{"id":904212,"date":"2025-04-10T15:19:29","date_gmt":"2025-04-10T21:19:29","guid":{"rendered":"https:\/\/www.myconstructionexpert.com\/blog\/?p=904212"},"modified":"2025-04-10T15:19:31","modified_gmt":"2025-04-10T21:19:31","slug":"construction-contract-versus-fraud","status":"publish","type":"post","link":"https:\/\/www.myconstructionexpert.com\/blog\/construction-contract-versus-fraud\/","title":{"rendered":"A Good Read on Fraud Versus Contract"},"content":{"rendered":"\n<p>Christopher G. Hill | <a href=\"https:\/\/constructionlawva.com\/a-good-read-on-fraud-versus-contract\/\" target=\"_blank\" rel=\"noreferrer noopener nofollow\">Construction Law Musings<\/a><\/p>\n\n\n\n<p>Here at\u00a0<a href=\"https:\/\/constructionlawva.com\/about-2\/\" target=\"_blank\" rel=\"noreferrer noopener nofollow\">Construction Law Musings<\/a>, I have discussed the interwoven issues of fraud, contract, and the\u00a0<a href=\"https:\/\/law.lis.virginia.gov\/vacodepopularnames\/virginia-consumer-protection-act\/\" target=\"_blank\" rel=\"noreferrer noopener nofollow\">Virginia Consumer Protection Act<\/a>\u00a0(VCPA)\u00a0<a href=\"https:\/\/constructionlawva.com\/fraud-the-vcpa-and-construction-contracts\/\" target=\"_blank\" rel=\"noreferrer noopener nofollow\">on several occasions<\/a>.\u00a0 In most cases, the three simply don\u2019t mix, acting\u00a0<a href=\"https:\/\/constructionlawva.com\/fraud-and-construction-contracts-like-oil-and-water\/\" target=\"_blank\" rel=\"noreferrer noopener nofollow\">more like oil and water<\/a>\u00a0than parallel causes of action.\u00a0 There are\u00a0<a href=\"https:\/\/constructionlawva.com\/economic-loss-rule-not-absolute-in-construction\/\" target=\"_blank\" rel=\"noreferrer noopener nofollow\">exceptions however<\/a>\u00a0so these three are always worth exploring in most (particularly residential) construction matters.<\/p>\n\n\n\n<p>A recent case out of the 4th Circuit Court of Appeals lays out a good roadmap for a properly pled, and properly tried in this case, VCPA, fraud, and contract matter.\u00a0 That case is\u00a0<a href=\"https:\/\/constructionlawva.com\/wp-content\/uploads\/2025\/04\/Harrell-v-Deluca.pdf\" target=\"_blank\" rel=\"noreferrer noopener nofollow\">Harrell v. Deluca<\/a>\u00a0and I recommend it to your reading.<\/p>\n\n\n\n<p>In&nbsp;Harrell, the Court considered a case where the Harrells entered into a residential sales contract to purchase property from DeLuca.&nbsp; After that sales contract, the parties entered into an addendum for a list of improvements that DeLuca was to make to the property as part of the sale.&nbsp; After that, the parties entered into a construction contract for the completion of certain uncompleted improvements by August 15, 2019.&nbsp; Needless to say (or this wouldn\u2019t be a blog post at a construction law blog) things did not go well and the Harrells sued Deluca for fraud, constructive fraud, breach of contract, and violation of the VCPA.&nbsp; Unsurprisingly, and after a 9-day bench trial, the district court found in DeLuca\u2019s favor on the fraud claims (actual and constructive) and the VCPA claim.&nbsp; It found for the Harrells on the breach of contract claim and awarded $181,762.87.<\/p>\n\n\n\n<p>Upon the Harrells appeal (and somewhat surprisingly), the 4th Circuit vacated the district court\u2019s judgment and remanded the case back to the district court to make explicit findings as to each of the claims.