Justia Contracts Opinion Summaries

Articles Posted in Supreme Court of Virginia
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The Supreme Court reversed the decision of the circuit court determining that an auctioneer had verbally modified its advertised terms prior to the start of the auction and ordering the conveyance of a fee simple interest in a parcel of real property by special warranty deed to Plaintiff, holding that the circuit court erred.Plaintiff attended an auction advertised by Plaintiff for the sale of the property at issue. Plaintiff's bid was the high bid, but Defendants refused to sell the property for that amount. Plaintiff brought this complaint seeking specific performance, alleging that, in the pre-auction announcement, Defendants used language stating that the auction was going to be an absolute auction. The trial court ruled that Plaintiff was entitled to specific performance and ordered the conveyance of the property by special warranty deed. The Supreme Court reversed, holding (1) the trial court erred in ruling that the auction was an absolute auction rather than an auction with reserve; and (2) therefore, no contract was formed between the parties. View "Williams v. Janson" on Justia Law

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The Supreme Court reversed the judgment of the circuit court dismissing Ashland, LLC's claim against Virginia-American Water Company for an alleged breach of contract, holding that the circuit court erred in concluding that Va. Const. art. IX, 4 deprived it of jurisdiction to adjudicate Ashland's contract claim.Ashland filed suit against Virginia-American, which provided water to Ashland pursuant to a tariff issued by the State Corporation Commission, after a power outage disrupted water service to Ashland, resulting in $515,000 in damages due to lost business and profits. Ashland's complaint asserted a breach of contract claim based on an alleged violation of the tariff. The circuit court concluded that the promulgation of a tariff by the Commission is an action of the Commission, and therefore, the circuit court lacked jurisdiction. The Supreme Court reversed, holding that circuit courts are free to read and then apply the terms of a tariff as adopted by the Commission as necessary to resolve a common law dispute. View "Ashland, LLC v. Virginia-American Water Co." on Justia Law

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The Supreme Court affirmed in part and reversed and remanded in part the judgment of the circuit court awarding sanctions against Plaintiffs, holding that the circuit court erred in awarding the total amount of the attorney's fees claimed.Plaintiffs brought this claim alleging fraud, breach of fiduciary duty, tortious interference with a contractual relationship or business expectancy, and business conspiracy against Defendant, a former employee. After the circuit court granted Plaintiffs' motions to nonsuit as to all parties the circuit court granted Defendant's motion for sanctions, awarding sanctions of $213,197 - Defendant's total attorney's fees - against Plaintiffs. The Supreme Court reversed in part, holding that the circuit court (1) was within its discretion to award sanctions against Plaintiffs; but (2) erred in awarding sanctions for certain conduct and in failing to segregate sanctionable claim from the attorney's fees requested. View "AV Automotive, LLC v. Gebreyessus" on Justia Law

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The Supreme Court held that the Virginia Uniform Arbitration Act, Va. Code 8.01-581.01 to -.016 (VUAA), and the Federal Arbitration Act, 9 U.S.C. 1-16 (FAA), do not compel enforcement of an arbitration clause in a trust.The decedent created an inter vivos irrevocable trust that was divided into three shares for his children and grandchildren. The trust contained an unambiguous arbitration clause. Plaintiff filed a complaint against Defendant, the trust's trustee, alleging breach of duty. Defendant filed a motion to compel arbitration, which the circuit court denied. The Supreme Court affirmed, holding (1) a trust is neither a contract nor an agreement that can be enforced against a beneficiary; and (2) therefore, neither the VUAA nor the FAA compel arbitration. View "Boyle v. Anderson" on Justia Law

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The Supreme Court held that the circuit court erred in this case in awarding SustainedMED, LLC attorneys' fees as well as expenses and costs in excess of $24,999.94 on its indemnification claim because the award exceeded the maximum indemnification amount allowed under an indemnity agreement.Sellers entered into a stock purchase agreement (SPA) for the sale of their collective shares in Cyfluent, Inc. to SustainedMED. The total purchase price for the sale of the Cyfluent stock was $4,900,000. The SPA included an indemnity agreement requiring Sellers to indemnify Sustained MED for losses resulting from inaccuracies in or breach of any representations or warranties made by Sellers. SustainedMED filed suit against Sellers alleging misrepresentations and fraud in the inducement. The circuit court ruled in favor of SustainedMED and awarded SustainedMED $972,323.50 in attorneys' fees and $64,225 in litigation expenses and costs. The Supreme Court reversed as to the award of attorneys' fees and costs, holding that the circuit court erred in awarding attorneys' fees and costs in excess of $24,999.94 on SustainedMED's indemnification claim because of the SPA's indemnification cap of $4,900,000. View "Ehrhardt v. SustainedMED, LLC" on Justia Law

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The Supreme Court affirmed the decision of the State Corporation Commission finding that a pumped storage hydroelectric facility (or pumped storage) generates "renewable energy" under the former definition in Va. Code 56-576 and that the amended definition would not apply to contracts executed before the amendment's effective date, holding that there was no error.The Commission concluded that pumped storage satisfied the statutory definition of renewable energy in effect at the time that the service provider executed its contracts and declined to find that the amended definition would apply retroactively to contracts executed before the amendment's effective date. The Supreme Court affirmed, holding (1) the Commission did not err in its interpretation of the statute or its finding that pumped storage satisfied the former definition of renewable energy; and (2) the Commission did not err in refusing retroactively to apply the amended statutory definition of renewable energy to the service provider's contracts that were executed before the amendment took effect. View "Virginia Electric & Power Co. v. State Corporation Commission" on Justia Law

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The Supreme Court reversed the judgment of the circuit court declining to award attorney's fees to Plaintiffs in this case, holding that the circuit court erred in failing to award the amount of attorney's fees Plaintiffs incurred in defending lawsuits initiated by Defendant as damages in this action for breach of a covenant not to sue.During bankruptcy proceedings, the parties in this case entered into a settlement agreement wherein Plaintiffs relinquished all rights to sue Defendants. Less than one year later, Defendant breached the covenant not to sue by suing Plaintiffs twice in state court and once in federal court. Plaintiffs then brought this action alleging breach of the settlement agreement. The circuit court granted summary judgment for Plaintiffs but declined to award attorney's fees. The Supreme Court reversed, holding that the circuit court erred by denying an award of attorney's fees. View "Bolton v. McKinney" on Justia Law

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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

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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

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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