Selective Application of Law

In two separate appeals from a judgment of the trial court, the Virginia Supreme Court seems to have been selective in the laws it applied to arrive at its decision.  The appeals involve the sale of property known as "Rock Hall" in 2007 by Donald and Nancy Devine to Charles Buki and Kimberly Marsho.

Donald Devine appears from the facts of the case, to be a "flipper", and Rock Hall is a 200 year old house that Donald did some rehab work on to prepare it for resale.  Donald owned the property with his wife Nancy.  In listing the property for sale with a broker, Donald made some statements to the broker regarding the condition of the property.  The broker in turn prepared some advertising materials that indicated that the property had been "completely restored", that the foundation had been restored, and that the property had been completely restored "from the wood plank floors and molding to the portico and from the brick foundations to the roof and chimney".  The sales material also contained a disclaimer indicating that the information was obtained from the seller and was accurate,  but was not guaranteed.

Buki and Marsho entered into a contract to buy the property with Donald and Nancy.  The contract provided that Rock Hill was being sold, "as-is".  The buyers had several inspections made of the property and required the sellers to make some repairs, which the sellers did.  Subsequently the parties closed on the sale and purchase of Rock Hill.  After the closing Rock Hill incurred water damage and other defects were uncovered as well, all of which was contrary to the statements made by Donald.

After replacing windows to stop the water leaks, the buyers brought suit to rescind the contract, alleging that the transaction was based on fraudulent representations.  The trial court found that the buyers were in fact entitled to a judgment providing for the rescission of the purchase agreement, and ordered Donald and Nancy to return the purchase price paid by the buyers at which time the buyers were to reconvey the property to Donald and Nancy.  The trial court also made an express finding that the buyers failed to prove that Nancy committed any fraud in connection with the transaction.

Both Donald and Nancy took separate appeals from the judgment of the trial court.  The Supreme Court of Virginia found that the trial court erred in its holding that rescission of the contract was proper against Nancy as she had not committed any wrong doing.  Consequently, the Supreme Court reversed the judgment of the trial court and ordered that a new judgment be entered directing the reconveyance of the property to Donald only, and ordered Donald only to return the purchase price to the buyers.  The Supreme Court selectively applied some principals of law by entering such an order and ignoring the fact that the property was owned jointly by Donald and Nancy prior to the execution of the contract to sell Rock Hall to Buki and Marsho.  The concept of rescission of a contract by reason of fraud in the inducement is to place the parties in the same position they were in prior to the execution of the contract.  The Virginia Supreme Court seemingly ignored that whole idea.  The point being that you cannot even count on the highest court in a state to always get the answer right.

The appeal by Donald can be found HERE.  The appeal by Nancy can be found HERE.