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LLP v. Uniwest Commer. Realty, Inc.

Supreme Court of Virginia

June 4, 2015

SPECTRA-4, LLP, ET AL.
v.
UNIWEST COMMERCIAL REALTY, INC

FROM THE CIRCUIT COURT OF FAIRFAX COUNTY. Michael F. Devine, Judge.

Stephen D. Charnoff (Rees Broome, on briefs), for appellants.

Sean Patrick Roche (Edward W. Cameron; Cameron/McEvoy, on brief), for appellee.

Present: All the Justices

OPINION

Page 291

LEROY F. MILLETTE, JR., JUSTICE

In this appeal we determine to what extent implied-in-fact contracts encompass the terms of previously expired express contracts that were not executed by the parties to the implied-in-fact contracts.

Page 292

I. FACTS AND PROCEEDINGS

Spectra-4 LLP and Spectet Limited Partnership, LLP are limited liability partnerships that individually own and lease neighboring commercial buildings in Reston, Virginia. This appeal arises out of a dispute over the management services provided for the commercial buildings.

1. History Of Management Services

Relevant to this appeal, three separate entities have provided the management services for the commercial buildings.

First, Jefferson/LBG, L.L.C. managed the commercial buildings from 1995 to 1997. Jefferson/LBG was organized in August 1995 and was owned in part by Suzanne O. Farr. Jefferson/LBG's management services were governed by two separate but materially identical Management Agreements, one for each commercial building. Spectra-4 and Jefferson/LBG executed the Management Agreement pertaining to the commercial building owned by Spectra-4, and Spectet and Jefferson/LBG executed the Management Agreement pertaining to the commercial building owned by Spectet. The corporate existence of Jefferson/LBG was automatically cancelled by the Virginia State Corporation Commission in December 1997 when it failed to pay its annual registration fee.

Second, Jefferson Commercial Real Estate Services, Inc. managed the commercial buildings from 1998 to 1999. Farr was also an owner of Jefferson Commercial, but despite their similar titles, Jefferson Commercial was a separate entity legally distinct from Jefferson/LBG. No new Management Agreements were executed to govern Jefferson Commercial's management services for the commercial buildings. Also, Jefferson Commercial did not transact any business with Jefferson/LBG.

Third, Uniwest Commercial Realty, Inc. managed the commercial buildings from 2000 until 2012. No new Management Agreements were executed to govern Uniwest's management services for the commercial buildings. Also, Uniwest did not transact any business with Jefferson/LBG. However, Uniwest did transact business with Jefferson Commercial. Uniwest and Jefferson Commercial executed an Asset Purchase Agreement in November 1999 in which Jefferson Commercial sold all of its assets, but no stock, to Uniwest.

2. Uniwest's Tenure In Providing Management Services

Jefferson Commercial notified Spectra-4 and Spectet that it added Uniwest " as partners" to its management services effective January 2000. At that time, Farr became Uniwest's president. Later, in 2002, Uniwest fired Farr from this position. Despite this change, Uniwest continued to provide management services for the commercial buildings until 2012.

In September 2012, Spectra-4 and Spectet notified Uniwest that they sought to " terminate[] the [M]anagement [A]greement[s] between Uniwest and [Spectra-4 and Spectet]." Uniwest responded that the termination was " invalid per the terms of the [Management] Agreement[s]," and stated that it would continue its management services until certain specified dates. Legal counsel then became involved, and after a series of letters sent back and forth, Uniwest's management services for both commercial buildings were terminated in October 2012. Following the termination of its management services, Uniwest withdrew $13,847.61 in premature termination fees from Spectra-4's operating accounts, and $22,605.72 in premature termination fees and $1,751.30 in copying costs from Spectet's operating accounts.

Uniwest withdrew these funds because it believed that it was entitled to such fees and costs upon what Uniwest considered to be Spectra-4's and Spectet's premature termination of Uniwest's management services. Uniwest's position was predicated upon its belief that the Management Agreements themselves dictated the contractual relationships between Spectra-4 and Uniwest, and between Spectet and Uniwest; or, alternatively, that the ...


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