Well, now that my suggestion of a new year’s resolution and quick review of a recent (and funny) book are done, we’re back to the more mundane, yet no less relevant, discussion of recent construction opinions here in Virginia.
In the last quarter of 2013, the Virginia Circuit Courts in Norfolk and Richmond came out with opinions of interest to construction contractors and subcontractors.
In Specialty Products Inc. v. Demolition Services Inc. the Norfolk, VA Circuit Court considered a three part claim filed in Norfolk by Specialty Products. The complaint consisted of 3 counts: 1. Breach of Contract, 2. Unjust Enrichment, and, interestingly 3. Fraud. These claims were all based upon a representation during the bid phase of the project by the defendant, DSI, that only a thin layer of epoxy existed for Specialty Products to remove from a floor at Camp Peary, VA and subsequent failure to provide a change order to remedy the allegedly false statement(a venue that is very much not Norfolk).
DSI moved to transfer venue of the claim to Manassas, VA where the alleged breach of contract (the statement and subsequent failure to provide a change order) occurred. Seems like a logical motion. However, the Court denied the motion to transfer because part of the claim, namely the fraud count. The Court agreed with Specialty Products that the alleged fraudulent inducement occurred and caused damage at Specialty Products’ principal place of business in Norfolk. The Court did not opine as to the validity of that count but did deny the motion to transfer.
Another case, this one in my backyard of Richmond, considered the City of Richmond construction procurement process. In PEAC Consulting LLC v. Ridley Group & Assocs. the Court considered a claim by PEAC that Ridley Group breached a subcontractor/joint venture agreement with it and also conspired to keep it from being awarded a contract under the procurement laws. As is often the case, the defendant demurrer (in any other state moved to dismiss) the Complaint in its entirety.
After looking at the pleadings and attachments to those pleadings (including the alleged proposal between plaintiff and defendant), the Court denied the demurrer by the defendant to the breach of contract count. The court did grant the demurrer to the conspiracy count because conspiracy is not a remedy under the Virginia public procurement rules which set forth the exclusive means of redress for those that are unsuccessful bidders. Also, the Court pointed out that the Complaint did not allege that PEAC was in fact an unsuccessful bidder and as such could not claim to be aggrieved by the procurement process.
The common thread between these cases is the need for careful pleading of your construction related claim. In the first case, careful pleading kept the case in the plaintiff’s back yard. In the second, a lack of proper pleading cost the plaintiff much of its claim. In short, pleading is key to getting off the ground with your construction claim and the advice of experienced construction counsel can help you plead your case properly and in a fashion that can make your case moving forward.
Do any of you have other takeaways from these cases? As always I recommend them to your full reading so that you can form your own conclusions.
As always, I welcome your comments below. Please subscribe to keep up with this and other Construction Law Musings.