Disabled Woman Defrauded by Former Coworker

A plaintiff who suffers from a chronic mental disability due to a childhood accident, and whose former coworker used undue influence to get money from plaintiff, is awarded $224,905.45 in damages by the Virginia Beach Circuit Court.

Because the individual defendant, Sandra B. Colston, is under a bankruptcy stay, plaintiff moves to enter judgment against Kickin Chicken Poultry & Game Bird Farm LLC, S. Colston Properties LLC and Farmers Friend Old Time General Store LLC for fraud in the inducement, undue influence, unjust enrichment, constructive trust, resulting trust and rescission.

Plaintiff came to know Colston while working with her at Princess Anne High School in 2011. Colston worked as a special education teacher. In June 2012, Colston moved to Independence, Va., and began asking plaintiff for money. Plaintiff would deposit money in Colston’s bank account or in accounts belonging to one of the three companies Colston created as loans either to her or to the company, respectively. Money loaned to Colston individually would be used to pay personal debts or bills, repairs and upgrades to her own car and the like. Plaintiff also testified Colston sought money separate from her own personal needs for the benefit of the companies. These funds were used to purchase furniture and equipment, set up the company, purchase the property for the storefront and maintain its operation. In September 2013, Colston asked plaintiff for $190,000 to invest in the general store, in exchange for a partnership interest. Not until February 2014 did plaintiff receive a letter purporting to convey a 00.01 percent interest in the general store for her investment. In total, plaintiff loaned and invested $224,905.45 to Colston on behalf of the three companies without any repayment. When asked why she would make these loans, plaintiff responded that Colston would make her feel sorry for her. This continued until plaintiff eventually ran out of money and had to live on her sister’s income, at which point her sister realized what was happening and encouraged plaintiff to file this action.

The court finds that Colston was acting as a member of each of the LLCs and proceeding in the ordinary course of its business. The evidence is sufficient to find that Colston’s acts on behalf of the companies were in the ordinary course of the business of the companies and plaintiff may therefore seek default judgment against them. Colston specifically approached plaintiff to get her to purchase the property for the general store. Colston sought funds for the companies to deposit in their accounts or for plaintiff to use on their behalf.

Plaintiff is entitled to a presumption of undue influence and has sufficiently established a claim for fraud and rescission of the contracts and repayment of her loans and money invested in each of the three entities. While plaintiff’s incapacity may not rise to the level of legal incompetency, plaintiff has established she suffers from the continued effects of a brain injury she received as a child. The failure of the companies to perform their promise to return the money that was loaned to them in order to induce plaintiff to lend the money also was fraudulent.

Plaintiff has established a cause of action for rescission against defendant LLCs, separate and apart from defendant Colston as an individual, on the grounds of fraud and undue influence. Plaintiff is awarded damages of $224,905.45 and attorney’s fees of $167,521.61.

Alexander v. Colston (Frucci) No. CL 14-1877, July 2, 2016; Va. Beach Cir.Ct.; William A. Lascara for plaintiff; Sandra B. Colston, pro se. VLW 016-8-017, 5 pp.