Ferguson Enters., Inc. v. F.H. Plumbing, Heating & Air Conditioning, Inc., 830 S.E.2d 917 (Va. Aug. 1, 2019)
Ferguson Enterprises, Inc. (“Ferguson”) distributes Trane-manufactured HVAC equipment. Ferguson negotiated with Trane to provide rebates, known as “claim-backs,” if Ferguson sold Trane’s equipment at a specific discounted price, known as a “contract price.” Ferguson negotiated with Trane to provide contract pricing for one of its customers, F.H. Furr Plumbing, Heating, and Air Condition, Inc. (“Furr”). In 2013, Furr sued Ferguson. In its first amended complaint, Furr alleged that Ferguson sold equipment to Furr above “contract prices” and then submitted false claims to Trane for claim-backs, misrepresented to Furr that the prices charged to Furr were the lowest prices Ferguson could charge, that Ferguson’s misrepresentations were intended to induce Furr to buy Trane-manufactured equipment from Ferguson, and that Furr relied on these misrepresentations in entering into purchase agreements. Ferguson filed a demurrer and plea in bar, contending
that the damages sought on the fraud claims were barred by the 2 year statute of limitations. The circuit court granted Ferguson’s demurrer on Furr’s non-fraud claims, but declined to rule on Ferguson’s plea in bar. The circuit court gave Furr 21 days to file a second amended complaint for the non-fraud claims, but required that the fraud claims be restated “verbatim”. Furr filed a second amended complaint with the same fraud claims and new non-fraud claims. Ferguson demurred to the new non-fraud claims, did not refile a plea in bar as to the statute of limitations for the fraud claims, and filed an answer as directed by the court. The circuit court again granted Ferguson’s demurrer on the non-fraud claims.
In April of 2017, the circuit court held a jury trial on Furr’s fraud claims. At the close of Furr’s evidence, the circuit court granted Ferguson’s motion to strike the constructive fraud claim, but denied Ferguson’s motion to strike as to the actual fraud claim. Ferguson renewed its motion to strike the actual fraud claim at the close of its evidence, but it was also denied. When the parties presented their proposed jury instructions, Ferguson argued that the burden of proof shifted to Furr to prove that it could not have discovered the fraud before April 19, 2011, because it was apparent on the face of Furr’s second amended complaint that the 2 year statute of limitations had expired at the time of filing.
.The circuit court denied Ferguson’s proposed jury instruction and stated that the circuit court previously overruled Ferguson’s plea in bar. The jury returned a $3 million verdict in favor of Furr. Ferguson moved to set aside the verdict on multiple grounds, including Ferguson’s argument that the circuit court erred in denying Ferguson’s proposed jury instructions relating to the statute of limitations defense. The circuit court denied Ferguson’s motion to set aside the verdict, ruling that Ferguson waived the statute of limitations issue by failing to refile or incorporate its plea in bar in response to the second amended complaint and, alternatively, that Ferguson’s failure to raise the special plea or put it before the court for a hearing during the 2.5 years after the filing of the second amended complaint resulted in Ferguson waiving the affirmative defense. Even if Ferguson had not waived the affirmative defense, the court ruled that Ferguson’s proposed jury instructions were not proper because the burden of proof on Ferguson’s affirmative defense remained with Ferguson, not Furr.
The Supreme Court of Virginia reversed the circuit court and remanded the case on the limited issue of whether the statute of limitations barred a portion or all of Furr’s fraud claims. Because Ferguson had an outstanding plea in bar filed in response to the previous pleading that had been held over for an “evidentiary hearing,” the circuit court’s order required the fraud claims be refiled “verbatim,” and Ferguson was not directed by the circuit court to refile its special plea, the circuit court erred in finding that Ferguson waived its plea by not refiling its plea in bar. Ferguson was also entitled to have its statute of limitations defense heard by a jury because a plea in bar can be heard by a jury if demanded, Furr’s second amended complaint demanded a jury trial but did not specify any limits on the issues on which the jury was requested, and Ferguson had no obligation to make an additional demand. Because the only factual issues remaining for determination related to whether the fraud claims were barred by the statute of limitations, the Supreme Court of Virginia reversed the judgment of the circuit court that the statute of limitations defense was waived and remanded for a determination by the jury of the discrete issue of whether the statute of limitations applied to bar a portion or all of Furr’s fraud claims.