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Hanback v. Drhi, Inc.

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

March 11, 2015

WILLIAM HANBACK, Plaintiff,
v.
DRHI, INC. et al., Defendants

For Wlliam Hanback, Plaintiff: John Chapman Petersen, LEAD ATTORNEY, Surovell Isaacs Petersen & Levy PLC, Fairfax, VA; Stephen Patrick Pierce, Surovell Isaacs Peterson & Levy PLC, Fairfax, VA.

For DRHI, Inc., D.R. Horton, Inc., Defendants: Jon F. Mains, LEAD ATTORNEY, Jon F Mains & Associates LLC, Fairfax, VA.

MEMORANDUM OPINION

T. S. Ellis, III, United Stales District Judge.

In this removed, diversity breach-of-contract case, defendants have filed a threshold motion to dismiss raising the following questions:

(1) Whether dismissal of a declaratory judgment claim is warranted where, as here, the declaration sought concerns an alleged breach of contract and damages that have already occurred, and a declaration of rights would not provide guidance to the parties for future conduct under the contract or serve to clarify any ongoing legal relations among the parties;
(2) Whether plaintiff's breach-of-contract claim is time-barred by the applicable Virginia five-year statute of limitations; and
(3) Whether plaintiff's breach-of-contract claim fails to state a claim where, as here, the facts alleged in the Complaint establish that no actionable breach occurred.

I.

The facts relevant to the pending motion may be succinctly stated.[1] Plaintiff, William Hanback, is a resident of Virginia. Defendant DRHI, Inc. (" DRHI" ) is a Delaware corporation with its principal place of business in Fort Worth, Texas. Defendant D.R. Horton, Inc. (" D.R. Horton" ), DRHI's wholly-owned subsidiary, is also a Delaware corporation with its principal place of business in Fort Worth, Texas.

On July 28, 2000, plaintiff entered into a real estate contract with DRHI to sell his property in the City of Fairfax. The contract called for DRHI to pay plaintiff $560,000.00 for 2.14 acres of residentially-zoned land with the expectation that eight residential lots would be developed. One month later, on August 28, 2000, the contract (" August 28 Contract" ) was amended to read as follows: " the purchase price shall be $70,000 per approved lot with a minimum of six lots. If only [five] or fewer than [five] lots are approved, the Purchase Price shall be $400,000 for the 2.14 acres." Complaint U 8. On June 5, 2002, after failing to obtain rezoning, DRHI filed suit in Fairfax County Circuit Court seeking specific performance of the August 28 Contract. As a result of this suit, the Fairfax County Circuit Court Judge entered an Order on June 9, 2004, requiring plaintiff to appear at settlement and sign the necessary documents to convey the 2.14 acres to DRHI. Additionally, the June 9 Order construed the contract as requiring DRHI to compensate plaintiff as follows:

[A]t the time of settlement, DRHI, Inc. shall pay Mr. Hanback $400,000 minus the $10,000 already paid and . . . at the time any subdivision plans are submitted by DRHI, Inc. for the development of property sold by Mr. Hanback [and] are approved by the City of Fairfax, in the event that the plans submitted by DRHI, Inc. permit the construction of six or more individual residences, DRHI, Inc. shall pay to Mr. Hanback $70,000.00 for the sixth lot and $70,000.00 for each additional approved lot thereafter.

Complaint ¶ 11. As directed by the June 9 Order, the parties closed on the property in 2004, with DRHI paying plaintiff $400,000.00 and plaintiff, in return, conveying title to the 2.14-acre parcel to DRHI.

Thereafter, at some point between 2004 and 2007, DRHI conveyed the 2.14 acres purchased from plaintiff to D.R. Horton, DRHI's wholly-owned subsidiary and home building entity. In the spring of 2007, D.R. Horton submitted a combined redevelopment plan to the Fairfax City Council in which the 2.14 acres purchased from plaintiff were combined with an adjoining 1.9-acre parcel, which D.R. Horton had more recently purchased from another entity. The redevelopment plan for the combined parcels sought to create a community of 15 homes which would access the City's street network via Ridge Avenue, an existing street. On May 22, 2007, the City Council approved the redevelopment plan and authorized the construction of 15 new single-family homes on the combined parcels. The approval was contingent on the following proffers by D.R. Horton: (1) dedication of an acre to the City to create a natural buffer zone with the adjoining community; and (2) acquisition of additional land from the City in order to (i) widen Ridge Avenue for vehicular traffic, (ii) construct utility easements, and (iii) build a stone retaining wall. D.R. Horton satisfied these conditions by using the 2.14 acres DRHI purchased from plaintiff, which supplied all of the land for the buffer zone and enabled, as the Complaint puts it, the " swap" of the City property and rights-of-way. Complaint 19. The Complaint alleges that without the 2.14 acres purchased from plaintiff, the roadway could not have been expanded and the combined property could not have accommodated 15 units. In the end, as the Supreme Court of Virginia noted, " [u]nder the [2007] plan, [plaintiffs] former property contained 5.5 lots and a one acre 'buffer zone,' and the adjoining parcel contained 9.5 lots." DRHI, Inc. v. Hanback, 288 Va. 249, 765 S.E.2d 9, 10 (Va. 2014).

Shortly thereafter, the real estate market collapsed in Northern Virginia, and as a result, there was essentially no construction for the next two-and-a-half years. In late 2009, DRHI filed subdivision plans with the Fairfax City Council for the combined 2.14 and 1.9-acre parcels. This plan included the buffer zone and easements for the community and was approved by the City on January 8, 2010. This approved plan used the 2.14 acres DRHI purchased from plaintiff for the buffer zone and the remainder of the 2.14-acre parcel constituted five-and-a-half of the 15 subdivided lots. The Complaint alleges that D.R. Horton obtained the right to build five additional houses by combining the 2.14-acre and 1.9-acre parcels to ...


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