Weaver v. Nelson

By Judge John J. McGrath, Jr. This matter is before toe Court on an appeal from toe portion of toe decision of toe General District Court awarding defendants their attorney’s fees far toe cost of defending toe underlying action. On or about July 11, 1997, Mr. and Mrs. Weaver (hereinafter Sellers) entered into a standard "Virginia Association of Realtors Residential Contract of Purchase” agreeing to sell real estate, including toe improvements, to Mr. and Ms. Lewis E. Nelson (hereinafter Buyers). In addition to the standard contract that was contained on a form utilized by toe real estate agents involved, at toe Buyers’ request, an Addendum No. 1 was added to toe contract which provided that, inter alia: The purchasers at toeir expense will have a home inspection done on toe property by a home inspector within ten working days from date of acceptance of this contract. If any structural defects are found, toen purchasers at toeir option may void this contract and receive their deposit back. Shortly after toe agreement was signed, the purchasers had a structural inspection performed by a licensed engineer. Based upon toe reports they received from toeir licensed engineer, toe Buyers, relying upon toe provisions set forth in toe Addendum, exercised their option to void toe contract. The Sellers disagreed with toe position taken by toe Buyers and indicated that they intended to hold them responsible for damages. On February 7, [453] 1997, ti» Sellers filed a Warrant in Debt against the Buyers in the General District Court On April 29, 1997, the Buyers then filed a counterclaim against the Sellos alleging that they were entitled, pursuant to provision (I) of the contract to attorney’s fees, expert witness fees, and litigation costs. On My 15,1997, the General District Court entered judgment against the Sellers and entered judgment in favor of the Buyos on their counterclaim awarding them attorney’s fees and related litigation costs in the sum of $2,624.55. The only issue appealed to tills Court is the issue of whether the award of attorney’s fees on the counterclaim was appropriate. The standard form contract utilized by the parties contains a provision (0, which reads in pertinent part as follows: Default. If either sello or purchaser defaults under this contract, the defaulting party, in addition to all other remedies available at law or in equity, shall be liable... for any damages and all expenses incurred by the nonde&ulting party... including, without limitation, attorney’s fees and costs, if any. The Buyers take fee position that the Sellers breached this real estate sales contract by the filing of the Warrant in Debt in the General District Court The Buyers’ theory of the case is that the Sellers, by the filing of the General District Court action, created an event of “default" undo the toms of the contract thus enabling the nondefaulting party to recovo attorney’s fees. The Sellers argue that it is not a “default” of the contract to file a Warrant in Debt, but, that by doing so the Sellers woe merely seeking to enforce a contract at law that they believed in good faith the Buyers had improperly voided. Although it strikes this Court that there is little distinction between “‘default" and “breach of contract," the Supreme Court has dealt with this issue relatively recently in Clevert v. Jeff W. Soden. Inc., 241 Va. 108 (1991). The Supreme Court in the Clevert case essentially equated default with a breach of contract. It appears to this Court that the proper analysis of this case is that the Addendum had become an integral part of the contract, and the Addendum provided that the purchasers “at their option may void this contract....” The provision permitting the Sellers to void the contract gave the Buyers the unilateral and unfettered right to “void” the contract if certain conditions were met. However, «mee a contract has been properly voided, it has no force and effect whatsoever. As stated in Black's Law Dictionary (1992): [454] [WJhenever... technical accuracy is required, the term “void” can only be properly applied to those contracts that are of no effect whatsoever, such as a mere nullity.... Therefore, once die Buyers declared “this contract void,” the contract, including die ¡novisions relating to attorney’s fees, became of no further force and effect Thus, there being no contractual provision modifying die American Rule on attorney’s fees, judgment is entered in favor of plaintiff on defendants’ counterclaim, and each party is to bear their own costs, including attorney’s fees.