Case Title: Sunrise Continuing Care v. Wright

Citation: 

Docket Number: 072501

State: virginia

Court: Virginia Supreme Court

Date: 2009-01-16T00:00:00Z

Document:
P
 
resent: All the Justices 
SUNRISE CONTINUING CARE, LLC 
 
 
 
 
 
 
 
 
OPINION BY 
v. 
Record No. 072501 
 
JUSTICE LEROY F. MILLETTE, JR. 
 
 
 
 
 
 
 
  January 16, 2009 
JAMES F. WRIGHT, ET AL. 
 
 
FROM THE CIRCUIT COURT OF FAIRFAX COUNTY 
Robert W. Wooldridge, Jr., Judge 
 
 
In this appeal, we consider whether the trial court erred 
in allowing a jury to calculate damages arising from an alleged 
breach of a continuing care services contract when the 
plaintiffs’ claims for rescission of the contract and for fraud 
were dismissed, and the plaintiffs presented no evidence of 
compensatory damages in support of their sole remaining claim 
for breach of contract. 
BACKGROUND 
On November 13, 2003, Colonel James F. Wright, Jr., then 
age 82, and wife Marion C. Wright, then age 76 (collectively, 
the Wrights), moved into apartment 404 at The Fairfax, a 
continuing care facility for retired military officers owned by 
Sunrise Continuing Care, LLC (Sunrise).  Three weeks later, the 
Wrights experienced the first in a series of roof leaks that 
persisted for several years.  The existence of recurrent roof 
leaks in apartment 404 is uncontested.  Almost three years 
after they moved in and while they continued to live at The 
Fairfax, the Wrights filed a three-count complaint against 
Sunrise, consisting of count I – rescission, count II – fraud, 
and count III – breach of contract.* 
The contract the Wrights alleged had been breached by 
Sunrise was a continuing care agreement that set out the terms 
of the Wrights’ residence at The Fairfax and the parties’ 
respective obligations.  Although the Wrights were offered 
options including a 50 percent refundable or 95 percent 
refundable contract, they chose a non-refundable contract.  The 
Wrights paid a non-refundable entrance fee of $204,084.00.  
Under the agreement, the Wrights were also required to pay a 
monthly fee as additional consideration for medical and non-
medical services provided to the residents at The Fairfax.  
These services included 24-hour security, a daily main meal, 
weekly housekeeping service, scheduled transportation, 24-hour 
nurse on duty, an assisted living and skilled nursing care 
facility, a wellness clinic, an emergency call system, 
concierge service, scheduled recreational programs, full-time 
administrative staff, maintenance of residence and community 
grounds, and utilities.  A wide array of amenities was also 
offered, including fine dining and monthly wine tasting events.  
Additionally, in exchange for the entrance fee and continued 
                                                 
* Counts I and II were dismissed at trial and are not at 
issue in this appeal. 
 
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payment of the monthly fees, the Wrights were entitled to live 
at The Fairfax for the rest of their lives. 
Colonel Wright testified that apartment 404 was 
represented to Mrs. Wright and him as “[t]he best available, 
high class, first class.”  The Wrights expected to receive 
“[a]n apartment that was like new and one that [they] could 
live in safely and keep [their] furniture in, and go off if 
[they] wanted to, lock the door and go away for a week or so, 
without having [their] apartment on [their] mind.”  They 
anticipated “peace, quiet, no need to do the chores that go 
with owning a house, and camaraderie of other people [at The 
Fairfax and] social events that people with the same background 
would enjoy sharing with each other.” 
The Wrights contended that apartment 404 was less than 
“first class” due to the roof leaks and, therefore, Sunrise 
materially breached the agreement.  Colonel Wright testified 
regarding damages: 
[W]e had to spend a lot of our time in the 
apartment instead of doing the things that we 
wanted to do, and we felt as though we were a 
hostage to a faulty apartment.  We couldn’t go 
out to do the things we liked to do, and simply 
shopping and things like that where you − 
depending upon the weather, we’d decide that one 
of us had better stop and stay in the apartment.  
And it was three, going on four, years of the 
worst years of our retirement.  
 
