Virginia Confessions of Judgments Can Be Fragile

Real Estate, Land Use & Construction Law

Virginia Confessions of Judgments Can Be Fragile

Dec 21, 2009 | Real Estate, Land Use & Construction Law

Fairfax County Seal At the Government Center A recent Fairfax County Circuit Court case highlights how fragile confessions of judgments can be in Virginia. The case, Superior Paving v. Bud & The Boyz Construction , resulted in a confessed judgment being set aside by the trial court.

Virginia law provides at Code of Virginia Section 8.01-433.1 that the note, bond or other evidence of a debt with a confession of judgment provision contain a notice provision stating:

IMPORTANT NOTICE

THIS INSTRUMENT CONTAINS A CONFESSION OF JUDGMENT PROVISION WHICH CONSTITUTES A WAIVER OF IMPORTANT RIGHTS YOU MAY HAVE AS A DEBTOR AND ALLOWS THE CREDITOR TO OBTAIN A JUDGMENT AGAINST YOU WITHOUT ANY FURTHER NOTICE.

In Superior Paving , the plaintiff included the statutory notice language in the original credit agreement related to asphalt purchases. The defendant later requested a proposal from plaintiff for paving the entrance of an industrial building. Defendant accepted the proposal. According to the court’s opinion, neither the proposal nor the later resulting invoices contained the statutory notice language. The opinion is silent on whether the proposal, acceptance, and invoices expressly incorporated the terms of the credit application.

The court initially entered judgment in favor of plaintiff in March. On October 5, the court set the judgment aside ruling that “any and all notes or evidence of debt upon which a confessed judgment is to be based must unclude the 8.01-433.1 language”.

There are a couple take-aways from this case:

  • 1: Assume that confessions of judgment provisions are fragile and easily undone
  • 2: Even after judgment is entered , See No. 1
  • 3: Include the confession of judgment notice into the actual contracts

Image by Haole Punk

LinkedIn

Follow us on LinkedIn to view the latest blogs from our team.

About – Business Insights

Our business blog focuses on issues affecting Virginia, D.C. and Maryland business owners as well as those in other jurisdictions throughout the country. We provide timely insight and commentary on federal and state rules and how they affect you. If you are interested in having us cover a specific topic, please let us know.

About – Employment Law

As employment law constantly changes, the attorneys at Bean, Kinney & Korman stay up to date on the law as it develops. Our blog topics focus on those changes and what you need to know about them, ranging from severance agreements and the FLSA to social media in the workplace and recent court decisions. If you are interested in having us cover a specific topic, please let us know.

About- Real Estate

This blog focuses on real estate, land use and construction-related topics affecting Virginia and the Washington, D.C. metro area. With topics ranging from contract drafting and negotiation to local and regional land use project updates, the attorneys at Bean, Kinney & Korman provide timely insight and commentary on the issues affecting owners, builders, developers, contractors, subcontractors and other players in the industry. If you are interested in having us cover a specific topic, please let us know.

Share This