Washington v. Prasad
791 S.E.2d 566
| Va. | 2016Background
- Prasad purchased Tax Parcel 580-07-008C (Parcel 8‑C) at a county tax sale after reviewing county records; the property card showed the correct street address but mistakenly displayed a photograph of the Washingtons’ house on adjacent Parcel 9‑A.
- The Washingtons’ house (Parcel 9‑A) bore the incorrect street number 17211 on the house and mailbox; the true address is 17201. The house was vacant.
- Prasad viewed the pictured house, believed it to be Parcel 8‑C, bid $11,000 at the sale, received and recorded a deed to Parcel 8‑C, then began renovating the Washingtons’ house (Parcel 9‑A).
- Prasad expended about $23,508 on renovations without the Washingtons’ knowledge or consent; the Washingtons later demanded he vacate.
- Prasad sued seeking (1) a constructive trust on the Washingtons’ lot and a judgment for his expenditures (quantum meruit) and (2) damages on an implied‑in‑law contract; the trial court granted a constructive trust, judgment for $23,508, and a lien on the lot.
- The Supreme Court reversed, holding Prasad had constructive notice of the true locations and therefore could not recover for improvements made after being dispossessed by the rightful owner.
Issues
| Issue | Plaintiff's Argument (Prasad) | Defendant's Argument (Washingtons) | Held |
|---|---|---|---|
| Whether Prasad could obtain a constructive trust and money judgment for improvements he made to Parcel 9‑A after mistakenly renovating it | Prasad argued equity requires restitution for unjust enrichment; he need not show fraud and should recover under an implied‑in‑law contract (quantum meruit) because the Washingtons benefited from his work | Washingtons argued Prasad had constructive (and actual) notice of the correct parcel locations and thus, having failed to exercise due diligence, cannot recover for permanent improvements made while not the rightful owner | Reversed: purchaser is charged with constructive notice from title papers and maps; because Prasad failed to exercise due diligence and had constructive notice of the plat/tax map, he cannot recover for improvements after being dispossessed |
| Whether the trial court properly applied equitable relief (constructive trust) despite Prasad’s failure to exercise due diligence | Prasad relied on equitable principles (citing Faulknier) to justify imposing a constructive trust even absent fraud | Washingtons contended equitable relief is barred where plaintiff had imputed knowledge (unclean hands not reached by SCOTVa) and purchaser must use means of knowledge in chain of title | Reversed: Faulknier was inapposite (life insurance/separation‑agreement context); equitable relief cannot override the long‑standing rule imputing title information to purchasers who fail to review records |
Key Cases Cited
- Kian v. Kefalogiannis, 158 Va. 129 (court reaffirms purchaser must exercise reasonable diligence and is charged with constructive notice)
- McDonald v. Rothgeb, 112 Va. 749 (refuses recovery for improvements where purchaser had record notice; registry statute policy)
- Burwell v. Fauber, 62 Va. (discussing purchaser’s duty to inspect title papers and constructive notice)
- Faulknier v. Shafer, 264 Va. 210 (equitable imposition of constructive trust in different context; court found it inapposite here)