 
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As damages for breach of contract, the Wrights claimed 
$382,535.93, representing their payment of the $204,084.00 
entrance fee plus monthly fees paid up to the date of the trial 
amounting to $178,451.93. 
A jury trial was held, while the Wrights continued to live 
at The Fairfax.  After the Wrights completed the presentation 
of their evidence, Sunrise moved to strike the evidence and for 
entry of judgment in its favor.  Sunrise argued that although 
the Wrights had the burden to prove damages, they “put on no 
evidence to demonstrate anything other than full 
reimbursement.”  Sunrise further argued that rescission was an 
inappropriate remedy because rescission requires extraordinary 
circumstances in which the entire purpose of the contract 
between the parties is defeated.  Sunrise analogized the 
extraordinary circumstances required for rescission of the 
contract with constructive eviction in a landlord/tenant case.  
In addition, Sunrise contended it had taken extraordinary 
measures to repair the leaks. 
Arguing against Sunrise’s motion to strike, the Wrights 
asserted that the series of leaks constituted a material breach 
of the contract and they were therefore entitled to rescission 
to be returned to the “status quo” and to reimbursement of, at 
a minimum, the entrance fee.  In addition, the Wrights sought 
compensation for the amount the monthly fee was “devalued” by 
 
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the alleged breach.  The Wrights conceded, however, that “at 
this point in the case, the only thing that’s been proven was 
what [the Wrights have] paid in” and, having presented their 
case-in-chief, that they had not put on any evidence of 
compensatory damages.  The Wrights argued, “we are entitled to 
our money back because of a material breach of the contract,” 
and if Sunrise sought restitution for the services it provided 
to the Wrights, “the burden shifts to [Sunrise]” as “to any 
kind of quantum meruit that [it] can prove.”   
The trial court granted Sunrise’s motion to strike the 
rescission and fraud claims, but took the motion to strike the 
breach of contract claim under advisement.  Sunrise presented 
its case, after which Sunrise renewed its motion to strike the 
breach of contract claim.  The trial court continued to take 
the motion to strike the breach of contract claim under 
advisement.  At the conclusion of the Wrights’ rebuttal 
evidence, Sunrise renewed its motion to strike for a second 
time, which was again taken under advisement.  The case was 
submitted to the jury on the Wrights’ breach of contract claim. 
The jury returned a verdict in favor of the Wrights and 
assessed their damages at $279,000.  The trial court denied 
Sunrise’s outstanding motion to strike and entered final 
judgment.  This appeal followed. 
 
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DISCUSSION 
Sunrise contends that the trial court erred in denying its 
motion to strike the Wrights’ claim for breach of contract.  
Sunrise further contends the trial court erred in awarding 
final judgment to the Wrights. 
Sunrise argues that the Wrights never claimed compensatory 
damages in their lawsuit or proved any compensatory damages at 
trial.  According to Sunrise, the sole remedy the Wrights 
sought was rescission, with a repudiation and subsequent 
cancellation of the contract; and a total refund of all monies 
they had paid to Sunrise, less any offset that Sunrise could 
prove to the jury for the value of services the Wrights had 
received. 
Sunrise contends that even though the Wrights had resided 
in their apartment at The Fairfax for almost four years and 
received substantial services and enjoyed amenities provided by 
Sunrise, the Wrights presented no evidence to allow the jury to 
determine the amount the Wrights should recover if the jury 
found Sunrise had materially breached the contract.  Sunrise 
argues that without any evidence of the difference between the 
services the Wrights claimed they were entitled to receive 
pursuant to the contract and the services they did receive, the 
jury could only speculate in assessing damages.  Sunrise 
asserts that since the Wrights did not prove their damages, 
 
