Fortune-Johnson, Inc. v. RPM Construction Corp.

CourtCourt of Appeals of Virginia
DecidedFebruary 25, 2025
Docket1776234
StatusUnpublished

This text of Fortune-Johnson, Inc. v. RPM Construction Corp. (Fortune-Johnson, Inc. v. RPM Construction Corp.) is published on Counsel Stack Legal Research, covering Court of Appeals of Virginia primary law. Counsel Stack provides free access to over 12 million legal documents including statutes, case law, regulations, and constitutions.

Bluebook
Fortune-Johnson, Inc. v. RPM Construction Corp., (Va. Ct. App. 2025).

Opinion

COURT OF APPEALS OF VIRGINIA UNPUBLISHED

Present: Judges Beales, O’Brien and Fulton Argued at Alexandria, Virginia

FORTUNE-JOHNSON, INC., ET AL.

v. Record No. 1757-23-4

QFS, LLC, F/K/A QUIET FLOOR SYSTEMS, LLC

v. Record No. 1772-23-4

ADVANCED CAULKING & WATERPROOFING, INC.

FORTUNE-JOHNSON, INC., ET AL. MEMORANDUM OPINION* BY v. Record No. 1773-23-4 JUDGE MARY GRACE O’BRIEN FEBRUARY 25, 2025 BABCOCK ENTERPRISES, INC., d/b/a R & B CONSTRUCTION

v. Record No. 1775-23-4

MILLENNIUM CONSTRUCTION, LLC

v. Record No. 1776-23-4

RPM CONSTRUCTION CORP.

FROM THE CIRCUIT COURT OF ARLINGTON COUNTY Louise M. DiMatteo, Judge

Katherine M. Lennon (Jennifer Eaton; Dustin M. Paul; Woods Rogers Vandeventer Black PLC, on briefs), for appellants.

* This opinion is not designated for publication. See Code § 17.1-413(A). Lacey Ullman Conn (Sean C. Workowski; Laurel S. Huerkamp; Randolph Critzer, Jr.; James S. Liskow; Janeen B. Koch; Anna G. Zick; Thomas, Thomas & Hafer LLP; Frith Anderson & Peake, PC; DeCaro, Doran, Siciliano, Gallagher & DeBlasis, LLP; Chadwick, Washington, Moriarty, Elmore & Bunn, P.C.; McGavin, Boyce, Bardot, Thorsen & Katz, PC, on brief), for appellees.

In these consolidated appeals, Fortune-Johnson, Inc.1 challenges an order sustaining the

demurrers of five subcontractors and dismissing all claims for contractual and equitable

indemnification. Fortune-Johnson contends the court misconstrued Articles 16 and 18 in the

subcontracts; misapplied the anti-indemnification statute of Code § 11-4.1; disregarded ambiguities

in the subcontracts’ language; and improperly made negligence a prerequisite for equitable

indemnification. For the following reasons, we affirm.

BACKGROUND

Fortune-Johnson was the general contractor for the construction of an apartment building

owned by Archstone Parkland Gardens, LLC. Archstone alleged in a suit against Fortune-Johnson

that failures with weather-proofing apartment balconies caused damage to other parts of the building

and required the removal and reconstruction of almost 200 balconies. Archstone’s litigation against

Fortune-Johnson, which is still pending in the circuit court,2 is strictly a breach of contract case; a

negligence claim was dismissed.

Fortune-Johnson filed separate actions against each subcontractor, asserting that the

subcontracts indemnified Fortune-Johnson against Archstone’s claims or, alternatively, that the

1 The other appellant in these cases, Katerra, Inc., acquired Fortune-Johnson after the construction contracts at issue were executed and the project had begun. We refer to the appellants collectively as “Fortune-Johnson.” 2 Archstone Parkland Gardens, LLC v. Fortune-Johnson, Inc. and Katerra, Inc., Case No. CL19003410-00. -2- subcontractors were liable for equitable indemnification.3 The complaint did not attach the

subcontracts but relied on Article 16 as the basis of the contractual indemnification claim.

