{"id":1696,"date":"2013-06-06T06:04:54","date_gmt":"2013-06-06T12:04:54","guid":{"rendered":"https:\/\/www.myconstructionexpert.com\/blog\/?p=1696"},"modified":"2013-06-04T16:05:19","modified_gmt":"2013-06-04T22:05:19","slug":"another-exception-to-fraud-and-contract-dont-mix","status":"publish","type":"post","link":"https:\/\/www.myconstructionexpert.com\/blog\/another-exception-to-fraud-and-contract-dont-mix\/","title":{"rendered":"Another Exception to Fraud and Contract Don\u2019t Mix"},"content":{"rendered":"

Christopher G. Hill – May 27, 2013<\/p>\n

Here at Construction Law Musings, we\u2019ve discussed the fact that, in Virginia, the \u201ceconomic loss rule\u201d generally renders claims of fraud and construction contracts like oil and water. This is true in most states, including Florida.<\/p>\n

What this means is that as a general rule where any party is supposed to perform under a contract, and fails to do so, the Virginia courts will dismiss a fraud<\/a> claim out of a desire to avoid turning any breach of contract (read \u201cbroken promise\u201d) case into a claim for fraud.\u00a0 As you have likely gathered by the title of this post, there are exceptions.\u00a0 One is a properly plead Virginia Consumer Protection Act (\u201cVCPA\u201d) claim<\/a>.<\/p>\n

Another, found in a recent Loudoun County, VA<\/a> Circuit Court opinion in Madison v. Milton Home Systems Inc.<\/a>, is so called fraud in the inducement (in other words, inducing a person to enter the contract under false pretenses).\u00a0 In\u00a0Madison the Court analyzed several counts based upon a modular home contract and so called \u201cperformance agreement\u201d guarantying that the home would be installed by the manufacturer in the event that it\u2019s installer failed to perform.<\/p>\n

Needless to say, the installer failed to perform and the purchasers of the home sued everyone that they could think of.\u00a0 The Court was then faced with the classic economic loss rule case with counts for negligence, fraud and breach of the VCPA.\u00a0 After going through the all too familiar economic loss rule analysis, the Court dismissed all but the fraud count in their entirety.\u00a0 The Court allowed the fraud in the inducement allegations to remain despite their in-artfully plead nature.\u00a0 The Court, as best I can tell, determined that at least on a demurrer, it would allow the Madisons to attempt to prove that Milton Home Systems induced them to purchase the modular unit by making promises that it never intended to keep.<\/p>\n

This case shows once again that pleading matters and that there is an exception to every rule.\u00a0 In this case, the exception is that where the fraud is alleged to be in the inducement to contract and not in any alleged breach of a duty to contract, the economic loss rule will not bar the claim.\u00a0 Finding an experienced construction lawyer is always a good idea when seeking to pursue a claim here in Virginia.\u00a0 Good counsel can help you find the best ways to pursue your claims without having them dismissed.<\/p>\n

A summary of this case (though not the full opinion) can be found at Virginia Lawyers Weekly<\/a>, and I recommend that you read and analyze it yourself (and let me know if you think that my analysis flies off the rails anywhere).<\/p>\n

via Another Exception to Fraud and Contract Don\u2019t Mix | Construction Law Musings- Richmond, VA<\/a>.<\/p>\n","protected":false},"excerpt":{"rendered":"

