Vienna Metro Llc v. Pulte Home Corp..
| Decision Date | 29 March 2011 |
| Docket Number | Civil Action No. 1:10cv502. |
| Citation | 786 F.Supp.2d 1076 |
| Court | U.S. District Court — Eastern District of Virginia |
| Parties | VIENNA METRO LLC, Plaintiff,v.PULTE HOME CORPORATION, Defendant. |
OPINION TEXT STARTS HERE
Thomas Arthur Clare, Jeffrey Willian, Katherine Crytzer, Kirkland & Ellis, Washington, DC, for Plaintiff Vienna Metro LLC.Cathy Ann Hinger, Paul Kaplan, Elizabeth Warner Whip Grau, Jason Cameron Hicks, Washington, DC, for Defendant Pulte Home Corporation Womble Carlyle Sandridge & Rice PLLC.
THIS MATTER is before the Court on the Parties' Motions for Summary Judgment. (Dkt. Nos. 83 & 84.) This case concerns the Defendant Pulte Home Corporation's (“Pulte”) failure to construct infrastructure in a timely fashion on Plaintiff Vienna Metro LLC's (“Vienna Metro”) property.
There are twelve issues before the Court. The first issue is whether the Court should grant Plaintiff Vienna Metro's Motion for Partial Summary Judgment in regard to Defendant Pulte Home Corporation's breach of contract when Defendant failed to complete its construction obligations under the Declaration. The Court grants Plaintiff's Motion because Defendant materially breached the contract by failing to adhere to the Declaration's timeliness requirements.
The second issue is whether the Court should grant Plaintiff's Motion for Partial Summary Judgment in regard to Defendant's affirmative defense of waiver and/or estoppel when the Declaration expressly precludes the exercise of waiver and/or estoppel. The Court grants Plaintiff's Motion because the Declaration expressly states (1) a delay or failure of one party to complain about a default of the other party's performance obligations will not be considered a waiver, and (2) any waiver of a default must be made expressly and in writing.
The third issue is whether the Court should grant Plaintiff's Motion for Partial Summary Judgment in regard to Defendant's affirmative defense of breach of contract when the Declaration expressly provides a notice and opportunity to cure provision. The Court grants Plaintiff's Motion because the Declaration explicitly provides the process of curing breach of contract.
The fourth issue is whether the Court should grant Plaintiff's Motion for Partial Summary Judgment in regard to Defendant's affirmative defense of illegality when Defendant expressly assumed approval and performance risk. The Court grants Plaintiff's Motion because contract performance was not illegal.
The fifth issue is whether the Court should grant Plaintiff's Motion for Partial Summary Judgment in regard to Defendant's affirmative defense of impossibility when (1) Defendant cannot establish an unexpected occurrence or an intervening act, and (2) Defendant's continued performance under the Declaration is inconsistent with its impossibility defense. The Court grants Plaintiff's Motion because Pulte cannot establish that its performance was rendered impossible as a result of an unforeseeable event.
The sixth issue is whether the Court should grant Plaintiff's Motion for Partial Summary Judgment in regard to Defendant's immateriality defense. The Court grants Plaintiff's Motion because immateriality is inapplicable to breach of contract actions.
The seventh issue is whether the Court should grant Plaintiff's Motion for Partial Summary Judgment in regard to Defendant's laches defense. The Court grants Plaintiff's Motion because laches is inapplicable to breach of contract actions.
The eighth issue is whether the Court should grant Plaintiff's Motion for Partial Summary Judgment in regard to Defendant's unclean hands defense when unclean hands is an equitable remedy. The Court grants Plaintiff's Motion because unclean hands is inapplicable to breach of contract actions.
The ninth issue is whether the Court should grant Plaintiff's Motion for Partial Summary Judgment in regard to Defendant's impermissible reformation defense. The Court grants Plaintiff's Motion because impermissible reformation is inapplicable to breach of contract actions.
The tenth issue is whether the Court should grant Defendant Pulte Home Corporation's Motion for Summary Judgment in regard to Plaintiff's breach of contract claim when Plaintiff's damages are (1) an alleged eighteen percent recovery on lost investment, (2) wasted costs, and (3) default interest. The Court grants Defendant's Motion because the Declaration precludes recovery of any consequential damages, which includes all of Plaintiff's alleged damages.
The eleventh issue is whether the Court should grant Defendant's Motion for Summary Judgment in regard to Plaintiff's specific performance claim when Plaintiff cannot recover monetary damages. The Court denies Defendant's Motion because (1) the parties contracted for specific performance, and (2) specific performance is appropriate because Plaintiff does not have an adequate remedy at law.
