Document:

Exhibit 10.89

 Exhibit 10.89 
 IN THE UNITED STATES DISTRICT COURT 
 FOR THE EASTERN
DISTRICT OF VIRGINIA 
 Alexandria Division 
  

					
	COMSTOCK POTOMAC YARD, L.C,	  	)	  	
		  	)	  	
	Plaintiff,	  	)	  	
		  	)	  	
	V.	  	)	  	
		  	)	  	Civil Action No. 1:08-cv-894
		  	)	  	
	BALFOUR BEATTY CONSTRUCTION,	  	)	  	
	LLC	  	)	  	
		  	)	  	
		  	)	  	
	Defendant.	  	)	  	

 MEMORANDUM OPINION 
 This is an action for breach of contract arising out of a “multi-use” condominium construction project located in Arlington,
Virginia. The parties to the contract are Plaintiff/Counter-Defendant Comstock Potomac Yard, L.C. (“Comstock”) and Defendant/Counter-Plaintiff Balfour Beatty Construction, LLC (“Balfour Beatty”).  
  

	 	I.	Background and Undisputed Factual History 

 On or about November 12, 2004, Comstock, a developer, entered into a $92 million contract with Centex Construction Co., LLC for the construction of a multi-use condominium complex called The Eclipse
on Center Park Condominium (“the Project”) located in Arlington, Virginia. The Project involved the construction of two high rise towers (“the East and West Towers”), a below-ground parking garage, some 465 residential units, and
80,000 square feet of commercial retail space. Compl. ¶ 6; Answer ¶ 6. Balfour Beatty later acquired the rights to this General Conditions Contract. Pursuant to the Contract, Centex (later Balfour Beatty) served as the general contractor
on the Project, contracting with and supervising specialized subordinate contractors throughout construction of the complex. For its part, Comstock entered into a contract with Davis Carter Scott, Ltd. (“DCS”) on November 17, 2004, to
retain DCS’ services as the Project architect. (BB Ex. 97). 
  

 1 

 Among its primary obligations under the General Conditions Contract, Balfour was required to
achieve “Substantial Completion” of the Project “not later than Seven Hundred Sixty-Two (762) days from the date of commencement.” CPY Ex. 82, Contract § 3.3; Countercl. ¶ 11. This set December 16, 2006 as the
projected date of substantial completion. Countercl. ¶ 12. 
 Throughout the pendency of construction, a number of disputes
arose for which each party felt it incurred damages. Without delving into each of those issues, a number of these disputes centered on delays which prevented the Project’s full completion. On March 10, 2006, Balfour sent Comstock Schedule
Update 16 (“PY16”), which covered the period ending February 28, 2006, showing that each milestone would not be met. CPY Ex. 116. 
 Balfour and Comstock ultimately negotiated a time extension in Change Order 15 on May 25, 2006,1 for which Comstock paid additional funds to Balfour. CPY Ex. 89-A; BB Ex. 511; Tr. 115:14 - 117:18. 
 Complicating matters, in December of 2007, a subcontractor to Balfour Beatty named Atlas Comfort Systems, USA, LP (“Atlas”) filed
two mechanic’s liens in the amount of approximately $1.4 million against the Project. In an attempt to resolve some of the disputes that had arisen between the parties, and with the intention of removing these liens from the Project,
Comstock and Balfour Beatty entered into a settlement agreement on January 30, 2008 called the Lien-Free Completion Agreement (“LFCA”), though the LFCA left some disputed issues open for further negotiation. 
  

	1	 Change Order 15 had an “effective date” of May 25, 2006, though it was signed on May 31, 2006 by Comstock and on June 1, 2006
by Balfour. 

  

 2 

 As part of the Agreement, Balfour Beatty agreed that it would “not at any time file or
record a lien against the Project.” Balfour Beatty, however, after it formed a belief that Comstock breached the new deal, filed two mechanic’s liens against the Project. After those lien filings, Comstock initiated the instant lawsuit
against Balfour Beatty, alleging breach of contract (Count I), slander of title (Count II), and abuse of process (Count III). Balfour Beatty responded by filing its own counterclaim asserting claims of breach of contract (Counterclaim Count I),
breach of contract/specific performance (Counterclaim Count II), changes to the contract (Counterclaim Count III), breach of implied duty not to hinder or delay contract performance (Counterclaim Count IV), and enforcement of the mechanic’s
liens (Counterclaim Count V). 
  

	 	II.	Procedural Posture 

 Comstock initiated this action by filing a Complaint on September 3, 2008. Balfour Beatty filed its Answer and Counterclaims on October 14, 2008. On April 20, 2009, the Court issued an Order and Memorandum Opinion finding
that (1) the Lien-Free Completion Agreement was supported by consideration; (2) the lien waiver provisions in the Agreement were unconditional; (3) Comstock did not breach the Agreement before Balfour Beatty filed the liens; and
(4) the liens were invalid. Because the Court invalidated those liens, the claims related to the liens (i.e., Counterclaim Count V and Third Party Complaint Count I) were dismissed with prejudice, which resulted in the termination of the
hundreds of Third Party Defendants as parties to this case. 
  

 3 

 On July 7, 2009, both parties moved for partial summary judgment regarding
Comstock’s complaint, and Comstock moved for partial summary judgment on Balfour Beatty’s counterclaims. On August 14, 2009, the Court granted Balfour Beatty’s Motion for Summary Judgment regarding Comstock’s Slander of
Title (Count II) and Abuse of Process (Count III) claims and granted Comstock’s Motion for Summary Judgment on the issue of whether Balfour Beatty breached the Lien-Free Completion as to the first two breach elements only and provided that
Comstock may attempt to meet the third and final element by proving damages beyond a reasonable certainty at trial. The court also granted Comstock’s Motion for Summary Judgment as to Balfour Beatty’s delay claims, holding that Balfour
Beatty may only pursue the six primary delay claims that were outlined in Balfour’s expert’s report. 
 A bench trial
then proceeded before this Court from September 8 through September 16, 2009. Attached to and referenced throughout this Opinion is an addendum, detailing the Court’s findings of facts. 
  

	 	III.	Conclusions of Law 

 As a matter of law, this lengthy trial can be reduced to two claims for damages: 1) for breach of the contract to construct the Project (“the Construction Contract”); and 2) for breach of the contract which the parties refer to as
the Lien Fee Completion Agreement. In both instances, the Court notes that the law in Virginia affords the words of a contract their full effect and does not allow a court to unjustifiably insert terms or obligations not contemplated by the
contracting parties. See Ames v. American Nat’l Bank, 163 Va. 1,38 (1934). 
  

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	 	i.	Count I: Breach of the Construction Contract 

 As noted above, the evidence introduced at trial, in large measure, revolved around whether or when Balfour achieved “Substantial Completion” on the Project and who is responsible for any
deviation from the Contract’s “Substantial Completion” date. Based on the foregoing findings of facts, the Court reaches the following conclusions of law. 
  

	 	a.	The Contract, as Modified by Change Order 15, Controls 

 The initial source of authority controlling construction of the Project is the November 12, 2004 Contract executed by Comstock and Balfour. The Contract provides that Balfour’s work on the
Project would meet certain interim milestones, and that failure to do so would result in Balfour’s payment of liquidated damages to Comstock. The Contract further provides that Balfour’s work on the entire project would meet a
“Substantial Completion” deadline. Under the Contract, Substantial Completion constitutes: 
  

	 	(i)	Construction is complete, in accordance with the Contract Documents, so that [Comstock] can lawfully occupy or use the Work (or a designated portion thereof for the use
for which it is intended), 

  

	 	(ii)	all remaining punch list items can be reasonably and ordinarily expected to be completed within thirty (30) days, and 

  

	 	(iii)	A Temporary Certificate of Occupancy (“TCO”) for the portion of the Work required to achieve Substantial Performance as set forth in the Contract Documents,
including the Project Schedule, has been issued by Arlington County...., and 

  

	 	(iv)	90% of individual condominium units and all associated common areas within each milestone are complete for turnover/delivery to unit owners. 

Gen. Cond., § 8.1.3, CPY Ex. 82. The Contract also provides the process Balfour was to follow if circumstances arose which excusably delayed meeting
the timelines set forth in the Contract. Id. 
  

 5 

 Change Order 15 (“CO15”) modified the contract. Comstock argues that CO15 acted as
an accord and satisfaction for all delays through April 30, 2006. Generally, “[t]he doctrine of accord and satisfaction provides a method of discharging a contract or cause of action by which the parties may first agree to give and accept
something other than that which is due in settlement of the claim or demand of one party against the other, and then perform their agreement.” WILLISTON ON CONTRACTS § 73:27; see also Lindsay
v. McEnearney Associates, Inc., 260 Va. 48, 54 (Va. 2000). In CO15, Comstock further committed to pay additional funds as consideration for the improvement of the revised interim milestones by two weeks. BB Ex. 511, ¶3(a)).
These modified milestones were based on a revised schedule Balfour prepared called PYR2. 
 Importantly, although CO15 updated
the Project’s timelines, it did not discard Balfour’s overarching requirement to achieve Substantial Completion as originally defined in the Contract. 
  

	 	b.	Balfour Beatty is Responsible for the Delays in Meeting the Projected Substantial Completion Date 

 Change Order 15’s additional compensation and extension of “Substantial Completion” milestones were agreed to be “full
consideration for any and all delays to the Project through April 30, 2006.” (CPY Ex. 89-A; BB Ex. 511). Thus, Balfour assumed responsibility for all delays to the Project through April 30, 2006 not provided for in CO15. It was
abundantly clear from the evidence introduced at trial that the interim milestones and “Substantial Completion” dates were not ultimately met. Thus, the salient question for the Court is whether the contractual provisions which levy
responsibility for these delays on Balfour remain in force or whether the occurrence of some fact relieves Balfour of that burden. 
  

 6 

	 	1.	Balfour Beatty is Responsible for Those Delays Attributable to Poor Performance by Subcontractors 

 Under the Contract, Balfour was required to “supervise and direct the Work, using [Balfour’s] best skill and attention. [Balfour]
shall be solely responsible for and have control over construction means, methods, techniques, sequences, and procedures and for coordinating all portions of the Work under the Contract...” CPY Ex. 82, Gen. Cond. §3.3.1. Specifically,
even though Comstock paid certain subcontractors directly for design work, the Contract provides: 
 The
Mechanical/Electrical/Plumbing portion of the Work is being performed by the Contractor on a design-build basis with Cherry Lane Electrical Service Company and Atlas Air Conditioning Company. Owner shall pay directly to Cherry Lane Electrical
Service Company and Atlas Air Conditioning Company the design costs under their respective subcontracts with Contractor. Nevertheless, Contractor shall be responsible for performance of the MEP Work on a design-build basis in accordance with the
Contract Documents. 
 CPY Ex. 82, Gen. Cond. §3.1.5. 
 Based on the attached findings of fact, the Court concludes that a central contributing factor to the delays incurred on the project after CO15 was Balfour’s inadequate supervision of independent
contractors. Under the Contract, it was specifically Balfour’s responsibility to increase manpower, increase the number of working hours per shift or the number of shifts, in addition to advancing activities as needed to meet the milestones.
Gen. Cond. §3.10.4. Moreover, as noted, it was Balfour’s contractual duty to oversee and direct the work of the subcontractors employed on the project. While Balfour points to the facts that Comstock directly paid Cherry Lane and Atlas,
the Contract specifically provides that “[Balfour] shall be responsible for

  

 7 

 
performance of the MEP Work on a design-build basis in accordance with the Contract Documents.” CPY Ex. 82, Gen. Cond. §3.1.5. The Contract further states that Balfour was obligated to
“supervise and direct the Work, using [Balfour’s] best skill and attention. [Balfour] shall be solely responsible for and have control over construction means, methods, techniques, sequences, and procedures and for coordinating all
portions of the Work under the Contract, including coordination of the duties of all trades.” CPY Ex. 82, Gen. Cond. §3.3.1. 
 Comstock introduced a great deal of testimony and other evidence which demonstrated the inadequacy of the performance of these subcontractors. See, e.g., Findings of Fact at ¶20,40,52. Balfour’s efforts to introduce
testimony which implied that responsibility for the performance of Atlas, Cherry Lane, and other subcontractors in building the Project was anything other than the province of Balfour proved unpersuasive. 
  

	 	2.	Balfour Beatty’s Six (6) Grounds for Delay are Unavailing as Excusable Under the Contract 

 Pursuant to this Court’s August 14, 2009 Order and Memorandum Opinion, Balfour Beatty was restricted at trial to introducing
evidence on its delay claims to the six primary delays listed in Dr. Harmon’s report. The grounds asserted in that report are: (1) delays caused by Comstock’s alleged failure to obtain a building permit in a timely manner;
(2) delays caused by the alleged late approval of sprinkler drawings; (3) delays caused by a lack of utility services (e.g., gas service) on the worksite that allegedly prevented Balfour Beatty from having the resources necessary to
complete work; (4) delays caused by changes in the Fair Housing Act and Americans with Disabilities Act, which impacted, inter alia, the plumbing arrangement, cabinet installation, and wall

  

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placement; (5) delays caused by incomplete drawings and plans regarding the landscaping areas surrounding the two towers and retail units; (6) delays caused by a window order requiring
Balfour Beatty to fabricate, ship, and install new windows on East Tower floors eight through eleven, which were different than the lower windows. 
 As a preliminary matter, the Contract is clear on what constitutes an “excusable delay” and what procedures must be followed before a delay qualifies as “excusable.” To make a claim
for Excusable Delay under the Contract, Balfour had to adhere to the following procedure: 
 If the Contractor wishes to make
Claim for an increase in the Contract Time, including claims for Excusable Delay...written notice as provided herein shall be given. The Contractor’s Claim shall include an estimate of cost and of probable effect of delay on progress of the
Work. In the case of a continuing delay only one Claim is necessary. No adjustment to the Contract Time shall be granted, unless the Contractor furnishes documentation and evidence satisfactory to the Owner (1) demonstrating that the impacted
activities are on the critical path of the Project’s schedule consistent with any scheduling requirements in the Contract Documents: (2) establishing that the delay is beyond the control and not the fault of the Contractor, its
Subcontractors or supplies: and (3) demonstrating that the Contractor has complied with all claims and notice submission requirements in the Contract... 
 (CPY Ex. 82, Gen. Cond. § 4.3.8.1). In other words, in order to establish an “excusable delay”: (l) the impacted activities must have been on the critical path; (2) the delay must have
been beyond Balfour’s control (and that of its Subcontractors or suppliers); and (3) Balfour had to comply with all claims and notice submission requirements under the Contract. Based on the Court’s Findings of Fact, the Court is
convinced that Balfour failed to adhere to the Contract’s requirements pertaining to excusable delays and that none of the grounds proffered by Balfour suffice as an “excusable” delay under the Contract. 
  