&nbsp; In doing so, the Court considered certain statements made by DeLuca (I won\u2019t set all of them out here, but they are set out in the linked opinion), and set out the elements of a fraud claim in Virginia as follows:<\/p>\n\n\n\n<blockquote class=\"wp-block-quote is-layout-flow wp-block-quote-is-layout-flow\">\n<p>Under Virginia law, to prevail on an \u201cactual fraud\u201d claim, a plaintiff must prove: (1) a false representation, (2) of a material fact, (3) made intentionally and knowingly, (4) with intent to mislead, (5) reliance by the party mislead, and (6) resulting damage to the party misled. Virginia also recognizes a claim for constructive fraud, which \u201cdiffers only in that the misrepresentation of material fact is not made with the intent to mislead, but is made innocently or negligently.<\/p>\n<\/blockquote>\n\n\n\n<p>It then went on to state that there were additional proceedings necessary to determine if the statements made were promises to perform certain acts that were later not performed or if the statements were false when made.\u00a0 The former being barred by the\u00a0<a href=\"https:\/\/constructionlawva.com\/contracts-and-fraud-dont-mix-even-for-lawyers\/\">source o<\/a><a href=\"https:\/\/constructionlawva.com\/contracts-and-fraud-dont-mix-even-for-lawyers\/\" target=\"_blank\" rel=\"noreferrer noopener nofollow\">f<\/a><a href=\"https:\/\/constructionlawva.com\/contracts-and-fraud-dont-mix-even-for-lawyers\/\"> duty rule<\/a>, and the latter being actionable.\u00a0 These matters had been decided with general statements after summary judgment motions were filed.\u00a0 In short, the Court essentially said that the district court had to at least examine the facts of the case and make findings thereon before it would sustain its judgment.<\/p>\n\n\n\n<p>This case is a good primer on where the various lines between contract, fraud, and VCPA claims blur and move.\u00a0 I have not set out every statement made and every specific finding of the 4th Circuit so I commend the case for your reading.\u00a0 I also recommend that you get counsel from an\u00a0<a href=\"https:\/\/christopherhill-law.com\/\" target=\"_blank\" rel=\"noreferrer noopener nofollow\">experienced Virginia construction attorney<\/a>\u00a0to explore the possibilities and interactions of these legal claims.<\/p>\n\n\n\n<hr class=\"wp-block-separator has-alpha-channel-opacity\"\/>\n\n\n\n<p><strong>When one of your cases is in need of a construction expert, estimates, insurance appraisal or umpire services in defect or insurance disputes &#8211; please call Advise &amp; Consult, Inc. at 888.684.8305, or email <a href=\"mailto:experts@adviseandconsult.net\">experts@adviseandconsult.net<\/a>.<\/strong><\/p>\n","protected":false},"excerpt":{"rendered":"<p>Christopher G. Hill | Construction Law Musings Here at\u00a0Construction Law Musings, I have discussed the interwoven issues of fraud, contract, and the\u00a0Virginia Consumer Protection Act\u00a0(VCPA)\u00a0on several occasions.\u00a0 In most cases, the three simply don\u2019t mix, acting\u00a0more like oil and water\u00a0than parallel causes of action.\u00a0 There are\u00a0exceptions however\u00a0so these three are always worth exploring in most&hellip; <a class=\"more-link\" href=\"https:\/\/www.myconstructionexpert.com\/blog\/construction-contract-versus-fraud\/\">Continue reading <span class=\"screen-reader-text\">A Good Read on Fraud Versus Contract<\/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],"tags":[9895,224],"class_list":["post-904212","post","type-post","status-publish","format-standard","hentry","category-construction-contracts","tag-advise-consult","tag-construction-contract","entry"],"jetpack_publicize_connections":[],"yoast_head":"<!-- This site is optimized with the Yoast SEO plugin v25.0 - https:\/\/yoast.com\/wordpress\/plugins\/seo\/ -->\n<title>A Good Read on Fraud Versus Contract - Advise &amp; 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