Construction Law Insights

Concord Crossroads, LLC v. Human Capital Res. & Concepts, Inc., 2021 U.S. Dist. LEXIS 222063, 2021 WL 5323693 (E.D. Va. Nov. 16, 2021)

On March 23, 2018, Human Capital Resources and Concepts, Inc. (“HCRC”), Concord Crossroads, LLC (“Concord”), and M. Holland Group, LLC (“MHG”) entered into a teaming agreement, whereby the parties agreed that if HCRC was named the prime contractor in a contract with the United States Department of Defense (“DoD”), then HCRC would offer subcontracts to Concord and MHG. The DoD awarded HCRC the contract (the “Contract”) and HCRC was named the prime contractor. While negotiating subcontract terms, Concord provided HCRC with personnel to help HCRC perform the Contract with the understanding that Concord would be compensated when the parties reached an agreement on the subcontracts. However, negotiations broke down and Concord unsuccessfully sought compensation for 2 months of work performed by Concord’s personnel. Concord sued HCRC for unjust enrichment and fraud in the inducement.

The Court denied Concord’s Motion for Summary Judgment and HCRC’s Motion for Partial Summary Judgment because there were a substantial number of disputed material facts. For unjust enrichment, a plaintiff must establish that: (1) plaintiff conferred a benefit on the defendant; (2) defendant knew of the benefit and should reasonably have expected to pay plaintiff; and (3) defendant accepted or retained the benefit without paying for its value. The Court found that there was a disputed material fact as to the value of the benefit Concord conferred on HCRC. As to fraud in the inducement, HCRC argued there was no promise to induce performance. In Virginia, fraud must relate to a present or pre-existing fact and cannot ordinarily be predicated on unfulfilled promises or statements as to future events. A promisor may commit fraud if the promisor has no intent to perform at the time the promise is made. HCRC’s president promised to compensate Concord out of her own pocket. HCRC, itself, however, argued that Concord’s personnel simply volunteered to perform Contract work without a promise or expectation of compensation. Thus, the Court found there were disputed material facts.

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