Christopher G. Hill – May 27, 2013 Here at Construction Law Musings, we\u2019ve discussed the fact that, in Virginia, the \u201ceconomic loss rule\u201d generally renders claims of fraud and construction contracts like oil and water. This is true in most states, including Florida. What this means is that as a general rule where any party… Continue reading Another Exception to Fraud and Contract Don\u2019t Mix<\/span><\/a><\/p>\n","protected":false},"author":1,"featured_media":0,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"jetpack_post_was_ever_published":false,"_jetpack_newsletter_access":"","_jetpack_dont_email_post_to_subs":false,"_jetpack_newsletter_tier_id":0,"_jetpack_memberships_contains_paywalled_content":false,"_jetpack_memberships_contains_paid_content":false,"footnotes":"","jetpack_publicize_message":"","jetpack_publicize_feature_enabled":true,"jetpack_social_post_already_shared":true,"jetpack_social_options":{"image_generator_settings":{"template":"highway","enabled":false},"version":2}},"categories":[9,172],"tags":[72,27,319,3],"class_list":["post-1696","post","type-post","status-publish","format-standard","hentry","category-construction-contracts","category-construction-law-2","tag-construction-contracts-2","tag-construction-law","tag-economic-loss-rule","tag-insurance-claims","entry"],"jetpack_publicize_connections":[],"yoast_head":"\nAnother Exception to Fraud and Contract Don\u2019t Mix - Advise & Consult, Inc.<\/title>\n<meta name=\"robots\" content=\"index, follow, max-snippet:-1, max-image-preview:large, max-video-preview:-1\" \/>\n<link rel=\"canonical\" href=\"https:\/\/www.myconstructionexpert.com\/blog\/another-exception-to-fraud-and-contract-dont-mix\/\" \/>\n<meta property=\"og:locale\" content=\"en_US\" \/>\n<meta property=\"og:type\" content=\"article\" \/>\n<meta property=\"og:title\" content=\"Another Exception to Fraud and Contract Don\u2019t Mix - Advise & Consult, Inc.\" \/>\n<meta property=\"og:description\" content=\"Christopher G. Hill – May 27, 2013 Here at Construction Law Musings, we\u2019ve discussed the fact that, in Virginia, the \u201ceconomic loss rule\u201d generally renders claims of fraud and construction contracts like oil and water. This is true in most states, including Florida. What this means is that as a general rule where any party… Continue reading Another Exception to Fraud and Contract Don\u2019t Mix\" \/>\n<meta property=\"og:url\" content=\"https:\/\/www.myconstructionexpert.com\/blog\/another-exception-to-fraud-and-contract-dont-mix\/\" \/>\n<meta property=\"og:site_name\" content=\"Advise & Consult, Inc.\" \/>\n<meta property=\"article:publisher\" content=\"https:\/\/www.facebook.com\/Advise-Consult-Inc-126949043996790\/\" \/>\n<meta property=\"article:published_time\" content=\"2013-06-06T12:04:54+00:00\" \/>\n<meta name=\"author\" content=\"admin\" \/>\n<meta name=\"twitter:card\" content=\"summary_large_image\" \/>\n<meta name=\"twitter:creator\" content=\"@adviseconsult\" \/>\n<meta name=\"twitter:site\" content=\"@adviseconsult\" \/>\n<meta name=\"twitter:label1\" content=\"Written by\" \/>\n\t<meta name=\"twitter:data1\" content=\"admin\" \/>\n\t<meta name=\"twitter:label2\" content=\"Est. reading time\" \/>\n\t<meta name=\"twitter:data2\" content=\"2 minutes\" \/>\n<script