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September 14, 2010
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Topics Litigation

While it may not seem like it from talking to many lawyers, a very important part of the job of the lawyer is effective communication.  Occasionally, I run across materials that are great examples of great communication, or even more often examples of how not to communicate.  (Happily, these are often the most entertaining things to share as well!)

September 8, 2010
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Topics Litigation

Virginia follows the “American Rule,” which basically stands for the proposition that each litigant is on the hook for its own counsel fees. However, as we have discussed numerous times, parties are free to enter into contracts that deviate from the norm. Fortunately for Thor, Inc., the contract it had with Shen Valley Masonry contained just such an attorneys' fees provision allowing it to escape  the American Rule. In the recent case of Shen Valley Masonry Inc. v. Thor, Inc., in the Circuit Court for the City of Roanoke, Judge Apgar had a chance to review this attorneys' fees provision in detail.

blackjackArlington County has moved to sue yet another individual transportation official in its pending HOT lanes project in federal court in the District of Columbia.  The pending case, a fight over the HOT/HOV lanes in I-395, argues that VDOT and the US Department of Transportation failed to undertake appropriate traffic, environmental, and other studies in approving the northern section of the project.

August 25, 2010
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Topics Litigation

It’s hard to believe it’s already been over six months since we discussed this case in the blog post Never Underestimate the Value of Facetime, where Judge Williams of the U.S. District Court for the District of Virginia (Richmond Division) found a “distinct and ripe controversy” of whether PHH owed Kersey a face-to-face interview before foreclosing on her home.

Question markMany plaintiffs attempt to allege fraud claims in construction cases.  These attempts generally fail in Virginia because a claimant must allege a basis for a fraud claim that arises outside the context of a contractual duty.  This theory was clearly established in the Richmond v. McDevitt Street Bovis case in 1998, but we still see it regularly playing out in Virginia state and federal courts. 

Last month, we looked at Station #2, where the Virginia Supreme Court refused to turn a breach of contract allegations into a fraud claim. Contrast that with Nathan, et al. v. Long & Foster, Real Estate, Inc., et al., in which the Circuit Court for the City of Roanoke has allowed a fraud in the inducement claim to go forward.

Geeta Nathan and Santam Singh were looking to buy a home in Roanoke, and worked with Barbara Michelsen, a Long & Foster real estate agent. They signed a Purchase Agreement to buy a home for $260,000, and the agreement listed Michelsen as the selling agent.

hourglass on sandduneStatute of limitations defenses are a hotly litigated and important aspect of construction law.  This is particularly true in Virginia where the clock often starts ticking based on a literal bright line trigger.  This means the time for filing suit can often start running in Virginia before anyone even knows there is a case.  In construction litigation, where problems can stem from latent defects which do not manifest for an extended period, these rules can be pivotal in limiting risk.

The Virginia Supreme Court recently gave us yet another example of a breach of contract case that couldn’t rise to a fraud in the inducement claim in Station #2, LLC v. Lynch, et al., Record No. 091410.

In Station #2, the Lynches owned a three-story building in the City of Roanoke. They sold the top two floors to 237 Granby LLC in order to convert the floors to condos. The Lynches then leased the ground floor to Station #2 so it could operate a restaurant with live music and other entertainment. The lease between the Lynches and Station #2 required Station #2 to install soundproofing material in the void space between Station #2’s ceiling and the lower level of 237 Granby’s condos. 237 Granby’s agent agreed to allow Station #2 access to the void space, but the company hired by the agent to renovate and develop the condos closed off the void space before Station #2 could soundproof.

Frequent readers will know that we have talked about Chinese drywall litigation and issues quite a bit here.  One of the ugliest cases was a builder who proactively repaired drywall issues having its initial complaint against its insurers who did not provide a defense thrown out on motion to dismiss.  The court originally found that the complaint failed to state a claim because the builder had not been sued and in essence the builder voluntarily made repair efforts in violation of the insurance policies.

Happily for Dragas, the court gave it leave to amend and it did so, alleging more facts regarding the threats of claims by home owners.  Dragas' claim has now officially survived a motion to dismiss.  While this is far from a victory, it does provide a bit of comfort to builders that they are not simply stuck with no path forward for coverage unless sued. 

Common sense and good policy certainly suggest that builders should be encouraged to solve problems rather than let them fester and worsen in the hope that they eventually get sued and an insurance policy is triggered.  Virginia law, however, is driven by contract and statutory interpretation rather than equitable consideration of good policy by courts.  Insurance coverage on construction projects is highly complex and poorly understood.  Look forward to us engaging in further discussion of this important issue moving forward.

In the recent case of TC MidAtlantic Development, Inc. v. Commonwealth of Virginia, Record No. 091271, the Virginia Supreme Court was faced with the issue of properly pleading compliance with conditions precedent in a public contract. Despite the tongue-twisting nature of this issue, the crux of the case came down to simple timing.