{"id":901628,"date":"2023-09-20T14:57:14","date_gmt":"2023-09-20T20:57:14","guid":{"rendered":"https:\/\/www.myconstructionexpert.com\/blog\/?p=901628"},"modified":"2023-09-20T14:57:17","modified_gmt":"2023-09-20T20:57:17","slug":"vcpa-default-fraud-oh-my","status":"publish","type":"post","link":"https:\/\/www.myconstructionexpert.com\/blog\/vcpa-default-fraud-oh-my\/","title":{"rendered":"Default, Fraud, and VCPA (Oh My!)"},"content":{"rendered":"\n

Christopher G. Hill | Construction Law Musings<\/a><\/p>\n\n\n\n

I\u2019ve discussed the\u00a0Virginia Consumer Protection Act (VCPA)\u00a0and the interaction between\u00a0fraud and contract<\/a>\u00a0on numerous occasions here at\u00a0Construction Law Musings.\u00a0 A recent case from the Eastern District of Virginia District Court discusses this interaction (along with\u00a0that dreaded default) further.<\/p>\n\n\n\n

In\u00a0Bhutta v. DRM Construction Corp., the homeowners, the Bhuttas, sued DRM for breach of contract, conversion, fraud, and a violation of the VCPA.\u00a0 These allegations were based upon DRM having taken a $40,000.00 deposit from the Bhuttas and then failing to even begin work.\u00a0 As you may have guessed from the title of this post, DRM did not respond to the Complaint and the Court granted default.\u00a0 The Court then took up the question of whether the Bhuttas had alleged enough on each count for default judgment on those counts. After going through a procedural recitation and finding that DRM was properly served and that the Court had jurisdiction, the Court got to the meat of the matter.<\/p>\n\n\n\n

The Court held that the Bhuttas properly plead a breach of contract for the obvious reason.  The reason was that DRM never performed<\/em> any work and the Bhuttas were damaged because they both paid the deposit and also had to hire another contractor to complete the work at a higher price. The Court granted default judgment for breach of contract.<\/p>\n\n\n\n

On the conversion count, the Court found for the Bhuttas because the Bhuttas had properly pleaded that they provided the $40,000.00, and then when it became clear that DRM had no intention of moving forward on the project, they demanded the money back to no avail.  The Court further found that DRM even acknowledged that the Bhuttas were entitled to return of the deposit but still failed to return it. The Court granted default judgment on this count as well.<\/p>\n\n\n\n

After going through the source of duty and economic loss cases relating to the\u00a0interaction of fraud and contract, the Court then looked at the fraud allegations by the Bhuttas.\u00a0 After review of the pleadings (remember, DRM defaulted and therefore could not defend) the Court determined that the Bhuttas had not pleaded enough to get a judgment for fraud.\u00a0 The Court found that the bare allegation that DRM never intended to perform without more did not meet the standard set forth in the case law.\u00a0 I recommend this portion of the opinion for its good discussion of the various cases relating to fraud and contract.<\/p>\n\n\n\n

The Court also found that the bare bones \u201cblack letter\u201d recitation of the legal standard under the VCPA without more to link the allegations of the Complaint to those standards was insufficient to allow for default judgment.\u00a0 The Court specifically called out the failure to plead how the\u00a0construction claim involved a \u201cconsumer transaction,\u201d and the failure to articulate how the actions of DRM employed the use of \u201cdeception, fraud, false pretense, false promise, or misrepresentation.\u201d In short, the Court wanted more \u201cmeat on the bone.\u201d<\/p>\n\n\n\n

Finally, because the contract between the Bhuttas and DRM did not\u00a0contain an attorney fees provision\u00a0and the VCPA count was found lacking, the Court did not award attorney fees.\u00a0 The Court also invited the Bhuttas to replead the final two counts if they could plead further facts to meet the Court\u2019s objections.<\/p>\n\n\n\n

The takeaway here, aside from a good discussion of the law that I recommend to your reading, is that just because you get a default does not necessarily mean you get all of the relief requested.\u00a0 You should always have an experienced\u00a0Virginia construction attorney\u00a0help you assure that you plead all of the facts and law that will allow a full judgment should the defendant fail to appear.<\/p>\n\n\n\n

\n\n\n\n

When one of your cases is in need of a construction expert, estimates, insurance appraisal or umpire services in defect or insurance disputes – please call Advise & Consult, Inc. at 888.684.8305, or email experts@adviseandconsult.net<\/a>.<\/strong><\/p>\n","protected":false},"excerpt":{"rendered":"

Christopher G. Hill | Construction Law Musings I\u2019ve discussed the\u00a0Virginia Consumer Protection Act (VCPA)\u00a0and the interaction between\u00a0fraud and contract\u00a0on numerous occasions here at\u00a0Construction Law Musings.\u00a0 A recent case from the Eastern District of Virginia District Court discusses this interaction (along with\u00a0that dreaded default) further. In\u00a0Bhutta v. DRM Construction Corp., the homeowners, the Bhuttas, sued DRM… Continue reading Default, Fraud, and VCPA (Oh My!)<\/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":false,"jetpack_social_options":{"image_generator_settings":{"template":"highway","enabled":false},"version":2}},"categories":[9],"tags":[9895,224,9016,11958,357,11834],"class_list":["post-901628","post","type-post","status-publish","format-standard","hentry","category-construction-contracts","tag-advise-consult","tag-construction-contract","tag-fraud","tag-vcpa","tag-virginia","tag-virginia-consumer-protection-act","entry"],"jetpack_publicize_connections":[],"yoast_head":"\nDefault, Fraud, and VCPA (Oh My!) - 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