center of driveway during Dabbiere period).’ The undisputed evidence is that the Urn has not been physically annexed to the realty.® Nor does it qualify as property “adapted to the use of the property to which [it is] annexed, and [] essential to the purpose for which the [property was] acquired.” Transcon. Gas Pipe Line Corp. v. Prince William Cnty., 172 S.E.2d 757, 762 (Va. 1970) (gas mains “buried in the ground”). Although the Urn remained in one location for extended periods of time, it had been moved from time to time, as mentioned above, and its relatively fixed location does not under the circumstances allow any inference of specialized or adapted use relative to the land. See Rothermich v. Union Planters Nat’l Bank, 10 S.W.3d 610, 617 (Mo. Ct. App. 2000) (“The fact that the item was actually removed and installed elsewhere further reinforces the conclusion that the item was not so peculiarly adapted to the realty as to constitute a fixture.”).
7 Compare Danville Holding, \6 S.E.2d at 351 (machinery “securely fastened to the floor of the building”); /n re Alterman, \27 B.R. at 361 (animal cages in veterinary hospital building “secured to the wall or to each other’); Lamar Corp. v. City of Richmond, 402 §.E.2d 31, 34 (Va. 1991) (billboards “supported by steel poles, three feet and five feet in diameter” with the “supporting poles” “encased in concrete slabs, .. . extending underground over thirteen feet”); Adams Outdoor Advert. Ltd. P’ship v. Long, 483 S.E.2d 224, 226 (Va. 1997) (billboards “permanently affixed to the land”); United States Fire Ins. Co. v. Martin, 282 S.E.2d 2, 3 (Va. 1981) (air conditioning compressors “built into the building”); Transcon. Gas Pipe Line Corp. v. Prince William Cnty., 172 S.E.2d 757, 762 (Va. 1970) (gas mains “buried in the ground”) with In re Ryerson, 519 B.R. 275, 289 (Bankr. D. Idaho 2014) (holding that two “monumental bronze” sculptures “rest[ing]” on “concrete pads in the gardens outside the residence” were “personal and movable works of art, and are not fixtures”); McBride v. Commonwealth, 2003 WL 21788936, at *2 (Va. Ct. App. Aug. 5, 2003) (affirming that an electric air compressor was personal property when “connection to the building was merely by wires and a hose” and “was easily detached”). 8 In support of its position, Defendant relies on two non-Virginia cases, which are dissimilar in almost every aspect. See Def.’s Mem. at 22 (citing to Snedeker v. Warring, 12 N.Y. 170, 171 (1854) and Oakland Cemetery Co. v. Bancroft, 28 A. 1021, 1021 (Pa. 1894)). In Snedeker, the court found the statute to be a fixture because removing it would have left an “unseemly and uncovered base” which was permanent and specifically constructed, made of the same material as the house for ornamental purposes, and removal would have caused an “objectionable deformity.” 12 N.Y, at 177-78. In Oakland Cemetery Co., the court held that a cemetery monument, consisting of a stone foundation extending below ground down below the frost line, “upon [which] foundation a marble base was placed, surmounted by a marble shaft, and upon the shaft the statue in question was erected” and “(t]he whole of the structure was cemented together, and constituted a solid mass,” constituted a fixture. 28 A. at 1021. It had been specially “built by the cemetery company for the ornamentation of the grounds.” /d. Defendant also asserts that “many jurisdictions have concluded, in the context of fixtures law, that an object may be ‘affixed to the land’ solely by force of gravity.” Def.’s Mem. at 22-24. To the extent any of the cited cases stands for that proposition based on facts comparable to this case, they are inconsistent with settled Virginia taw on fixtures. See Pl.’s Opp’n. at 16-17. 15
