Fired Association Exec Claims Defamation

In plaintiff’s suit challenging his termination, the Richmond Circuit Court overrules defendant Virginia Automobile Dealers Association’s demurrers to plaintiff’s claim for defamation and for actual fraud, but sustains the demurrers to his claim for fraud in the inducement and for breach of contract.

Fraud claims

Plaintiff specifically alleged that defendant Hall’s statements were “false at the time made,” that defendants “concealed their true intention” and “had no intention of closing the pay gap or promoting [plaintiff] to the position of President and CEO in 2017.” The court finds that plaintiff has alleged that defendants’ misrepresentations were as to defendant’s state of mind as being one thing when in fact his purpose was to the contrary and consequently were alleged misrepresentations of defendants’ state of mind at the time the statements were made, and thus considered a misrepresentation of a then-existing fact. Consequently, the alleged statements meet the qualifications to the “present and or pre-existing fact” requirement regarding alleged misrepresentations and the demurrer is overruled.

While the difference between constructive fraud and actual fraud is merely the difference between an intended misrepresentation on the one hand, and an innocent or negligent misrepresentation on the other, the application of the rule regarding misrepresentations of “present and pre-existing fact” is completely different. The exception to the general rule regarding future promises does not apply to constructive fraud and the demurrer to the constructive fraud claim is sustained.

Plaintiff alleges he had a three-year contract with VADA, and that he would have succeeded Hall as president and CEO in or about May 2017, had he not been presented with a proposed severance agreement and general release. He alleges the agreement was for a fixed term of three years, and therefore, based on Graham v. Central Fidelity Bank, 245 Va. 395 (1993), it fails under the statute of frauds. Consequently, with no contract to enforce, the court cannot find a valid claim of fraud in the inducement of such a contract.

Plaintiff argues the alleged contract could be performed within one year because defendant Hall could die, or he could decide to retire and promote plaintiff to be president and CEO within one year. But those events are not contemplated by the contract. The contract in question provides for plaintiff to be employed for three years, at the end of which he would be promoted to president and CEO. But the mere fact that unanticipated life events might occur, that would cause the parties to enter into a new and different agreement, does not save the existing agreement from its own terms.

If defendant Hall died before May 2017, and if defendant VADA wanted to make plaintiff president and CEO at that time, that would be a new and different contract. That is not the contract now before the court. The court finds the contract to be within the statute of frauds and sustains the demurrer to the breach of contract count.

Defamation

Plaintiff has alleged defendant Hall made and published to dealers and other persons in the automobile dealers industry the false and defamatory statements that plaintiff “had to be let go” and was fired for cause. The clear inference that may be drawn from these statements is that plaintiff was fired for some misconduct or fault.

The alleged defamatory statements regard whether plaintiff was fired and for what reason. Since the court finds the meaning of the statements was defamatory, and that they can be tested for the truth, defendants’ demurrer is overruled as to the defamation claim.

Davis v. Virginia Automobile Dealers Ass’n (Marchant) No. CL 17-258, May 2, 2017; Steven S. Biss, Charles M. Sims, Brad D. Weiss for the parties. VLW 017-8-052, 8 pp.