The Court of Appeals’ recent decision in LPC Commercial Services, LLC v. Ar-Razzaaq Properties, LLC, 88 Va. App. 655 (2026), has one overriding lesson for practitioners: if you have to be sanctioned for including a couple dozen hallucinated quotations in a brief, pray that Judge Friedman is on your panel.*
(*) I stole this line from Kyle. But seriously, it is good to have appellate judges who used to be appellate lawyers.
In LPC, CAV affirmed a $91,826 judgment against a property management company, LPC, in favor of the building owner, RAZ. The appellee won on the merits. But its lawyer was ordered to take a CLE on AI or appellate practice because his brief contained 26 purported quotations from Virginia cases, none of which was accurate. One was off by a single word; the other 25 were what the court called “phantom quotes.”Judge Friedman wrote for a panel that also included Judge AtLee and Senior Judge Annunziata.
(Oh, the acronyms. Garner wept.)
The case should have been a bog-standard commercial-real-estate dispute. Its facts are so boring that I had to enlist an AI just to write this summary. The CAV agreed with the trial court that LPC had breached the parties’ Property Management Agreement, but concluded that the trial court had misinterpreted the agreement’s remedy provisions. It nonetheless affirmed under the right-result-wrong-reason doctrine. Teasing out the details, Section 2.1(d) of the agreement barred LPC from charging RAZ for salaries of personnel who did not work at the property site. Yet LPC billed RAZ for its property manager and assistant property manager, both of whom worked in LPC’s offices across the street. LPC conceded that Section 2.1(d) was unambiguous. That concession sidelined LPC’s appellate arguments about course of dealing, because parol evidence cannot be used to change unambiguous contract terms. Its trade-custom argument also failed: LPC had not established an applicable trade usage or RAZ’s knowledge of one. The court also rejected LPC’s waiver and estoppel arguments. RAZ’s wish not to “rock the boat” after buying the building was not clear evidence that it had knowingly given up its rights, and LPC never showed that RAZ’s conduct had left it worse off.
So far, so good. But when it came to remedies, CAV ruled that the trial court had relied on the wrong part of the contract. The trial court had resolved the damages question under Section 2.11, “Indemnity Provisions.” Reading the contract as a whole, CAV concluded that Section 2.11 governs only third-party indemnity claims. Breach-of-contract remedies between the parties are governed by Section 5, the “Default Remedies” section, which makes LPC liable for any losses resulting from its default. RAZ had given LPC notice of default and, after LPC failed to cure, terminated the agreement. Section 5 therefore entitled RAZ to recover its resulting losses. The court thus affirmed under the right-result-wrong-reason doctrine.
Finally, the court addressed RAZ’s appellate brief. That brief contained 26 purported quotations from Virginia cases, not one of which was accurate. In fairness, one was off by a single word. It can happen. But the other 25 ranged from paraphrases to wholly fabricated quotations. CAV concluded that they likely resulted from computer-assisted research gone wrong.
To his credit, RAZ’s counsel acknowledged the errors. The court accepted counsel’s assurance that there was “no intent to mislead anyone.” LPC claimed no monetary losses as a result of the phantom quotes, and its counsel never even raised the issue. CAV suggested that being the subject of its cautionary tale might be penalty enough, but concluded that the statute required a sanction.
Be that as it may, Code § 8.01-271.1(D) says that the court “shall” impose an appropriate sanction. Its hands thus tied, the court ordered counsel to complete a CLE on AI or appellate practice within six months. The court stressed that lawyers who use AI tools must check their work, because the attorney who signs a brief remains responsible for its contents.
Two further details: First, the defects were identified before oral argument, and the opposing party had not raised them with the court. The court checks these things! I had a case recently where the court noticed that some transcripts were filed a few days late, even though none of the parties had raised it as an issue. Second, in footnote 18, the court flagged proposed Legal Ethics Opinion 1902, which addresses opposing counsel’s responsibilities when confronted with AI-hallucinated misstatements of law or fact.
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