The subcontractors filed a motion craving oyer for Fortune-Johnson to produce and identify

the subcontracts underlying the suits. The subcontractors also demurred, arguing that Article 16

was void under Code § 11-4.1 and that the complaints failed to state a claim for equitable

indemnification.

In compliance with the court’s order granting the motion craving oyer, Fortune-Johnson

filed a notice identifying the subcontract provisions that formed the basis of its claims. In relevant

part, this compliance notice identified not only Article 16 but also Article 18(c). The complaint had

not mentioned Article 18, and Fortune-Johnson did not seek leave to amend.

At a hearing on the demurrers, the subcontractors objected to the court’s consideration of

Article 18(c) because “there’s no allegation in the complaint itself that [Fortune-Johnson is] relying

on this.”

The court issued an opinion letter finding that, under Code § 11-4.1, Article 16 was void

because it required the subcontractors to indemnify Fortune-Johnson for Fortune-Johnson’s own

negligence. The court also found that Article 18(c) was a promise to perform and not an actionable

promise to indemnify. Finally, the court dismissed the equitable indemnification claim because

equitable indemnification only applies to damages resulting from negligence, and “the negligence

case ha[d] been eliminated” from the underlying suit Archstone brought against Fortune-Johnson.

The court sustained the subcontractors’ demurrers without leave to amend, and these appeals

followed.

3 Fortune-Johnson asserted two other claims not at issue in this appeal: breach of contract for failure to obtain insurance and contribution for any negligence damages awarded to Archstone. -3- ANALYSIS

A. Standard of Review

“The purpose of a demurrer is to determine whether the pleading and any proper

attachments state a cause of action upon which relief can be given.” Young-Allen v. Bank of Am.,

N.A., 298 Va. 462, 467 (2020) (quoting Steward v. Holland Fam. Props., LLC, 284 Va. 282, 286

(2012)). “A [circuit] court’s decision sustaining a demurrer presents a question of law [that

appellate courts] review de novo.” Kalergis v. Comm’r of Highways, 294 Va. 260, 264 (2017) (first

alteration in original) (quoting Harris v. Kreutzer, 271 Va. 188, 196 (2006)). Likewise, we review

issues of statutory and contract interpretation de novo. See Ayers v. Brooke Rd., LLC, 300 Va. 315,

321 (2021) (statutory interpretation); Va. Fuel Corp. v. Lambert Coal Co., 291 Va. 89, 98, 106-07

(2016) (contract interpretation).

B. Contractual Indemnification

Fortune-Johnson argues the court erred in finding that the complaint failed to state a claim

for contractual indemnification based on either Article 16 or Article 18(c) of the subcontracts. The

court found that Article 16 was void under Code § 11-4.1 and that Article 18(c) was not an

actionable indemnification provision.

(i) Article 16 is void and unenforceable under Code § 11-4.1.

Code § 11-4.1 provides that certain indemnification provisions in construction contracts are

void as against public policy. Specifically,

any provision . . . by which the contractor performing such work purports to indemnify or hold harmless another party to the contract against liability for damage arising out of bodily injury to persons or damage to property suffered in the course of performance of the contract, caused by or resulting solely from the negligence of such other party or his agents or employees, is against public policy and is void and unenforceable.

-4- Code § 11-4.1 (emphasis added). The Supreme Court has interpreted this statute to “void[] any

indemnification provision that reaches damage caused by the negligence of the indemnitee, even if

the damage does not result solely from the negligence of the indemnitee.” Uniwest Constr., Inc. v.

Amtech Elevator Servs., Inc., 280 Va. 428, 442 (2010).4 In Uniwest, a general contractor (Uniwest)

sued a subcontractor (Amtech) for contractual indemnification based on a clause that provided as

follows: “If any claims . . . be made or asserted, whether or not such claim(s) are based upon the

negligence of Uniwest . . . , [Amtech] agrees to indemnify and [hold] harmless Uniwest from any

and all such claims . . . .” Id. at 441. The Court found that this language was so broad that it

indemnified Uniwest for its own negligence and was therefore void as against public policy under

Code § 11-4.1. Id. at 442.

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