 9 

	 	a.	Delays caused by Comstock’s alleged failure to obtain a building permit in a timely manner and the late approval of the sprinkler drawings.

 Comstock’s alleged failure to obtain a building permit in a timely manner was a central point of
contention between the parties at trial. In Dr. Harmon’s report, the first identified delay proceeds from the theory that the delay in obtaining a building permit kept Balfour from obtaining the Fire Sprinkler Permits. In turn,
Dr. Harmon’s second delay theorizes that because the Hydro inspections required a Fire Sprinkler Permit, all close-in approvals necessary to begin hanging drywall were consequently delayed due to the late approval of the sprinkler permit,
which in turn, is attributable to Comstock’s failure to obtain a building permit. 
 The Court declines
to adopt this theory, however, because the evidence introduced at trial simply does not support the theory that Balfour was unable to obtain the sprinkler permits because of the lack of a building permit.2 The testimony of J.D. Martin indicated that construction was
permitted to proceed above street level prior to the issuance of the building permits on the Project and acquisition of the permits was not the driving force behind the Project’s delays as Dr. Harmon represents. Tr. 260:1-8. Each trade,
except the fire sprinkler work, attained at least some close-in inspection approvals before the County issued a building permit. Additionally, J.D. Martin’s testimony revealed that he did not refuse to evaluate Atlas’ sprinkler drawing
because of the lack of a building permit. 
  

	2	 Moreover, the portion of Dr. Harmon’s report dealing with the supposed Building Permit delays was based on the Modified PYR2 start dates for
the Hanging Drywall Activity on the second floor (2W4070 and 2E4070, respectively). Tr. 1305:10-20, 1317:18 - 1318:6. Harmon used PYR2, the schedule that is “statused” through March 1, 2006 as opposed to PY18, the schedule that is
statused through April 30, 2006, in order to calculate the delay inserted for the purpose of her analysis. Tr. 1319:4-13. 

  

 10 

 Despite Balfour’s protests to the contrary, failure to obtain
sprinkler permits in a timely manner was ultimately Atlas’ responsibility as the design-build contractor under the Contract. Gen. Cond. §3.1.5. Martin testified that there were numerous reasons why the Atlas’ drawings were rejected,
none of which were the absence of a building permit. Tr. 517:13-17. Rather, Martin rejected Atlas’ plans simply because they were not code-compliant. Tr. 517:18-20. Atlas’ designs consistently contained defects, not the least of which was
a discrepancy involving the size of the “fire” and “domestic” water lines3 coming into the buildings from the street. As Dan Strotman testified at trial, based on the civil engineer’s drawings, which were complete when Atlas and Centex bid on the Project, the buildings were
constructed with a six-inch fire line and a four-inch domestic line running into the building. Tr. 270:10-16. However, Atlas’ design drawings for the fire sprinkler system allowed for an eight-inch fire line and a six-inch domestic water line.
Id. This discrepancy caused significant delays, as detailed in the Court’s Findings of Fact. 
 Further, the notion
that delays in hanging drywall are attributable to this building permit-sprinkler permit delay theory is equally unpersuasive. Balfour points to the testimony of Dan Strotman which indicated “there was the possibility that the building permit
delayed [Balfour] in some respects.” Tr. 362:21-23. Strotman further stated that “it’s possible that there were two to three to maybe four weeks of time that they could have been hanging drywall if they had a building permit in some
areas. Not all areas, but in some.” Tr. 379:22 – 380:1-4. Strotman’s testimony on this point, however, struck the Court as far from certain. More importantly, when considered in conjunction with evidence of the County’s
willingness to approve plans without the building permit and of the other trade-related delays occurring on both Towers, the testimony of Strotman is all the more speculative. 
  

	3	 Mr. Strotman clarified that “[d]omestic service is the water that runs out of your tap that you drink or runs into the toilet or runs into
the kitchen sink... The fire, the fire service is, serves the fire sprinklers. And it is not, it’s not tied into any kind of a meter, it goes directly to the fire pump out to the piping to the sprinkler heads if they are activated.”

  

 11 

 On the East Tower, the last close-in inspections on several upper floors were not for the
fire sprinklers, but were for plumbing, electrical, mechanical, or gas work. Tr. 290:2-15; BB Ex. 1135, Tab 14. Accordingly, the argument that the hanging of drywall was delayed by anything other than Atlas’ slow and deficient performance is
unpersuasive. As the Court notes in its attached Findings of Fact, the same was true with close-in inspections on the upper level of the East Tower, where the plumbing and gas trades were the last to receive close-in approval. Tr. 290:16-20; BB Ex.
1135, Tab 14. 
 In light of the foregoing, Comstock’s alleged failure to obtain a building permit in a timely manner was
not an “excusable delay” under the Contract. 
  

	 	b.	Delays caused by a lack of utility services on the worksite that allegedly prevented Balfour from having the resources necessary to complete work.

 Balfour also argues that Comstock failed to install certain utilities which were a necessary precursor to
Balfour completing certain tasks. Chief among these was the installation of gas service, which Balfour asserts it needed to test the hot water and heating systems and other punchlist work. Balfour also argues that Comstock failed to procure
telephone service for the Project in a timely manner, and therefore Balfour could not perform tests of the fire/life safety system. 
 However, Balfour’s expert, Dr. Harmon, opined that the lack of gas service related only to punchlist activities. No other testimony or evidence introduced by Balfour indicates to the Court that the lack of gas service actually
impaired Balfour and its subcontractors’ ability to perform work, punchlist or otherwise. As such, the Court

  

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heard no credible evidence that if the gas service had been provided earlier, Balfour could have completed punchout work on time. Moreover, the temporary phone line Comstock proposed would have
not have prevented testing if Balfour had actually completed all its other work and stood ready to start tests of the life safety systems. In the end, these issues were simply not factors contributing to delays on the Project. 
  

	 	c.	Delays caused by CCB46 and 46R – changes in design to meet FHA and ADA requirements. 

 Another of Balfour’s central grounds for excusable delay were the changes mandated in CCB46 and CCB 46R. These schedule updates dealt
with redesigns of the condominium units to comply with ADA and FHA requirements, which the parties agree necessitated significant work, such as demolishing pipes, relocating risers, changing partition layouts, x-raying, and
“core-drilling.” 
 However, CCB46 was issued before CO15, and based on the evidence at trial, the Court is persuaded
that any delays arising from the implementation of the CCB46 revisions were contemplated by the parties and subsumed within the CO15 agreement. Balfour further alleges that CCB46R delayed the progress of “rough in” work. As noted above,
the Court finds that Atlas’ “rough in” work was inconsistently paced and frequently delayed. CPY Exs. 262, 358; BB Ex. 1180; Tr. 1610:18 – 1612:13. Balfour argues that the CCB46R altered the fire sprinkler designs. However, as
Comstock notes, Balfour failed to present any application drawing or calculation to demonstrate how CCB 46R actually altered the sprinkler design. Balfour’s own expert did not perform any review of the CCB 46 and 46R drawings. 
  

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 Balfour also argues that the changes required by CCB 46R to the design of the cabinets
delayed the installation of those cabinets in the individual condominium units at the Project. However, the Court finds that Comstock mitigated the CCB 46R delays to cabinet fabrication by meeting with CAI, DCS and Balfour in Kansas City to review
and approve revised cabinet shop drawings for CCB 46R changes, and also paying to expedite shipment of the cabinets. Tr. 295:15-23; CPY Ex. 335. The real delay in installing the cabinets in the individual condominiums was not due to any change in
design before manufacturing, but due to the ongoing delays in hanging drywall at the time of the cabinets’ delivery. Tr. 302:3-12 
  

	 	d.	Delays caused by incomplete drawings and plans regarding the landscaping in CCB64 and by CCB 72. 

 Balfour also points to delays it attributes to changes necessitated by CCB64, which dealt with masonry work on two levels and was tied to
landscape work and to CCB72, which required Balfour to fabricate and install new windows on the eighth through eleventh floors of the East tower. However, Balfour offered little testimony or evidence regarding CCB 64 and CCB 72, and on the evidence
presented, the Court does not deem this a legitimate basis for delay of the Project by Balfour. 
  

	 	c.	Comstock did not Order Balfour to Accelerate 

 Balfour argues that Comstock directed Balfour to accelerate by indicating its wish to close as many units as possible in 2006. BB Br. at 11-12. The Court fails to see, however, how that directive by
Comstock did anything other than express what was already understood by the parties at the time of CO15’s execution: that Comstock desired Balfour to recover delays reflected in its PY18 schedule update and make as much progress on the
condominium units as possible. 
  

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 Rather, § 3.10.4 of the Contract specifically provides that if it became apparent to
Balfour that the Substantial Completion Date may not be met, unless the delays were excusable, Balfour was to: 
 (a) Increase
construction manpower to substantially eliminate the backlog of Work and overcome the delays to the Scheduled Substantial Completion Date; 
 (b) Increase the number of working hours per shift, shifts per day or the amount of construction equipment or any combination of construction equipment or any combination of the foregoing...

 (c) Reschedule and expedite activities to overcome the delays to the Scheduled Substantial Completion Date. 
 CPY Ex. 82, Gen. Cond. § 3.10.4). Moreover, if Balfour failed to do any of the foregoing within three days from Comstock’s request, Comstock could
“take appropriate action to overcome the delays to the Scheduled Substantial Completion Date...” Id. 
 Because the Court holds that none of Balfour’s reasons proffered constitute an excusable delay, Comstock’s admonitions to Balfour to increase the pace of work at the project were not orders to accelerate entitling Balfour to the
recovery of damages. 
  

	 	d.	Damages 

  

	 	i.	Liquidated Damages 

 The
Contract provides that failure to complete its work within the Contract time, and interim milestones set forth in Exhibit K. to the Contract, would result in payment of liquidated damages by Balfour. Gen. Cond. § 8.1.4. The Contract also
contains a clause which stated that that the liquidated damages amounts were reasonable and did not function as a penalty. CPY Ex. 82; Gen. Cond. § 8.1.4. Under the Contract, if Balfour failed to meet the Substantial Completion dates set
forth in the Project Schedule “due to the fault or neglect of [Balfour], [Balfour] shall pay to [Comstock] liquidated damages as follows”: 
 West Tower: 
 Floors 1-3 $1,500 per day 
 Floors 4-6 $3,000 per day 
 Floors 7-9 $4,500 per day 
 Floors 10-11 $6,000 per day 
  

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 East Tower: 
 Floors 1-3 $1,500 per day 
 Floors 4-6 $3,000 per day 
 Floors 7-9 $4,500 per day 
 Floors 10-11 $6,000 per day 
 CPY
Ex. 82, Gen. Cond. § 8.1.4. The Contract also provided that liquidated damages owed on any calendar day shall not exceed $12,000 in the aggregate.” In CO 15, the parties revamped the dates at which Balfour would begin payment of Liquidated
Damages if it failed to reach Substantial Completion as follows: 
  

								
	 West Tower:
	 		  			  	
	 Floors 2-3:
	 	10/9/2006	  	$	1,500 per day	  	
	 Floors 4-6:
	 	11/17/2006	  	$	3,000 per day	  	
	 Floors 7-9:
	 	12/08/2006	  	$	4,500 per day	  	
	 Floors 10-11:
	 	12/20/2006	  	$	6,000 per day	  	
	
	 East Tower:

	 Floors 2-3:
	 	11/22/2006	  	$	1,500 per day	  	
	 Floors 4-6:
	 	12/20/2006	  	$	3,000 per day	  	
	 Floors 7-9
	 	1/18/2007	  	$	4,500 per day	  	
	 Floors 10-11:
	 	2/8/2007	  	$	6,000 per day	  	
	
	 Hoist & Trash Chute Units

	 West Tower

	 Levels 2-4 12/08/2006 $4,500 per day

	 Levels 5-11 12/20/2006 $6,000 per day

	
	 East Tower

	 Levels 1-4 1/18/2007 $4,500 per day

	 Levels 5-11 2/8/2007 $6,000 per day

 BB Ex. 511. Thus, through CO15, the parties maintained the underlying obligation for Balfour to pay liquidated damages should Balfour fail to meet these
milestones, but pushed those milestones back for each level. Id. Under Comstock’s suggested calculations, Balfour would owe $9,069,000 in liquidated damages. 
  

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 Balfour argues, however, that CO15 went further in altering the conditions of the Contract.
Balfour contends that CO15 changed the agreement so that if “Owner Acceptance” – instead of “Substantial Completion” – was not achieved by the revised milestones, Balfour would begin paying liquidated damages. One
paragraph of CO15, ¶2.e., states that “[i]f Owner Acceptance is not achieved by the revised times of Completion/Interim Milestones dates, [Balfour] shall begin payment of Liquidated Damages as established in Section 8.1.4 of
[the Contract]” pursuant to the revised milestone dates listed above. B.B. Ex. 511 (emphasis added). On the other hand, the very first page of CO15, which appears to be a cover sheet of sorts, explicitly states “[t]he date of
Substantial Completion as of the date of this Change Order therefore is 02/15/2007.” (emphasis added). Other paragraphs in CO15 state that: 
 1. a. Article 3, Section 3.3 of the Agreement is amended to change the Completion date of the Work by 60 Calendar Days to February 15, 2007. 
 ... 
 b. In order to
satisfy these required dates, all facilities, systems, and improvements must be in place per Article 8 of [the Contract], and a Certificate of Occupancy must have been issued by Arlington County. 
 Id. Attempting to give full effect to the term “Owner Acceptance” as it appears in CO15 leads to the issue of whether the term is
ambiguous. 
 Of course, whether a term of a contract is ambiguous is a question of law. Nextel WIP Lease Corp. v.
Sounders, 276 Va. 509, 516 (2008). Virginia adheres to the “plain meaning” rule and the Court gives full effect to all contractual language if it can be read in conjunction without conflicting. Berry v. Klinger, 225 Va. 201,
208 (Va. 1983). Thus, “meaning must be given to every clause. The contract must be read as a single document.” Id. “When determining a contract’s plain meaning, the words used are given

  

