## Facts

- Alan D. Weinberger founded and controlled The ASCII Group, Inc. (ASCII) and helped form TechnologyNet, Inc. (TechNet), which sought investment capital.
- Attorney Stefan F. Tucker represented Weinberger and ASCII; after joining Venable, Baetjer & Howard LLP, Tucker and the firm also represented investor Lev Volftsun in other matters.
- Tucker introduced Weinberger and Volftsun and helped arrange a meeting at Venable where Volftsun agreed to lend TechNet $250,000 and join its board; Tucker assisted in negotiating loan documents.
- Tucker sent a conflict/waiver letter stating that for the loan transaction Venable would represent only Volftsun’s interests and that the arrangement applied retroactively to the earlier meeting.
- Volftsun later loaned additional funds to TechNet, totaling $400,000; ASCII guaranteed repayment of the loans.
- When TechNet failed, Volftsun sued ASCII to enforce the guarantees; Venable represented Volftsun, and ASCII moved to disqualify Venable based on the alleged conflict and prior representation.
- The court in the guarantee action denied disqualification and entered judgment enforcing the guarantees against ASCII.
- After losing that case, Weinberger and ASCII sued Tucker for professional negligence, breach of fiduciary duty, and fraud, alleging conflicted representation, inadequate disclosure/waiver, and transactional structuring that exposed ASCII.
- The district court dismissed the suit on collateral estoppel grounds, and Weinberger and ASCII appealed.

## Issues

1. Whether Virginia collateral estoppel can bar malpractice, fiduciary-duty, and fraud claims when the same conflict-of-interest and related conduct were decided in prior litigation.
2. Whether Weinberger, though not a named party in the earlier guarantee case, was in privity with ASCII such that he was bound by the earlier determinations.
3. Whether Tucker, though not a party in the earlier case, was in privity with Volftsun such that he could assert collateral estoppel defensively.
4. Whether the challenged issues were actually litigated and essential to the judgment in the prior guarantee litigation.

## Decision

- The Fourth Circuit affirmed dismissal of all claims.
- The court held the prior guarantee litigation produced a valid final judgment that actually litigated and necessarily resolved issues central to the later malpractice-related claims.
- The court held Weinberger was in privity with ASCII because, as founder/CEO/majority shareholder, he shared an economic identity with ASCII and had virtually identical interests in the earlier litigation.
- The court held Tucker was in privity with Volftsun for defensive issue preclusion because the claims targeted the same professional conduct scrutinized in the prior case in which Tucker’s client prevailed.
- Because the relevant conflict/waiver and related attorney-conduct issues had already been decided, Weinberger and ASCII could not relitigate them under different legal labels.

## Legal Principles

- Under Virginia law, collateral estoppel applies when there is (1) a valid, final judgment; (2) identity of parties or privies; (3) an issue actually litigated; (4) an issue essential to the prior judgment; and (5) a full and fair opportunity to litigate.
- Issue preclusion turns on whether the same factual/legal issues were previously resolved, not on whether the later suit uses different causes of action (e.g., malpractice or fraud versus disqualification or contract enforcement).
- A corporate officer/controlling shareholder may be in privity with the corporation when their interests in the prior litigation are virtually identical and their claimed losses are tied to the corporation’s losses.
- A nonparty may assert collateral estoppel defensively if sufficiently in privity with a prior party and the issue sought to be precluded was previously litigated and necessary to the judgment.

## Conclusion

The Fourth Circuit held that Virginia collateral estoppel barred Weinberger and ASCII from pursuing malpractice, fiduciary-duty, and fraud claims against their former attorney because the conflict and related conduct underlying those claims had been litigated and necessarily resolved in prior guarantee-enforcement litigation, and both sides satisfied privity requirements for issue preclusion.


Weinberger v. Tucker, 510 F.3d 486 (4th Cir. 2007)