There is no evidence that anyone ever viewed the Urn as a fixture other than the Defendant, who voiced that view for the first time sometime between May and June, 2010, when Plaintiff acted to obtain possession of it. See also supra Section I § 10; [Doc. Nos. 55-12, 55-13, 55-14]. Rather, the only evidence concerning how its owners viewed the Urn before the parties’ dispute is the 1941 Memorandum between the Roccas and Justice Jackson; the 2009 Purchase Agreement between Mrs. Kennedy and Defendant, which includes Exhibit F, titled “List of Excluded Personal Property,” which does not include the Urn; and Mrs. Kennedy’s gifting of the Urn to Plaintiff. The 1941 Memorandum specifically lists the “lawn urn” as “personal property” that “will remain with the real estate and become the property of the purchaser.” [Doc. No. 55-5] at 2; Def.’s Mem. at 12-13; Pl.’s Mem. at 10-11. The 2009 Purchase Agreement contains a list of “fixtures” that do not convey, [Doc. No. 55-11] at 35; and the Urn’s absence from that list does not allow the inference that the parties considered the Urn a fixture.? And Mrs. Kennedy’s gifting of the Um to Plaintiff in 2010 reflects her view that the Urn did not convey with its sale to Defendant. See also supra Section I 4 9 note 2. For all of these reasons, the Urn is personal property, not a fixture, as matter of law, and it, therefore, did not convey with Defendant’s purchase of Hickory Hill, but rather remained the personal property of Mrs. Kennedy.'°
Defendant points to this List as a recognition by Mrs. Kennedy and Defendant that at the time he purchased Hickory Hill the Urn was a fixture and not personal property. Def’s Opp’n at 24-27. That contention, however, ignores the List’s purpose, the exclusion of those items that would otherwise convey as “fixtures,” i.e., property attached to the house and other structures, such as the listed chandeliers, weathervane on top of a cabana, and candle sconces screwed in the wall. Pl.’s Reply at 9-10; [Doc. No. 55-11] at 35. In any event, however viewed, Exhibit F does not alter the conclusion dictated under the other Danville factors that the Um is personal property as a matter of law, particularly since an intention to consider the Um a fixture must be accompanied by an actual or constructive “annexation” to the property, something clearly lacking here. See Danville Holding, 16 S.E.2d at 232, 349 (stating that while “(t]he intention of the party making the annexation is [a] paramount and controlling consideration[,] . . . there must be actual or constructive annexation[]” in order to reach the issue of intent). '© Defendant makes the alternative argument that even if the Urn is not a fixture, it is an “improvement” to the property that conveyed with the land pursuant to the 2009 Purchase Agreement. Def.’s Mem. at 25-26. There is no merit to this argument. “The word ‘improvement’ is a comprehensive term, which includes in its meaning any development whereunder work is done and money expended with reference to the future benefit or enrichment of 16
2. The Plaintiff had sufficient ownership of the Urn when the parties entered into the 2010 Agreement. Defendant contends that even if the Urn were personal property, Mrs. Kennedy never successfully gifted the Urn to Plaintiff, thereby depriving her of any legal ability to affect its disposition. First, there is no evidence of any dispute between Plaintiff and Mrs. Kennedy over its ownership or whether the Urn was gifted to Plaintiff, as she contends. No one, other than Defendant, has claimed that Plaintiff does not own the Urn. Nevertheless, Defendant argues that there is evidence that Plaintiff came into the actual possession of the urn . . . [n]or was any written instrument prepared to evidence the gift or the transfer of ownership” to comply with Virginia law. Def.’s Mem. at 29. Instead, Defendant contends that the evidence only proves that Mrs. Kennedy “desired” to gift the Urn to Plaintiff. /d. at 9 (citing to a June 14, 2010 letter from Mrs. Kennedy’s attorneys to Defendant’s counsel which stated that “Mrs. Kennedy desires to give the urn to her daughter as a gift.” [Doc. No. 55-14] at 3). “T]he common elements necessary to constitute a gift infer vivos are: (1) The gift must be of personal property; (2) possession of the property must be delivered at the time of the gift to the donee, or some other for him and the gift must be accepted by the donee: and (3) the title to the property must vest in the donee at the time of the gift.” Ne/son v. Liggan, 53 S.E.2d 798, 802 (Va. 1949), adhered to on reh’g, 56 S.E.2d 54 (1949) (internal quotation marks and citation omitted). “The delivery, however, may be actual, constructive, or symbolical, depending upon the nature of the thing given.” Gardner v. Moore’s Adm’r, 94 S.E. 162, 163 (Va. 1917). With
the premises.” Eppes v. Eppes, 27 S.E.2d 164, 172 (Va. 1943). Here, the Urn is a chattel, not a “development” or an undertaking of work on the property or an “addition or other change in the structure of a building calculated to add to its useable value.” Taylor v. Wal-Mart Stores, Inc., 2001 WL 418740, at *1 (W.D. Va. Mar. 12, 2001) (applying Eppes test). 17