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their usual, ordinary, and popular meaning.” Pocahontas Mining Ltd. Liability Co. v. Jewell Ridge Coal Corp., 263 Va. 169, 173 (Va. 2002). Reading CO15 as a whole, it is
clear “Owner Acceptance” is intended to represent a point of some significance in the Project’s progression, the nonoccurrence of which by a certain point in time would result in the levying of liquidated damages. 
 Further, while “contractual provisions are not ambiguous merely because the parties disagree about their meaning,” it is clear
that Balfour and Comstock differ greatly in their interpretation of “Owner Acceptance” as it appears in CO15. Dominion Savings Bank, FSB v. Costello, 257 Va. 413,416 (Va. 1999). Comstock and Balfour offer different meanings for the
term as it appears in CO15. Comstock notes that “Owner Acceptance” is not defined in the Contract or CO15, but also notes that the flow chart attached to CO15 indicates that “Owner Acceptance” would follow the completion of
punchlist work and the issuance of Certificates of Occupancy, just as the Contract contemplated with “Substantial Completion.” Thus, Comstock argues, “Owner Acceptance” as used in CO15, is merely analogous to “Substantial
Completion” in the Contract and does not alter the point at which liquidated damages should cease running. Balfour counters that liquidated damages cannot be imposed because “Owner Acceptance” occurred at some point prior to the dates
provided in the Liquidated Damages chart appearing on page two of CO15. 
 Absent from Balfour’s briefing, however, is any
reference as to when “Owner Acceptance” actually occurred, other than a vague reference stating that December 2008 was “two years after the initial Owner Acceptance dates.” B.B. Rebut, at 2. The contention, however, that Balfour
had sufficiently met its contractual obligations in late

  

 18 

 
2006 so as to warrant tolling liquidated damages is completely implausible in the face of evidence presented at trial. For instance, on January 13, 2007, Comstock sent a letter to Balfour,
threatening default termination of the Contract due to recurring delays and unacceptable performance. B.B. Ex. 825. Further, CO15 seem indicates that the parties sought to push all timelines back by approximately sixty days, making Balfour’s
proffered interpretation of “Owner Acceptance” completely inconsistent with that provision of CO15. 
 Ultimately,
whether “Owner Acceptance” is sufficiently ambiguous to warrant the consideration of parol evidence or not, the result is the same. If unambiguous, the Court reads “Owner Acceptance” consistently with the rest of CO15 as pushing
the Substantial Completion date back from December 16, 2006 to February 15, 2007, but not displacing the occurrence of “Substantial Completion” as the tolling event for liquidated damages. If the term is ambiguous, the Court
would look to evidence such as the testimony of Mr. Williams which supports the proposition that CO15 did not revise “Substantial Completion” as the tolling event for liquidated damages. Tr. 118:22-119:1. 
 Balfour also raises a number of additional objections to the enforcement of the liquidated damages clause. 
 First, Balfour argues that Comstock failed to present sufficient evidence to establish the cause and duration of the delays needed to
properly assess any delay damages. Balfour cites to TechDyn Systems Corp. v. Whittaker Corp., 245 Va. 291, 296 (Va. 1993), in which the Virginia Supreme Court noted “that where there is evidence of damage from several
causes, for a portion of which a defendant cannot be held liable, a plaintiff must present evidence that will show within a reasonable degree of certainty the

  

 19 

 
share of damages for which that defendant is responsible.” Balfour cites this TechDyn as if the Virginia Supreme Court were discussing the standard for establishing liability for
liquidated damages specifically, when instead the court was discussing damages for delays generally. 
 It has long been held
that: 
 Because of the difficulty of ascertaining with certainty the damages arising from failure to complete working contracts
within the stipulated time, the parties to such contracts frequently provide for the payment of a specified amount as liquidated damages for failure to perform the contract in time and the courts have unhesitatingly upheld and enforced such
provision. 
 Schmulbach v. Caldwell, 196 F. 16, 25 (4th Cir. 1912). Furthermore, “the purpose of a liquidated damages provision is
to obviate the need for the nonbreaching party to prove actual damages.” O’Brian v. Langley School, 256 Va. 547, 552 (Va. 1998). 
 Only if Balfour were to establish that the liquidated damages sought by Comstock amounted to an unenforceable penalty would Comstock be forced to prove actual damages. O’Brian, 256 Va. at 552.
Under Virginia law, a clause for liquidated damages “will be construed as a penalty when the damage resulting from a breach of contract is susceptible of definite measurement, or where the stipulated amount would be grossly in excess of actual
damages.” Brooks v. Bankson, 248 Va. 197, 208 (Va. 1994). Thus, the “amount agreed upon will be construed as enforceable...when the actual damages contemplated at the time of the agreement are uncertain and
difficult to determine with exactness, and when the amount fixed is not out of all proportion to the probable loss.” Id. (emphasis added). Analysis of these provisions “depends upon the intent of the parties as evidenced by the
entire contract viewed in light of the circumstances under which the contract was made.” Taylor v. Sanders, 233 Va. 73, 75, 353 S.E.2d 745, 747 (1987). Importantly, the burden to prove the impropriety of enforcing the
liquidated damages clause falls on Balfour as the breaching party. Boots, Inc. v. Prempal Singh, 274 Va. 513, 517 (Va. 2007). 
  

 20 

 Balfour does not argue that, at the time of contracting, Comstock’s damages in event of
default were certain and not “difficult to determine.” Id. at 518. Rather, Balfour argues that since Comstock is at least partially responsible for delays to the project, liquidated damages cannot be assessed. However, given that
the Court finds that Comstock was not responsible for delays to the project this argument falls under its own weight. 
 Rather,
the most difficult aspect of enforcing the liquidated damages clause is that the Contract’s benchmark for ending the imposition of liquidated damages – the issuance of certificates of Substantial Completion – never occurred. Thus, as
each party tacitly agrees, if the Court is to impose liquidated damages, it must ascertain a “begin” and “end” date for the running of these damages. 
 Comstock suggests that calculation of liquidated damages should begin at the new milestone dates established in CO15 previously referenced and end on December 1, 2008. Comstock supports
December 1, 2008 as the cutoff for liquidated damages based on Comstock President Gregory Benson’s estimation that it should have taken an extra ninety days to complete the punchlist work from the date Balfour ceased its work on the
Project in August of 2008. Tr. 680:7-18. 
 Balfour argues that the Court should instead look to: the County’s issuance of
Temporary Certificates of Occupancy (“TCO”) or Certificates of Occupancy (“CO”); Comstock’s “use” and sale of individual condominium units; and/or Comstock’s “admissions” that the Project was
substantially complete. 
  

 21 

 Regarding Comstock’s purported “admissions” of substantial completion, none
of the instances cited by Balfour suffice to toll the enforcement of the liquidated damages clause. Regarding Comstock’s use and sale of some of the individual condominium units in the West Tower, the Contract provides for Comstock’s
occupancy of the Project without forgoing its entitlement to liquidated damages. Gen. Cond. § 8.1.4. If Balfour considered any of the units in the Project to be substantially complete, Balfour could have initiated the procedure provided by
§9.8.2 of the Contract, but failed to do so here. Furthermore, the Contract’s explicit prerequisites for Substantial Completion also include that the punchlist be reasonably capable of completion within 30 days and that 90% of the units be
complete for turnover/delivery to unit owners. Gen. Cond. §8.1.3. Balfour’s suggestion that the Court cease the running of liquidated damages at the issuance of TCOs/COs or Comstock’s “use” and sale of some of the individual
condominium units would disregard these contractual prerequisites. 
 Balfour cites to Perini Corp. v. Greate Bay
Hotel & Casino, Inc., 129 N.J. 479, 486,610 A.2d 364, 367 (1992), abrogated on other grounds by Tretina Printing, Inc. v. Fitzpatrick & Assocs., 135 N.J. 349,640 A.2d 788 (1994) which discusses the general concept
of substantial completion provisions in the construction industry. That court noted “[c]ourts have found that liquidated damages may not be imposed after the owner ‘is able to put the project to its beneficial use or the owner has taken
occupancy’” and that “liquidated damages otherwise would become a penalty because those damages are designed to approximate an owner’s loss before occupancy.” Perini, 610 A.2d at 367. 
  

 22 

 The fact that Comstock was able to “occupy” and sell some units does not indicate
to the Court that Comstock was able to put the relevant portions of the Project to its “beneficial use.” Though Balfour notes that Comstock was able to sell a number of units by December 31, 2006 for a profit of some $46 million,
Comstock justifiably points out that it lost some $70 million in sales revenue. BB. Ex. 1209; Tr. 679:4-21. In the end, regardless of the limited extent to which Comstock was able to use some of the condominiums, the conditions set forth in
§8.1,3 of the Contract still had to be satisfied. In fact, the Contract specifically provides that “[u]nless otherwise agreed upon, partial occupancy or use of a portion or portions of the Work shall not constitute acceptance of Work not
complying with the requirements of the Contract Documents.” Gen. Cond. §9.9.3. Thus, enforcement of the liquidated damages clause does not constitute a penalty because the Court finds that the Project was not being sufficiently used for
its intended purpose nor did Balfour comply with the Contract’s explicit prerequisites to substantial completion. 
 The
issue of “use” and sale of the West Tower units dovetails with Balfour’s additional argument that Comstock’s “occupancy” of the individual units delayed Balfour’s performance and precludes Comstock’s
collection of liquidated damages during that period. As noted, the Contract specifically provides that Comstock’s exercise of its option under the Contract to occupy all or any portion of the Project prior to Substantial Completion did not:

 toll, waive or diminish in any way damages for which [Balfour] is responsible under this paragraph, except that if such
occupancy further delays Substantial Completion of the Work, through no fault of [Balfour] or its Subcontractors, [Balfour] shall not be responsible for liquidated damages during the period of such additional delay.” 
  

 23 

 CPY Ex. 82, Gen. Cond. § 8.1.4. Balfour argues that Comstock did not properly occupy the units under
the Contract because it failed to enter into an agreement pursuant to §9.9.1 of the Contract. That section provides: 
 The
Owner may occupy or use any completed or partially completed portion of the Work at any stage when such portion is designated by separate agreement with the Contractor, provided such occupancy or use is consented to by the insurer as required under
Section 11.4.1.5 and authorized by public authorities having jurisdiction over the Work. Such partial occupancy or use may commence whether or not the portion is substantially complete, provided the Owner and Contractor have accepted in writing
the responsibilities assigned to each of them for payments, retainage, if any, security, maintenance, heat, utilities, damages to the Work and insurance, and have agreed in writing concerning the period for correction of the Work and commencement of
warranties required by the Contract Documents. When the Contractor considers a portion substantially complete, the Contractor shall prepare and submit a list to the Architect as provided under Section 9.8.2. Consent of the Contractors to
partial occupancy or use shall not be unreasonably withheld. The state of the progress of the Work shall be determined by written agreement between the Owner and Contractor, or if no agreement is reached, by decision of the Architect. 
 CPY Ex. 82, Gen. Cond. §9.9.1. Comstock emphasizes the portion reading “[w]hen the Contractor considers a portion substantially complete, the
Contractor shall prepare and submit a list to the Architect as provided under Section 9.8.2” as putting the onus on Balfour to satisfy any partial occupancy requirements. The Court agrees. Further, the Court looks to the final sentence
which states that “[t]he state of the progress of the Work shall be determined by written agreement between the Owner and Contractor, or if no agreement is reached, by decision of the Architect” as indicative that this section is aimed at
averting future disputes regarding the condition of units should Comstock decide to occupy some of them, which never occurred here. Failure to enter into an agreement as contemplated by this section is therefore not fatal. Furthermore, as noted
above, the Court finds that Comstock’s occupancy of the units did not further any delay to the

  

 24 

 
Project. Thus, even if Comstock failed to strictly comply with §9.9.1, that failure was immaterial to the overall performance of the Contract and should certainly not work to excuse Balfour
from its liquidated damages provision. See, e.g., Horton v. Horton, 254 Va. 111, 115 (Va. 1997)(“Generally, a party who... breach[es] ... a contract is not entitled to enforce the contract. An exception to this rule arises
when the breach did not go to the ‘root of the contract’ but only to a minor part of the consideration.”). 
 Balfour further argues that liquidated damages cannot be imposed for delays to the East Tower because Comstock waived its claim to damages by agreeing to a change in the work schedule in a March 6,
2007 “Letter of Understanding.”4 However, that
letter clearly stated that “the parties “could not come to an agreement as to the cause, responsibility, fees, damages and/or a succinct timeline for completion of the project.” BB Ex. 861. Rather, that letter, at most, memorialized
the parties’ efforts to improve the pace of work on the Project and, by its own terms, was drafted as part of an effort to “come up with mutually agreeable goals and the process for schedule improvement.” Id. Balfour’s
reliance on the letter is entirely misplaced and did not work to waive Comstock’s claim to liquidated damages. 
 Finally,
there is some discussion in the briefs (and previous briefs incorporated by reference) that Comstock forfeited its claim to liquidated damages by failing to comply with a notice requirement which was a prerequisite to imposing liquidated damages.
Balfour relies on §§4.2.1 and 4.3.2 which fall under the general rubric of “Claims and Disputes.” Specifically, §4.3.2 states that claims by either party must be initiated within 
  

	4	 Balfour’s Post-Trial Brief references a March 6, 2006 Letter of Understanding, but based on its Proposed Findings of Fact, the Court is
confident Balfour is referencing the Letter of Understanding marked as BB Ex. 861, which, as noted above, actually shows a drafting date of February 25, 2007, though it was emailed as an attachment on March 6, 2007.

  

 25 

 twenty-one days of the occurrence of the event giving rise to the claim, unless otherwise provided in the
Contract. Thus, Balfour argues, Comstock did not properly notice its demand for liquidated damages and is now barred from doing so under §4.3.2 of the Contract. 
 However, the Court cannot agree with Balfour that this provision limits Comstock’s ability to recover liquidated damages here. Rather, the Court favors the reading of the Contract that “gives
full effect to all contractual language if it can be read in conjunction without conflicting.” Berry, 225 Va. at 208 (Va. 1983). The Court reads §8.1.4 as imposing liquidated damages automatically upon failure to meet the provided
milestones, which is only logical given the entire purpose of a liquidated damages provision as discussed above. Thus, the Contract “provides otherwise” under the explicit language of §4.3.2. Furthermore, reading §4.3.2 to
mandate a noticed “claim” for each day liquidated damages runs (and for each individual floor) would read into the contract an onerous and inherently conflicting requirement. The Court declines to do so. 
 Also problematic to Balfour’s waiver argument is the aforementioned lack of DCS’s issuance of Certificates of Substantial
Completion and the other unmet prerequisites to Substantial Completion. Under §8.1.3, of the Contract, Comstock had a completely justifiable ground for believing that liquidated damages continued to run in the absence of these prerequisites
being met, and thus the court is left to wonder when Balfour would have Comstock issue a notice of a “claim” under §4.3.2 when the “claim” was arguably still accruing through the pendancy of this suit. Rather, the Court
finds Comstock’s February 14, 2007 Letter indicating that Balfour had failed to meet all interim milestones in Change Order 15 is sufficient notice to Balfour that it would assess liquidated damages for Balfour’s late completion. CPY
Ex. 844. 
  

