Case Title: Blue Stone v. Neff

Citation: 

Docket Number: 990969

State: virginia

Court: Virginia Supreme Court

Date: 2000-03-03T00:00:00Z

Document:
Present:  Carrico, C.J., Compton,* Lacy, Hassell, Keenan, 
Koontz, and Kinser, JJ. 
 
BLUE STONE LAND COMPANY, INC. 
 
 
 
OPINION BY 
v.  Record No. 990969 
CHIEF JUSTICE HARRY L. CARRICO
 
 
 
March 3, 2000 
BILL V. NEFF, T/A BILL V. 
NEFF ENTERPRISES 
 
FROM THE CIRCUIT COURT OF ROCKINGHAM COUNTY 
John J. McGrath, Jr., Judge 
 
 
In a motion for judgment filed below, Bill V. Neff, 
trading as Bill V. Neff Enterprises (Neff), sought damages 
from Blue Stone Land Company, Inc. (Blue Stone) for the 
latter’s alleged breach of a written contract dated July 
22, 1992.  In the contract, Neff agreed to construct a 
street known as Lucy Drive in a subdivision located in the 
City of Harrisonburg and Blue Stone agreed to pay Neff an 
amount not to exceed $181,609.88 for the work.  Neff 
alleged that he had fully performed the contract but that 
Blue Stone had refused to pay the agreed amount. 
 
Blue Stone filed grounds of defense in which it denied 
any indebtedness to Neff.  Blue Stone also filed a 
counterclaim in which it alleged that Neff had agreed to 
complete the construction of the street within a reasonable 
period of time, but, despite repeated requests from Blue 
                     
* Justice Compton participated in the hearing and decision 
of this case prior to the effective date of his retirement 
on February 2, 2000. 
Stone, the construction was not completed within a 
reasonable period of time.  Blue Stone alleged further that 
as a direct and proximate result of Neff’s material breach 
of contract and refusal to construct the street within a 
reasonable and timely manner, Blue Stone was unable to sell 
its lots.  Finally, Blue Stone alleged that as a direct and 
proximate result of Neff’s material breach of contract and 
refusal to construct the street in a reasonable and timely 
manner, Blue Stone had suffered damages in the amount of 
$200,000. 
 
The record shows that Neff and Blue Stone each 
contributed half the land for construction of Lucy Drive.  
In the contract between the parties, Blue Stone agreed to 
pay Neff $32,089.88 for previous work performed on the 
street and to split “fifty/fifty” with Neff the remaining 
cost of construction.  The contract provided that Blue 
Stone’s share of the total cost would not exceed 
$181,609.88, and payment would not be required until lots 
located on Lucy Drive “would be sold by Bluestone.”  
However, it was agreed that the $181,609.88 amount “would 
be paid in full no later than five years from June 9, 
1992.”  No time was fixed for the completion of Lucy Drive. 
 
On September 27, 1996, Blue Stone addressed a letter 
to Neff stating that since “prior to July of 1992 . . . 
 
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[n]othing further has been done on [Lucy Drive]” and that 
Neff should “do no further work” on the street.  A Neff 
exhibit in the record indicates that construction of the 
street was “generally completed” as of July 14, 1997, some 
five years after the date of the parties’ contract. 
 
During discovery, Neff served interrogatories upon 
Blue Stone.  One inquiry required Blue Stone to “[i]temize 
and describe with particularity all damages, including but 
not limited to the $200,000 in damages sought in [the] 
Counterclaim filed in this case . . . .”  In response, Blue 
Stone stated: 
 
i)  The sale of [Blue Stone’s] land abutting Lucy 
Drive to Balanced Care Corporation was contingent upon 
[Blue Stone] constructing and paying for Deyerle 
[Avenue] Extended.  Due to the fact that Lucy Drive 
was not completed as agreed, [Blue Stone] could not 
sell its lots to Balanced Care Corporation without 
constructing a street at an estimated cost of 
$200,000. 
 
 
Lucy Drive runs in a north-south direction, with 
Neff’s land lying to the west and Blue Stone’s to the east.  
Deyerle Avenue runs east and west along Neff’s southern 
border and intersects Lucy Drive at a right angle.  Deyerle 
Avenue extended runs eastward from Lucy Drive and is 
bordered on both sides by Blue Stone’s property.  The lot 
sold by Blue Stone to Balanced Care Corporation is located 
at the southeast corner of the intersection of Lucy Drive 
 
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and Deyerle Avenue extended.  A Blue Stone exhibit in the 
record indicates that the cost of constructing Deyerle 
Avenue extended amounted to $296,289.86. 
 
