LPC Commercial Services, LLC v. Ar-Razzaaq Properties, LLC

What sanction did the court impose?

In a published opinion by Judge Frank K. Friedman, the panel affirmed the judgment for RAZ, holding that the circuit court misread the Agreement's remedy provisions but reached the correct result under the right result for the wrong reason doctrine. On the brief, the court said it believed counsel's assurance that the misquotes were unintentional and concluded that "the source of the phantom quotes was some form of computer-assisted research that went awry." Noting that no monetary losses were claimed or established and that counsel took responsibility at argument, the court wrote: "We suspect that being the subject of this cautionary tale is penalty enough at this juncture; but because we are compelled by statute and case law to impose a consequence for the offending brief, Nestler, 77 Va. App. at 454, we call upon counsel to complete a continuing legal education course relating to AI or appellate practice within six months of the issuance of this opinion." No fine or fee award was imposed. The opinion does not name the lawyer; its counsel listing shows Michael Hadeed, Jr. (Hadeed Law Group, P.C., on brief) for the appellee.

Why does LPC Commercial Services, LLC v. Ar-Razzaaq Properties, LLC matter for law firms using AI?

The appeal was a contract dispute over a property manager’s payroll charges, and the AI-related part of the opinion concerns the winning side’s brief. The panel affirmed the $91,826 judgment for Ar-Razzaaq Properties, but it devoted a separate section of the published opinion to that party’s briefing under Code § 8.01-271.1, Virginia’s signature-certification statute. The court described quotations that ranged “from general paraphrases of the case’s actual language, to optimistic or wishful paraphrases of the case’s content, to totally ‘hallucinated’ and presumably computer-fabricated quotes having nothing to do with the cited case,” and noted that the defects “were identified before oral argument and the misrepresentations were prevented from sullying Virginia precedent.”

The court did not treat the apology as ending the inquiry. It stated that “it is the attorney who signs the brief and, therefore, is responsible for the accuracy of its contents,” cited Virginia Rules of Professional Conduct 1.1, 1.3, 3.1 and 3.3, and quoted the statute’s text that a court “shall impose” an appropriate sanction when a paper is signed in violation of it. After reviewing the consequences available, from monetary sanctions to disciplinary action to striking the filing, the court said being “the subject of this cautionary tale is penalty enough at this juncture,” but that it was “compelled by statute and case law to impose a consequence,” and it called upon counsel to complete a continuing legal education course relating to AI or appellate practice within six months, with no fine and no fee award, citing the absence of any monetary loss and counsel’s acceptance of responsibility.

The opinion also addresses AI use more generally, reminding lawyers that “the ‘A’ in ‘AI’ stands for artificial” and that the technology “cannot think for itself or exercise caution or responsibility,” and quoting a June 2026 Virginia Lawyer article on verification. Firms documenting compliance may wish to consider that in this case the court’s stated reason for imposing any consequence at all was the statutory command, not a finding of bad faith: counsel’s candor reduced the consequence to a CLE requirement but did not eliminate it.