 26 

 In light of the foregoing, the Court will enforce the liquidated damages provision of the
Contract as suggested by Comstock, save one revision. Given that all contractual prerequisites for Substantial Completion were never met, one could argue that liquidated damages could continue running through the present date. That, however, would
encroach too far into the realm of penalizing Balfour, which, of course, liquidated damages cannot do. Gordonsville Energy, L.P. v. Virginia Elec. and Power, Co. 257 Va. 344,355, (Va.l999)(“a liquidated damages provision may constitute a
penalty and, therefore, be unenforceable when the amount agreed to is ‘out of all proportion to the probable loss.’” (citations omitted)). 
 Under the Contract, Substantial Completion was to occur at a point in time when, inter alia, “all remaining punch list items can be reasonably and ordinarily expected to be completed within
thirty (30) days.” As mentioned, Comstock suggests December 1, 2008 as the cutoff for liquidated damages based on Comstock President Gregory Benson’s estimation that it should have taken an extra ninety days to complete the
lingering punch list work from the point Balfour ceased its work on the Project in August of 2008. The Court gives great weight to this testimony by Mr. Benson, as he was on site almost daily once the delays began. Tr. 656: 2-6. 
 However, since the Substantial Completion was to be measured, not when all punch list was completed, but when the work was within thirty
days of completion, November 1 is the more appropriate date for ceasing the imposition of liquidated damages. Given §8.1.4’s cap of $12,000 in liquidated damages per day, the Court deducts $360,000 from Comstock’s calculation
of liquidated damages, resulting in a final amount of $8,769,000. 
  

 27 

 In the end, the Court’s holding does nothing more than confirm that “a
‘liquidated damages’ clause leaves in the hands of the parties the issue of likely actual owner damages to be sustained due to delayed completion, and contractors are presumed to have taken such clauses into consideration in pricing the
contracts they accept.” 5 BRUNER & O’CONNOR CONSTRUCTION LAW § 15:82 (citation omitted). 
  

	 	ii.	Other Damages 

 In
addition to the liquidated damages discussed above, Comstock asserts damages on several additional grounds. First, Comstock also seeks damages related to “financing” and unit cancellations arising from Atlas’ filing of two liens which
Balfour failed to timely discharge. Comstock seeks $2,994,720.00 in damages for the “financing” fees and $303,813.00 in damages arising out of the unit cancellations. Comstock also seeks recovery for other damages it incurred in completing
the Project after Balfour’s deficient performance. Comstock labels these damages as: “costs to supplement punchlists”; “additional and extended personnel costs”; “estimated future costs to complete punchlist”; and
“estimated future costs to complete warranty list” which allegedly total $4,472,689.22. 
 An initial point of inquiry
for the Court regarding all of these damages is whether they constitute direct or consequential damages. The Contract specifically provides that the parties “waive Claims against each other for consequential damages arising out of or relating
to this Contract.” Gen. Cond. §4.3.11. 
  

 28 

	 	1.	Consequential vs. Direct Damages 

 The
parties agree that, as a matter of law, “[d]irect damages are those that flow ‘naturally’ from a breach of contract; i.e., those that, in the ordinary course of human experience can be expected to result from the breach, and
are compensable.” R.K. Chevrolet, Inc. v. Hayden, 253 Va. 50, 56, 480 S.E.2d 477 (1997). On the other hand, “[c]onsequential damages are those which arise from the intervention of ‘special circumstances’ not
ordinarily predictable.” Virginia Polytechnic Institute and State University v. Interactive Return Service, Inc., 595 S.E.2d 1, 7 (Va. 2004)(citing Roanoke Hosp. Ass’n v. Doyle & Russell, Inc., 214 S.E.2d 155,
160 (Va. 1975)). 
 The Contract goes further and defines “consequential damages,” to include specifically:

 This mutual waiver includes... damages incurred by [Comstock] for rental expenses, for losses of use, income, profit,
financing, business and reputation, and for loss of management or employee productivity or of the services of such persons; 
 Gen. Cond.
§4.3.11. As in all other contexts of this trial, the Court endeavors to give full effect to the terms of the Contract as they are written. Thus, the Contract’s definition of “consequential damages” will control to the extent it
specifically identifies waived damages. 
  

	 	a.	Comstock’s Claims for “Financing” and Unit Cancellation Costs Stemming from Balfour’s Failure to Discharge Its Subcontractors’ Liens 

 The Contract specifically compels Balfour to release or otherwise discharge subcontractor’s liens within
five days for amounts paid by Comstock or for amounts that the subcontractor previously provided. Gen. Cond. §§3.18.3, 5.3.3. On December 14, 2007, Atlas filed two mechanic’s liens on the project totaling approximately

  

 29 

 
$1.3 million.5 CPY Ex. 5. Balfour breached the contract by failing to secure the release of those liens. Tr. 66:16-18. Balfour argues that, regardless of any breach, Comstock’s assertion of damages totaling $2,994,720.006 in the form of various fees incurred in securing alternate financing
are not direct damages arising from such a breach. 
 Comstock argues that the damages it seeks in the form of extra financing
arise directly out of Balfour’s failure to bond off or otherwise obtain the release of liens filed by Atlas on the Project and thus do not fall within the purview of the consequential damages waiver in the Contract. Balfour responds by
pointing to §4.3.11 of the Contract which states that the parties’ waiver of consequential damages includes those losses “incurred by [Comstock] for... losses of... income, profit, [and] financing.” (emphasis
added). 
 In reading §3.18.3 of the Contract in conjunction with §5.3.3, the Court infers that Comstock sought to
protect itself from the negative consequences which flow from a subcontractor’s filing of a lien on the project, one of which may logically be the impairment of Comstock’s ability to secure financing using the Project property as
collateral. However, the waiver explicitly contemplates and waives claims for losses incurred by Comstock for “losses of... financing.” Gen. Cond. § 4.3.11. The Court finds this to be a clear and unambiguous waiver of precisely the
type of damages Comstock seeks. 
  

	5	 These liens are
not to be confused with the two mechanic’s liens Balfour filed on July 29, 2008 after signing the LFCA, which is discussed later in this Opinion. 

	6	 This amount is
comprised of: a “Modification Fee” paid to Corus Bank of $133,276.64; the payment of a transaction fee of $200,000 to Stonehenge Funding, LLC; the payment of fees of $530,520.00 and $2,122,520.00 to KeyBank; and $8,844.92 in legal fees as
part of the payoff of the Corus loan. 

  

 30 

 The Court is compelled to say the same about the ancillary losses Comstock asserts which
arise from the lost sales of condominium units while the Atlas liens encumbered the Project. Comstock argues that it lost eight sales contracts during the time period that the Atlas liens were on the Project in the total amount of $2,885,419.
Comstock does not appear to seek damages directly for those lost sales, perhaps because they too are explicitly waived, but rather argues that because of the unit cancellations, Comstock was not able to make payoffs to the bank which caused Comstock
to incur additional interest of in the amount of $225,273.00 on a loan. Tr. 64:17-22; 65:8-20; Tr. 62:16 – 64:16; 65:4-7; CPY Ex. 253. Comstock also claims it paid homeowner’s fees for these units that went unsold totaling $49,980.00 and
real estate taxes associated with ownership of the units totaling $28,560.00. Tr. 64:17 – 66:2. 
 Comstock fails to
establish entitlement to these damages for two reasons. First, Comstock failed to introduce sufficient evidence to tie these lost sales to the liens on the Project. The Court did hear testimony, however, from Comstock’s own witnesses that the
condominium market in Northern Virginia was on the decline at the time the liens were filed. Tr. 667:1-5. Thus, there is every possibility that the lost sales contracts, and these corresponding fees, were the result of something other than
Balfour’s filing of the liens. Second, the Court must conclude that the Contract’s waiver of consequential damages provision also includes these kinds of losses. Again, the waiver covered “damages incurred by [Comstock] for rental
expenses, for losses of use, income, profit, [and]financing...” Gen. Cond. §4.3.11. While these losses arguably fall under rental expenses or loss of income and profit, the Court would also note that it does not read the waiver as
exclusive. This means that while the Court reads §4.3.11 to include certain types of losses, as it explicitly states, there is no corresponding clause stating that the listed types of loss are somehow exclusive. The Court concludes that
the incurred interest, homeowner fees, and taxes do not “flow naturally” from the breach of the Contract, and therefore these are consequential damages which Comstock waived in signing the Contract. 
  

 31 

	 	b.	Comstock’s Damages for Completion of the Project 

 Next, Comstock seeks to recover a number of expenses it allegedly incurred in correcting and concluding Balfour’s deficient and incomplete work. In order to recover for breach of contract under
Virginia, three elements must be established: (1) the existence of a legally enforceable obligation or promise between the defendant and plaintiff; (2) the defendant’s breach of this obligation or promise; and (3) injury or
damage to the plaintiff caused by that breach. Brown v. Harms, 251 Va. 301, 306 (Va. 1996). 
 Before proceeding,
the Court concludes that, unlike the damages sought in the preceding section, the damages arising from Balfour’s unsatisfactory work are not of the sort contemplated and waived by § 4.3.11 of the Contract. The Court also concludes that
LFCA clearly reserves Comstock’s right to seek additional damages under the Contract and only settled those charges which were specifically enumerated by the parties in executing the LFCA. 
  

	 	i.	Costs to Supplement Punchlist Paid to Third Parties and Additional and Extended Personnel Costs 

 Comstock argues that the Contract obligated Balfour to produce detailed lists of deficiencies, and that because Balfour did not do so,
Comstock is entitled under the Contract to “supplement Balfour’s Work.” Specifically, if Balfour failed to perform work as required, §2.4.1 of the Contract provides: 
 If the Contractor defaults or neglects to carry out...Work in accordance with the Contract Documents...and fails within a five-day
period after receipt of written notice from the Owner to commence and continue correction of such default or neglect ... the Owner may ...correct such deficiencies. 
  

 32 

 CPY Ex. 82, Gen. Cond. § 2.4.1. However, if a dispute of this nature arose, the Contract provides:

 Except as provided otherwise in the contract, claims by either party must be initiated within 21 days after occurrence of the
event giving rise to such Claim or within 21 days after the claimant first recognizes the condition giving rise to the Claim, whichever is later. Claims must be initiated by written notice ... If a party fails to submit a claim within the time
limits required by the Contract Documents, such claim is hereby expressly waived. 
 CPY Ex. 82; Gen. Cond. § 4.3.2. 
 On August 10, 2007, Comstock issued an additional Notice pursuant to Article 2.4.1 of the Contract. In the notice letter, Comstock
states that Balfour must “commence and continue corrective repairs and warranty work to the flooring at the Project.” (Tr. 667:9-23 (Benson); CPY Ex. 183). 
 Balfour proved unable to sufficiently complete punchlist work, so Comstock hired additional help. As noted in the Court’s Findings of Fact, Comstock hired Owens Corning and Warner Construction
Consultants as external personnel to assist in creating and inspecting the punchlists, in addition to paying DCS to prepare a punchlist for “common areas.” CPY Ex. 232. Comstock also paid Quintilla Construction to provide punchlist labor
such as painting, hanging drywall, adjustments, and minor installations in addition to Production Cleaning Services to clean the units for unit purchaser walk-throughs because Balfour was not doing so. Tr. 473:1-7; Tr. 593:11-13; Tr. 593:20 –
594:5; CPY Ex. 232. The total cost incurred by Comstock for this work was $1,835,120.73. CPY Ex. 232. 
  

 33 

 Additionally, Comstock added further personnel and resources to the Project as a result of
Balfour’s incomplete work. CPY Ex. 233. Comstock also hired additional contractors for security and punchlist work. Id. Comstock’s costs for these additional expenses were $492,479.13 in additional on-site supervision and
$636,384.36 for third party security and punchlist work. CPY Ex. 233. 
 Balfour also argues that these damages constitute
double recovery when taken in conjunction with the liquidated damages discussed above. “In determining whether multiple damage awards constitute impermissible double recovery, the trial court must consider the nature of the claims involved, the
duties imposed and the injury sustained.” Wilkins v. Peninsula Motor Cars, Inc., 266 Va. 558, 561 (Va. 2003)(citing Advanced Marine Enterprises v. PRC Inc., 256 Va. 106,124, 501 S.E.2d 148, 159 (Va. 1998)). After looking to the
claims involved and the injury sustained by Comstock, the Court rejects any argument by Balfour that these damages are duplicative of those awarded above as liquidated damages. These damages go beyond those contemplated by the liquidated damages
clause and are not “delay damages” as Balfour contends, but rather are the direct result of Balfour’s poor workmanship and abandonment of the Project before it was completed. 
 The Court finds all of the preceding damages to have been reasonably incurred as a direct and natural consequence of Balfour’s breach
of the Contract. Comstock has established Balfour’s breaches of Contract by a preponderance and is thus entitled to recover its actual costs (which the Court finds to be reasonable) to supplement and perform Balfour’s Work. See, e.g.,
Brown, 251 Va. at 306. 
  

 34 

	 	ii.	Estimated Future Costs to Finish Punchlist and Warranty List Work 

 Finally, Comstock also seeks to recover damages it incurred in the months following execution of the LFCA, and newly-discovered items that needed to be corrected and/or completed by Balfour. Comstock did
not add these tasks to current punchlists and instead created a separate “Warranty List” to follow those tasks. 
 Comstock argues that $248,145 worth of punch list work remained outstanding in addition to $1,260,502 worth of “warranty” items outstanding. Tr. 605:1 – 606:2; CPY Ex. 234. Comstock argues that because it has proven all three
elements of Balfour’s breaches of Contract, it is entitled to recover its actual costs to supplement and perform Balfour’s Work and its estimated future costs to complete Balfour’s Work. See Filak v. George, 267 Va. 612, 619
(Va. 2004). 
 On this point, the parties disagree as to which portion of the Contract should control. Balfour points to
§15.3 as a limit on Comstock’s “Warranty.” That section states that Comstock’s recovery on “warranty” claims are limited to the “reasonable cost of repairs already made” which would
invalidate claims for expenses yet to be incurred. However, §15.3 explicitly applies to “warranty” claims asserted by an individual unit purchaser or the Condominium Association and states that Balfour is responsible for repairs to
the extent that it is determined to be responsible for deficient work. This seems to render that provision inapplicable. Comstock further argues that the Project is not in the “Contractual Warranty period” covered by §15.3 because the
Project is still not Substantially Complete. Thus, Comstock argues, §12.2.1.1, which provides that Balfour bears the cost to correct non-conforming or rejected work, should control. On this point, the Court concludes that §12.2.1 is the
controlling section of the Contract. 
  

