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Ferguson Enterprises, Inc. v. F.H. Furr Plumbing, Heating and Air Conditioning, Inc.

Supreme Court of Virginia

August 1, 2019





         Ferguson Enterprises, Inc. ("Ferguson") appeals from the judgment of the Circuit Court of Prince William County ("circuit court") denying Ferguson's motion to set aside a jury verdict in favor of F.H. Furr Plumbing, Heating, and Air Conditioning, Inc. ("Furr"). Ferguson argues that even after the circuit court admitted that it erroneously ruled that it had previously decided

         Ferguson's plea in bar of the statute of limitations, it still committed reversible error by ruling (1) that Ferguson waived its statute of limitations argument when it did not refile a plea in bar after Furr filed a second amended complaint; (2) that if there was no waiver for failing to refile the plea in bar, Ferguson in any event waived the issue by failing to docket the plea in bar for a hearing; and (3) that even if the statute of limitations issue had survived to trial, the proposed jury instructions tendered on that issue were not a proper statement of the law. For the following reasons, we will reverse the judgment of the circuit court finding that the statute of limitations issue was waived and remand on the limited issue of whether the statute of limitations barred a portion or all of Furr's fraud claims.

         I. BACKGROUND

         Ferguson distributes Trane-manufactured HVAC equipment in the Mid-Atlantic Region. To obtain competitive pricing for some of its customers, Ferguson negotiated with Trane to provide rebates, known as "claim-backs," if Ferguson sold Trane's equipment at a specific discounted price, known as a "contract price." To obtain a claim-back, Ferguson provided written confirmation to Trane that the resale price did not exceed the contract price. Ferguson specifically negotiated with Trane to provide contract pricing for one of its customers, Furr. Furr began purchasing Trane-manufactured equipment from Ferguson for retail installation and sale in 1995.

         In April 2013, Furr initiated this lawsuit against Ferguson asserting claims of fraud, constructive fraud, unjust enrichment, money had and received, and breach of contract. In its first amended complaint, Furr alleged that Ferguson was selling equipment to Furr above "contract prices" and then submitting falsified claims to Trane for claim-backs. Furr contended that Ferguson represented that it was receiving the "special prices Trane had approved for it to charge to [Furr], that the prices charged were the lowest prices [it] could charge . . ., and that it was passing on to . . . Furr the pricing concessions it had received from Trane." Furr argued that these misrepresentations were intended to induce Furr to buy Trane-manufactured equipment from Ferguson, and that Furr relied on these misrepresentations to enter into such purchase agreements.

         Ferguson filed a demurrer and plea in bar, contending, among other things, that many of the damages sought on the fraud claims were barred by the two-year statute of limitations. Ferguson's plea in bar to the statute of limitations stated that: "[Furr] therefore cannot make out a claim for fraud predicated on conduct that occurred prior to April 19, 2011. Nevertheless, [Furr] repeatedly allege[d] that the conduct giving rise to its claims began more than fifteen years ago [(i.e. 1995)]."

         The circuit court granted the demurrer as to Furr's non-fraud claims, but expressly "declined to rule on the special pleas" after concluding the issue would "require fact-finding after an evidentiary hearing." The court gave Furr 21 days to file a second amended complaint for the non-fraud claims, but required that the fraud claims be restated "verbatim." The order stated that Ferguson could file "responsive pleadings" to any new claims, but directed Ferguson to "file an [a]nswer" to the fraud claims. Furr filed a second amended complaint in July 2014, with the same fraud claims and new non-fraud claims. Ferguson demurred to the new non-fraud claims. Ferguson did not refile a plea in bar as to the statute of limitations for the fraud claims, but filed an answer as directed by the circuit court. The circuit court again granted Ferguson's demurrer to the non-fraud claims, and the case proceeded on Furr's fraud claims only.

         In April 2017, the circuit court held a nine-day jury trial. At the close of Furr's evidence, the circuit court granted Ferguson's motion to strike the constructive fraud claim, but denied it as to the actual fraud claim. Ferguson's renewed motion to strike the actual fraud claim at the close of the evidence was also denied.

         The parties then presented their proposed jury instructions to the circuit court. Ferguson objected to Furr's proposed Jury Instruction 10 (duty to investigate), contending that the burden of proof shifted to Furr to prove that it could not have discovered the fraud before April 19, 2011, because it was apparent on the face of Furr's second amended complaint that the two-year statute of limitations had expired at the time of filing. In response to the objection, the circuit court stated: "I think we're talking apples and oranges. This is not related to the plea in bar which I've overruled. And you're not suggesting that I submit the plea in bar to the jury, are you?" Counsel for Ferguson responded, "We are, Your Honor, we are raising the statute of limitations defense as to all of the so called alleged misrepresentations that [Furr] alleges happened from 2002 until more than two years before their complaint was filed." To which, the circuit court stated:

I overruled the plea in bar at least a year ago and [Ferguson] did not request a jury to determine the relative facts at that time. We decided it on argument. And today, I've overruled the motion to strike which raised it again. So, if we're working our way around to letting the jury now decide facts that would determine a plea in bar, I'm sorry, I just don't think we're on the same page. I think that, that ship has sailed. I ruled on that before.

         Ferguson subsequently proffered proposed Jury Instruction N, which provided:

Claims based on statements that were made to [Furr] before April 19, 2011 are barred by the statute of limitations unless [Furr] proved by a preponderance of the evidence that, even if [Furr] had exercised due diligence, [Furr] could not have discovered the alleged fraud before April 19, 2011.

         The circuit court refused to give this instruction, again stating that it already "ruled on the plea in bar." The circuit court also refused additional proposed Jury Instruction O and proposed Jury Question F proffered by Ferguson, both relating to the statute of limitations defense. Jury Instruction O, as proposed, provided the definition of due diligence:

"Due diligence" is the measure of prudence that is properly to be expected from, and ordinarily exercised by, a reasonable and prudent corporation under the particular facts ...

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