Opinion ID: 1058173
Heading Depth: 2
Heading Rank: 1

Heading: the demurrers to count vi and vii

Text: A demurrer tests the legal sufficiency of facts alleged in pleadings, not the strength of proof.... Because the decision whether to grant a demurrer involves issues of law, we review the circuit court's judgment de novo. Augusta Mut. Ins. Co. v. Mason, 274 Va. 199, 204, 645 S.E.2d 290, 293 (2007) (internal citations and quotation marks omitted). Station # 2 argues that the circuit court erred in sustaining the demurrer to Count VI because the complaint alleged all elements necessary for a claim of fraud or fraudulent inducement. We disagree. Although we clearly have stated the proposition, we often must repeat it: an omission or non-performance of a duty may sound both in contract and in tort, but only where the omission or non-performance of the contractual duty also violates a common law duty. Richmond Metro. Auth. v. McDevitt Street Bovis, Inc., 256 Va. 553, 558, 507 S.E.2d 344, 347 (1998) (citing Foreign Mission Bd. v. Wade, 242 Va. 234, 241, 409 S.E.2d 144, 148 (1991)); see also Dunn Constr. Co. v. Cloney, 278 Va. 260, 266-67, 682 S.E.2d 943, 946 (2009); Augusta Mutual, 274 Va. at 205, 645 S.E.2d at 293. The only duty Station # 2 alleged was contractual: that Gadams and Marathon had agreed to allow Station # 2 access to install the soundproofing material. Consequently, Station # 2 has not pleaded a proper claim for fraud. Even if we assume, as Station #2 invites us to do, that Gadams' and Marathon's agreement induced Station # 2 to contract with the Lynches, and that Gadams' and Marathon's contractual duty to allow the installation did not spring from the lease between Station # 2 and the Lynches, its fraud claim fails. Station #2 contends it relied on its existing agreement with Gadams and Marathon when it leased the first story from the Lynches. It further contends that Gadams and Marathon never intended to allow Station # 2 to install the soundproofing material. Consequently, their promise to do so was a false representation of material fact. In general, if a defendant makes a promise that, when made, he has no intention of performing, that promise is considered a misrepresentation of present fact and may form the basis for a claim of actual fraud. SuperValu, Inc. v. Johnson, 276 Va. 356, 368, 666 S.E.2d 335, 342 (2008); accord Richmond Metro. Auth., 256 Va. at 560, 507 S.E.2d at 348. [3] However, Station #2 did not plead sufficiently that Gadams and Marathon intended not to allow installation of the soundproofing material at the time they promised to do so. The only mention of a contemporaneous intent not to perform on the promise to permit the installation appears in Count VII, the statutory conspiracy claim: [A]ll of the defendants were aware that there was never an intention by any of them to allow sound attenuation materials to be installed ... or, alternatively, they decided at some point to breach their agreements. In either event, whether the promises were false at the inception or were agreements that were broken later, the defendants deceived the principals of Station #2.... Station # 2 does not allege that Gadams' and Marathon's promise was false when made but rather that the Lynches, Gadams, and Marathon all agreed to prevent Station # 2 from effecting the installation, either before or after Station #2 entered into the lease. Accordingly, Station #2's allegations were insufficient to establish a claim of fraudulent inducement. The circuit court did not err in sustaining the demurrer to Count VI. [4] , [5] Station # 2 also argues that the circuit court erred in sustaining the demurrers to Count VII because the complaint alleged all elements necessary for a claim of statutory conspiracy. We again disagree. Code § 18.2-499 criminalizes conspiracies to willfully and maliciously injur[e] another in his reputation, trade, business or profession by any means whatever. Code § 18.2-500 allows victims of such conspiracies to claim treble damages and attorney's fees in a civil action. [T]o survive demurrer, an allegation of conspiracy, whether criminal or civil, must at least allege an unlawful act or an unlawful purpose. Hechler Chevrolet, Inc. v. General Motors Corp., 230 Va. 396, 402, 337 S.E.2d 744, 748 (1985). Station #2 asserts that Gadams, Marathon, and the Lynches acted unlawfully by preventing it from installing the soundproofing material. Even assuming the defendants conspired among each other, preventing Station #2 from installing the soundproofing material does not constitute an unlawful act. In Worrie v. Boze, 198 Va. 533, 536, 95 S.E.2d 192, 196 (1956), we recognized a common law claim of conspiracy by a plaintiff who alleged the defendants had conspired to procure the breach of a contract. We commented in Chaves v. Johnson, 230 Va. 112, 119-20, 335 S.E.2d 97, 102 (1985), that such claims were embraced by Code §§ 18.2-499 and 18.2-500. [6] However, we presently are of opinion that a conspiracy merely to breach a contract that does not involve an independent duty arising outside the contract is insufficient to establish a civil claim under Code § 18.2-500. [7] To permit a mere breach of contract to constitute an unlawful act for the purposes of the conspiracy statute would be inconsistent with the diligence we have exercised to prevent turning every breach of contract into an actionable claim for fraud. Dunn Constr. Co., 278 Va. at 268, 682 S.E.2d at 946; Augusta Mutual, 274 Va. at 208, 645 S.E.2d at 295; Richmond Metro. Auth., 256 Va. at 560, 507 S.E.2d at 348. Non-performance of a contractual promise does not, without more, create a basis for recovery in tort. Likewise, we do not believe it can rise to the level of an unlawful act under Code § 18.2-500 for a similar reason: the duty of performance under the contract springs solely from the agreement; the duty is not imposed extrinsically by statute, whether criminal or civil, or independently by common law. Thus, non-performance, without more, is not an unlawful act. Applying this standard, the cases cited by Station # 2 are distinguishable. In Commercial Business Systems v. Bellsouth Services, 249 Va. 39, 41, 453 S.E.2d 261, 263 (1995), the plaintiff alleged an employee of the defendant awarded a contract to the plaintiff's competitor as the result of a bribe. In Advanced Marine Enterprises v. PRC Inc., 256 Va. 106, 112, 501 S.E.2d 148, 151 (1998), the plaintiff alleged that a defendant knew its actions would constitute actionable tortious interference, knowingly weighed the cost of damages, and purposefully proceeded with its plan to hire employees of the plaintiff who were subject to a covenant not to compete. In CaterCorp, Inc. v. Catering Concepts, Inc., 246 Va. 22, 26, 431 S.E.2d 277, 280-81 (1993), the plaintiff alleged that a defendant competitor had conspired to work with a person still in its employ, in violation of his common law duty of loyalty. Similarly, the plaintiffs in Simmons v. Miller, 261 Va. 561, 578, 544 S.E.2d 666, 676-77 (2001), and Feddeman & Company v. Langan Associates, P.C., 260 Va. 35, 46, 530 S.E.2d 668, 675 (2000), alleged an accompanying breach of fiduciary duty. Station # 2's agreements with the Lynches and with Gadams and Marathon do not implicate statutory or independent common law duties. Consequently, merely alleging breach of those contracts is insufficient to establish a claim of statutory conspiracy under Code §§ 18.2-499 and 18.2-500. The circuit court did not err in sustaining the demurrers to Count VII. [8]