respect to constructive delivery of a gift of personal property, “it is sufficient if the donor delivers the means of getting possession.” /n re Garrett, 45 B.R. 190, 193 (Bankr. E.D. Va. 1984). “The intention to give, manifested by the words or acts of the donor, is often the crucial test in determining a constructive delivery.” Snidow v. First Nat'l Bank of Narrows, 16 S.E.2d 385, 387 (Va. 1941), set aside on other grounds sub nom., 18 8.E.2d 405 (Va. 1942); see also Monds v. Monds, 68 Va. App. 674, 689 (2018) (“[A] clear and unmistakable intention on the part of the donor to make a gift of his property is an essential requisite to a gift inter vivos. And this intention must be inconsistent with any other theory.”) (internal quotations and citation omitted). Moreover, “[t]here are many things of which actual, manual tradition cannot be made, either their nature or their situation at the time. It is not the intention of the law to take from the owner the power of giving these. It merely requires that he shall do what, under the circumstances, will in reason be considered equivalent to an actual delivery.” Snidow, 16 S.E.2d at 387 (quoting Elam v. Keen, 31 Va. 333, 335 (1833)) (emphasis added); see also Payne v. Payne, 104 S.E. 712, 716 (Va. 1920) (‘There was a delivery if there was the intention to deliver which is effectuated by words or acts, and this is a question of fact to be gathered from all of the circumstances of the particular case.”’). While it is debatable who bears the burden of proof with respect to the status of Plaintiff's ownership of the Urn,'' the evidence is undisputed that Mrs. Kennedy intended to gift
Compare Miller v. Buck, 271 F. Supp. 822, 828 (W.D. Va. 1967) (“The court also pointed out that, though the burden of proof is normally upon claimant to prove the gift by clear and convincing evidence, when the owner of a safe-deposit box and his donee execute a contract or lease which recites that the property therein is the joint property of the lessees, with right of survivorship, and recites that the lessees acknowledge the receipt of two keys to said box—this creates a prima facie case of a valid inter vivos gift of a joint interest (with right of survivorship) in said property. Existence of such a contract, then, shifts the burden of proof to the party contesting the gift.”) (internal citations omitted) with In re Garrett, 45 B.R. at 192 (“With respect to the burden of proof of establishing a sufficient delivery, it is settled in Virginia that the one claiming the validity of the gift has the burden of proof to establish by clear and convincing evidence all the facts and circumstances which would show that the gift was, in fact, a valid one.”). 18
the Um to Plaintiff, she confirmed to Plaintiff and others her decision to gift the Urn to Plaintiff, she took all steps necessary to deliver that gift, including authorizing Plaintiff to take actual possession, and given the “situation,” Plaintiff took all necessary steps to take actual possession, frustrated in that effort only by the Defendant’s last minute decision to challenge her right to possession. In that regard, it is undisputed that sometime between April and May of 2010, but before Mrs. Kennedy’s departure from Hickory Hill on May 31, 2010, Mrs. Kennedy allowed each of her children to choose three items from Hickory Hill and Plaintiff chose the Urn as one of the three items; that on June 4, 2010, shortly after Mrs. Kennedy vacated Hickory Hill, Plaintiff made arrangements to obtain possession of the Urn; Defendant and Mrs. Kennedy’s personal assistant, Anne C. Phelan exchanged emails with respect to Plaintiff's obtaining possession of the Urn; Defendant subsequently objected, and as a result, Plaintiff did not take possession of the Urn. Here, “the crucial test in determining a constructive delivery” has been satisfied since the evidence is undisputed that Mrs. Kennedy “manifested [her intention] [flor the gift to be complete [to Plaintiff] by the words or act of [Mrs. Kennedy],” Snidow, 16 S.E.2d at 385-87; timely arrangements were made for Plaintiff to take actual possession, which did not occur for reasons beyond their control. In short, Mrs. Kennedy and Plaintiff had done all that was necessary and “manual tradition [could not] be made, either from their nature or their situation at the time.” Snidow, 16 S.E.2d at 387. They therefore did “what, under the circumstances, will in reason be considered equivalent to an actual delivery.” /d. (quoting Elam, 31 Va. at 335) (emphasis added). Under all the undisputed facts and circumstances, Plaintiff constructively possessed the Urn, its gift to her was completed as matter of law, and Defendant effectively recognized
