McPike v. Zero-Gravity Holdings, Inc.
280 F. Supp. 3d 800
E.D. Va.2017Background
- McPike (Austrian resident) contracted with Space Adventures (SA), a Virginia-based space‑tourism company, on March 20, 2013 for a circumlunar/ISS trip; total price $150M with a $30M non‑refundable deposit to be paid in three installments. McPike paid the first $7M installment on March 28, 2013 and made no further payments.
- The Agreement expressly represented SA ‘‘owns the rights’’ to provide a circumlunar flight via arrangements with Russian entities (RSCE/Energiya and Roscosmos), made payments non‑refundable except as provided, and selected Virginia law/venue.
- In June–July 2014 a Moscow Times article reported Roscosmos disavowed involvement; SA officers told McPike the article was incorrect. McPike stopped paying but did not contact Roscosmos until May 2016. Roscosmos later stated it had no valid documents currently obligating it to SA.
- McPike sued in May 2017 raising breach of contract (Count I), fraud in inducement (Count II), Virginia Consumer Protection Act fraud (Count III), conversion (Count IV), and unjust enrichment (Count V). Defendants moved to dismiss on statute‑of‑limitations and merits grounds.
- The court dismissed conversion (time‑barred) and unjust enrichment (duplicative of an enforceable contract) but denied dismissal of the fraud and breach‑of‑contract claims, finding factual disputes about discovery/due diligence and causation/materiality.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Whether fraud claims are time‑barred under Va. Code § 8.01‑243/§ 59.1‑204.1 (2‑year) | McPike: complaint was filed within two years of his discovery (Roscosmos letter July 25, 2016) and SA’s reassurances reasonably delayed discovery | SA: McPike discovered (or should have discovered) the fraud in July 2014 when he read the Moscow Times article; he failed to exercise due diligence | Denied dismissal — question of when fraud should have been discovered is factual and not resolvable on the complaint; survives to summary judgment/trial |
| Proper limitations period for conversion claim | McPike: conversion claim accrues later / should use 5‑year property limitations | SA: claim is essentially fraud directed at the person causing loss to property; the 2‑year personal‑injury statute applies | Conversion dismissed — two‑year limitations applies and claim is time‑barred |
| Viability/timeliness of unjust enrichment claim | McPike: equitable claim for return of $7M deposit because SA lacked means to perform; may be tolled | SA: three‑year statute applies and claim accrued at payment in March 2013; unjust enrichment is improper where a valid contract exists | Dismissed — untimely and, independently, unjust enrichment inapplicable because an enforceable contract governs the dispute |
| Breach of contract: causation/materiality (can McPike show breach caused damages?) | McPike: SA’s representations about rights with Roscosmos were fundamental; failure to have those rights defeated essential purpose and caused his loss | SA: even if a representation was false, McPike had already stopped performance in 2014; causation and materiality not shown as a matter of law | Denied dismissal — causation/materiality are factual issues; complaint pleads sufficient facts to proceed to discovery |
Key Cases Cited
- Ashcroft v. Iqbal, 556 U.S. 662 (2009) (standard for accepting factual allegations at motion to dismiss)
- Jones v. Shooshan, 855 F. Supp. 2d 594 (E.D. Va. 2012) (discovery/due‑diligence accrual analysis for fraud)
- J.F. Toner & Sons, Inc. v. Staunton Prod. Credit Ass’n, 375 S.E.2d 530 (Va. 1989) (when fraud directed at the person makes a claim subject to shorter limitations)
- Bader v. Central Fidelity Bank, 427 S.E.2d 184 (Va. 1993) (conversion governed by property‑injury limitations where defendant wrongfully exercised authority over funds)
- Rodrigue v. Olin Employees Credit Union, 406 F.3d 434 (7th Cir. 2005) (majority view refusing discovery rule for conversion claims)
- Navar, Inc. v. Federal Business Council, 784 S.E.2d 296 (Va. 2016) (elements of breach of contract)
- Horton v. Horton, 487 S.E.2d 200 (Va. 1997) (material breach defeats essential purpose of contract)