Williams v. Neff

By Judge Herbert C. Gill, Jr. The parties were before the Court by counsel on October 10, 1997, for a hearing on defendants’ motions for summary judgment The Court, having reviewed the memoranda of counsel, pertinent sections of the Virginia Code, and applicable case law, determines that the motions for summary judgment should be granted. The Neffs’ motion for summary judgment relies on Virginia Code § 55-519 and toe doctrine of caveat emptor. In response, toe plaintiffs argue fraud on toe part of toe Neffs. Under Virginia law, three components must be alleged to plead fraud: (1) either a concealment of a material fact if there exists a duty to disclose or misrepresentation of a pre-existing material fact, (2) reliance on toé concealment or misrepresentation inducing toe plaintiff to act, and (3) injury to toe plaintiff resulting from such concealment or misrepresentation. Lloyd v. Smith, 150 Va. 132 (1928). Virginia Code § 55-519 allows toe owner of real properly to provide toe buyer with a disclaimer statement indicating that “toe owner makes no representations or warranties as to toe condition of tiie real property or any improvements thereon and that the purchaser will be receiving toe real property ’as-is,' that is, with all defects which may exist, if any, except as otherwise provided for in toe real estate contract” Va. Code § 55-519 (Michie 1950 as amended), hi the case at hand, toe Neffs provided such a disclaimer statement to toe plaintiffs, Mr. and Mrs. Williams, stating specifically that toe plaintiffs took toe property “as-is” with no representations [465] or warranties. Thus, the Neffs had no duty to disclose any defects in the real property under the statute. The Virginia Supreme Court continues to reaffirm that the doctrine of caveat emptor is applicable in the state of Virginia. See Boris v. Hill, 237 Va. 160 (1989), and Virginia Natural Gas Co. v. Hamilton, 249 Va. 449 (1995). The doctrine of caveat emptor provides that: Where ordinary care and prudence are sufficient for full protection, it is die duty of the party to make use of them. Therefore, if false representations are made regarding matters of fact and the means of knowledge are at hand and equally available to both parties, and the party, instead of resorting to them, sees fit to trust himself in the hands of one whose interest it is to mislead him, the law, in general, will leave him where he has been placed by Ms own imprudent confidence. Horner v. Ahern, 207 Va. 860, 863-864 (1967). The Supreme Court has further stated in Armentroui v. French that caveat emptor is the law in Virginia, but an “important exception to that rule is that the seller “must not say or do anything to throw the purchaser off Ms guard or divert Mm from making the inquiries and examinations which a prudent man ought to make’." Armentrout v. French, 220 Va. 458, 466 (1979) (quoting Horner v. Ahern, 207 Va. 860, 864 (1967)). Plaintiffs allege in their bill of complaint, "defendants knew or should have known of certain serious defects in the condition of the property and did with tire intent to defraud the plaintiffs conceal these defects from the plaintiffs as they knew to disclose the defects would result in the contract not being consummated.” Bill of Complaint at 1-2. The Court shall not enter summary judgment "if any material fact is in dispute.” Rule 2:21, Rules of tire Supreme Court of Virginia 1997. However, there is no dispute as to the facts, since plaintiffs have failed to allege any actions on tire part of tire Neffs that concealed tire defects in the house. Further, tire plaintiffs have Med to allege any affirmative actions on the part of the Neffs that kept the plaintiffs from making a proper inquiry and investigation. Since there was no duty for the Neffs to disclose and tire plaintiffs have Med to show a material misrepresentation on tire part of the Neffs, tire motion for summary judgment should be granted in favor of the Neffs as the plaintiffs have Med to allege one of tire necessary elements of fraud. The Court does not address the Neffs’ second argument, that the plaintiffs are bound by all that their independent investigation revealed or should have revealed, as the above analysis is dispositive of tire case. [466] Defendants, Rick Volante and The Home Team Inspection Service rely on a liquidated damages clause in tibe inspection contract for their motion for summary judgment Plaintiffs claim that the inspection contract is an unconscionable contract, which should not be enforced by die Court The law is well setded in Virginia that: parties to a contract properly may agree in advance upon die amount to be paid for loss which may result from a breach of the contract When the actual damages contemplated at the time of agreement are uncertain and difficult to determine with exactness and when die amount fixed is not out of proportion with the probable lo», die amount is deemed to have been intended as enforceable liquidated damages. But where the damage resulting from a breach of contract is susceptible of definite measurement (as when the breach consists of failure to pay a sum of money) or where the stipulated amount would be grossly in exce» of actual damages, courts of law usually construe such a stipulation as an unenforceable penalty. Taylor v. Sanders, 233 Va. 73, 75 (1987) (citing Crawford v. Heatwole, 110 Va. 358, 359-361 (1909)). hi the case at hand, damages at the time of the agreement were difficult to determine with exactness, and the amount cannot be construed as a penalty. Therefore, under Virginia law, the liquidated damages clause is enforceable and valid. The Court thus grants summary judgment in favor of Rick Volante and the Home Team Inspection and limits the damages as to the amount defined in the contract.