Hensley v. Dreyer

Decision Date07 January 1994
Docket NumberNo. 930155,930155
Citation439 S.E.2d 372,247 Va. 25
PartiesElijah Lee HENSLEY, et al. v. Donald Leif DREYER, et al. Record
CourtVirginia Supreme Court

Roger A. Inger, Warrenton, for appellants.

Linda I. Dodge, Warrenton, for appellees.

Present: All the Justices.

COMPTON, Justice.

Pertinent to this controversy, Code § 8.01-377 provides that when, at trial, there appears to be a variance between the evidence and the allegations, the court "if it consider that substantial justice will be promoted and that the opposite party cannot be prejudiced thereby," may, instead of allowing the pleadings to be amended, direct that the facts be determined. The statute further provides that after such factual finding, the court "shall give judgment according to the right of the case," if it considers that the variance "could not have prejudiced the opposite party."

In this appeal, the broad question presented is whether the trial court, after finding a variance between the evidence and the allegations, erred in ordering rescission of a deed on the basis of mutual mistake of fact when the plaintiffs sought rescission on the theory of fraud.

In May 1986, appellants Elijah Lee Hensley and Frances E. Hensley agreed to sell and appellees Donald Leif Dreyer and Christine Debra Dreyer agreed to buy a residential lot in Fauquier County that the sellers had acquired about a month earlier from Robert I. Kennedy, Jr., and Evelyn A. Kennedy. The Hensley-Dreyer written purchase agreement specified that the property included "existing well & septic system." The purchasers planned to build a three-bedroom dwelling on the lot after clearing a fire-damaged structure from the land. In making representations about the existence of the septic system on the lot, the sellers had relied on a February 1986 letter from the Fauquier County Health Department to the Kennedys stating: "Records indicate enough drainfield for a 3 bedroom house."

In June 1986, after closing of the sale and after the purchasers began construction, the Health Department notified the purchasers that the drainfield the sellers had represented as servicing the lot actually was located on adjacent property. As a result, the Health Department had the building permit issued to the purchasers "voided." Subsequently, the purchasers' application for an on-site sewage disposal system was denied due to "unacceptable soil conditions" on the lot.

In August 1986, the purchasers filed a bill of complaint against the sellers reciting the foregoing facts and alleging that the sellers "represented as true the existence of such septic system, when such information was in fact false." The purchasers alleged that, as a result of reliance on the false information, they sustained damages "in the nature of construction materials, time and labor expended for such construction in the amount of $50,000.00 and $24,000.00 for the acquisition of the realty." The purchasers, alleging that "as a result of such fraud" they have been denied the benefit of their bargain, prayed for rescission of the deed and for an award of damages.

The sellers answered and denied making "any fraudulent representations as alleged." The sellers also filed a third party cross-bill under Rule 2:14 against the Kennedys seeking indemnification for any judgment that may be entered against the sellers in favor of the purchasers.

Subsequently, the purchasers filed an amended bill of complaint adding the State Department of Health and the Fauquier County Health Department as parties defendant. The allegations against the sellers in the amended bill were the same as the allegations of the original bill and were included in a count labelled "Rescission and Fraud." The purchasers sued the public bodies in negligence alleging they were "diverted" from making inquiry about the location of the drainfield by certain health department documents indicating a drainfield was in fact located on the subject lot. In May 1989, the trial court entered an order sustaining a special plea filed by the health departments on the ground that the claim against them under the Virginia Tort Claims Act was time-barred. In October 1989, this Court refused the purchasers' petition for appeal challenging this dismissal.

In April 1990, the court below entered a pretrial order framing the main issue as: Were the purchasers "defrauded (whether by actual or constructive fraud) by the representation(s)" of the sellers "such that they are entitled to equitable relief in rescission of the subject Deed to real property?"

In November 1990, the trial court held an ore tenus hearing. The purchasers presented evidence that the sellers had "deliberately" misled them "as to the existence of and the location of the drainfield." However, Mr. Dreyer, one of the purchasers, testified that the sellers "may have innocently misled" them into believing "that a functioning drainfield existed upon the subject property."

The record shows that the sellers moved to strike the purchasers' evidence both at the conclusion of the purchasers' case-in-chief and at the conclusion of all the evidence upon the ground that the purchasers "had failed to prove actual fraud on the part of" the sellers. The record also shows that neither the trial court nor counsel gave any indication at trial that a variance existed between the evidence and the pleadings. At the close of the purchasers' case-in-chief, the sellers nonsuited the cross-bill against the Kennedys.

The chancellor took the matter under advisement and, in September 1991, ruled in favor of the purchasers in a letter opinion. The court found "this controversy to be the result of plain mistake and not the effect of fraud or contrivance." The court specifically found there was "no constructive fraud." After noting that the "real villain is the Health Department" that is "no longer a party," the chancellor wrote, "It devolves upon the Court to fashion such remedy as equity can at this stage of the proceedings."

Referring to post-trial discussions, the chancellor stated it was "conceded by counsel that the Court had the power to grant leave to the complainants to amend to plead mutual mistake." The chancellor went on to state there was no objection to evidence introduced at trial "because of any variance as contemplated by Code Section 8.01-377, and the Court deems the failure to...

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9 cases
  • Jenkins v. Bay House Associates, LP
    • United States
    • Virginia Supreme Court
    • June 6, 2003
    ...permitted to enter a decree or judgment order based on facts not alleged or on a right not pleaded and claimed. Hensley v. Dreyer, 247 Va. 25, 30, 439 S.E.2d 372, 375 (1994); Harrell v. Woodson, 233 Va. 117, 121, 353 S.E.2d 770, 773 (1987); Ted Lansing Supply Co., 221 Va. at 1141, 277 S.E.2......
  • Estate of James v. Peyton
    • United States
    • Virginia Supreme Court
    • April 17, 2009
    ...of the claim being made. See, e.g., Ford Motor Co. v. Benitez, 273 Va. 242, 251-52, 639 S.E.2d 203, 207 (2007); Hensley v. Dreyer, 247 Va. 25, 30, 439 S.E.2d 372, 375 (1994). Thus, when there is an ambiguity in the pleading, whether as a result of a defect in form or lack of clarity in the ......
  • Dabney v. Augusta Mut. Ins. Co.
    • United States
    • Virginia Supreme Court
    • June 9, 2011
    ...permitted to enter a decree or judgment order based on facts not alleged or on a right not pleaded and claimed. Hensley v. Dreyer, 247 Va. 25, 30, 439 S.E.2d 372, 375 (1994); Harrell v. Woodson, 233 Va. 117, 121, 353 S.E.2d 770, 773 (1987); Ted Lansing Supply Co., 221 Va. at 1141, 277 S.E.2......
  • Syed v. Zh Technologies Inc
    • United States
    • Virginia Supreme Court
    • June 10, 2010
    ...to the right of the case,” if it considers that the variance “could not have prejudiced the opposite party.” Hensley v. Dreyer, 247 Va. 25, 27, 439 S.E.2d 372, 373 (1994). This Court reviews whether the trial court correctly determined that a variance was not prejudicial to a party under an......
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