Construction Law Insights

Miller v. Foremost Indus., 2018 U.S. Dist. LEXIS 55547 (W.D. Va. Apr. 2, 2018)

On March 17, 2016, Foremost Industries, Inc. of PA (“Foremost”) and Jason Miller entered into an agreement for Foremost to deliver a prefabricated home to Miller’s address. In December of 2016, Miller filed a complaint against GLD Foremost Holdings, Inc. (“GLD”) in Clark County’s Circuit Court. On January 3, 2017, GLD removed the case to the federal district court. On April 20, 2017, Miller filed an amended complaint against GLD and Foremost. In the original and amended complaint, Miller alleged fraud in the inducement.

Taken as true, Miller alleged facts sufficient to state a cause of action for fraud in the inducement and $74,541.84 in damages. In Virginia, fraud in the inducement is a false representation of a material fact, constituting an inducement to the contract, on which the purchaser has a right to rely. In other words, a party must allege that the misrepresentations: (i) were positive statements of fact, made for the purpose of procuring the contract; (ii) that they are untrue; (iii) that they are material; and (iv) that the party to whom they were made relied upon them, and was induced by them to enter into the contract. Miller’s complaint alleged that a representative of Foremost assured Miller in December of 2015 that the Foremost was licensed to operate, was indeed operating in Virginia, possessed the necessary equipment to erect the prefabricated home to the agreed upon specifications, and would be able to deliver the product by June 27, 2016. Miller alleged that Foremost’s assurances were not true because GLD – of which Foremost had become a wholly owned subsidiary – began selling off Foremost’s assets and the process of dismantling Foremost as early as July of 2015. Miller further alleged that he was unaware of the untruthfulness of Foremost’s assurances and relied on Foremost’s assurances in entering into the contract with Foremost. Miller tendered a check for $2,500 to Foremost on March 17, 2016 and wired $72,041.84 to Foremost on March 30, 2016 to complete his deposit, but Foremost never performed under the contract and stopped communicating with Miller altogether after June of 2016.

PLDR Law Mark Burgin 1 PLDR Law Scott Kowalski 1 Thomas Wolf 002 Kenneth Stout 002

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