873 F. Supp. 2d 736
E.D. Va.2012Background
- Goodrich filed suit for breach of contract and related claims arising from BaySys’s alleged failure to pay for PPI’s cabinetry work on the SRF A340 project.
- BaySys counterclaimed for breach of contract (Count I), express warranty (Count II), implied warranty (Count III), and tortious interference with contract (Count IV).
- PPI fabricated cabinetry; DeCrane owned PPI before being acquired by Goodrich in 2012.
- BaySys contends PPI missed deadlines, delivered defective work, and caused substantial delays and costs; BaySys paid multiple installments and overtime, while asserting ongoing nonconformity and delays.
- Goodrich argues BaySys cannot maintain an independent tort based on implied covenant, and seeks dismissal of various claims under Rule 12(b)(6).
- The court partially grants and partially denies the motion to dismiss; Count IV is dismissed; the implied covenant claim is treated as a breach-of-contract vehicle; Counts I and III survive in part.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Implied covenant as independent claim | Goodrich: implied duty cannot be an independent tort | BaySys: implied duty supports BaySys’s breach-of-contract Theory | Implied-duty claim is not independent; remains as breach-of-contract vehicle; Count I portion survives |
| Implied warranty disclaimer conspicuousness | Goodrich: disclaimer not conspicuous under Va. law | BaySys: disclaimer is conspicuous or essential-purpose remedy fails | Disclaimer not conspicuous; continues; Count III may proceed with essential-purpse analysis |
| Implied warranty meets essential purpose | Beausoleil-like reasoning supports dismissal | Remedy failed essential purpose; warranty may be overridden by U.C.C. general remedies | Express warranty failed its essential purpose; Count III may proceed |
| Tortious interference and economic loss rule | BaySys’s claim barred by economic loss rule | Claim sounds in tort, independent of contract | Economic loss rule bars tortious-interference claim; Count IV dismissed |
Key Cases Cited
- Charles E. Brauer Co., Inc. v. Nations-Bank of Va., N.A., 251 Va. 28 (Va. 1996) (implied covenant not independent tort; contract dominates)
- Lacks v. Bottled Gas Corp., 205 S.E.2d 671 (Va. 1974) (conspicuousness standard for contract terms)
- Ward’s Equip. v. New Holland N. Am., 493 S.E.2d 516 (Va. 1997) (conspicuousness and contract-term notice considerations)
- Virginia Vermiculite, Ltd. v. W.R. Grace & Co., 156 F.3d 535 (4th Cir. 1998) (good faith implied-in-contract doctrine in Virginia)
- Enomoto v. Space Adventures, Ltd., 624 F. Supp. 2d 443 (E.D. Va. 2009) (distinguishes duties arising from contract vs. tort in Virginia law)
- Richmond Metro. Auth. v. McDevitt Street Bovis, Inc., 256 Va. 553 (Va. 1998) (independent torts may coexist with contracts only for willful torts)
- Insteel Indus., Inc. v. Costanza Contracting Co., Inc., 276 F. Supp. 2d 479 (E.D. Va. 2003) (distinguishes nonfeasance from malfeasance for tort vs. contract analysis)
- Dur v. W. Branch Diesel, Inc., 240 F. App’x 568 (4th Cir. 2007) (economic loss rule context in Fourth Circuit)