The twelfth issue is whether the non-breaching party is entitled to attorney's fees. The Court holds that Plaintiff is entitled to attorney's fees under the contract following an appropriate showing under Fourth Circuit law. Each issue is discussed below.
This case is about Defendant's failure to complete Plaintiff's infrastructure project when Plaintiff lacked incentive to complete the project on time because of the real estate market collapse of 2007–2008.
Plaintiff Vienna Metro LLC, a Virginia limited liability company, and Defendant Pulte Home Corporation, a sophisticated national developer, entered into a contract to develop MetroWest. MetroWest is a fifty-six acre tract of land located adjacent to the Vienna Metro station in Fairfax County, Virginia. Compl. ¶ 1. Vienna Metro owns approximately 9.8 acres of MetroWest, while Pulte owns the remainder. Def. Mot. Summ. J. ¶ 2. On June 21, 2006, the parties executed the Declaration, which sets forth the parties' contractual obligations in developing the MetroWest project. See generally id. The Declaration obligated Pulte to perform certain infrastructure design, permitting, and construction work over the entire project site within eighteen months of the Declaration's execution. Id. ¶¶ 4, 8.
Section 5.1.1 of the Declaration provided remedies should either Vienna Metro or Pulte default on its obligations. Pl. Ex. 1 at 14. The Declaration reads:
If any party defaults (the “Defaulting Party”) in the performance of any of its covenants or obligations under this Declaration and fails to cure such default within thirty (30) days after written notice (a “Default Notice”) from another party (the “Non–Defaulting Party”), then the Non–Defaulting Party, as applicable, shall be entitled to all remedies that are available at law or in equity, including, without limitation, specific performance, self help (as described [in another section] ), the right to offset amounts due by the Defaulting Party hereunder, the right to contact third parties, and recovery of reasonable legal fees and costs of collection, with respect to the Non–Defaulting Party's breach of such covenants or obligations, but in no event shall any Party be liable for consequential, punitive or exemplary damages hereunder.... Any amounts due by the Non–Defaulting Party and not paid prior to the end of such thirty (30) day cure period shall earn interest from the date such funds were originally due until the date paid at eighteen percent (18%) per annum. Each party shall be responsible for the defaults of their respective agents, contractors, employees and representatives.
Id. In December 2007 and January 2008, Vienna Metro sent Pulte default notices for failing to complete its required work by the appropriate date. Def. Mot. Summ. J. ¶ 8. It is undisputed that the dates initially set in the Declaration have passed, and that the work set forth in the Declaration is incomplete. Dkt. No. 50 at 2. The contract included a Force Majeure Clause, which provided a maximum extension of time in case of extenuating circumstances. See Pl. Ex. 1 at 5. Additionally, the Declaration featured one express timeliness provision for the entire contract, as well as a number of mandatory deadlines. Id. at 6. It should be noted that Vienna Metro (1) has no approved site plans, (2) has no design plans, (3) has no tenant, and (4) has no buyer. See Def. Mot. Summ. J. ¶¶ 16–18, 21, 22; Pl. Opp'n ¶¶ 16–18, 21, 22. Lastly, Vienna Metro did not identify any evidence that the timing of the infrastructure construction caused Vienna Metro to lose any prospective tenant for MetroWest. Def. Mot. Summ. J. Ex. 9 347:11–348:13.
On May 14, 2010, Plaintiff filed suit in the United States District Court for the Eastern District of Virginia. In addition to a claim for specific performance, Plaintiff alleges monetary damages for real estate taxes, loan interest, and lost return on equity investment. In the alternative, Plaintiff seeks money damages for default interest and wasted costs. To calculate lost return on equity investment, Plaintiff attached eighteen percent interest for its costs over the last several years. See Def. Mot. Summ. J. Ex. 57. To calculate default interest, Plaintiff attaches eighteen percent interest to hypothetical, budgeted costs. See id. Ex. 38. Following discovery, the Court now considers the Parties' Motions for Summary Judgment.
Under Federal Rule of Civil Procedure 56, the Court must grant summary judgment if the moving party demonstrates that there is no genuine issue as to any material fact, and that the moving party is entitled to judgment as a matter of law. Fed.R.Civ.P. 56(c).
In reviewing a motion for summary judgment, the Court views the facts in a light most favorable to the non-moving party. Anderson v. Liberty Lobby, Inc., 477 U.S. 242, 255, 106 S.Ct. 2505, 91 L.Ed.2d 202 (1986). Once a motion for summary judgment is properly made and supported, the opposing party has the burden of showing that a genuine dispute exists. Matsushita Elec. Indus. Co. v. Zenith...
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