 35 

 The Court’s difficulty in awarding these damages, however, does not arise from a debate
over which contractual provision should apply, but rather from the fact that these costs are simply estimates of damages. As Balfour notes, Comstock provided nothing more than a list containing “estimates” of work yet to be
completed. CPY Ex. 234. As a general matter, “[p]rospective damages—damages that compensate for future losses reasonably certain to arise from a past breach of a contract—can be recovered if there is a total breach of a promise
that has formed the consideration for an entire and indivisible contract.” 22 am. JUR. 2d DAMAGES § 488 (2009). Virginia appears to recognize that “[r]ecovery of future damages may be had if the damages
are reasonably certain to occur or follow.” Kiser v. Amalgamated Clothing Workers of America, 169 Va. 574, 574, (Va.1938). 
 The only evidence submitted by Comstock on this point are its own estimates of work that has yet to be performed, based on costs which have yet to be incurred. In particular, the Court has serious
reservations regarding the certainty of Comstock’s damages arising from the outstanding cabinet punchlist7 items, leaks in individual units, patio pavers, and potential duplicates of replacement glass. Comstock seems to
anticipate this difficulty, and asks the Court for a specific finding that its future claims for actual costs expended to repair the “Warranty” items are not barred by the doctrine of res judicata. 
  

	7	 Mr. Kidwell testified that the cost to replace all deficient cabinet door fronts was $3,300 per kitchen, regardless of the work that actually
needed to be done. Tr. 606:20 – 607:15. While Comstock notes that Kidwell would credit the warranty list for the difference in cost between replacing the entire kitchen and the amount on the original punchlist, the Court has lingering doubts as
to whether damages were actually properly assessed on a case by case basis. 

  

 36 

 The Court agrees that these claims are not yet ripe, and thus have not been actually
litigated by this Court.8 
 In conclusion, the Court awards $2,964,002.229 in direct damages to Comstock as a result of Balfour’s breach of contract and the costs Comstock incurred to
properly finish the Project as contemplated by the Contract. 
  

	 	ii.	Count II: Breach of the Lien Free Completion Agreement 

  

	 	a.	Damages and Attorneys’ Fees are the Only Issues Remaining 

 In an attempt to resolve some of the disputes that had arisen between the parties, and with the intention of removing liens Atlas had filed on the Project, Comstock and Balfour entered into an agreement
on January 30, 2008, which the Court refers to simply as the LFCA. As part of the LFCA, Balfour agreed that it would “not at any time file or record a lien against the Project,” but left other disputed issues open for further
negotiation. Balfour, however, subsequently filed two mechanic’s liens against the Project after it believed Comstock breached the agreement. Balfour filed these liens against anyone owning an interest in the Project, such as individual
condominium unit owners, lenders, and trustees, thinking that this act was compelled by the Virginia lien statute. See Va. Code. §§ 43-1 through §43-23.2. Balfour filed a third party complaint to join all owners, lenders, and
trustees named in the mechanic’s lien filings in the present action, and as a result, hundreds of parties were joined in this lawsuit. 
  

	8	 Because §12.2.1.1 of the Contract applies, however, the parties may find themselves able to agree on the amount due and avoid the need for any
further litigation. 

	9	 This is the sum of Comstock’s “Actual Costs to Supplement Punchlist Costs” (itemized separately as $1,835,120.73 and $636,384.46) and
Comstock’s “Additional and Extended Personnel Costs” (itemized as $492,497.03). 

  

 37 

 After a hearing on the validity of the liens, the Court then issued an
Order and Memorandum Opinion finding that (1) the Lien-Free Completion Agreement was supported by consideration; (2) the lien waiver provisions in the Agreement were unconditional; (3) Comstock did not breach the Agreement before
Balfour Beatty filed the liens; and (4) the liens were invalid. As a result, the claims related to the liens were dismissed with prejudice, which resulted in the termination of the hundreds of Third Party Defendants as parties. Then, as
mentioned, on Summary Judgment the Court concluded that “Balfour Beatty had a legally enforceable obligation to refrain from filing a mechanic’s lien. And... that Balfour Beatty violated this obligation by filing liens on the
Project...” Aug. 14, 2007 Memo. Op. at 17. In its Memorandum Opinion, the Court granted partial summary judgment to Comstock on the first two elements of its breach of contract claim arising out of Balfour’s breach of the Lien Free
Completion Agreement (“LFCA”). Id. Thus, the only issues left for trial were Comstock’s damages arising from Balfour’s breach and whether Comstock could satisfactorily establish the reasonableness of attorneys’ fees
incurred.l0 As the only “damages” Comstock seeks
from Balfour’s breach of the LFCA seem to be attorneys’ fees, the remainder of this section will be devoted to that analysis.11 Comstock seeks attorneys’ fees in the amount of $261,160.47, the sum of five separate firms’ fees involved
in the Balfour lien litigation. 
  

	10	 In this Court’s Memorandum Opinion on the parties’ Cross-Motions for Summary Judgment, the Court noted that Comstock “alleged that it
incurred significant direct damages to indemnify and defend third parties in this litigation as a result of Balfour Beatty’s lien filings. Whether these damages are direct damages or consequential damages barred by contract is a disputed issue
of material fact.” SJ Op. at 18 n.7. The Court’s discussion of attorneys’ fees and the Hiss exception occurred in a section of the Court’s opinion preceding the Court’s discussion of Balfour’s breach of the LFCA.
Thus, the only one of the “three breach” elements remaining at trial was damages, but the reasonableness of attorneys’ fees in defending and maintaining the suit with third parties under Hiss also obviously remained an issue
and are thus both discussed here. 

	11	 As established in the previous footnote, Comstock referenced “direct damages” in indemnifying and/or defending third parties after
Balfour’s breach of the LFCA. However, in Comstock’s breakdown of its damages, it only seems to seek recovery of the attorneys’ fees arising from LFCA matters as direct damages. 

  

 38 

 On the issue of attorneys’ fees, as this Court held previously, Virginia adheres to the
“American Rule,” meaning that attorney’s fees are not recoverable by a prevailing litigant unless a statutory or contractual provision provides for such an award. See Lee v. Mulford, 269 Va. 562, 565 (Va. 2005);
Dowling v. Rowan, 270 Va. 510, 521-522 (Va. 2005). The exception to this rule, however, applies “where a breach of contract has forced the plaintiff to maintain or defend a suit with a third person[.]” Hiss v.
Friedberg, 201 Va. 572, 577 (Va. 1960); see also Owen v. Shelton, 221 Va. 1051, 1055 (Va. 1981). In such an instance, a plaintiff forced to defend third persons “may recover the counsel fees incurred by him in the
former suit provided they are reasonable in the amount and reasonably incurred.” Id. However, retaining counsel must be a “direct and necessary consequence” of the defendant’s breach of contract. Id. at 876-77.

 Comstock did not introduce expert testimony on the issue of the reasonableness of attorneys’ fees. Balfour argues that
ordinarily, expert testimony will be required to assist the fact finder on the reasonableness of attorneys’ fees. Mullins v. Richlands Nat. Bank, 403 S.E.2d 334, 335 (Va. 1991). The Virginia Supreme Court has caged this
“requirement,” however, noting that a party seeking attorneys’ fees “is not required to prove the reasonableness of the fees with expert testimony in all instances.” Seyfarth, Shaw, Fairweather & Geraldson
v. Lake Fairfax Seven Ltd. P ‘ship, 480 S.E.2d 471, 473 (Va. 1997)(emphasis added). For its part, Comstock cites to an unreported Virginia Court of Appeals Case, Byrd v. Byrd, 1998 WL 136434 at *3 (Va. App. 1998), which
held that “[e]xpert evidence is not necessary to establish the reasonableness of attorney’s fees.” In that case, evidence in the form of detailed bills and the party’s testimony that the fees were consistent with rates for that
attorney and firm sufficed in establishing the reasonableness of the fees. Id. 
  

 39 

 The Court reads the law in Virginia as not requiring expert testimony to establish the
reasonableness of fees, so long as there is adequate corroborating evidence and testimony to ascertain the basis for the fees sought. Comstock sufficiently did so here. Balfour also contests whether these “damages” are properly considered
direct or consequential. In fact, the Court specifically left this question open in its August 14, 2008 Summary Judgment Memorandum Opinion. Aug. 14, 2008 Mem. Op. at 18 n. 7 (“Whether these damages are direct damages or consequential
damages barred by contract is a disputed issue of material fact.”). Given, however, that the Court now finds these expenses to be a direct and natural consequence of Balfour’s breach, the Contract’s waiver is inapplicable. 

Although the Court held that Balfour forced Comstock to “maintain a suit with a third person” and thus fell within the Hiss
exception, Comstock was not automatically entitled to attorneys’ fees. Rather, Comstock maintains the burden to prove that the fees were “reasonable in the amount and reasonably incurred.” Id. In this Circuit, in order to
ascertain that attorneys’ fees were reasonably incurred “a court must first determine a lodestar figure by multiplying the number of reasonable hours expended times a reasonable rate.” Robinson v. Equifax Information Services, LLC,
560 F.3d 235, 244 (4th Cir. 2009) (citing Grissom v. The Mills Corp., 549 F.3d 313, 320 (4th Cir.2008). 
 This Circuit has adopted a twelve-factor test to calculate the “reasonable number of hours” and the “reasonable rate.” Id. These factors are: 
 (1) the time and labor expended; 
 (2) the novelty and difficulty of the questions raised; 
 (3) the skill required to
properly perform the legal services rendered; 
 (4) the attorney’s opportunity costs in pressing the instant litigation;

 (5) the customary fee for like work; 
 (6) the attorney’s expectations at the outset of the litigation; 
 (7) the
time limitations imposed by the client or circumstances; 
 (8) the amount in controversy and the results obtained; 

 

 40 

 (9) the experience, reputation and ability of the attorney; 
 (10) the undesirability of the case within the legal community in which the suit arose; 
 (11) the nature and length of the professional relationship between attorney and client; and 
 (12) attorneys’ fees awards in similar cases 
 Barber v. Kimbrell’s Inc., 577 F.2d 216, 226 n. 28 (4th Cir.l978)(adopting twelve factors set forth in Johnson v. Get. Highway Express, Inc., 488 F.2d 714 (5th Cir.1974), abrogated
on other grounds by Blanchard v. Bergeron, 489 U.S. 87, 109 S.Ct. 939, 103 L.Ed.2d 67 (1989)). Further, “[a]fter determining the lodestar figure, ‘the court then should subtract fees for hours spent on unsuccessful claims unrelated to
successful ones.’ ” Robinson, 560 F.3d at 245 (citations omitted). Further, as this Circuit emphasizes: 
 determination of the hourly rate will generally be the critical inquiry in setting the “reasonable fee,” and the burden rests with the fee applicant to establish the reasonableness of a requested rate. In addition to the
attorney’s own affidavits, the fee applicant must produce satisfactory ‘specific evidence of the ‘prevailing market rates in the relevant community’ for the type of work for which he seeks an award.’ Although the
determination of a ‘market rate’ in the legal profession is inherently problematic, as wide variations in skill and reputation render the usual laws of supply and demand largely inapplicable, the Court has nonetheless emphasized that
market rate should guide the fee inquiry. 
 Plyler v. Evatt, 902 F.2d 273, 277 -278 (4th Cir. 1990). 
 At this point, the record before the Court on the issue of attorneys’ fees consists of documentary evidence in the form of
attorneys’ bills and the testimony of Comstock’s Chief Financial Officer and President, respectively. Comstock’s Exhibit 240 indicates that in its representation of Comstock specifically on the lien issues, and excluding time spent on
its failed Slander of Title and Abuse of Process Claims, Quagliano & Seeger billed $114,859.51 in legal fees, though a total number of hours and rate summary is not

  

 41 

 
included. Comstock’s Exhibit 241 are records pertaining to McGuire Woods’ brief participation in the suit representing KeyBank, which amounted to fees for .8 hours of work in the amount
of $396. Comstock’s Exhibit 242 shows billing by Debra Fitzgerald-O’Connell (“O’Connell”), who represented the homeowners at the Project in connection with the lien proceedings, for 111.7512 hours of work for a total of 23,746.87.13 Exhibit 242 indicates that Miles & Stockbridge, P.C. was
retained by the title insurance company that represented both Corus and KeyBank in connection with the lien proceedings, which led to fees in the amount of 74,577.14 Unfortunately, the bill submitted into evidence does not indicate a breakdown of hours worked and rates which comprise
that final sum. Finally, Exhibit 244 contains invoices from McKenna Long & Aldridge (“McKenna”), who represented KeyBank, in the amount of $43,811.20. 
 Comstock introduced testimony of Bruce Labovitz, Comstock’s former Chief Financial Officer, who testified to Comstock’s obligations to defend its lenders and work to have the liens Balfour
placed on the Project removed. He also testified to the legal expenses Comstock incurred in defending against the liens. Labovitz further testified on the basis of his previous experience reviewing invoices for legal fees that the attorneys’
fees incurred in defending against the liens were in line with fees that Comstock pays to other attorneys in other like matters. Mr.Benson testified to Comstock’s belief that the liens existence constituted a default under their loan documents
with their lender, giving rise to Comstock’s obligation to indemnify and defend the lenders, title holders, and the unit owners’ association. Tr. 685:6-10. Comstock also introduced all relevant billing invoices from the five separate firms
involved in litigating the matter. See CPY Ex. 240-244. 
  

	12	 O’Connell’s bill indicates that she deducted a “courtesy discount” of $4,190.63. 

	13	 Comstock seeks recovery in the amount of $23,880.47, but that figure also includes approximately $133.60 in costs. This section of the Court’s
Opinion is dedicated to the reasonableness of attorneys’ fees. 

	14	 Comstock seeks a total of $78,213.29, which includes $3,635.79 in costs. 

  

 42 

 While the above evidence supplies the Court with much of the information needed to do its
analysis under the aforementioned test, it lacks critical information regarding whether the rates charged and time expended are reasonable in Northern Virginia. The Court is without affidavits and other evidentiary materials on which the Court can
further analyze the fee request under the law of this Circuit. As such, the Court requests further briefing and adjoining affidavit submissions by the Comstock, limited to this discrete issue only. Balfour may respond to this further submission
within 14 days. 
  

	 	IV.	Conclusion 

 Based
on the foregoing findings of fact and conclusions of law, the Court holds Balfour liable for breach of contract with damages in the following amounts: $8,769,000. in liquidated damages and $2,964,002.22 in direct damages, for a total award of
$11,733,002.22. 
 As discussed, the Court is presently unable to decide the issue of the reasonableness of attorneys’ fees
arising out of Balfour’s breach of the Lien Free Completion Agreement and requests supplemental briefing by the parties on this issue. Comstock shall file its initial brief on the matter within 21 days and Balfour shall file its brief in
response within 14 days. An appropriate Order shall issue. 
 Alexandria, Virginia 
 February 23, 2010 
  

	
	/s/ Liam O’Grady
	Liam O’Grady
	United States District Judge

  

 43Exhibit 10.90

 Exhibit 10.90 
 PURCHASE AGREEMENT 
 THIS PURCHASE
AGREEMENT, entered into this      day of             , 2009 (the “Effective Date”) between COMSTOCK STATION VIEW LC, a Virginia limited liability
company, hereinafter known as “Seller,” and M/I HOMES OF DC, LLC, a Delaware limited liability company, hereinafter known as “Purchaser.” 
 WHEREAS, the Seller is the owner of certain real property located in Loudoun County, Virginia, as more specifically shown in the plat attached hereto as Exhibit A, known as Station
View, located on the southwest corner of Route 772 (Old Ryan Road) and Route 645 (Croson Lane) and identified as Loudoun County Tax Map 78, Parcel 21A and MCPI ####-##-####, Loudoun County, Virginia, consisting of approximately 7.47 acres, to be
developed into FORTY SEVEN (47) townhome lots (the “Lots”), together with all improvements constructed thereon and all rights and appurtenances appertaining thereto, (the “Property”); and 
 WHEREAS, Seller desires to sell and Purchaser wishes to purchase the Property upon the terms and conditions hereafter set forth.

