therein). Lott v. Scottsdale Ins. Co., 811 F.Supp.2d 1224, 1230 (E.D. Va. 2011)(Virginia law)(tort victim has standing as third-party beneficiary to sue insurer for denial of coverage and defense before obtaining judgment).

 

Additionally, one of potentially many unidentified third-party beneficiaries can sue a party to an agreement for its violation of the agreement’s “rules and regulations”. E.g., Smokeless Fuel Co. v. The Chesapeake and Ohio R. Co., 142 Va. 355 (1925)(random victim common carrier is third-party beneficiary). Following Montague, Bankers, Kelley, USAA, Lott, and  Smokeless Fuel, in 2016 Newport News Circuit Court declared as “first impression” that the Plaintiff patient in a medical malpractice suit for alleged wrongful death was a third-party beneficiary – specifically was an “intended beneficiary,” not just an “incidental beneficiary” – of the agreement between Defendant radiologists and Riverside, which contractually imported a “national Standard of Care for radiology” and all “policies, protocols and procedures adopted” by Riverside. Rauchfuss v. Peninsula Radiological Assocs., Ltd., No. CL13-02754V-04(DP), 4/6/16 Hr’g Order (Newport News Apr. 6, 2016).