Justia Contracts Opinion Summaries

Articles Posted in Supreme Court of Virginia
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The Supreme Court affirmed in part and reversed in part the judgment of the circuit court dismissing Plaintiffs' claims against home builder gravestone Homes, Inc. seeking tort and contract remedies after mold developed in a new home, holding that the circuit court erred in dismissing negligent-repair claims and contract claims. George and Crystal Tingler entered into a construction contract with Graystone to construct a new home on property owned by a family-run company, Belle Meade Farm, LLC. After the house was built, rain water leaked into the house, and mold developed. Graystone tried unsuccessfully to remediate the mold. The Tinglers and their children subsequently abandoned the home and sued Graystone seeking contract remedies for roperty damage, personal injuries, and economic losses. The Tinglers and Belle Meade separately sued Graystone seeking contract remedies for economic losses and property damage. The circuit court dismissed all claims in each of the complaints. The Supreme Court reversed in part, holding that the circuit court erred (1) in dismissing the negligent-repair counts in the Tingler family's personal injury complaints and the Tinglers' and Belle Meade's complaint; and (2) in dismissing the contract claims and contractual claims in the Tinglers' and Belle Meade's complaint. View "Tingler v. Graystone Homes, Inc." on Justia Law

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In this action brought by Radiance Capital Receivables Fourteen, LLC seeking to collect the principal due on a promissory note the Supreme Court affirmed the decision of the circuit court sustaining Defendants' plea in bar based on the statute of limitations and dismissing Radiance Capital's complaint with prejudice, holding that Defendants were not estopped from pleading the statute of limitations. Foster and Wilson Building, LLC (the Company) executed a promissory note, and Robert Foster and James Wilson executed a continuing guaranty agreement guaranteeing to pay the Company's debt. In the guaranty, Foster and Wilson agreed to waive the benefit of any statute of limitations or other defenses affecting the guarantor's liability under the agreement. After the Company defaulted on the promissory note, Radiance Capital, the holder of the promissory note and guaranty, brought suit against Foster and Wilson seeking to collect the principal due on the note, interest, and attorney's fees. Foster and Wilson, in turn, argued that the claim was barred by the statute of limitations. The circuit court concluded that the contractual waiver of the statute of limitations defense was not valid and dismissed Radiance Capital's complaint with prejudice. The Supreme Court affirmed, holding that the waiver was neither valid nor enforceable under Virginia law. View "Radiance Capital Receivables Fourteen, LLC v. Foster" on Justia Law

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The Supreme Court reversed the judgment of the circuit court denying Appellant's motion to set aside a jury verdict in favor of Appellee, holding that the circuit court erred in finding that Appellant waived its statute of limitations argument when it did not refile a plea in bar after Appellee filed a second amended complaint. In moving to set aside the verdict Appellant argued that the circuit court erred when it denied Appellant's proposed jury instructions relating to the statute of limitations defense. The circuit court denied Appellant's motion, admitting that it erred in ruling that it had previously decided Appellant's plea in bar of the statute of limitations but then concluding that Appellant waived its statute of limitations argument when it did not refile a plea in bar after Appellee filed a second amended complaint. The Supreme Court reversed and remanded the case, holding that the circuit court erred in not permitting Appellant to present its statute of limitations defense to the jury. View "Ferguson Enterprises, Inc. v. F.H. Furr Plumbing" on Justia Law

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The Supreme Court affirmed in part and reversed in part the judgment of the circuit court in this action, holding that the circuit court properly denied a motion to dismiss based on the doctrine of forum non conveniens but erred in dismissing the case based on forum selection clauses. RMBS Recovery Holdings I, LLC and others (collectively, Funds) filed suit against HSBC Bank USA, National Association (HSBC) asserting that HSBC served as an indenture trustee of three trusts in which the Funds had invested and that the trusts were filled with defective mortgage loans. Based on HSBC's failure to act to have sponsors of the trusts repurchase the deficient loans or to file suit against the sponsors, the Funds claimed breach of contract, breach of fiduciary duty, and other causes of action. The circuit court denied HSBC's motion to dismiss for forum non conveniens but granted HSBC's motion to dismiss based upon forum selection clauses in confidentiality and indemnification agreements between the parties. The Supreme Court reversed in part, holding that HSBC's delay in asserting the forum selection clauses, while actively continuing litigation, resulted in a waiver of the right to rely upon that contractual provision. View "RMBS Recovery Holdings I, LLC v. HSBC Bank USA, N.A." on Justia Law

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The Supreme Court accepted certification of a question of law in a proceeding pending before the United States District Court for the District of Connecticut and answered that Virginia law recognizes that the collateral source rule can apply to breach of contract cases. Specifically at issue was whether Virginia law applies the collateral source rule to a breach of contract action where the plaintiff has been reimbursed by an insurer for the full amount it seeks in damages from the defendant. The Supreme Court answered that the same rationales supporting the recognition of the collateral source rule in tort cases also supports the rule's application in certain breach of contract actions. The Court further explained that whether the rule applies to a given case requires a case by case analysis as to whether the parties' expectations, in light of those rationales, support the rule's application. View "Dominion Resources, Inc. v. Alstom Power, Inc." on Justia Law