 NOW, THEREFORE, WITNESSETH: In consideration of the mutual promises and covenants herein contained, Seller hereby
grants to Purchaser the right to purchase and the Purchaser agrees to purchase in fee simple the Property on the following terms and conditions: 
 ARTICLE I 
 PURCHASE, PAYMENT AND PRICE 
 1.01 Property. Purchaser agrees to purchase the Property and Seller agrees to sell and convey all of Seller’s right, title and
interest in and to the Property together with any and all improvements, appurtenances, rights, privileges and easements benefiting, belonging, or pertaining to the Property and any right, title and interest of Seller in and to the land lying in the
bed of any street, road or highway (open or proposed) in front of, adjoining or servicing the Property including condemnation awards or payments in lieu thereof as a result of change of grade, alignment or access rights (all of which shall be deemed
part of the Property for the purposes of this Agreement, but only to the extent currently existing), pursuant to the terms and conditions hereof. 

 1.02 Purchase Price. Subject to all of the terms and conditions of this Agreement,
Seller agrees to sell and Purchaser agrees to purchase the Property at a price of TWO MILLION EIGHT HUNDRED FORTY THOUSAND AND NO/100THS DOLLARS ($2,840,000.00) (the “Purchase Price”), which shall be payable in cash at settlement.

 1.03 Price Adjustment. In the event that the final approved record plat, which has been approved by all
appropriate government authorities (the “Final Record Plat”) together with federal and/or any other state or local approvals, including wetlands and/or Virginia DEQ permits, does not permit the development and construction of the number of
Lots used to calculate the Purchase Price (i.e., FORTY SEVEN (47) townhome Lots), at any time, then the Purchase Price shall be appropriately adjusted downward, based upon a price of SIXTY THOUSAND FOUR HUNDRED TWENTY FIVE AND 53/100THS DOLLARS
($60,425.53) per Lot so that the total Purchase Price paid by Purchaser for the Property at settlement shall be calculated based upon the total number of Lots permitted to be developed and constructed on the Property.  
 ARTICLE II 
 DEPOSIT 
 2.01 Amount. 
 a. Within five (5) business days of the Effective Date, Purchaser shall deliver to Curran & Whittington, PLLC, located at 15100 Washington Street, Suite 201, Haymarket, VA 20169, (the
“Escrow Agent”), a cash in the sum of ONE HUNDRED THIRTY THOUSAND AND NO/100THS DOLLARS ($130,000.00), (the “Deposit”). 
 2.02 Release. The Deposit, unless previously returned to the Purchaser or released to the Seller pursuant to the terms of this Agreement, shall be credited to the Purchase Price at settlement and
closing. 

 Provided Purchaser does not terminate the Agreement at the expiration of the Feasibility
Study Period, and Seller has obtained Lender Approval as herein defined, Escrow Agent shall, within three business days after receipt of a vendor invoice from Seller, with a copy delivered to Purchaser, disburse portions of the Deposit required to
pay all normal and customary third party costs, approved by Purchaser, which approval shall not be unreasonably withheld or delayed, incurred subsequent to the Effective Date hereof and associated with satisfying the pre-conditions set forth in
Paragraph 5.01(e) below, provided however, in no event shall disbursements hereunder exceed Fifty Thousand and No/100ths Dollars ($50,000.00). 
 ARTICLE III 
 TITLE AND SURVEY 
 3.01 Title. The Seller covenants that at settlement and closing, it will be the fee simple owner of the Property subject to all
instruments forming the chain of title to the Property that it will have full legal, beneficial, and equitable ownership of the Property and that it will have the right and power to convey the Property. The Property is to be sold and conveyed free
of liens, and title is to be good of record, merchantable and insurable. Title shall be fully insurable under a full coverage advantage owner’s title policy issued by a recognized title insurance company of Purchaser’s choice, at standard
rates and without requirement or exception subject, however, to all standard pre-printed exceptions and to any easements, covenants, rights of way or declaration of covenants of record that exist (the “Permitted Exceptions”). Prior to the
expiration of the Feasibility Study Period, Purchaser may order (a) a title commitment (the “Title Commitment”)or other evidence of title to the Lots acceptable to Purchaser in the amount of the Purchase Price, from a reputable title
insurance company (the “Title Company”), and (b) a physical survey acceptable to the Title Company and Purchaser. Purchaser reserves the right to approve or disapprove any and all exceptions to title and/or matters of survey (the
“Title Exceptions”), including without limitation, and whether or not of record, liens, encumbrances, easements, restrictions, reservations, rights, ingress from and egress to public thoroughfares, encroachments and claims, and
commencement of

 
condemnation proceedings. On or before the expiration of the Feasibility Study Period Purchaser shall give Seller notice (the “Purchaser’s Notice”) of any Title Exceptions which
are not satisfactory to Purchaser. As to any Title Exceptions, Seller will advise Purchaser within ten (10) days of receipt of Purchaser’s Notice as to which of said Title Exceptions it is willing to cure (“Seller’s
Notice”). In the event Seller is unwilling or unable to cure any Title Exceptions, Purchaser may: (a) cancel this Agreement in which event it shall be null and void and Escrow Agent, shall return to Purchaser the Deposit, and the parties
hereto shall have no further rights and obligations under this Agreement, or (b) waive any item or items. Purchaser shall perfect its election by providing notice to Seller; provided, however, that such election shall be without prejudice to
Purchaser’s right to cancel this Agreement and receive the Deposit should the Seller unreasonably delay in removing or be unable to cure any Title Exceptions it has agreed to cure. Failure to provide notice pursuant to (a) or
(b) above within three business days from receipt of Seller’s Notice shall be deemed an election to waive a Title Exception. 
 Seller agrees not to encumber the title to or permit the encumbrance of title to the Property after the Date of Execution of this Agreement unless required to satisfy a precondition of settlement. 
 Seller agrees to sign such customary affidavits, indemnities or other documents as reasonably necessary for the Title Company to delete the
standard preprinted exceptions from Purchaser’s title policy. 
 Notwithstanding anything to the contrary above, any deeds
of trust, judgments, unpaid state or federal taxes, inheritance taxes, unpaid real estate taxes, or any other liens against the Property that can be cured by the payment of money shall be first paid and released of record by the settlement agent or
attorney at settlement (if not sooner paid and released of record by Seller), utilizing the proceeds paid by Purchaser at settlement. 
 The state of title at date of settlement and closing shall be the same as is disclosed by the Title Examination, except as may be required to satisfy a precondition of settlement and further except for those matters and approved by
Purchaser, or Seller shall be in default and Purchaser may exercise its remedies pursuant to this paragraph or Paragraph 8.02 hereof. 

 In the event this Agreement is terminated by Purchaser for reasons set forth within this
paragraph, Escrow Agent, shall promptly return the Deposit to the Purchaser, after which neither party shall have any further liability to the other hereunder, except for the indemnification of obligations set forth in Paragraph 4.01. 
 ARTICLE IV 
 FEASIBILITY AND ENGINEERING 
 4.01 Feasibility Study Period. Seller agrees to provide to Purchaser,
within three (3) days of the date of this Agreement, copies of all plans, plats, tests, approvals, current homeowners association documents, proffers, title work, marketing report, environmental studies and soil studies, together with any and
all approvals received regarding the Lots within its possession (collectively, the “Due Diligence Items”). Purchaser and its agents, representatives, employees and consultants shall have the right to conduct, at Purchaser’s sole
expense, a review of the Due Diligence Items, such physical, environmental, engineering, and feasibility studies (the “Feasibility Studies”) as Purchaser deems appropriate in an effort to determine whether to proceed with the Closing.
During the feasibility study period, Purchaser and its agent, representatives, employees and consultants shall have the right, during normal business hours and from time to time after the Effective Date of this Agreement, to enter upon the Property
for the purpose of performing soil borings tests, engineering, and topographic surveys and to make feasibility, zoning, marketing and economic tests and studies upon or of the Property in order to determine whether the Property is suitable for
Purchaser’s needs. The feasibility study period shall expire at 5 P.M. eastern standard time THIRTY (30) DAYS from the Effective Date hereof (the “Feasibility Study Period”). 
 In the event the results of the aforesaid engineering, zoning, feasibility, marketing and other tests and studies performed by or on behalf
of Purchaser are not, in Purchaser’s sole exclusive, and nonreviewable discretion, satisfactory to Purchaser, Purchaser may at any time prior to expiration of the Feasibility Study Period, upon

 
written notice to Seller, terminate this Agreement, after which event Escrow Agent, shall return the Deposit to the Purchaser and neither party shall have any further liability to the other
hereunder except as required by this Paragraph. 
 Purchaser agrees to restore the Property to the extent changed by the
Purchaser or its agents, at its sole expense, to the extent reasonably possible, to its condition as of the Effective Date of this Agreement if this Agreement does not go to settlement due to Purchaser’s termination or default hereunder.

 In the event Purchaser, its agents, representatives, employees or consultants, enter upon the Property for the purpose
contained herein, Purchaser agrees to promptly pay for all expenses thereof and further agrees to indemnify Seller from and against any and all loss, damage or claim resulting from the negligence of this Purchaser, its agents, representatives,
employees or consultants. 
 4.02 Title Report and Engineering. In addition to any other plans Seller is obligated to
deliver to Purchaser under this Agreement, Seller shall deliver to Purchaser without cost to Purchaser, within three (3) days after the Effective Date copies of all of the following (collectively, the “Documents”) to the extent that
the Documents are in the possession or control of Purchaser: (a) preliminary title report for the Property, together with a copy of all documents listed as exceptions in such report of title; (b) topographic surveys of the Property;
(c) the engineering drawings for the water lines and for the street improvements for the Property; (d) level one environmental assessment for the Property; (e) traffic studies of the Property; (f) any other engineering plans,
engineering studies, soil studies, soil tests, appraisals, surveys, or any other test results, plats, plans or studies Seller may have which relate to the Property, and (g) the approved preliminary plan, final plan and proposed record plat.
Seller shall also certify to Purchaser that all such surveys, test results, plats, plans or studies have been or will by settlement and closing be paid for in full. 

 ARTICLE V 
 PRE-CONDITIONS OF SETTLEMENT 
 5.01
Pre-Conditions. Should settlement not be completed on or before August 1, 2010 (“Outside Closing Date”), as a result of any pre-condition of settlement not being satisfied, Purchaser, at its sole discretion, may
(i) terminate this Agreement in its entirety; or (ii) waive such pre-condition and proceed to settlement. Should this Agreement be terminated pursuant to this paragraph, Escrow Agent, shall return the remaining portion of the Deposit to
the Purchaser and thereafter the parties shall have no further obligation pursuant to this Agreement, except for the indemnification obligations set forth in Paragraph 4.01. The pre-conditions of settlement are as follows: 
 a. No governmental action or inaction (such as but not limited to the imposition of a sewer, water or building permit moratorium shall have
been taken, or shall have been publicly announced to be taken, by any applicable governmental authority, which; would increase the cost of, or materially increase the processing time for obtaining all necessary permits or utilities required for the
construction, sale and occupancy of residential dwellings on the Property; would materially increase the cost of or materially delay construction of residential dwellings on the Property; or which prevent the residential dwelling units to be
constructed on the Property from being connected to a public sewer and water system (subject to the payment of tap fees and obtaining the customary permits). 
 b. Title to the Property is as required by Paragraph 3.01 hereof; 
 c. The Final
Record Plat, materially consistent with Exhibit A attached hereto, approving no less than FORTY FIVE (45) townhome Lots, has been recorded or is ready for recordation, subject only to the posting of applicable bonds, among the land records of
Loudoun County, Virginia. 
 d. All material representations, warranties and covenants of Seller contained within this Agreement
are true and correct; 
 e. All offsite easements, if any, necessary for the development of the Property to include complete
access to the property as well as any sight, water, sewer, and stormwater management easements shall be in place. 

 f. Development permits, or their equivalent, have been issued or are ready to be issued,
subject only to the posting of applicable bonds, for the Development of the Lots. All federal, state and/or local wetlands and Virginia DEQ, if applicable, approvals and permits shall be in place or are ready to be issued, subject only to the
posting of applicable bonds, allowing the development and construction of the FORTY-FIVE (45) townhomes on the Property consistent with the Final Record Plat. 
 ARTICLE VI 
 CLOSING AND POSSESSION 
 6.01 Conveyance. Settlement and closing hereunder shall be held within TEN (10) business days after all pre-conditions of
settlement are satisfied, or no later than the Outside Closing Date if Purchaser elects to proceed with settlement if a pre-condition has not been satisfied. Settlement and closing shall be conducted at the offices of Potomac Settlement Services,
Inc., located at 15100 Washington Street, Suite 201, Haymarket, Virginia 20169 or by such other agent or attorney designated by Purchaser in writing to Seller. Purchaser shall provide written notice to Seller of the exact time, date and place of
settlement at least five (5) business days prior thereto. Copies of all closing documents to be executed and delivered by either Seller or Purchaser at closing, together with a proposed closing statement, shall be delivered to Seller and
Seller’s attorney and to Purchaser and Purchaser’s attorney for review at least two (2) business days prior to the scheduled closing date. 
 6.02 Deed of Conveyance. At settlement Seller shall execute and deliver into settlement a Special Warranty Deed in proper form for recording among the land records of Loudoun County, Virginia. The
cost of the preparation of the deed of conveyance, Seller’s attorney’s fees, a reasonable settlement fee, costs pertaining to payoff and release of existing trusts and liens, agricultural transfer tax for years through the year of closing,
front foot benefit or similar charges roll back or similar taxes (if applicable) and grantor’s tax shall be paid by the Seller. Purchaser shall pay all expenses of examination of title , Purchaser’s attorney’s fees and title insurance
premiums, if any and all other transfer and recording taxes. 