Plaintiff's status as the owner through gift of the Urn when the parties entered in the 2010 Agreement on June 16, 2010, resolving their dispute over the Urn. 3. Plaintiff's agreement to postpone her possession of the Urn constituted adequate consideration to support the 2010 Agreement. Both parties agree that “‘a promise to forbear the exercise of a legal right is adequate consideration to support a contract.” Greenwood Assoes., Inc. v. Crestar Bank, 448 S.E.2d 399, 402 (Va. 1994); see also Thompson v. Commonwealth, 89 S.E.2d 64, 67 (Va. 1955). Prior to reaching the June 16, 2010 Agreement, the parties disputed whether the Urn constituted a fixture. [Doc. No. 55-14]. To resolve that dispute, the parties entered into an agreement whereby Defendant would be permitted to hold the Urn for ten years and upon expiration, he would return it to Plaintiff. See C.&O. Ry. Co. v. Mosby, 24 S.E. 916, 918 (Va. 1896) (“The law favors the compromise . . . of disputed claims . . . and a settlement . . . ought not to be set aside except upon the most satisfactory evidence.”). As such, the “compromise [] involve[d] an act of favor or concession by each of the parties. The favor or concession received by one is the consideration for the favor or concession granted the other.” Thompson, 89 S.E.2d at 67 (citing Cawley v. Hanes, 173 Va. 381, 390 (1939)). Because she reasonably claimed that she had the legal right to immediate possession of the Urn, her forbearance of that legal right constituted adequate consideration to support the 2010 Agreement, which compromised and settled the parties’ conflicting claims to the Urn. B. Plaintiff’s request for specific performance is not precluded based on the doctrines of unclean hands or equitable estoppel. Based on Plaintiff's misrepresentation concerning the Urn’s origin, Defendant has alleged that Plaintiff is prevented from obtaining the equitable remedy of specific performance of the 2010 Agreement under the doctrines of unclean hands and equitable estoppel.
A party is precluded from obtaining relief on an equitable claim under the doctrine of unclean hands if the party “has been ‘guilty of any inequitable or wrongful conduct with respect to the transaction or subject matter sued on.’” Worldcom, Inc. v. Boyne, 68 F. App’x 447, 451 (4th Cir. 2003) (quoting Richards v. Musselman, 267 S.E.2d 164, 166 n.1 (Va. 1980)); see Vienna Metro LLC v. Pulte Home Corp., 786 F. Supp. 2d 1076, 1084 (E.D. Va. 2011) (“Unclean hands prevents a party from obtaining equitable relief because of that party’s own inequitable conduct.”) (citing Brown v. Kittle, 303 S.E.2d 864, 867 (Va. 1983)). “[A] defendant raising an unclean hands defense must demonstrate a close nexus between a party’s unethical conduct and the transactions on which that party seeks relief.” Worldcom, Inc., 68 F. App’x at 451 (internal quotation marks omitted). Here, it is undisputed that Plaintiff did not know at the time she entered into the 2010 Agreement that the Urn had not come from Hammersmith; and there is no evidence that she otherwise acted unfairly or inequitably. [Doc. No. 53-8] at 40; see also id. at 41 (Defendant stating, “I was not implying [that what Plaintiff said about the Urn] was untrue or intentionally untrue.”’); id. at 40 (Defendant stating that he had “no reason to suspect that [Plaintiff] knew that [the Urn] had not come from Hammersmith.”); id. at 36 (testimony of Defendant confirming that he had the Urn for 10 years and that Plaintiff had done everything she said she would do as part of that June 16, 2010 agreement, and that there was nothing left for her to do.). Second, for the reasons stated infra in connection with Defendant’s fraud and mutual mistake claims, there was not a “close nexus between a party’s [alleged] unethical conduct and the transactions on which that party seeks relief.” Worldcom, Inc., 68 F. App’x at 451 (internal quotation marks omitted).