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The Supreme Court reversed the decision of the circuit court denying Defendant’s motion to compel arbitration, holding that the circuit court erred in denying the motion for arbitration because the parties’ disagreements were controversies arising out of or relating to their contract, and therefore, pursuant to the contract, an arbitrator must resolve them. Plaintiffs sued Defendant, alleging that the home Defendant constructed for Plaintiffs suffered from defects that caused damage to the home. Defendant filed a motion to compel arbitration under the arbitration clause of the parties’ contract. The circuit court denied the motion, concluding that the arbitration clause was unenforceable. The supreme Court reversed, holding that the parties’ disagreement over the interpretation of the arbitration clause, as well as the application of the doctrine of impossibility to the arbitration clause, were “controvers[ies] arising out of or relating to the contract,” and therefore, the circuit court erred in refusing to compel arbitration. View "Brush Arbor Home Construction, LLC v. Alexander" on Justia Law

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The Supreme Court affirmed the decision of the circuit court dismissing on demurrer Sweely Holdings, LLC’s suit against SunTrust Bank alleging breach of contract, fraud in the inducement, and constructive fraud, holding that an agreement between the parties defeated Sweely’s breach of contract claim and that Sweely failed to state a claim for fraud. SunTrust loaned Sweely $18.3 million and later sought to recover collateral when Sweely defaulted and threatened bankruptcy. SunTrust and Sweely negotiated an agreement that provided Sweely with another opportunity to pay its debt, but when Sweely failed to do so, SunTrust took action against the collateral. Thereafter, Sweely filed this lawsuit. The circuit court sustained SunTrust’s demurrer to the complaint and dismissed all counts with prejudice. The Supreme Court affirmed, holding that the circuit court did not err in (1) interpreting the agreement to preclude Sweely’s breach of contract claim, and (2) ruling that the fraud claims failed because Sweely had not alleged any justifiable reliance on SunTrust’s alleged misrepresentation. View "Sweely Holdings, LLC v. SunTrust Bank" on Justia Law

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The Supreme Court reversed the circuit court’s judgment against Defendants as to Plaintiff’s claims for tortious interference and statutory business conspiracy, holding that the circuit court erred in ruling that Defendants were liable for tortiously interfering with their own contract and in therefore finding that their tortious interference could serve as the predicate unlawful act for statutory business conspiracy. Plaintiff, Read Properties, LLC, filed a complaint against Defendants, Francis Hospitality, Inc. and Delta Educational Systems, Inc., alleging breach of contract, intentional interference with contract, and statutory business conspiracy. The circuit court found in favor of Plaintiff on all claims. The Supreme Court affirmed as to the breach of contract claim and otherwise reversed, holding (1) Defendants could not tortiously interfere with their own contract; and (2) because Plaintiff’s underlying claims of tortious interference with a contract against Defendants failed, its claims of statutory business conspiracy must also fail. View "Francis Hospitality, Inc. v. Read Properties, LLC" on Justia Law

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The Supreme Court affirmed the decision of the circuit court dismissing Plaintiff’s suit alleging breach of contract claims against Wells Fargo Bank, N.A. pursuant to the applicable statute of limitations, holding that because Plaintiff did not file his suit within five years of the date of accrual, the statute of limitations barred his claims. After a foreclosure sale of the property at issue, Plaintiff filed this complaint alleging that Wells Fargo breached a mortgage loan agreement by failing to give him a contractually required opportunity to cure his default and by improperly accelerating the balance due after his default. The circuit court concluded that the debt acceleration had triggered the accrual of the breach of contract claims and that this breach had occurred more than five years before Plaintiff filed suit. The Supreme Court affirmed, holding that Plaintiff’s breach of contract claims were barred by the statute of limitations. View "Kerns v. Wells Fargo Bank, N.A." on Justia Law

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At issue was whether the circuit court abused its discretion when it dismissed a complaint with prejudice upon sustaining a plea in bar for failure to comply with a contractual condition precedent before filing suit. Plaintiff filed a complaint against Defendant alleging breach of contract. Plaintiff had filed a similar breach of contract action against Defendant, which he nonsuited. In the current action, Plaintiff alleged that he entered into an employment agreement with Defendant that Defendant later breached. Defendant filed a plea in bar to the complaint alleging that a written request to mediate was a condition precedent to initiating legal action. The circuit court found that the mediation provision was a condition precedent to filing suit, that Plaintiff did not satisfy this condition, and that the appropriate remedy was dismissal of the complaint with prejudice. The Supreme Court affirmed, holding that, under the circumstances of this case, the circuit court did not abuse its discretion in dismissing the complaint due to Plaintiff’s failure to comply with a mandatory condition precedent to filing suit. View "Primov v. Serco, Inc." on Justia Law