811 S.E.2d 817
Va.2018Background
- In 2000 West*Group sold ~29 acres (Capital One Property) to Capital One and transferred 1.1 million sq ft of FAR; the purchase Agreement and recorded Declaration included an FAR-sharing formula anticipating increased density from a new Tysons Corner Metro overlay.
- The FAR formula (§28.7(b) of the Agreement, mirrored in the Declaration) allocated the first 200,000 sq ft of any additional FAR to Capital One and fractionally divided the remainder based on numerical caps in the County Comprehensive Plan’s Metro Overlay (the 2000 Plan/Existing Metro Overlay).
- In 2010 Fairfax County adopted an Amended Metro Overlay (2010 Plan) removing site-specific maximum FAR caps and making intensity subject to rezoning rather than fixed numerical limits.
- Capital One obtained rezoning approval in 2012 for ~3.8 million additional sq ft and proceeded with development; WG Land (assignee of West*Group’s contract rights but not title to neighboring parcels) sued in 2015 claiming Capital One breached the FAR-sharing formula by failing to allocate WG Land its share.
- Capital One defended (1) that the Agreement ties “available” FAR to the Comprehensive Plan’s Metro Overlay (which after 2010 had no numerical cap, rendering the formula impossible to calculate), and (2) that WG Land lacked contractual enforcement rights as a non-landowner under the Declaration (though the court found WG Land could enforce the Agreement as assignee).
- The circuit court sustained Capital One’s demurrer on declaratory relief, granted Capital One summary judgment on breach/damages (impossibility), and awarded Capital One attorney’s fees under the Agreement. The Supreme Court of Virginia affirmed.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Properness of declaratory relief (Count I) | WG Land: Seeks declaration that FAR allocations are enforceable and Capital One breached; claims issues ripe for declaration. | Capital One: Claims alleged breach already occurred, so WG Land seeks remedial relief not pre-enforcement declaration. | Court: Demurrer sustained; declaratory relief unavailable because claims had matured (actual breach alleged). |
| Construction of FAR formula — what is “additional FAR” | WG Land: "Additional FAR" means the actual FAR Capital One obtained via rezoning (i.e., approved development). | Capital One: "Additional FAR" references FAR made available by the County’s Metro Overlay caps in the Comprehensive Plan (Existing or Amended). | Court: FAR formula unambiguously references the Metro Overlay caps; construable only as tied to County Plan. |
| Impossibility of performance after 2010 Plan | WG Land: Formula still operable; rezoning yields measurable additional FAR to allocate. | Capital One: Removal of numerical FAR caps made the formula mathematically unworkable ("infinity"), excusing performance. | Court: Impossibility defense applies; removal of caps changed the character of the essential means of performance and rendered the formula impossible to calculate. |
| Award of contractual attorney's fees | WG Land: Fees provision unenforceable because FAR provision impossible; Capital One created impossibility via lobbying; Capital One not prevailing because impossibility may be temporary. | Capital One: Fee provision survives under severability; it did not cause the governmental change; it prevailed on all claims. | Court: Fees award affirmed — severability preserves §32; Capital One not at fault for legislative action; Capital One was the prevailing party. |
Key Cases Cited
- Babcock & Wilcox Co. v. Areva NP, Inc., 292 Va. 165 (clarifies contract-construction principles and de novo review)
- Hampton Roads Bankshares, Inc. v. Harvard, 291 Va. 42 (recognizes impossibility defense where change in character/means of performance excuses promisor)
- Charlottesville Area Fitness Club Operators Ass’n v. City, 285 Va. 87 (limits on declaratory relief—no declaration where rights already matured)
- Mount Aldie, LLC v. Land Trust of Va., Inc., 293 Va. 190 (presumption parties intended a rational scheme; common-sense contract interpretation)