 6.03 Taxes and Assessments. Seller shall pay or credit against the Purchase Price
(a) all delinquent real estate taxes, front foot benefit charges or similar charges (the “Real Estate Taxes”), together with penalties and interest thereon, (b) all assessments which are a lien against the Property as of the date
of closing, both current and reassessed, which are due and payable on or before closing, (c) all use recoupment taxes (agriculture or otherwise) for years through the year of closing, if any, and (d) all real estate taxes for years prior
to the closing. The proration of undetermined taxes shall be based on a 365-day year and on the last available tax rate and valuations, giving effect to applicable exemptions, recently voted millage, change in tax rate or valuation, etc., whether or
not officially certified. It is the intention of the parties in making this tax proration for Purchaser to pay to Seller at closing the amount which Seller remitted, or will be required to remit, to the appropriate collector of taxes for the period
of time after the closing date hereof. Should the Property be taxed as part of a larger parcel, the proration shall be based on the acreage of the Property versus the acreage of the larger parcel. Upon making the proration provided for herein,
Seller and Purchaser agree that the amount so computed shall be subject to later adjustments should the amount credited at closing be incorrect based upon actual tax bills received by Purchaser after closing. Seller hereby represents and warrants to
Purchaser that (i) all assessments now a lien are shown on the public records of the collector of real property taxes, (ii) no improvements have been installed by public authority or Seller, the costs of which are to be assessed against
the Property in the future, and (iii) Seller has not been notified orally or in writing of possible future improvements by public authority, any part of the cost of which would or might be assessed against the Property. 
 6.04 Future Encumbrances. Seller agrees that from the date of execution hereof by Seller, Seller may not further encumber the
Property other than the necessary easements provided in Article V of this Agreement without the written consent of the Purchaser, which consent will not be unreasonably withheld. 

 6.05 FIRPTA. Seller hereby represents and warrants to Purchaser that Seller is not a
“foreign person” within the meaning of Section 1445 of the Internal Revenue Code of 1986, and Seller further agrees, at closing, if requested, to furnish Purchaser an affidavit to this effect complying with the provisions of
Section 1445 of the Internal Revenue Code. 
 6.06 Performance. The delivery to settlement attorney or agent of the
cash payment, the executed deed of conveyance, and all other documents and instruments required to be delivered by either party to the other by the terms of this Agreement shall be deemed to be good and sufficient tender of performance of the terms
hereof. Seller shall give possession of the Property at the time of payment of Purchase Price and delivery of the appropriate deed of conveyance. 
 ARTICLE VII 
 DECLARATION OF COVENANTS 
 7.01 Declaration of Covenants. The Property is not currently subject to a declaration of covenants, conditions and restrictions or
similar document. 
 ARTICLE VIII 
 DEFAULT 
 8.01 Purchaser. In the event Purchaser shall default with
respect to its obligations to proceed to full and final settlement on the Property, and if Seller is ready, willing and able to perform, then Seller shall give written notice to Purchaser, with a copy to the Escrow Agent, that said default shall be
cured within ten (10) days of Purchaser’s receipt of such notice. If Purchaser fails to cure the default within such ten (10) day cure period, then as the Seller’s fixed, agreed and liquidated damages, and as Seller’s sole
remedy, the Deposit shall be paid to the Seller and thereafter the parties shall be relieved of all further liability and obligation under this Agreement, excluding, however, the indemnification obligations under Paragraph 4.01, which shall survive
such termination. The parties hereto agree that if Purchaser defaults on its obligations and fails to cure such default within the ten (10) day cure period, the actual damages thereby incurred by Seller would be difficult to measure and the
receipt of the Deposit by Seller would in such circumstances represent reasonable compensation to Seller on account thereof. 

 8.02 Seller. In the event Seller fails to perform or breaches any of its
representations, warranties, covenants or obligations to be performed by Seller, the Purchaser shall give to the Seller written notice, with a copy to the Escrow Agent, that such default shall be cured within ten (10) days for its failure to
convey the Property or thirty (30) days of Seller’s receipt of such notice for a any other default. If Seller fails to cure the default within the applicable ten (10) or thirty (30) day cure period, to Purchaser’s reasonable
satisfaction, then, at Purchaser’s sole option, it shall either (i) terminate this Agreement, whereupon the Seller shall return the entire Deposit to the Purchaser as full liquidated damages and as its sole remedy, in lieu of any other
claims or causes of action which may be available to Purchaser at law or in equity by reason of such default by Seller, after which event neither party shall have further liability hereunder, or (ii) pursue the remedy of specific performance
except where Lender Approval has not been obtained, or (iii) waive such breach and proceed with settlement of the Property.  
 ARTICLE IX 
 AGENTS AND COMMISSION 
 9.01 Liability. Seller and Purchaser each warrant to the other that neither has dealt with any agent, broker or finder with respect
to the transaction contemplated by this Agreement. In the event that any claim for commission or finder’s fee is brought by any person or entity as a consequence of the transaction contemplated hereby, then the party whose acts gave rise to
such claim shall hold harmless the other party against any loss, cost or expense of any nature, including but not limited to, court costs and reasonable attorney’s fees arising as a consequence of the claim for the commission or fee.

 ARTICLE X 
 CONDEMNATION 
 10.01 Notice and Award. Seller
agrees to give Purchaser prompt notice of any actual or threatening taking of all or any portion of the Property by condemnation or eminent domain prior to the date of closing hereunder. In the event that prior to closing hereunder there shall occur
a taking by condemnation or eminent domain or a proposed conveyance to a condemning authority in lieu of condemnation of all or any material portion of the Property, then Purchaser, at its option, may either (i) terminate this Agreement by
written notice to Seller whereupon the Escrow Agent shall return the Deposit to Purchaser and the parties shall not be further obligated to each other pursuant to this Agreement, except for the indemnification obligations set forth in Paragraph
4.01, or (ii) proceed to closing hereunder, with a reduction in the Purchaser Price, equal to SIXTY THOUSAND FOUR HUNDRED AND TWENTY-FIVE AND 53/100THS DOLLARS ($60,425.53) per Lot for each Lot lost incident to the condemnation or to be lost
pursuant to a threatened condemnation.  
 ARTICLE XI 
 SELLER’S REPRESENTATIONS 
 11.01 General. Seller hereby represents, warrants and covenants to Purchaser that Comstock Station View L.C., a Virginia limited liability company, is a duly organized and validly existing
corporation under the laws of the Commonwealth of Virginia qualified to do business in the Commonwealth of Virginia and in good standing; that Seller has the power as a limited liability company to execute and perform this Agreement; that all
necessary consents and approvals from the Seller have been obtained; and that the person executing this Agreement on behalf of Seller is duly empowered to bind Seller to perform its obligations hereunder. Copies of any necessary approvals are to be
furnished by Seller upon written request by Purchaser. 
 11.02 Specific. In addition to any other warranty made in
connection with this Agreement, the Seller warrants and agrees (a) that the Seller is the fee simple owner of all of the Property which shall be sold to and acquired by Purchaser under this Agreement and at settlement will be the fee simple
owner of the Property, and has no knowledge of off-record or undisclosed interest in the Property, and, with exception to

 
the deed of trust secured against the Property, to Seller’s knowledge and belief, the Property has no other liens and encumbrances other than as shall be disclosed by a proper title search
conducted incident to 3.01 hereof by Purchaser ; (b) that Seller has not received written notice that the Property is subject to any unrecorded restrictive covenant or equitable servitude of any kind which would in any way limit the free choice
of the Purchaser with respect to the nature or location of homes to be constructed on the Property, except as provided herein; (c) that to the best of Seller’s knowledge and belief: The Property does not contain any hazardous substance,
the Seller has not conducted or authorized the generation, transportation, storage, treatment or disposal at the Property of any hazardous substance other than is customary resulting from construction on surrounding properties; that the Seller has
not received any written notice of, and has no knowledge that, any government authority or any employee or agent thereof, or any private citizen, making a claim that there is a presence, release, threat of release, placement on or in the Property,
or the generation, transportation, storage, treatment or disposal at the Property, of any hazardous substance; to the best of Seller’s knowledge and belief nor has any “clean-up” of the Property occurred pursuant to the Environmental
Laws (as hereinafter defined) which could give rise to liability on the part of Purchaser to reimburse any governmental authority for the costs of such clean-up or a lien or encumbrance on the Property. For purposes of this paragraph,
“hazardous substance” means any materials in violation of any applicable environmental laws or regulations including, but not limited to, Section 103 of the Comprehensive Environmental Response, Compensation and Liability Act, 42
U.S.C., 9601 et seq., any “superlien” laws, any “superfund” laws, or similar federal, state or local laws, or any successor statutes thereto (the Environmental Laws”); (d) that to the best of Seller’s actual
knowledge, the Property does not contain levels of natural asbestos unacceptable to any local, state or federal authority; (e) that to the best of Seller’s actual knowledge, the Property has not been used as a grave site or fill or borrow
area; (f) no suit, actions, arbitration or legal, administrative or other proceeding is pending or has been threatened against the Property, or against Seller with respect to 

 
the Property, which, if adversely determined, could prevent or impair the ability of Seller to perform this Agreement or restrict Purchaser’s use or development of the Property, or any part
thereof, except as set forth in Paragraph 15.01; (g) no bankruptcy, insolvency, rearrangement, or similar action or proceeding, whether voluntary or involuntary, is pending or threatened against Seller and Seller has no immediate intention of
filing or commencing any such action or proceeding; (h) that Seller has granted no person any contract right or other legal right to the use of any portion of the Property or to the furnishing or use of any facility or amenity on or relating
solely to the Property; (i) Seller has not received any written notice that any part of the Property is subject to a right of first refusal which has not been waived or other right which Seller, or any predecessor in title, may have granted to
other persons or parties as to the Property, or any part thereof, whether written or verbal; (j) that no written notice has been received by Seller that any governmental or quasi-governmental agency or authority intends to commence construction
of any special or off-site improvements or impose any special or other assessment against the Property, or any part thereof; (k) that the Property is not located within a flood hazard area or wetland except as referenced and disclosed on the
Wetlands Permit attached hereto as Exhibit B; (l) that Seller has not received any written notice alleging that it or the Property to be, or that with due notice or lapse of time or both it or the Property will be, in breach of default
of any lawful statute, ordinance or regulation of the United States, State, County or City applicable to the Lots (“Legal Requirement”) which could materially adversely affect the ability of Seller to perform this Agreement or restrict
Purchaser’s use or construction of residential homes on the Lots; and (m) that the execution of this Agreement will not conflict with or result in a breach of any of the terms or provisions of, constitute a default under, or cause or allow
an acceleration of any note, mortgage, deed of trust, loan agreement or other document, instrument or agreement to which Seller is a party or by which the Property is encumbered or affected, except as otherwise disclosed in Paragraph 15.01.

 11.03 Mechanic’s Liens. All contractors, subcontractors, laborers, and
materialmen who are or did perform work upon or furnish labor or materials at Seller’s request to improve or benefit the Property prior to settlement have been or will be paid in full by Seller on or before the date of each settlement. Seller
will execute at closing the necessary affidavits and other documents reasonably required by Purchaser’s title insurance company to eliminate from its title policy any exceptions to filed or unfiled mechanic’s liens arising from any act of
Seller or its subcontractors. Should at any time after settlement and closing a notice of intent to file a mechanic’s lien or a mechanic’s lien be filed against the Property arising from any act of Seller or its contractors,
subcontractors, laborers or materialmen, Seller shall, within thirty (30) days of written notifications from Purchaser to Seller of the filing of such notice or lien, cause said notice or lien to be withdrawn or released of record, either by
payment in full of all sums represented by said lien or by statutory bonding. Seller shall indemnify and hold Purchaser harmless against all costs and expenses (including reasonable attorney’s fees) incurred by Purchaser for Seller’s
failure to do so. 
 11.04 Zoning. Seller shall immediately provide Purchaser with written notice of any and all special
zoning limitations or other restrictions with regard to the Property including, without limitation, restrictions (if any) relating to fencing, bike paths, walking paths, park areas, reserves, house sizes, garages, basements, no-build zones, lighting
or other similar items. All such limitations or restrictions shall be subject to Purchaser’s approval which shall not be unreasonably withheld. 
 11.05 Indemnification. Seller shall, and hereby does indemnify, protect and hold harmless the Purchaser of, and from, any and all liability and all loss, damage and expense including judgments,
costs and attorney’s fees by reason of a material breach of Seller’s representations or warranties. 
 11.06
Affidavit. All of the foregoing covenants, warranties and representations will be effective, repeated and true at the time of settlement and closing and Seller will provide an affidavit to that effect. 

 11.07 Survival. The warranties set forth above shall be materially true and accurate
as of the date of Closing and will survive the conveyance of the Property to Purchaser for a period of nine months and will be for the benefit of the Purchaser and its successors and/or assignees. 
 ARTICLE XII 
 PURCHASER’S REPRESENTATIONS 
 12.01 General. Purchaser hereby represents, warrants and covenants to
Seller that Purchaser is a duly organized and validly existing limited liability company under the laws of Delaware, qualified to do business in the Commonwealth of Virginia and in good standing; that Purchaser has the power to execute and perform
this Agreement; that all necessary consents and approvals from the Purchaser have been obtained; and that person executing this Agreement on behalf of Purchaser is duly empowered to bind Purchaser to perform its obligations hereunder. Copies of any
necessary approvals are to be furnished by Purchaser upon written request by Seller. 
 12.02 Indemnification. Purchaser
shall, and hereby does indemnify, protect and hold harmless the Seller of, and from, any and all liability and all loss, damage and expense including judgments, costs and attorney’s fees by reason of a material breach of Purchaser’s
representation or warranties. 
 12.03 Survival. The warranties set forth above will survive the conveyance of the
Property to Purchaser and will be for the benefit of the Seller and its successors and/or assignees. 
 ARTICLE XIII

 ESCROW AGENT 
 13.01 Name. For the purposes of this Agreement the term “Escrow Agent” shall mean Curran & Whittington, PLLC., 15100 Washington Street, Suite 201, Haymarket, Virginia 20169.
Unless otherwise provided herein, any funds deposited with the Escrow Agent will be placed in a separate interest bearing escrow account. All interest earned thereon shall be considered part of the Deposit. 

 13.02 Liability. The Escrow Agent shall have no liability, personal or otherwise,
absent gross negligence, fraud or willful misconduct on account of its duties hereunder or in acting upon any signature, notice, demand, request, waiver, consent, receipt or other paper or document believed by Escrow Agent to be genuine. 

