2016 Va. Cir. LEXIS 142
Fairfax Cir. Ct.2016Background
- In 2000 WestGroup sold a 29.22-acre Tysons Corner site to Capital One with 1,100,000 sq. ft. of FAR and contract provisions (§28.7, §30) allocating how any additional FAR from future Metro/Comprehensive Plan changes would be handled between Capital One and WestGroup (later assignee WG Land).
- A 2000 Supplemental Declaration recorded selected §28.7 language and added that "additional FAR" would not become Allocable FAR under the 1992 Declaration absent further amendment.
- In 2010 Fairfax County removed FAR caps within a quarter-mile of Tysons metro stations; Capital One obtained rezoning approval for up to ~3.8 million additional FAR and began development.
- WG Land (assignee of the Purchase Agreement but not owner of the benefitted parcels) sued seeking declaratory relief, an injunction forcing Capital One to make FAR available to WG Land, and breach-of-contract damages.
- The court found (a) WG Land has standing to sue under the Purchase Agreement as assignee but not to enforce the restrictive covenant as a non-landowner; (b) §28.7(b)’s sharing Formula is impossible/unworkable after the county removed the FAR cap; and (c) Capital One prevailed on summary judgment for Counts II and III and the demurrer to Count I was sustained.
- The court awarded Capital One $1,894,477.27 in attorney’s fees and costs under the contract fee-shifting clause, after detailed lodestar adjustments.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Whether a declaratory judgment was proper | WG Land: ongoing, continuing harm from Capital One’s retention/use of additional FAR justifies declaratory relief | Capital One: parties are already adverse; declaratory judgment would be advisory or determine disputed facts | Demurrer sustained; Count I dismissed — declaratory relief inappropriate (would be advisory / seeks resolution of disputed facts) |
| Standing to enforce restrictive covenant and Purchase Agreement | WG Land: assignee of Purchase Agreement and assignee of enforcement rights (and majority owner of entities) can enforce covenants | Capital One: non-landowner assignee lacks vertical privity and cannot enforce covenant running with land | WG Land lacks vertical privity and cannot enforce covenant as non-landowner, but has standing to enforce the Purchase Agreement as assignee |
| Availability of injunctive relief (enforce §28.7 sharing Formula) | WG Land: §28.7 requires Capital One to set aside/make available additional FAR; injunction needed to prevent ongoing breach | Capital One: Formula is impossible to perform after cap removal; injunction would be inequitable, unworkable, and involve impermissible court supervision | Summary judgment for Capital One; Count II dismissed — Formula unworkable (infinite FAR), purpose was sharing not an indefinite restriction, injunction denied |
| Breach of contract damages and measure | WG Land: damages tied to value of Capital One’s development rights/property | Capital One: WG Land suffered no quantifiable damages; property valuation of Capital One is not WG Land’s loss | Summary judgment for Capital One; Count III dismissed — plaintiff failed to prove pecuniary damages and proposed measure was improper |
Key Cases Cited
- Assurance Data, Inc. v. Malyevac, 286 Va. 137 (clarifies demurrer standard)
- Fun v. Virginia Military Inst., 245 Va. 249 (demurrer does not permit deciding merits)
- Blodinger v. Broker’s Title, Inc., 224 Va. 201 (declaratory relief appropriate for continuing, accruing liability)
- Liberty Mut. Ins. Co. v. Bishop, 211 Va. 414 (scope and caution in declaratory judgments)
- Barner v. Chappell, 266 Va. 277 (elements for covenants running with the land: privity, touch and concern, writing, intent)
- Long Signature Homes v. Fairfield Woods, 248 Va. 95 (impossibility/discharge of contractual duty)
- Dewberry & Davis, Inc. v. C3NS, Inc., 284 Va. 485 (contractual fee recovery principles; reasonableness/necessity of fees)
- Hensley v. Eckerhart, 461 U.S. 424 (fee-shifting: exclusion of excessive or unnecessary hours)