Based on undisputed facts, Plaintiff is therefore entitled to judgment as a matter of law on Defendant’s assertion of the doctrine of unclean hands.'* Likewise, as to equitable estoppel. Courts have used equitable estoppel as a remedy to enjoin a party whose action induced reliance by another from unfairly benefiting from the relying party’s change in position. Emp’rs Commercial Union Ins. Co. of Am. v. Great Am. Ins. Co., 214 Va. 410 (1973). However, there is no affirmative cause of action for estoppel under Virginia law. Parker v. Westat, Inc., 301 F.Supp.2d 537, 544 (E.D. Va. 2004). Equitable estoppel usually operates as a shield rather than a sword, and therefore does not of itself create a new right. /d. (citing Meriweather Mowing Serv., Inc. v. St. Anne’s-Belfield, Inc., 51 Va. Cir. 517 (2000)). When equitable estoppel is applicable, a party must show (1) a representation; (2) reasonable reliance on the representation; (3) a change of position; and (4) resulting harm. Waynesboro Vill. LLC v. BMC Props., 496 S.E.2d 64, 68 (Va. 1998). Again, for the reasons discussed infra in connection with Defendant’s rescission claims, the origin of the Urn had nothing to do with whether the Urn was personalty or a fixture and any representation as to its origins was not material to the subject matter of the dispute being compromised in the 2010 Agreement. Plaintiff's realization that her previous understanding as to the Urn’s origins was incorrect did not inflict any cognizable harm on the Defendant, as Plaintiff's “change in position” did not interfere with Defendant’s obtaining the full benefit of his bargain, which he in fact received. Based on the undisputed facts, Plaintiff is entitled to judgment as a matter of law on Defendant’s equitable estoppel defense. See Smith v. Sam’s E.,
2 Alternatively, Plaintiff contends that Defendant cannot assert a defense of unclean hands because he himself has unclean hands based on his concealment for four to five years of the 1941 Memorandum—stating that the Urn was “personal! property”—and because Defendant “went back on his word that he would protect the Urn and maintain it in the same condition that he found it.” Pl.’s Mem. at 27. Given that Plaintiff was not guilty of unclean hands as a matter of law, there is no need to consider this alternative position. 22
Inc., 2016 WL 3189293, at *5 (W.D. Va. June 7, 2016), aff'd, 672 F. App’x 311 (4th Cir. 2017) (the party asserting the defense of equitable estoppel “bears the burden of proving these elements by ‘clear, precise and unequivocal evidence.’” (citing Cowan v. Psychiatric Assocs., Ltd., 387 S.E.2d 747, 749 (Va. 1990))). C. Defendant is not entitled to rescission based on fraudulent inducement or mutual mistake either as a separate cause of action or as an affirmative defense. Defendant seeks relief from the 2010 Agreement based on mutual mistake and fraudulent inducement, asserted as separate causes of action for recission in Counts I and II of his counterclaim and also as affirmative defenses in his Answer. Plaintiff is entitled to judgment as a matter of law on these claims, either as separate causes of action or as affirmative defenses. □ 1. Defendant’s rescission claims in Counts I and IT based on mutual mistake and fraudulent inducement are barred by the doctrine of laches. Defendant's rescission claims based on fraudulent inducement and mutual mistake are equitable in nature, rather than legal claims, and are therefore subject to dismissal under the doctrine of laches. Defendant’s obligation to act with respect to such rescission claims has been summarized as follows: An application to rescind a contract should be made with due diligence, for prompt action is essential when one believes himself entitled to the rescission of his contract .... Where a suit based on fraud is not for damages but seeks to rescind a writing or impose a trust or other equitable relief, it is not a common-law action for fraud but is equitable in nature. Consequently, the doctrine of laches is applicable rather than any specific statute of limitations. Relief will not be granted to one who has been guilty of inexcusable delay in asserting the right. He will be held to have waived the objection and will be conclusively bound by the contact as if the ground of rescission did not exist.
13 Defendant has also asserted in Count II] of his Counterclaim a cause of action for rescission based on unclean hands and equitable estoppel. Neither unclean hands nor equitable estoppel is a cause of action, but rather an affirmative defense to Plaintiff's request for specific performance of the 2010 Agreement, as to which Plaintiff is entitled to judgment as a matter of law. See supra Section III(B).