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they failed to establish a prima facie claim for breach of 
contract. 
In response, the Wrights argue that because Sunrise 
committed a material breach, the Wrights were entitled to 
repudiate and cancel the contract.  The Wrights also contend 
they were entitled to receive as damages the difference in 
value between the benefits under the contract if they had been 
“first class” as contracted for and the value of the “actual” 
benefits the Wrights received. 
The Wrights argue that the jury was provided with evidence 
of the agreed upon contract value of the “first class” benefits 
the Wrights were supposed to receive.  According to the 
Wrights, they presented evidence regarding the deficient nature 
of these benefits, which were of such character that no precise 
evidence of value or lack of value could be ascertained.  Thus, 
the Wrights contend that a precise determination of loss or 
reduction in value was not possible.  In support of their 
position, the Wrights argue that plaintiffs are not required to 
prove their damages to a mathematical certainty, and that 
juries are allowed to consider probable and inferential proof 
and to rely upon their general knowledge in awarding damages. 
“[W]here the trial court has declined to strike the 
plaintiff’s evidence or to set aside a jury verdict, the 
standard of appellate review in Virginia requires this Court to 
 
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consider whether the evidence presented, taken in the light 
most favorable to the plaintiff, was sufficient to support the 
jury verdict in favor of the plaintiff.”  Bitar v. Rahman, 272 
Va. 130, 141, 630 S.E.2d 319, 325-26 (2006) (citation and 
internal quotation marks omitted).  “The elements of a breach 
of contract action are (1) a legally enforceable obligation of 
a defendant to a plaintiff; (2) the defendant’s violation or 
breach of that obligation; and (3) injury or damage to the 
plaintiff caused by the breach of obligation.”  Filak v. 
George, 267 Va. 612, 619, 594 S.E.2d 610, 614 (2004).  The 
plaintiff bears the burden to establish the element of damages 
with reasonable certainty.  Nichols Construction Corp. v. 
Virginia Machine Tool Co., LLC, 276 Va. 81, 89, 661 S.E.2d 467, 
472 (2008).  Damages that are contingent, speculative, and 
uncertain are not recoverable because they cannot be 
established with reasonable certainty.  Shepherd v. Davis, 265 
Va. 108, 125, 574 S.E.2d 514, 524 (2003); Crist v. Metropolitan 
Mortgage Fund, Inc., 231 Va. 190, 195, 343 S.E.2d 308, 311 
(1986). 
In pursuing a breach of contract claim against Sunrise, 
the Wrights are subject to well-established proof requirements 
imposed on any plaintiff in a breach of contract action.  The 
Wrights failed as a matter of law to establish damages 
 
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resulting from the difference in the “first class” care Sunrise 
agreed to provide and the care they actually received. 
The Wrights’ arguments alone reveal the insufficiency of 
their evidence of damages.  In response to Sunrise’s original 
motion to strike at the conclusion of the Wrights’ case-in-
chief, the Wrights argued that the value of the contracted-for 
services was contained in the continuing care agreement: 
This is pretty plain.  [The continuing care 
agreement] says what the entrance fee is, and it 
says what the monthly service fee is for the 
services.  And so if what we are looking at is 
the value of the services, then that’s what 
we’ve got. 
 
(Emphasis added).  At oral argument on appeal, the Wrights 
asserted that “the measure of damages in a contract case is the 
difference between what you paid for generally speaking and what 
you actually received.”  However, the Wrights conceded that no 
evidence was presented on the value of average care or poor care 
from which the jury could calculate the difference between the 
value of the contracted-for services and the services actually 
received. 
Throughout trial, the Wrights maintained the position that 
the jury had sufficient evidence to formulate an appropriate 
damages award.  When discussing jury instructions, the Wrights 
asserted that they were “going to ask [the jury] for so much of 
those amounts[, the entrance fee and monthly fees,] as [the 
 
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jury] deem appropriate from the evidence.”  The Wrights 
elaborated, “[W]hat we are asking the jury to do is we were 
[sic] asking the jury to allow the Wrights to cancel or 
repudiate the contract and give them back so much of the money 
as they have paid to [Sunrise] as [the jury] deem appropriate.”  
When the trial court pointed out at this late stage in the trial 
that “[the Wrights] haven’t put on evidence that would allow 
compensatory damages in . . . something other than a material 
breach,” the Wrights responded: “We’re not looking for 
compensatory damages.” 
During appellate argument, the Wrights’ counsel explained 
that he was trying to say to the trial court “that the value of 
what the Wrights received given the contract wasn’t worth 
anything.  And therefore [they] were looking for the money back 
as damages.”  However, at trial, the Wrights’ counsel 
acknowledged: “And [the Wrights] don’t deny that they had the 
benefit of those [contracted-for] services for the period of 
time that they have been living . . . at The Fairfax.”  On 
cross-examination, counsel for Sunrise asked Colonel Wright if 
the pond, flowers, and maintenance at The Fairfax were part of 
his monthly fees, to which Colonel Wright replied: “Well, I 
guess so, sure.  That’s what we’re paying for.” 
Clearly, the Wrights received services pursuant to the 
continuing care services contract over nearly four years 
 
