Karen Nance v. Huntington West Virginia Housing Authority
16-0855
| W. Va. | May 19, 2017Background
- In 2008 petitioners (Karen Nance/Historic Barnett Apartments, L.P., and Old House Doctor) bought a property to redevelop into nine for‑profit, low‑income apartments and sought federal NSP grant funding under a Consortium application led by Huntington West Virginia Housing Authority (respondent).
- The NSP required 25% of awarded state funds be used for projects serving households ≤50% of median income; petitioners’ project did not meet that “25% set aside” requirement.
- WVDO awarded the Consortium less funding than requested after identifying eligibility problems with several consortium projects, leaving insufficient non‑set‑aside funds to cover petitioners’ project.
- Respondent removed petitioners’ project from the Consortium and replaced it with respondent’s Artisan Heights project; petitioners sued respondent (after WVDO and Cloudburst were dismissed) asserting negligence, breach of contract, breach of good faith, and promissory estoppel.
- The circuit court granted respondent’s summary judgment, finding (1) no duty for negligence because the Consortium Agreement did not guarantee funding, (2) no breach of contract causing damages (insufficient proof that lack of sixty‑day notice caused loss), and (3) no promissory estoppel proof of a promise to fund.
- The Supreme Court of Appeals of West Virginia affirmed, concluding petitioners failed to show a special relationship/duty, failed to prove contract entitlement to funds or causation, and were given ample discovery opportunity.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Whether respondent owed a duty of care (negligence) | Consortium Agreement created a special relationship/duty to protect petitioners’ economic interests | No duty: agreement only permitted collective application and allowed respondent to remove projects to protect state funding | No duty as a matter of law; negligence claim fails |
| Whether breach of contract occurred causing damages | Failure to give 60‑day notice and removal caused loss of NSP funding | Agreement did not promise funding; notice failure did not cause damages | No breach producing recoverable damages; summary judgment proper |
| Whether promissory estoppel applies | Respondent promised funding and then reneged | No promise to provide funding; no reliance showing funding would have been received | Promissory estoppel not proven; claim dismissed |
| Whether trial court applied a heightened evidentiary standard | Court improperly demanded expert/definitive agency testimony | Court carefully permitted additional discovery and based ruling on record and law | No improper heightened standard; no reversible error |
Key Cases Cited
- Parsley v. Gen. Motors Acceptance Corp., 167 W. Va. 866, 280 S.E.2d 703 (W. Va. 1981) (duty is prerequisite to negligence recovery)
- Aikens v. Debow, 208 W. Va. 486, 541 S.E.2d 576 (W. Va. 2000) (economic‑loss recovery requires physical harm, contract, or special relationship)
- Powderidge Unit Owners Ass’n v. Highland Properties, Ltd., 196 W. Va. 692, 474 S.E.2d 872 (W. Va. 1996) (summary judgment standard discussion)
- Painter v. Peavy, 192 W. Va. 189, 451 S.E.2d 755 (W. Va. 1994) (de novo review of summary judgment)
- Anderson v. Liberty Lobby, Inc., 477 U.S. 242 (U.S. 1986) (standard for summary judgment and genuine issue of material fact)