Construction Law Insights

James River Stucco, Inc. v. Monticello Overlook Owners’ Ass’n, No. CL16-408, 2019 Va. Cir. LEXIS 468 (Cir. Ct. Sep. 30, 2019)

In the case-in-chief, plaintiff, James River Stucco, Inc. (“James River”), alleged that defendant, Monticello Overlook Owners’ Association (“Monticello”), breached their Agreement (“Agreement” or “Contract”) by failing to pay its outstanding balance. Monticello counterclaimed that James River had itself breached first by hiring subcontractors, thereby failing to staff the job with a sufficient number of appropriately skilled “employees” as the Contract provided. Id. The Court held that the Contract did not require James River to use only workers who were on its own payroll.

First, the Court invoked textualism, finding that the plain meaning of the word “employ” was “to hire, use, utilize, or make arrangements for.” Id. Thus, the Court reasoned, James River was not required to hire its own internal workforce so long as it otherwise “employed” an adequate number of workers who could complete the job to trade standards. Monticello presented no evidence that this was not the case.

Applying the noscitur a sociis canon, the Court determined that the Contract’s “Sufficient Number of Employees Provision” allocated James River the responsibility for maintaining “a sufficient workforce to get the work done, not to impose [human resources] duties.” Id. (emphasis added). Moreover, the Court observed that Monticello had constructive knowledge that James River was using subcontractors, but never complained. Thus, the Court held that Monticello would have waived its right to enforce that provision even if its errant construction applied.

Lastly, the Court found that even if (1) the Contract required James River to use its own employees, and (2) Monticello had not waived its right to enforce that provision, its claims were nonetheless moot because it presented no evidence of damages. Contradicting Monticello’s claim of “increased costs” owing to James River’s use of subcontractors, the Court observed that the Agreement was for a fixed price, irrespective of labor. Thus, Monticello would have owed the same amount no matter how James River accomplished the work. The Court dismissed Monticello’s counterclaim as a matter of law and granted James River’s motion for summary judgment.

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