16 Michie’s Jurisprudence of Virginia and West Virginia, Rescission, Cancellation, and Reformation § 7 (2010) (emphasis added, collecting cases, and internal citations omitted). As the Fourth Circuit recognized in White v. Daniel, 909 F.2d 99, 102 (4th Cir. 1990): Laches is one of the affirmative defenses generally allowable under [Federal Rule of Civil Procedure] 8(c), although it is properly relevant only where the claims presented may be characterized as equitable, rather than legal . . . . Laches imposes on the defendant the ultimate burden of proving ‘(1) lack of diligence by the party against whom the defense is asserted, and (2) prejudice to the party asserting the defense.’ The first element of laches— lack of diligence—exists where ‘the plaintiff delayed inexcusably or unreasonably in filing suit.” An inexcusable or unreasonable delay may occur only after the plaintiff discovers or with reasonable diligence could have discovered the facts giving rise to his cause of action. The defendant may show lack of diligence either by proof that the action was not commenced within the period provided by the applicable statute of limitations or by facts otherwise indicating a lack of vigilance. 909 F.2d at 102 (collecting cases). In Virginia, the statute of limitations for claims based on mutual mistake or fraud is two years from when the claimant learns of the grounds for rescission. Va. Code §§ 8.01-248 (“Every personal action accruing on or after July 1, 1995 ... shall be brought within 2 years after the right to bring such action has accrued.”); Va. Code §§ 8.01- 8.01-249 (actions in fraud or mistake “shall be deemed to accrue when such fraud [or] mistake . . . is discovered or by the exercise of due diligence reasonably should have been discovered”); see Hughes v. Foley, 128 S.E.2d 261, 263 (Va. 1962) (the burden of proof is on the claimant “to prove that he acted with due diligence and yet did not discover the fraud or mistake until within the statutory period of limitation immediately preceding the commencement of the action”). Defendant entered into the 2010 Agreement on June 14, 2010. Defendant first asserted his rescission claim when he filed his Counterclaim, Answer and Affirmative Defenses on January 27, 2021 and raised the issue of the Um’s origins to the Plaintiff for the first time on May 18, 2020. The uncontested record shows that Defendant received information that
objectively raised a question concerning the origin of the Urn no later than 2015 or 2016 when he received the 1941 Memorandum, which listed the Um as personal property that would remain at Hickory Hill after its sale to Justice Jackson, and the Herrick book, which had photographs identifying the Urn as the urn on the property when it was sold to Justice Jackson. However, he said nothing to Plaintiff about what he had learned until May, 2010, after she had fully performed, Defendant had received the full benefit from their contract and she sought to retrieve the Um, as she was entitled to under the 2010 Agreement.'* Indeed, he said nothing during the parties’ discussions between April and November, 2018 about Plaintiff's interest in an early retrieval of the Urn, Defendant’s efforts to replace the Urn with a replica, and Defendant’s interest in finding an “acceptable arrangement . . . to keep the existing urn in place.” [Doc. No. 53-14] at 2-3. Defendant contends that he was “not sure” or “did not have confidence” in 2015 that the urn pictured on the property in 1941 was in fact the Urn that Plaintiff represented as coming from Hammersmith, and that it wasn’t until 2020 when he received another photo of the Urn from a historian of the property that he concluded that the Urn had been on the property since at least 1941. Def.’s Opp’n at 23; [Doc. No. 61-1] at 4. Whatever Defendant’s subjective beliefs as to the conclusiveness of the information he had received in 2015 and 2016 about the Urn’s origins, that information objectively placed Defendant on notice that the Urn likely did not come
In a letter to Plaintiff on May 18, 2020, Defendant stated: Dear Kerry, . . . 10 years ago when you reached out | had said that | felt the urn had conveyed with the property and that I felt it was an important piece of the history of the property that should stay here.... At that time you told me the story that the um had come from Hammersmith and was a gift from your Aunt Jackie, and that it had great sentimental value to you due to that history. Based on this story ] agreed to your request and we made the 10 year agreement. Since then I have discovered some additional pieces of information that are attached. I am confident the urn was in fact on the property when the house conveyed from the Rocca family to the Jackson family, and then on to the John Kennedy family. Please take a look and can we discuss this when convenient. [Doc. No. 53-20]. 95
from Hammersmith; and he offers no reasons why in light of those concerns he delayed any investigation for five or six years. Based on the undisputed facts and circumstances presented, Defendant engaged in inexcusable delay and a lack of due diligence, as a matter of law, in asserting any right of rescission with respect to the 2010 Agreement; and as a result, Plaintiff has been prejudiced in her ability to be restored to the status quo ante!> or obtain possession of the Urn for over a year from when she was entitled to regain possession. Defendant is therefore barred from asserting his rescission claim in either Counts I and II of his Counterclaim.'® 2. The 2010 Agreement was not based on mutual mistake. Defendant claims that Plaintiff “persuad[ed] Defendant to relinquish his ownership of the urn as the purchaser of Hickory Hill, [by] represent[ing] that (1) the urn was a family heirloom of her aunt Jacqueline Kennedy and (ii) the urn had been brought to Hickory Hill when Mr. and Mrs. John F. Kennedy purchased it in 1955.” Def.’s Opp’n at 15. Based on that contention, Defendant claims that the parties entered the 2010 Agreement based on a mutual mistake of fact, namely, that the Urn was moved to Hickory Hill from Hammersmith. /d.
