Justia Contracts Opinion Summaries

Articles Posted in Supreme Court of Virginia
by
The Supreme Court affirmed the judgment of the trial court holding that a general contractor was liable for construction materials provided by a supplier to one of the general contractor's subcontractors, holding that the distinct circumstances of this case permitted the supplier to obtain relief for the general contractor's unjust enrichment. General Contractor contracted with Subcontractor to assist with a residential condominium project. Subcontractor agreed to purchase materials from Supplier and to pay Supplier for materials delivered. General Contractor and Subcontractor entered into a joint check agreement specifying a method for how Supplier would be paid for the materials it shipped to the job. Supplier ultimately shipped $252,062 in materials for which it was not paid due to the Subcontractor's financial difficulties. General Contractor ultimately used those materials to complete the project. Supplier sued General Contractor and Subcontractor alleging breach of contract and unjust enrichment. Supplier obtained a default judgment against Subcontractor. After a trial, the court ruled for Supplier in its claim of unjust enrichment against General Contractor. The Supreme Court affirmed, holding (1) the joint check agreement did not foreclose relief; (2) General Contractor was not being compelled to pay twice for the materials; and (3) Supplier was permitted to obtain relief for General Contractor's unjust enrichment. View "Davis Construction Corp. v. FTJ, Inc." on Justia Law

by
The Supreme Court affirmed the judgment of the trial court declaring that the School the City of Richmond's School Board's UM/UIM motorist coverage was $1 million, as provided in the contract between the School Board and the Virginia Association of Counties Group Self-Insurance Risk Pool (VACORP), holding that the $1 million in UM/UIM coverage the School Board contracted for was the amount of available UM/UIM coverage. Maisia Young was injured while riding a school bus. Young filed suit against the School Board seeking damages for her personal injuries. The School Board was self-insured through a self-insurance risk pool managed by VACORP. Young filed a declaratory judgment action to determine the extent of the coverage available to the School Board under the UM/UIM provisions of its contract. VACORP argued that $50,000 was the maximum amount of coverage available, as set by statute. In response, Young argued that the statutes set a minimum, not a cap, and that the maximum available was what was specified in the contract. The circuit court agreed with Young. The Supreme Court affirmed, holding that the School Board's UM/UIM coverage was $1 million, as provided in the contract between the School Board and VACORP. View "VACORP v. Young" on Justia Law

by
The Supreme Court affirmed in part and reversed in part the judgment of the trial court awarding FoxFire Towing damages in the amount of $56,595, holding that the doctrine of quantum merit was not applicable in this case and that while FoxFire was entitled to relief under a theory of unjust enrichment it was only to the extent that T. Musgrove Construction Company was benefitted. Musgrove owned a truck that was involved in an accident. FoxFire returned the truck to an upright position, towed the damaged truck away and stored it, and cleaned up the scene. FoxFire sent Musgrove a bill for $12,380. When Musgrove did not pay, FoxFire sued. By the time the suit was filed the storage fees had risen to $28,980. The jury returned a verdict in the amount of $56,595. Musgrove appealed, arguing that most of the charges FoxFire impressed were unjustified because they constituted a recovery that was not warranted under the doctrine of unjust enrichment. The Supreme Court reversed in part, holding (1) a cause of action for quantum merit did not apply; and (2) established principles governing the unjust enrichment remedy foreclosed recovery for some of the charges FoxFire sought to obtain. View "Musgrove Construction Co. v. Young" on Justia Law

by
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

by
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

by
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

by
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

by
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

by
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

by
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