Prior to trial, Neff filed a motion in limine seeking 
to exclude from evidence any testimony or exhibits relating 
to costs expended by Blue Stone in the construction of 
Deyerle Avenue extended.  By order, the trial court 
sustained Neff’s motion in limine and ruled that Blue Stone 
“will be limited to proving damages relating to lost lot 
sales or diminished revenues from lot sales.” 
 
On the morning of trial, Blue Stone moved for 
reconsideration of the trial court’s ruling on the motion 
in limine.  When the court denied the motion for 
reconsideration, Blue Stone moved the court to provide the 
reasons for its ruling.  The trial judge stated:  “I 
consider damages for construction of an alternate route to  
[Blue Stone’s] property to be special damages which should 
have been pled specially.  It would have been very simple 
to plead it []specially, it was not done, and it’s too late 
to change it now on the eve of trial.” 
 
The case proceeded to trial before a jury.  At the 
conclusion of all the evidence, the trial court struck Blue 
Stone’s counterclaim and submitted the case to the jury on 
Neff’s motion for judgment alone.  The jury returned a 
 
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verdict in favor of Neff in the amount of $181,609.88.  The 
trial court entered judgment on the verdict, and we awarded 
Blue Stone this appeal. 
 
Blue Stone assigns a number of errors, but we think 
the dispositive question is whether the trial court erred 
in sustaining Neff’s motion in limine on the ground the 
damages for the construction of Deyerle Avenue extended 
were special damages not specially pleaded.  We are of 
opinion the trial court did err in this regard. 
 
In Roanoke Hospital Ass’n v. Doyle & Russell, Inc., 
215 Va. 796, 214 S.E.2d 155 (1975), we said: 
 
There are two broad categories of damages ex 
contractu:  direct (or general) damages and 
consequential (or special) damages.  Direct damages 
are those which arise “naturally” or “ordinarily” from 
a breach of contract; they are damages which, in the 
ordinary course of human experience, can be expected 
to result from a breach.  Consequential damages are 
those which arise from the intervention of “special 
circumstances” not ordinarily predictable.  If damages 
are determined to be direct, they are compensable.  If 
damages are determined to be consequential, they are 
compensable only if it is determined that the special 
circumstances were within the “contemplation” of both 
contracting parties.  Whether damages are direct or 
consequential is a question of law.  Whether special 
circumstances were within the contemplation of the 
parties is a question of fact. 
 
Id. at 801, 214 S.E.2d at 160 (citations and footnote 
omitted); see also Chesapeake & Potomac Tel. Co. v. Sisson 
& Ryan, Inc., 234 Va. 492, 505-06, 362 S.E.2d 723, 731 
(1987) (damages direct when contractor fails to complete 
 
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work to specifications and building collapses).  Direct or 
general damages need not be specially pleaded.  Wood v. 
American Nat’l Bank, 100 Va. 306, 309, 40 S.E. 931, 932 
(1902). 
 
Here, the counterclaim involves a garden-variety type 
of breach of contract without the intervention of any 
special circumstances that would convert the resulting 
damages from general to special.  Neff and Blue Stone were 
both land developers, and Neff knew that Blue Stone’s 
purpose in contracting for the construction of Lucy Drive 
was to provide access to Blue Stone’s land so it could be 
developed and sold.  Blue Stone alleges that Neff failed to 
complete Lucy Drive within a reasonable period of time.  If 
Neff breached the contract in that respect, he should have 
expected that Blue Stone, in the ordinary course of human 
experience, would take alternative means of providing 
access to its property when needed to accomplish a sale of 
a portion that would have been served by Lucy Drive.  
Indeed, had Blue Stone not taken alternative means of 
providing access to its property, it might well have been 
met at the threshold of this case with a claim that it had 
failed to mitigate its damages. 
 
The alleged damages, therefore, are those which arise 
naturally and ordinarily from a breach of contract, they 
 
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are direct and not consequential, and it was not necessary 
to plead them specially.  They were sufficiently pleaded in 
the allegation of Blue Stone’s counterclaim that “[a]s a 
direct and proximate result of [Neff’s] material breach of 
contract and refusal to construct Lucy Drive in a 
reasonable and timely manner, [Blue Stone] suffered damages 
in the amount of TWO HUNDRED THOUSAND DOLLARS.”  If Neff 
desired more detailed information concerning the damages, 
he could have requested a bill of particulars. 
  
Neff argues, however, that even if it is assumed the 
trial court erred in any of its rulings concerning Blue 
Stone’s alleged damages for the costs of constructing 
Deyerle Avenue extended, such error “would not provide 
grounds for overturning the jury’s verdict.”  Neff says 
that by favoring him with a verdict in the full amount of 
his claim, “the jury conclusively determined and 
established the fact that [he] was not in breach . . . and 
. . . had in fact completed Lucy Drive within a reasonable 
amount of time.”  Hence, Neff concludes, “[s]ince the jury 
found that [he] was not in breach of the contract, and 
since Blue Stone’s defenses and counterclaim damages 
(including the proffered Deyerle Avenue extended 
construction costs) were asserted solely on the basis of a 
breach by Neff, . . . said damages became irrelevant to the 
 
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case once the jury’s verdict was returned in favor of Neff” 
and the trial court’s rulings were “rendered . . . 
harmless.” 
 