type=\"application\/ld+json\" class=\"yoast-schema-graph\">{\"@context\":\"https:\/\/schema.org\",\"@graph\":[{\"@type\":\"Article\",\"@id\":\"https:\/\/www.myconstructionexpert.com\/blog\/another-exception-to-fraud-and-contract-dont-mix\/#article\",\"isPartOf\":{\"@id\":\"https:\/\/www.myconstructionexpert.com\/blog\/another-exception-to-fraud-and-contract-dont-mix\/\"},\"author\":{\"name\":\"admin\",\"@id\":\"https:\/\/www.myconstructionexpert.com\/blog\/#\/schema\/person\/0a11abe008083d5fb19c2b0feefe7bd7\"},\"headline\":\"Another Exception to Fraud and Contract Don\u2019t Mix\",\"datePublished\":\"2013-06-06T12:04:54+00:00\",\"mainEntityOfPage\":{\"@id\":\"https:\/\/www.myconstructionexpert.com\/blog\/another-exception-to-fraud-and-contract-dont-mix\/\"},\"wordCount\":477,\"commentCount\":0,\"publisher\":{\"@id\":\"https:\/\/www.myconstructionexpert.com\/blog\/#organization\"},\"keywords\":[\"construction contracts\",\"construction law\",\"Economic Loss Rule\",\"Insurance Claims\"],\"articleSection\":[\"Construction Contracts\",\"Construction Law\"],\"inLanguage\":\"en-US\",\"potentialAction\":[{\"@type\":\"CommentAction\",\"name\":\"Comment\",\"target\":[\"https:\/\/www.myconstructionexpert.com\/blog\/another-exception-to-fraud-and-contract-dont-mix\/#respond\"]}]},{\"@type\":\"WebPage\",\"@id\":\"https:\/\/www.myconstructionexpert.com\/blog\/another-exception-to-fraud-and-contract-dont-mix\/\",\"url\":\"https:\/\/www.myconstructionexpert.com\/blog\/another-exception-to-fraud-and-contract-dont-mix\/\",\"name\":\"Another Exception to Fraud and Contract Don\u2019t Mix - Advise & Consult, Inc.\",\"isPartOf\":{\"@id\":\"https:\/\/www.myconstructionexpert.com\/blog\/#website\"},\"datePublished\":\"2013-06-06T12:04:54+00:00\",\"inLanguage\":\"en-US\",\"potentialAction\":[{\"@type\":\"ReadAction\",\"target\":[\"https:\/\/www.myconstructionexpert.com\/blog\/another-exception-to-fraud-and-contract-dont-mix\/\"]}]},{\"@type\":\"WebSite\",\"@id\":\"https:\/\/www.myconstructionexpert.com\/blog\/#website\",\"url\":\"https:\/\/www.myconstructionexpert.com\/blog\/\",\"name\":\"Advise & Consult, Inc.\",\"description\":\"Construction Expert Witnesses\",\"publisher\":{\"@id\":\"https:\/\/www.myconstructionexpert.com\/blog\/#organization\"},\"potentialAction\":[{\"@type\":\"SearchAction\",\"target\":{\"@type\":\"EntryPoint\",\"urlTemplate\":\"https:\/\/www.myconstructionexpert.com\/blog\/?s={search_term_string}\"},\"query-input\":{\"@type\":\"PropertyValueSpecification\",\"valueRequired\":true,\"valueName\":\"search_term_string\"}}],\"inLanguage\":\"en-US\"},{\"@type\":\"Organization\",\"@id\":\"https:\/\/www.myconstructionexpert.com\/blog\/#organization\",\"name\":\"Advise & Consult\",\"url\":\"https:\/\/www.myconstructionexpert.com\/blog\/\",\"logo\":{\"@type\":\"ImageObject\",\"inLanguage\":\"en-US\",\"@id\":\"https:\/\/www.myconstructionexpert.com\/blog\/#\/schema\/logo\/image\/\",\"url\":\"https:\/\/www.myconstructionexpert.com\/blog\/wp-content\/uploads\/2015\/11\/AC-Red-Logo.png\",\"contentUrl\":\"https:\/\/www.myconstructionexpert.com\/blog\/wp-content\/uploads\/2015\/11\/AC-Red-Logo.png\",\"width\":162,\"height\":75,\"caption\":\"Advise & Consult\"},\"image\":{\"@id\":\"https:\/\/www.myconstructionexpert.com\/blog\/#\/schema\/logo\/image\/\"},\"sameAs\":[\"https:\/\/www.facebook.com\/Advise-Consult-Inc-126949043996790\/\",\"https:\/\/x.com\/adviseconsult\",\"https:\/\/www.linkedin.com\/company-beta\/204526\/\",\"https:\/\/www.youtube.com\/user\/MrConstructionExpert\"]},{\"@type\":\"Person\",\"@id\":\"https:\/\/www.myconstructionexpert.com\/blog\/#\/schema\/person\/0a11abe008083d5fb19c2b0feefe7bd7\",\"name\":\"admin\",\"image\":{\"@type\":\"ImageObject\",\"inLanguage\":\"en-US\",\"@id\":\"https:\/\/www.myconstructionexpert.com\/blog\/#\/schema\/person\/image\/\",\"url\":\"https:\/\/secure.gravatar.com\/avatar\/b01e71b7acadd7657af782b7ad1a30cc?s=96&d=mm&r=pg\",\"contentUrl\":\"https:\/\/secure.gravatar.com\/avatar\/b01e71b7acadd7657af782b7ad1a30cc?s=96&d=mm&r=pg\",\"caption\":\"admin\"},\"sameAs\":[\"http:\/\/www.expertwitnessinconstruction.com\"]}]}<\/script>\n<!