Ocean 10 Sec. LLC v. Hous. Auth., 2022 U.S. Dist. LEXIS 77645, 2022 WL 1272012 (W.D. Va. Apr. 28, 2022)
In 2019, Ocean 10 Security, LLC (“Ocean 10”) contracted with Lynchburg Redevelopment and Housing Authority (“LRHA”) for the purchase, installation, and operation of twelve security camera systems in LRHA’s housing developments. Ocean 10 installed and began operating the cameras, and LRHA began making monthly payments to Ocean 10. Based on the success of the initial project, LRHA ordered twelve more cameras, which Ocean 10 installed and operated throughout 2020. In early 2021, LRHA stopped making monthly payments to Ocean 10. In April of 2021 (under purported authority of the Virginia Public Procurement Act (“VPPA”)), LRHA’s Board approved a motion voiding Ocean 10’s contract as “not being in the public interest.” Ocean 10 sued LRHA claiming inter alia, breach of contract and quantum meruit. LRHA moved to dismiss, arguing that Ocean 10’s claims were barred by the statute of frauds and the VPPA.
The Court denied the LRHA’s motion to dismiss. The Court rejected the LRHA’s argument that its contract with Ocean 10 was unenforceable under the statute of frauds because it was never signed and, therefore, never reduced to writing. Signature notwithstanding, the document attached to the LRHA’s motion to dismiss, however, contained all the requisite elements of a contract. Also, the partial performance exception to the statute of frauds applied because Ocean 10 installed and managed the cameras LRHA purchased and LRHA made corresponding payments to Ocean 10 for more than a year. The Court also rejected the LRHA’s VPPA argument. The VPPA contemplates a public body making certain findings before voiding a contract on the basis of “public interest.” In its response to LHRA’s motion to dismiss, Ocean 10 alleged that the LRHA’s Board had not made the requisite findings before voiding its contract with Ocean 10. Thus, the Court held that there was a question of material fact as to whether the LRHA’s Board made the requisite findings before voiding Ocean 10’s contract and denied the LRHA’s motion to dismiss.