'S See 16 Michie’s Jurisprudence of Virginia and West Virginia, Rescission, Cancellation, and Reformation § 16 (2010) (“[A person demanding rescission of a contract must restore or offer to restore the other party that which he may have received under the contract.”). Given that Defendant has received the full benefit of his bargain, it would be difficult to restore to Plaintiff over ten years of lost possession and enjoyment of the Um, were the 2010 Agreement rescinded. /d. (“Equity is always reluctant to rescind unless the parties can be put in status quo.”). '6 To the extent that any contrary inferences could reasonably have been drawn by a fact finder, the Court, in its limited discretion in this non-jury case, would find, based on the same evidence that would be presented at trial, that Defendant is barred under the doctrine of laches from asserting his rescission claims in Counts | and II. See Cincinnati Ins. Co.,430 F. Supp. 3d at 119 (citing /nternational Bancorp, LLC, 329 F.3d at 362 (“It makes little sense to forbid the judge from drawing inferences from the evidence submitted on summary judgment when that same judge will act as the trier of fact, unless those inferences involve issues of witness credibility or disputed material facts. Ifa trial on the merits will not enhance the court’s ability to draw inferences and conclusions, then a district judge properly should draw his inferences without resort to the expense of trial.” (quoting /n re Placid Oil Co., 932 F.2d at 398)).
A mutual mistake of fact gives rise in equity to a right of rescission. Hensley v. Dreyer, 247 Va. 25, 30 (1994). But “the mutual mistake [must be] in a matter which is the cause or subject of the contract—that is, in the substance of the thing contracted for[,]” Briggs v. Watkins, 70 S.E. 551, 554 (Va. 1911) (emphasis added). See also Jennings v. Jennings, 12 Va. App. 1187, 1192 (1991) (“The mistake may be common to both parties to a transaction, and may consist either in the expression of their agreement, or in some matter inducing or influencing the agreement, or in some matter to which the agreement is to be applied. Nothing is more clear in equity than the doctrine that a contract founded in mutual mistake of the facts constituting the very basis or essence of it will avoid it.”) (emphasis added and quoting Briggs, 70 S.E. at 554); McCarthy v. Bayliss, Chry., 1987 WL 488700, *2 (Va. Cir. Ct. Aug. 19, 1987) (“[T]he mistake must be material to the transaction, affecting the very substance of it and not merely incidental matter”); Holderby v. Harvey C. Taylor Co., 104 S.E. 550, 552 (W.Va. 1920) (“It is not permitted for a casual, technical, or unimportant breach or failure of performance, but only for a breach so substantial as to tend to defeat the very object of the contract, and in practically all cases of rescission it is held that restoration of the status quo is an essential prerequisite to the right to rescind.”) (cited by Bolling v. King Coal Theatres, Inc., 41 $.E.2d 59, 62 (Va. 1947)). Moreover, “[t]o prove a mutual mistake, the challenging party, . . . bears a high degree of proof.” Tiger Fibers, LLC v. Aspen Specialty Ins. Co., 594 F. Supp. 2d 630, 644 (E.D. Va. 2009) (stating that the challenging party “must show that ‘there has been a meeting of minds—their agreement actually entered into, but the contract . .. does not express what was really intended by the parties thereto’” (citing to Dickenson Cty. Bank v. Royal Exch. Assur. of London, England, 157 Va. 94, 103 (1931))).