-- \/ Yoast SEO plugin. -->","yoast_head_json":{"title":"Another Exception to Fraud and Contract Don\u2019t Mix - Advise & Consult, Inc.","robots":{"index":"index","follow":"follow","max-snippet":"max-snippet:-1","max-image-preview":"max-image-preview:large","max-video-preview":"max-video-preview:-1"},"canonical":"https:\/\/www.myconstructionexpert.com\/blog\/another-exception-to-fraud-and-contract-dont-mix\/","og_locale":"en_US","og_type":"article","og_title":"Another Exception to Fraud and Contract Don\u2019t Mix - Advise & Consult, Inc.","og_description":"Christopher G. Hill – May 27, 2013 Here at Construction Law Musings, we\u2019ve discussed the fact that, in Virginia, the \u201ceconomic loss rule\u201d generally renders claims of fraud and construction contracts like oil and water. This is true in most states, including Florida. What this means is that as a general rule where any party… Continue reading Another Exception to Fraud and Contract Don\u2019t Mix","og_url":"https:\/\/www.myconstructionexpert.com\/blog\/another-exception-to-fraud-and-contract-dont-mix\/","og_site_name":"Advise & Consult, Inc.","article_publisher":"https:\/\/www.facebook.com\/Advise-Consult-Inc-126949043996790\/","article_published_time":"2013-06-06T12:04:54+00:00","author":"admin","twitter_card":"summary_large_image","twitter_creator":"@adviseconsult","twitter_site":"@adviseconsult","twitter_misc":{"Written by":"admin","Est. reading time":"2 minutes"},"schema":{"@context":"https:\/\/schema.org","@graph":[{"@type":"Article","@id":"https:\/\/www.myconstructionexpert.com\/blog\/another-exception-to-fraud-and-contract-dont-mix\/#article","isPartOf":{"@id":"https:\/\/www.myconstructionexpert.com\/blog\/another-exception-to-fraud-and-contract-dont-mix\/"},"author":{"name":"admin","@id":"https:\/\/www.myconstructionexpert.com\/blog\/#\/schema\/person\/0a11abe008083d5fb19c2b0feefe7bd7"},"headline":"Another Exception to Fraud and Contract Don\u2019t Mix","datePublished":"2013-06-06T12:04:54+00:00","mainEntityOfPage":{"@id":"https:\/\/www.myconstructionexpert.com\/blog\/another-exception-to-fraud-and-contract-dont-mix\/"},"wordCount":477,"commentCount":0,"publisher":{"@id":"https:\/\/www.myconstructionexpert.com\/blog\/#organization"},"keywords":["construction contracts","construction law","Economic Loss Rule","Insurance Claims"],"articleSection":["Construction Contracts","Construction Law"],"inLanguage":"en-US","potentialAction":[{"@type":"CommentAction","name":"Comment","target":["https:\/\/www.myconstructionexpert.com\/blog\/another-exception-to-fraud-and-contract-dont-mix\/#respond"]}]},{"@type":"WebPage","@id":"https:\/\/www.myconstructionexpert.com\/blog\/another-exception-to-fraud-and-contract-dont-mix\/","url":"https:\/\/www.myconstructionexpert.com\/blog\/another-exception-to-fraud-and-contract-dont-mix\/","name":"Another Exception to Fraud and Contract Don\u2019t Mix - Advise & Consult, Inc.","isPartOf":{"@id":"https:\/\/www.myconstructionexpert.com\/blog\/#website"},"datePublished":"2013-06-06T12:04:54+00:00","inLanguage":"en-US","potentialAction":[{"@type":"ReadAction","target":["https:\/\/www.myconstructionexpert.com\/blog\/another-exception-to-fraud-and-contract-dont-mix\/"]}]},{"@type":"WebSite","@id":"https:\/\/www.myconstructionexpert.com\/blog\/#website","url":"https:\/\/www.myconstructionexpert.com\/blog\/","name":"Advise & Consult, Inc.","description":"Construction Expert Witnesses","publisher":{"@id":"https:\/\/www.myconstructionexpert.com\/blog\/#organization"},"potentialAction":[{"@type":"SearchAction","target":{"@type":"EntryPoint","urlTemplate":"https:\/\/www.myconstructionexpert.com\/blog\/?s={search_term_string}"},"query-input":{"@type":"PropertyValueSpecification","valueRequired":true,"valueName":"search_term_string"}}],"inLanguage":"en-US"},{"@type":"Organization","@id":"https:\/\/www.myconstructionexpert.com\/blog\/#organization","name":"Advise & Consult","url":"https:\/\/www.myconstructionexpert.com\/blog\/","logo":{"@type":"ImageObject","inLanguage":"en-US","@id":"https:\/\/www.myconstructionexpert.com\/blog\/#\/schema\/logo\/image\/","url":"https:\/\/www.myconstructionexpert.com\/blog\/wp-content\/uploads\/2015\/11\/AC-Red-Logo.png","contentUrl":"https:\/\/www.myconstructionexpert.com\/blog\/wp-content\/uploads\/2015\/11\/AC-Red-Logo.png","width":162,"height":75,"caption":"Advise & Consult"},"image":{"@id":"https:\/\/www.myconstructionexpert.com\/blog\/#\/schema\/logo\/image\/"},"sameAs":["https:\/\/www.facebook.com\/Advise-Consult-Inc-126949043996790\/","https:\/\/x.com\/adviseconsult","https:\/\/www.linkedin.com\/company-beta\/204526\/","https:\/\/www.youtube.com\/user\/MrConstructionExpert"]},{"@type":"Person","@id":"https:\/\/www.myconstructionexpert.com\/blog\/#\/schema\/person\/0a11abe008083d5fb19c2b0feefe7bd7","name":"admin","image":{"@type":"ImageObject","inLanguage":"en-US","@id":"https:\/\/www.myconstructionexpert.com\/blog\/#\/schema\/person\/image\/","url":"https:\/\/secure.gravatar.com\/avatar\/b01e71b7acadd7657af782b7ad1a30cc?s=96&d=mm&r=pg","contentUrl":"https:\/\/secure.gravatar.com\/avatar\/b01e71b7acadd7657af782b7ad1a30cc?s=96&d=mm&r=pg","caption":"admin"},"sameAs":["http:\/\/www.expertwitnessinconstruction.com"]}]}},"jetpack_featured_media_url":"","jetpack_sharing_enabled":true,"jetpack_shortlink":"https:\/\/wp.me\/p2ztG6-rm","jetpack_likes_enabled":true,"_links":{"self":[{"href":"https:\/\/www.myconstructionexpert.com\/blog\/wp-json\/wp\/v2\/posts\/1696","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/www.myconstructionexpert.com\/blog\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/www.myconstructionexpert.com\/blog\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/www.myconstructionexpert.com\/blog\/wp-json\/wp\/v2\/users\/1"}],"replies":[{"embeddable":true,"href":"https:\/\/www.myconstructionexpert.com\/blog\/wp-json\/wp\/v2\/comments?post=1696"}],"version-history":[{"count":0,"href":"https:\/\/www.myconstructionexpert.com\/blog\/wp-json\/wp\/v2\/posts\/1696\/revisions"}],"wp:attachment":[{"href":"https:\/\/www.myconstructionexpert.com\/blog\/wp-json\/wp\/v2\/media?parent=1696"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/www.myconstructionexpert.com\/blog\/wp-json\/wp\/v2\/categories?post=1696"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/www.myconstructionexpert.com\/blog\/wp-json\/wp\/v2\/tags?post=1696"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}