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Via Design Architects, PC v. U.S. Development Co., LLC

United States District Court, E.D. Virginia, Norfolk Division

November 4, 2014



MARK S. DAVIS, District Judge.

This matter is before the Court on a motion for summary judgment filed by defendant U.S. Development Co., LLC ("USD" or "Defendant") and a cross-motion for partial summary judgment filed by plaintiff VIA design architects, pc ("VIA" or "Plaintiff"). For the reasons set forth below, Defendant's motion for summary judgment is DENIED based on Defendant's judicial admissions. Plaintiff's cross-motion for partial summary judgment is DENIED based on the existence of disputed material facts.

I. Factual Background

In early 2010, USD hired VIA to perform architectural services associated with the planned redevelopment of a historical building in downtown Norfolk, Virginia ("the Project"). The initial agreement between VIA and USD is evidenced by a written fee proposal in which VIA calculated the estimated architectural costs for the Project to be $675, 631. ECF No. 13, at 6; ECF No. 40-1, at 8. The parties did not, however, enter into a formal written contract at that time.

VIA began performing architectural work on the Project in early 2010, and submitted monthly progress billings to USD. By the end of May 2011, VIA had billed USD approximately $642, 000, and had been paid approximately $450, 000. In early June 2011, VIA and USD entered into a "Form AIA B108" written contract for architectural services ("the June 2011 Contract" or "the Contract"), which is a form contract required by the United States Department of Housing and Urban Development ("HUD") when a project will utilize HUD financing. ECF No. 1, at 5; ECF No. 13, at 3. Although the parties' written Contract governs architectural services for the Project and states that it supersedes all prior agreements, the Contract does not appear to acknowledge the fact that VIA had already been working on the Project for a year and a half, and had already performed, and been paid, hundreds of thousands of dollars' worth of services.[1] ECF No. 34-1. Like VIA's prior written estimate, the June 2011 Contract lists VIA's compensation for "basic services" on the Project as $675, 631, although additional services are contemplated therein. Id.

The first page of the June 2011 Contract indicates that such agreement was between "VIA design architects, pc" and "the Architect's client identified as the Owner, " with the "Owner" being listed as "U.S. Development/The Rockefeller, LLC." ECF No. 34-1, at 12. Thomas Prioreschi, the individual that signed the June 2011 Contract on behalf of the "Owner, " has stated in an affidavit that he is the "managing member" of both USD and the separate entity "The Rockefeller, LLC, " ECF No. 42-1, at 1, yet when signing the written Contract, Mr. Prioreschi failed to indicate which company he was signing on behalf of, instead simply identifying himself by his printed name followed by the word "Principal, " ECF No. 34-1, at 29. The Contract page containing the signature block also includes a cross-reference to several additional documents that "form[] part of the Agreement, " to include VIA's prior written estimate to USD, and a "Historic Preservation Certification Application" listing the owner of the property being redeveloped as "Thomas J. Prioreschi" of "US Development." ECF No. 34-1, at 29, 37.

In September of 2012, more than a year after the written Contract was executed, an issue arose between VIA and USD regarding whether VIA would provide additional architectural work on the Project and whether VIA would be timely compensated for such additional work. By way of background, although USD had already paid VIA for a substantial portion of its work on the Project during 2010 and early 2011, USD contends in this litigation that the 2011 written Contract only required "the Owner" to pay VIA for a small fraction of the architectural work prior to the "HUD closing." VIA disputes such assertion, noting that the June 2011 Contract indicates that 80% of the basic services were to be paid to VIA by the WHUD Closing (No later than 11/15/2010)."[2] ECF No. 34-1, at 30.

Although USD offers a legal challenge to the admissibility of such exhibit, and separately argues that such email was written "under duress, " it is undisputed that Thomas Prioreschi sent an email to VIA's president on September 17, 2012 addressing VIA's concern regarding payment for prior work.[3] The email states as follows:

To the best of my ability, this e-mail will address your concern about Via design getting paid fully on the work you have done on this project prior to the contract and during the contract and your concerns that we have any issue with the invoices that you have sent or for the extra work you are invoicing for in this last burst of work.
US Development considers all the invoices received from Via Design valid from the beginning of this job to now that includes contract and pre-contract work. We have further signed a contract with your company which we intend to fully honor for all the work you have done to this date whether any future closing takes place or not. HUD guarantees that all professionals are paid by the schedules they allow and while we have to comply with HUD rules I believe those guarantees protect vendors as well as I have seen. So we and you have to warrant to them at the closing that you are paid current at that point. We have not gone through and checked the accrued interest computations and we assume those are right.
Further you have estimated an amount of $96, 140 which is required to complete extra work to complete the job. This will be paid as fast as we can send you the check for this extra work and we accept that these charges are valid as a result of the meeting we held in your office with you, I and Drew last month. So this work is considered valid, thereby making all outstanding invoices submitted by Via design as valid (again under assumption that the interest charges are correct) and will be paid or have been paid or are about to be paid whether the HUD loan closes or not.
I trust this satisfies all the concerns you have on this matter.
Thomas J. Prioreschi U S Development Co., LLC

ECF No. 40-1, at 82 (emphasis added).[4] It appears that VIA performed the "new work" referenced in the email shortly thereafter, as VIA received a $96, 000 payment from USD on October 4, 2012. Such payment was the last payment received by VIA for work performed on the Project.

In December of 2012, VIA and USD amended their June 2011 Contract to incorporate a new HUD amendment form which purports to modify the HUD form contract for architectural services that was used by the parties in June 2011 ("the HUD Amendment"). ECF No. 34-1, at 77-82. The HUD Amendment form that was incorporated by reference into the June 2011 Contract has a blank on the first page for the HUD project number it is associated with, has blanks on page four for the identification of other interested business entities, and has blanks on pages five and six for the execution date of the amendment form, and the signatures of the parties. ECF No. 34-1, at 77-82. It is undisputed that although the parties' Contract was modified in December of 2012 to expressly incorporate by reference the new HUD Amendment form into the prior Contract, neither VIA, USD, nor any other entity, signed, initialed, dated, or filled in any blanks on the HUD Amendment form. Moreover, it does not appear that the parties even exchanged a copy of such Amendment form, but instead ...

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