Spectra-4, LLP v. Uniwest Commercial Realty
772 S.E.2d 290
Va.2015Background
- Spectra-4 LLP and Spectet Limited Partnership own adjacent commercial buildings in Reston; management services changed hands over time.
- Jefferson/LBG (1995–1997) managed under written Management Agreements executed with Spectra-4 and Spectet; Jefferson/LBG was later administratively cancelled.
- Jefferson Commercial (1998–1999) and then Uniwest (2000–2012) provided management services without new written Management Agreements with Spectra-4 or Spectet.
- Uniwest continued operating the buildings, collected rents, paid itself monthly fees, and maintained operating accounts for about 12 years; Uniwest had an asset purchase agreement with Jefferson Commercial but not with Jefferson/LBG.
- After Spectra-4 and Spectet terminated Uniwest in 2012, Uniwest withdrew premature-termination fees and copying charges from the operating accounts; Spectra-4 and Spectet sued for conversion and breach of contract.
- The circuit court found implied-in-fact contracts governed Uniwest’s services and effectively incorporated the expired Management Agreements; the Supreme Court of Virginia reviewed whether the implied-in-fact contracts incorporated the Management Agreements’ full terms.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Whether Uniwest was bound by the original written Management Agreements | Spectra-4/Spectet: Agreements governed only Jefferson/LBG and were not extended to Uniwest | Uniwest: either succeeded to or incorporated the Management Agreements and therefore could enforce their terms | Held: Uniwest did not succeed to or have the Management Agreements assigned; those agreements did not directly govern Uniwest |
| Whether implied-in-fact contracts existed between Uniwest and each owner | Spectra-4/Spectet: No express agreement with Uniwest, but conduct did not evidence assent to all prior terms | Uniwest: Long course of performance created implied-in-fact contracts that incorporated full terms of prior Agreements | Held: Implied-in-fact contracts existed, based on long-term conduct, but only as to terms specifically evidenced by the parties’ conduct |
| Whether the implied-in-fact contracts incorporated the liquidation (premature termination) clause | Spectra-4/Spectet: No conduct showed mutual assent to the liquidation clause | Uniwest: Withdrawal of fees upon termination shows incorporation | Held: The liquidation clause was not incorporated; withdrawals were unauthorized by the implied-in-fact contracts |
| Whether copying charges were authorized under the implied-in-fact contracts | Spectra-4/Spectet: No history or conduct showed assent to copying-charge practice | Uniwest: Standard practice and internal procedure justified charging copying costs | Held: No evidence of mutual assent; copying charges were not authorized |
Key Cases Cited
- Jimenez v. Corr, 288 Va. 395 (2014) (standard that existence of contract is a question of law reviewed de novo)
- Mission Residential, LLC v. Triple Net Props., LLC, 275 Va. 157 (2008) (de novo review for contract existence)
- Doctors Co. v. Women's Healthcare Assocs., 285 Va. 566 (2013) (de novo review of contract terms and application)
- City of Norfolk v. Norfolk Cnty., 120 Va. 356 (1917) (distinguishing implied-in-fact and implied-in-law contracts)
- Hendrickson v. Meredith, 161 Va. 193 (1933) (definition and nature of implied-in-fact and implied-in-law contracts)
- Luden's Inc. v. Local Union No. 6 of the Bakery, Confectionery & Tobacco Workers Int'l Union, 28 F.3d 347 (3d Cir. 1994) (circumstance where parties continue same course of dealing before and after expiration may carry forward full prior-contract terms)