MCR Federal, LLC v. JB&A, Inc., 294 Va. 446

Summary

The Supreme Court of Virginia considered whether a buyer’s false certification that contractual representations remained true at closing supported both breach-of-contract and actual or constructive fraud claims. The Court held that the alleged duty arose solely from the parties’ contract, so the fraud claims were improper and the related attorney-fee award was reversed. The Court upheld the finding that the breach caused damages and that the damages were proven with reasonable certainty.

Holdings

1. JB&A could not maintain actual or constructive fraud claims because the duty allegedly breached arose solely from the Asset Purchase Agreement and the bring-down certificate, not from an independent common-law or statutory duty.
2. Sufficient evidence supported the circuit court's finding that MCR Federal's breach caused JB&A substantial damages.
3. The purchase price allocation was a reliable and sufficiently certain measure of JB&A's value at closing, and the $11,995,002 compensatory-damages award was supported by the evidence.
4. The attorney's-fee award was erroneous because JB&A could not maintain the constructive-fraud claim on which the award was based.
5. The court did not decide whether JB&A was required to elect between remedies because the fraud claim was improper; it reversed the attorney's-fee award on that basis.

Questions Presented

1. Whether JB&A could maintain actual or constructive fraud claims based on MCR Federal's allegedly false contractual representation and bring-down certificate.
2. Whether sufficient evidence established that MCR Federal's breach caused JB&A damages.
3. Whether the purchase price allocation provided a sufficiently certain measure of damages.
4. Whether attorney's fees could be awarded as equitable relief on the constructive-fraud claim.
5. Whether JB&A was required to elect between remedies for breach of contract and fraud.

Disposition

other