13.03 Direction. In the event the Escrow Agent is in doubt as to its duties and liabilities under the provisions hereof, the
Escrow Agent may, in its sole discretion, continue to hold the monies or instruments which are the subject of this escrow until the parties hereto mutually agree in writing to disbursement thereof, or until a judgment of a court of competent
jurisdiction shall determine the rights of the parties hereto, or Escrow Agent may deposit all monies and/or instruments then held pursuant to this Agreement with the clerk of the court having jurisdiction over the Property, and upon notifying all
parties concerning such actions, all liability on the part of the Escrow Agent shall fully cease and terminate, except to the extent of accounting for any monies or instruments heretofore delivered out of escrow. 
 13.04 Indemnification. Seller and Purchaser shall jointly and severally defend, indemnify and hold harmless the Escrow Agent against
and from any such liability and any and all costs, including attorney’s fees, in connections with this Purchase Agreement. 
 ARTICLE XIV 
 SUBDIVISION 
 14.01 Subdivision. Subject to Paragraph 2.02 of this Agreement, Seller shall have the responsibility at its expense for
administering, managing, directing and achieving the preparation, submission and governmental approval of all the plans to allow for the subdivision and development of the Property into approximately FORTY-SEVEN (47) townhome Lots
(“Development Plans”). The Seller represents and warrants that the final draft record plat has been submitted to, but not yet approved by, Loudoun County, Virginia, and is attached hereto as Exhibit A. The Final Record Plat shall
not be materially amended/modified from what is depicted in Exhibit A, or otherwise provided for herein. If the Final Record Plat is requested to be modified,

 
Seller shall provide the County’s comments and requested changes to Purchaser, upon receipt of which Purchaser shall have three business days to provide written confirmation to Seller that
Purchaser either accepts the County’s comments or rejects the County’s comments. If Purchaser accepts the County’s comments, the Parties shall, subject to satisfaction of the terms and conditions contained herein, proceed to
settlement as provided in Paragraph 6.01. If Purchaser rejects the County’s comments, Seller shall return the remaining portion of the Deposit to Purchaser, and neither party shall any further rights or responsibilities under this
Agreement. Upon receipt of approval of the Final Record Plat, and if requested by Purchaser, the Development Plans shall be submitted by the Seller to Loudoun County for permits in a commercially reasonable manner and as soon as possible thereafter,
the Final Record Plat shall be submitted for recordation. The Purchaser agrees to pay all customary fees and to post the customary bonds incident thereto. Seller agrees no work will be commenced pursuant to said plans and permits without
Purchaser’s written consent, until after settlement and closing. In the event settlement and closing does not occur for any reason, Seller agrees to assist in having any bonds, letters of credit and/or escrows released, including but not
limited to immediately replacing any such bonds, letter(s) of credit and/or escrows. Any right of Seller in all plans, approvals, permits and related engineering shall be assigned at no cost to Purchaser at settlement. Seller agrees to cooperate and
execute any documents reasonably required to accomplish said assignment. 
 14.02 “AS-IS” SALE OF PROPERTY.
Subject to the express terms and provisions of this Agreement, the Property shall be sold and conveyed in its “as is, where is” condition, with all faults, on the Closing Date, without any representations or warranties whatsoever, express
or implied, with all representations and warranties hereby waived by Purchaser except as otherwise specifically set forth herein. PURCHASER ACKNOWLEDGES AND AGREES THAT EXCEPT AS OTHERWISE SET FORTH IN THIS AGREEMENT, THE PROPERTY IS TO BE
TRANSFERRED BY SELLER TO PURCHASER “AS IS, WITH ALL FAULTS”, AND IN ITS CURRENT

 
CONDITION. PURCHASER FURTHER ACKNOWLEDGES AND AGREES THAT, EXCEPT AS EXPRESSLY CONTAINED HEREIN, NEITHER SELLER NOR ANY AGENT, EMPLOYEE OR OTHER REPRESENTATIVE OF SELLER (OR PURPORTED AGENT,
EMPLOYEE OR OTHER REPRESENTATIVE OF SELLER) HAS MADE (i) ANY GUARANTEE, REPRESENTATION, OR WARRANTY, EXPRESS OR IMPLIED (AND SELLER SHALL NOT HAVE ANY LIABILITY WHATSOEVER) AS TO THE VALUE, USES, HABITABILITY, CONDITION, DESIGN, OPERATION,
FINANCIAL CONDITION OR PROSPECTS, OR FITNESS FOR PURPOSE OR USE OF THE PROPERTY (OR ANY PART THEREOF) OR THE PROPERTY INFORMATION, OR (ii) ANY OTHER GUARANTEE, REPRESENTATION OR WARRANTY WHATSOEVER, EXPRESS OR IMPLIED, WITH RESPECT TO ANY
PORTION OF THE PROPERTY (OR ANY PART THEREOF) OR THE PROPERTY INFORMATION. FURTHER, SUBJECT TO THE EXPRESS TERMS AND PROVISIONS OF THIS AGREEMENT, SELLER SHALL HAVE NO LIABILITY FOR ANY LATENT, HIDDEN OR PATENT DEFECT AS TO THE PROPERTY OR THE
FAILURE OF THE PROPERTY, OR ANY PART THEREOF, TO COMPLY WITH ANY APPLICABLE LAWS AND REGULATIONS. IN PARTICULAR, SUBJECT TO THE EXPRESS TERMS AND PROVISIONS OF THIS AGREEMENT, PURCHASER ACKNOWLEDGES AND AGREES THAT THE “PROPERTY
INFORMATION” PROVIDED UNDER THIS AGREEMENT (AND ANY OTHER INFORMATION PURCHASER MAY HAVE OBTAINED REGARDING IN ANY WAY ANY OF THE PROPERTY, INCLUDING, WITHOUT LIMITATION, ITS OPERATIONS OR ITS FINANCIAL HISTORY OR PROSPECTS FROM SELLER OR ITS
AGENTS, EMPLOYEES OR OTHER REPRESENTATIVES) IS DELIVERED TO PURCHASER AS A COURTESY, WITHOUT REPRESENTATION OR WARRANTY AS TO ITS ACCURACY OR COMPLETENESS, AND NOT AS AN INDUCMENT TO ACQUIRE THE PROPERTY; THAT NOTHING CONTAINED IN SUCH DELIVERIES
SHALL CONSTITUTE OR BE DEEMED TO BE A GUARANTEE, REPRESENTATION OR WARRANTY, EXPRESS OR IMPLIED, IN ANY REGARD AS TO ANY OF THE PROPERTY (EXCEPT AS EXPRESSLY PROVIDED HEREIN); AND THAT 

 
PURCHASER IS RELYING ONLY UPON THE PROVISIONS OF THIS AGREEMENT AND ITS OWN INDEPENDENT ASSESSMENT OF THE PROPERTY AND ITS PROSPECTS IN DETERMINING WHETHER TO ACQUIRE THE PROPERTY. 
 ARTICLE XV 
 MISCELLANEOUS 
 15.01 Lender Approval. Seller’s obligations under this Agreement are conditioned
upon obtaining lender approval to release in full the existing deed of trust secured against the Property upon payment of the Purchase Price (“Lender Approval”). Seller agrees to diligently pursue Lender Approval. In the event Seller fails
to obtain Lender Approval , and provide written evidence satisfactory to Purchaser of said approval within TEN (10) days after the expiration of the Feasibility Study Period, either party shall have the right to terminate this Agreement and the
Deposit shall be immediately returned to Purchaser and the parties shall have no liability to each other. 
 15.02
Notice. All notices and other communications hereunder shall be in writing and be deemed duly given if personally delivered, electronically delivered(so long as followed by overnight delivery by a recognized national carrier), telecopied with
proof of receipt(so long as followed by overnight delivery by a recognized national carrier) or mailed by certified mail, return receipt requested, postage prepaid; 
  

			
	 if to Seller to:
	  	Comstock Station View L.C.
		  	11465 Sunset Hills Road, Fifth Floor
		  	Reston, Va 20910
		  	ATTN: Ms. Elena Garrison
		  	Telecopier #703.760.1520
		  	E-mail: egarrison@comstockhomebuilding.com
		
	 with a copy to:
	  	Comstock Station View L.C.
		  	11465 Sunset Hills Road, Fifth Floor
		  	Reston, Va 20910
		  	ATTN: Mr. Christopher Clemente
		  	Telecopier #703.760.1520
		  	E-mail: cclemente@comstockhomebuilding.com
		
	 and a copy to:
	  	Comstock Station View L.C.
		  	11465 Sunset Hills Road, Fifth Floor
		  	Reston, Va 20910
		  	ATTN: Mr. Jubal Thompson, Esquire
		  	Telecopier #703.760.1520
		  	E-mail: jthompson@comstockhomebuilding.com

			
		  	and
		
	 And if to Purchaser to:
	  	M/I Homes of DC, LLC
		  	c/o M/I Homes, Inc.
		  	3 Easton Oval, Suite 500
		  	Columbus, OH 43219
		  	Attn: Robert H. Schottenstein
		  	telecopier #614-418-8080
		  	Email:
		
	 with a copy to:
	  	M/I Homes of DC, LLC
		  	c/o M/I Homes, Inc.
		  	3 Easton Oval, Suite 500
		  	Columbus, OH 43219
		  	Attn: Thomas Mason, Esquire
		  	telecopier #614-418-8622
		  	Email:
		
	 and a copy to:
	  	M/I Homes of DC, LLC
		  	21355 Ridgetop Circle, Suite 220
		  	Sterling, Virginia 20166-6503
		  	Attn: Dennis Kelleher
		  	telecopier #(703) 404-3040

 The parties
hereto shall be responsible for notifying each other of any change of address. 
 15.03 Financial Accounting. Seller
recognizes that Purchaser is subject to the requirements of Revised Interpretation No. 46 (“FIN 46R”), Consolidation of Variable Interest Entities, an authoritative accounting pronouncement issued by the Financial Accounting
Standards Board. Seller will reasonably cooperate with Purchaser with Purchaser’s obligation, if any, to comply with the financial reporting requirements of FIN 46R. 
 15.04 Survival. The provisions hereof shall survive the execution and delivery of the deed(s) executed hereunder for a period of six
months and shall not be merged therein. 
 15.05 Assignment. The principals to the Agreement mutually agree that the
benefits hereunder are not assignable by either party without the written consent of the other party. Notwithstanding the foregoing, Purchaser shall have the right to assign this Agreement to a limited liability company, partnership, corporation, or
other entity in which Purchaser owns a membership, partnership or other equity interest. Additionally, Purchaser may assign its right to purchase certain Lots to other residential home builders and Seller shall not unreasonably withhold or delay
consent of such an assignment. 

 15.06 Construction of Agreement. 
 a. This Agreement may be executed in several counterparts, each of which shall be deemed an original, but all of which shall constitute one
and the same instrument. 
 b. Titles to paragraphs and subparagraphs are for convenience only and are not intended to limit or
expand the covenants and obligations expressed thereunder. 
 c. Time shall be of the essence with regard to all terms and
conditions of this Agreement. 
 d. This Agreement contains the entire agreement among the parties hereto with respect to the
Property. No change or modification of this Agreement, or any waiver of the provisions hereof, shall be valid unless same is in writing and signed by the parties hereto. 
 e. Waiver of performance or satisfaction of timely performance or the satisfaction of any condition, covenant, requirement, obligation or warranty by one party shall not be deemed a waiver of the
performance or satisfaction of any other condition, covenant, requirement, obligation or warranty unless specifically consented to in writing. 
 f. In the event any moratorium on building residences is imposed by any governmental entity, the Purchaser shall be entitled to extend all time periods imposed in this Agreement by a period equal to the
length of the moratorium, provided, that if such moratorium shall extend beyond six (6) months from the date of settlement and closing provided for herein, either party may terminate this Agreement, in which event the Deposit shall be forthwith
returned to Purchaser and both parties shall be released of all further liability or obligation hereunder. 

 g. It is the intention of the parties hereto that all questions with respect to the
construction of this Agreement and the rights or liabilities of the parties hereunder shall be determined in accordance with the laws of the Commonwealth of Virginia. 
 h. Any date specified in this Agreement which is a Saturday, Sunday or legal holiday, shall be extended to the first regular business day
after such date which is not a Saturday, Sunday or legal holiday. Any reference herein to the singular shall include the plural and vice versa and reference to the male, female or neuter gender shall include reference to all other genders.

 i. This Agreement represents the result of bargaining and negotiations between the parties and of a combined draftsmanship
effort. Consequently, Seller and Purchaser expressly waive and disclaim, in connection with the interpretation of this Agreement, any rule of law requiring that ambiguous or conflicting terms be construed against the party whose attorney prepared
this Agreement or any earlier draft of this Agreement. 
 j. Nothing contained herein is intended to create, nor shall it ever be
construed to make, Seller and Purchaser partners or joint ventures. 
 k. Approvals granted hereunder by Purchaser are solely for
its own benefit and shall not be relied upon by third parties or impose any liability upon Purchaser as to the accuracy or sufficiency of the item or matter being approved. 
 l. In the Event that full performance under this Agreement has not occurred within ten (10) years of the date hereof, this Agreement
shall terminate and be of no further force and effect, with the Deposit being returned to Purchaser. 
 15.07 Duration and
Acceptance of Offer. Should this Agreement be ratified by one party prior to submission to the other party, Purchaser’s offer to purchase or Seller’s offer to sell, as the case may be, shall remain open for
                     (            ) days after ratification by the first party to do so.
Should the other party not ratify this Agreement within said                     
(            ) day period, the offer to purchase or sell, as the case may b, is withdrawn and this Agreement shall be null and void. 

 15.08 Severability. In the event that any part or all of any term, covenant,
condition, agreement, provision or section of this Agreement shall be adjudged invalid or unenforceable by a court of competent and final jurisdiction, the same shall be severable from the remainder of this Agreement and this Agreement shall not
terminate or be deemed void or voidable, but shall continue in full force and effect and there shall be substituted for such invalid provision a like, but legal and enforceable, provision which most nearly accomplishes the intention of the parties
hereto, and if no such provision is available, the remainder of this Agreement shall be enforced. If such term, covenant, condition, agreement, provision or section of this Agreement is adjudged invalid due to its scope or breadth, such item shall
be deemed valid to the extent of the scope or breadth permitted by law. 
 15.09 Effective Date. The date on which this
Agreement is accepted by the last party to accept and sign the Agreement shall be inserted as the effective date of this Agreement under the first paragraph hereof. 
 15.10 WITNESS the following signatures and seals: 
  

									
		 		 		 	SELLER:
				
		 		 		 	COMSTOCK STATION VIEW LC,
		 		 		 	a Virginia limited liability company
				
		 		 		 	By: Comstock Homebuilding Companies, Inc.
		 		 		 	Its manager
	Witness:	 		 		 		 	
				
	  
	 		 	By:	 	  

		 		 		 	Name:	 	Christopher Clemente
	Date:	 	  
	 		 	Title:	 	Chief executive Officer

									
		 		 		 	PURCHASER:
				
		 		 		 	M/I HOMES OF DC, LLC,
		 		 		 	a Delaware limited liability company
	Witness:	 		 		 		 	
				
	  
	 		 	By:	 	  

		 		 		 	Name:	 	
	Date:	 	  
	 		 	Title:

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