We disagree with Neff that the error in excluding  
evidence of the cost of constructing Deyerle Avenue 
extended was harmless.  In a related context, we said: 
Under the harmless error doctrine, the judgment of the  
court below will be affirmed whenever we can say that 
the error complained of could not have affected the 
result.  The doctrine is never applied, however, when 
it appears that the jury has been misinstructed and, 
had it been properly instructed, that it might have 
returned a different verdict. 
 
Rhoades v. Painter, 234 Va. 20, 24, 360 S.E.2d 174, 176 
(1987) (citation omitted); see also Director Gen’l of 
Railroads v. Pence’s Adm’x, 135 Va. 329, 352, 116 S.E. 351, 
358-59 (1923) (error in instructing jury not harmless when 
upon correct instruction jury might have found contrary 
verdict).  By logical extension, the same rule must apply 
when it appears that evidence has been excluded erroneously 
and that, had it been admitted, it might have produced a 
different result.  See Pace v. Richmond, 231 Va. 216, 226, 
343 S.E.2d 59, 65 (1986) (error in excluding evidence 
harmless when it could not affect verdict); Lester’s Ex’r 
v. Simpkins, 117 Va. 55, 69, 83 S.E. 1062, 1067 (1915) 
(admission of illegal evidence not reversible when it could 
not affect result). 
 
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In this case, we are of opinion that had the evidence 
concerning the cost of constructing Deyerle Avenue extended 
been admitted it might have produced a different result 
both with respect to Blue Stone’s defenses and its 
counterclaim.  Daniel W. Brubaker, one of Blue Stone’s 
principals, testified to the necessity for the construction 
of Deyerle Avenue extended.  Neff objected to the testimony 
as violative of the trial court’s order granting Neff’s 
motion in limine, but the court overruled the objection, 
and the ruling is not the subject of an assignment of 
cross-error. 
 
Brubaker was asked why Blue Stone had written the 
letter of September 27, 1996, to Neff “telling him not to 
go ahead with the street.”  Brubaker answered as follows:  
Well, at that point, the street had not been built.  
We had waited all of this time for it to be built, and 
I had a contract at that time with [Balanced Care 
Corporation] to . . . buy three acres of real estate 
from us at a price of $100,000 per acre.  They would 
not sign the contract to purchase, or would not buy it 
until I assured to them . . . that we would have an 
entrance, either off of Lucy or off of Deyerle.  And 
since Lucy was not built, I immediately told them that 
I’d bring them in an entrance off of Deyerle Avenue 
extended, which we did.  And we had to build Deyerle 
Avenue extended in order to sell that three-acre lot 
to [Balanced Care Corporation]. 
 
 
It seems somewhat inconsistent for the trial court to 
admit evidence concerning the necessity for constructing 
Deyerle Avenue extended but to exclude evidence concerning 
 
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the cost of construction.  Without evidence concerning the 
cost of construction, the testimony concerning necessity 
would have been meaningless or at least confusing to the 
jurors.  They would not have known how to treat the 
testimony and, out of perplexity, might have disregarded it 
entirely.  Had the evidence been admitted, however, the 
confusion might have been avoided and a different result 
obtained. 
 
Furthermore, the trial court’s sole basis for striking 
Blue Stone’s counterclaim was “a lack of any compensable 
damages.”  Had the evidence of the cost of constructing 
Deyerle Avenue extended been admitted, the trial court 
might have found the evidence of compensable damages 
sufficient and might not have struck the counterclaim.  And 
it goes without saying that Blue Stone would have been in a 
much stronger position, both offensively and defensively, 
had the counterclaim been submitted to the jury for its 
consideration. 
 
Moreover, under the instructions of the trial court, 
Blue Stone had the burden of proving that Neff’s alleged  
breach of contract was material.  With evidence concerning 
the cost of construction excluded from the case, Blue Stone 
was denied one appropriate basis for the jury to find that 
Neff’s alleged breach was material and not merely de 
 
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minimus.  Had the evidence been admitted, the jury might 
well have found Neff’s breach was material and decided 
against him. 
 
For these reasons, we will reverse the judgment of the 
trial court and remand the case for a new trial on Neff’s 
claim and Bluestone’s counterclaim consistent with the 
views expressed in this opinion. 
Reversed and remanded. 
 
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