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residing at The Fairfax.  The trial court correctly granted 
Sunrise’s motion to strike the Wrights’ rescission claim 
specifically because there had been part performance of the 
continuing care services contract “such that a rescission right 
no longer exists and therefore a count for rescission does not 
stand.”  “[W]here a party wishes to rescind a contract on the 
ground of failure of consideration, if the failure has been 
partial only and a subsisting executed part performance is in 
his hands, and there has been no fraud on the part of the other, 
rescission will not be allowed.”  Bolling v. King Coal Theatres, 
Inc., 185 Va. 991, 997, 41 S.E.2d 59, 62 (1947) (internal 
citations and quotation marks omitted). 
Nevertheless, the Wrights pursued the remedy of rescission 
under the guise of a breach of contract claim because it was the 
only claim that survived Sunrise’s motion to strike.  During 
Sunrise’s argument on the motion to strike as to the contract 
claim, the trial court stated: “We are not dealing with the 
rescission count now; we are dealing with count III, which is 
the breach of contract.  But what you are – I understand you are 
giving me a rescission argument because the remedy that they 
have asked for is, in essence, rescission.”  (Emphasis added). 
“As a general rule, damages for breach of contracts are 
limited to the pecuniary loss sustained.”  Kamlar Corp. v. 
Haley, 224 Va. 699, 705, 299 S.E.2d 514, 517 (1983) (quoting 
 
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Wright v. Everett, 197 Va. 608, 615, 90 S.E.2d 855, 860 
(1956)).  Proof of damages is an essential element of a breach 
of contract claim, and failure to prove that element warrants 
dismissal of the claim.  Filak, 267 Va. at 619-20, 594 S.E.2d 
at 614-15.  The plaintiff also has the “burden of proving with 
reasonable certainty the amount of damages and the cause from 
which they resulted; speculation and conjecture cannot form the 
basis of the recovery.”  Shepherd, 265 Va. at 125, 574 S.E.2d 
at 524 (citations omitted). 
The Wrights failed to present to the jury evidence of any 
damages they sustained as a result of required repairs or out-
of-pocket expenditures of any type necessitated as a 
consequence of Sunrise’s breach.  They also failed to provide 
the jury any evidence of the value of the services they 
received from Sunrise during almost four years of residence, 
which included not only the enumerated services they 
acknowledged were always available, but also the right to 
continuous care for the rest of their lives as long as they 
continued to pay the monthly fee.  There was simply no evidence 
from which the jury could measure the difference between the 
value of the services that the Wrights contracted for and the 
value of the services that they received. 
The Wrights were incorrect in their contention that a 
material breach of the contract entitled them to an award of 
 
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their entire entrance fee plus all the monthly fees they had 
paid less any amount that Sunrise could prove it was entitled 
to for its provision of services pursuant to the contract.  
When a plaintiff has proved a breach of contract, the burden of 
proof regarding damages does not then shift to the defendant.  
The burden of proof remains with the plaintiff to prove with 
reasonable certainty the measure of damages sustained.  The 
Wrights failed to present sufficient evidence upon which the 
jury could base an award of damages without resorting to 
speculation or conjecture.  Thus, the Wrights failed to 
establish a prima facie claim for breach of contract. 
CONCLUSION 
The trial court erred in denying Sunrise’s motion to 
strike the breach of contract claim and in entering final 
judgment in favor of the Wrights.  For the reasons stated, we 
will reverse the judgment of the trial court and enter final 
judgment in favor of Sunrise. 
Reversed and final judgment.