Summary:
The Harrells alleged that DeLuca made false representations about the property and sued for fraudulent inducement, constructive fraud, breach of contract, and violations of the Virginia Consumer Protection Act. The district court granted summary judgment favoring DeLuca on the fraud claims related to certain misrepresentations, but found in favor of the Harrells on a breach-of-contract claim related to uncompleted work specified in the Construction Agreement.
The Fourth Circuit found the district court's grant of summary judgment on the fraud claims inappropriate, highlighting that there was a genuine dispute of material fact regarding the materiality of the misrepresentations. The appellate court vacated and remanded the summary judgment on these claims.
The appellate court also addressed the Harrells' claim for constructive fraud based on DeLuca's alleged misrepresentation about obtaining necessary permits. It determined that the district court improperly applied the source-of-duty rule without clearly establishing whether DeLuca's statements were about current facts or future promises. Consequently, this part of the summary judgment was also vacated and remanded for further proceedings.
Lastly, the appellate court agreed with the Harrells that the district court did not make clear findings on whether DeLuca breached the Sales Contract, which was important because this contract contained a provision for recovering attorney's fees, unlike the Construction Agreement. The court remanded this issue for explicit findings.
To read a copy of the transcript, please see:
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