Nothing in the 2010 Agreement states why or for what reasons the agreement was made. See Baum v. Whitehorse Marine, Inc., 46 Va. Cir. 527 (1996) (“[A] party’s subjective intent, undisclosed at the time of contracting, can never form the basis of contract”). There is no contention that the 2010 Agreement did not state accurately what the parties agreed to or intended; and Plaintiff's statement as to the Urn’s provenance had nothing to do with whether the Urn was personal property or a fixture. Nor does Defendant challenge the truth of Plaintiff's overall point that the Urn had sentimental value to the Plaintiff because of its association with her family and her growing up at Hickory Hill. Nor is there any evidence that somehow Defendant's enjoyment of the Urn during the ten year period he was entitled to retain the Um had anything to do with where it came from originally. In short, the alleged mutual mistake had nothing to do with the substance of the contractual bargain and did not affect the performance of that contract. See McCarthy, 1987 WL 488700, *2. Plaintiff has fully performed, as Defendant expected, and Defendant continued to receive and enjoy the full benefits of precisely what he bargained for, even after he learned that the Urn had not been brought by the Kennedy family to Hickory Hill. For all these reasons, Plaintiff is entitled to judgment as a matter of law on Defendant’s recission claim based on mutual mistake. 3. Defendant was not fraudulently induced into entering the 2010 Agreement. Defendant next seeks recission of the 2010 Agreement on the grounds that he was fraudulently induced into the 2010 Agreement by Plaintiff's misrepresentation as to the Urn’s origins. To prevail on a claim of fraud in the inducement under Virginia law, a party must prove by clear and convincing evidence a (1) false representation of material fact; (2) made intentionally, in the case of actual fraud, or negligently or innocently, in the case of constructive
fraud; (3) reliance and detriment; and (4) inducement to enter the contract. Ly v. Tran, No. 2017 WL 4002721, at *7 (E.D. Va. Aug. 23, 2017), report and recommendation adopted sub nom. Yen Kin Ly v. Dung Quoc Tran, 2017 WL 3981432 (E.D. Va. Sept. 11, 2017) (citing Murphy v. Capella Educ. Co., 589 F. App’x 646, 652 (4th Cir. 2014)). As discussed above, Defendant has conceded that there is no evidence that Plaintiff knew that the Urn had come from Hammersmith and has based his fraudulent inducement claim solely on constructive fraud, which requires only that Plaintiff's statement was false and material. See Hitachi Credit Am. Corp. v. Signet Bank, 166 F.3d 614, 628 (4th Cir. 1999) (under Virginia law the fraud exists when the misrepresentation was made negligently or innocently). While the evidence is that it was false, for essentially the same reasons stated with respect to Defendant’s mutual mistake defense, Plaintiff's misstatement as to the Urn’s origins were not material to the 2010 Agreement. It had nothing to do with whether the Urn was personalty or a fixture and had nothing to do with Defendant’s ability to receive precisely what he had bargained for. IV. CONCLUSION Accordingly, for the foregoing reasons, it is hereby ORDERED that Defendant Alan J. Dabbiere’s Motion for Summary Judgment (Doc. No. 51] be, and the same hereby is, DENIED; it is further ORDERED that Plaintiff's Motion for Summary Judgment and to Dismiss [Doc. No. 52} be, and the same hereby is, GRANTED; and it is further ORDERED that that judgment be, and the same hereby is, ENTERED in favor of Plaintiff as to Counts I and II of the Amended Complaint and also Counts I, II, and III of Defendant’s Counterclaim; and it is further
ORDERED that the Urn is declared the Plaintiff's personal property, and not a fixture that conveyed to Defendant with the sale of Hickory Hill, and that Defendant specifically perform in accordance with the 2010 Agreement by delivering the Um to Plaintiff's possession in accordance with arrangements to be made by the Plaintiff at her expense. The Clerk is directed to forward a copy of this Order to all counsel of record and enter judgment pursuant to Fed. R. Civ. P. 58 in accordance with this Order.
Anthony J. Li United States District Court Alexandria, Virginia June 23, 2021