RADIANCE CAPITAL RECEIVABLES FOURTEEN, LLC, AS ASSIGNEE OF NEW SOUTH FEDERAL SAVINGS BANK,
ROBERT D. FOSTER, ET AL.
THE CIRCUIT COURT OF GLOUCESTER COUNTY Charles J. Maxfield,
All the Justices
M. CHAFIN, JUSTICE.
appeal requires us to determine whether a contractual waiver
of the right to plead the statute of limitations was valid or
enforceable under Virginia law. Upon review, we conclude that
the waiver at issue was neither valid nor enforceable, and
therefore, we affirm the circuit court's decision.
pertinent facts of this case are undisputed. On February 21,
2006, Foster and Wilson Building, LLC (the
"Company"), executed a promissory note in favor of
New South Federal Savings Bank ("New South") based
on a construction loan. On March 2, 2006, Robert D. Foster and
James M. Wilson executed a Continuing Guaranty agreement (the
"Guaranty") with New South in which they personally
guaranteed and promised to pay all of the Company's debt.
In the Guaranty, Foster and Wilson agreed to "waive
the benefit of any statute of limitations or other defenses
affecting the . . . Guarantor's liability" under the
Company eventually defaulted on the promissory note, and a
notice of default and demand for payment was sent to Foster
and Wilson on August 27, 2010. On November 23, 2015, Radiance
Capital Receivables Fourteen, LLC ("Radiance
Capital"), the assignee of New South and holder of the
promissory note and Guaranty, filed a complaint against
Foster and Wilson in the Circuit Court of Gloucester County.
Based on the Guaranty, Radiance Capital sought to collect the
principal balance due on the note, interest, and
attorney's fees. In response to Radiance Capital's
complaint, Foster and Wilson asserted that Radiance
Capital's claim was barred by the statute of limitations.
circuit court held a hearing regarding the plea in bar based
on the statute of limitations on February 8, 2018. Although
the Guaranty stated that it was governed by Alabama law, both
parties agreed that Virginia law supplied the applicable
statute of limitations and that a five-year statute of
limitations applied to Radiance Capital's claim. Foster
and Wilson acknowledged that the Guaranty contained a waiver
of their statute of limitations defense. They maintained,
however, that the waiver was unenforceable because it did not
meet the specific requirements of Code § 8.01-232, the
statute addressing the "[e]ffect of promises not to
plead" the statute of limitations.
response, Radiance Capital emphasized that the present case
involved a waiver of the statute of limitations defense
rather than a promise not to plead the statute of limitations
at a later date. Based on this distinction, Radiance Capital
maintained that Code § 8.01-232 did not apply to the
waiver at issue. Citing the first sentence of Code §
8.01-232, Radiance Capital also argued that Foster and Wilson
should be estopped from asserting a statute of limitations
defense because the failure to enforce the contractual waiver
would "operate as a fraud" on Radiance Capital.
considering the parties' arguments and additional
briefing, the circuit court concluded that the contractual
waiver was not valid or enforceable according to the terms of
Code § 8.01-232. Thus, the circuit court sustained the
plea in bar based on the statute of limitations and dismissed
Radiance Capital's complaint with prejudice. This appeal
Capital contends that the circuit court erred by determining
that the statute of limitations waiver set forth in the
Guaranty was not valid or enforceable under Code §
8.01-232. Radiance Capital's arguments present issues of
statutory interpretation. "Under well-established
principles, an issue of statutory interpretation is a pure
question of law which we review de novo." Conyers v.
Martial Arts World of Richmond, Inc., 273 Va. 96, 104
(2007). Likewise, an "[a]ppeal of a decision on a plea
in bar of the statute of limitations involves a question of
law that we review de novo." Van Dam v. Gay,
280 Va. 457, 460 (2010). Upon conducting a de novo review of
the issues presented in this case, we conclude that the
waiver at issue was neither valid nor enforceable.
WAIVER CONTAINED IN THE GUARANTY WAS NOT VALID UNDER CODE
general, a party may contractually waive "any right
conferred by law or contract." Gordonsville Energy,
L.P. v. Virginia Elec. and Power Co., 257 Va. 344, 356
(1999). "[A] term of the parties' contract becomes
the law of the case unless such term is ...