Statute of limitations defense was jury issue

The circuit court should have set aside a $3 million award in this business dispute because it did not instruct the jury on appellant’s statute of limitations defense.

Background

Ferguson distributes Trane heating and cooling equipment. Ferguson made a rebate deal with Trane, under which Ferguson would qualify for “claim-backs” if it sold the equipment at a discounted “contract price.” Ferguson negotiated with Trane to provide contract pricing for F.H. Furr Plumbing, Heating and Air Conditioning, which began buying Trane equipment in 1995.

Furr sued Ferguson in April 2013, alleging fraud, unjust enrichment and breach of contract. In an amended complaint, Furr alleged that Ferguson was selling equipment above “contract prices” and then submitting false claims to Trane to obtain rebates, while telling Furr the equipment prices were “were the lowest prices [it] could charge …, and that it was passing on to … Furr the pricing concessions it had received from Trane.”

Ferguson filed a demurrer and a plea in bar. Ferguson argued that a two-year statute of limitations barred many of Furr’s fraud claims. The circuit court granted the demurrer as to the non-fraud claims but did not rule on the fraud claims, citing the need for an evidentiary hearing. The court instructed Furr to file a second amended complaint for the non-fraud claims but to refile the fraud claims “verbatim.” Ferguson could file “responsive pleadings” to the non-fraud claims but was ordered to answer Furr’s fraud claims.

Furr alleged the same fraud claims and new non-fraud claims. The circuit court granted Ferguson’s demurrer to the new non-fraud claims. Ferguson did not refile a plea in bar as to the statute of limitations but did file an answer as the court ordered.

A jury heard Furr’s fraud claims. The court, erroneously believing it previously overruled Ferguson’s plea in bar, refused Ferguson’s jury instruction, which stated that fraud claims before April 2011 were untimely unless Furr proved that even with due diligence, it could not have discovered the claims.

The jury returned a $3 million verdict for Furr.

Post-trial, Ferguson argued that the court erred by not giving the proposed statute of limitations jury instructions, noting that the court never overruled the plea in bar. The court acknowledged this but also stated that Ferguson waived the statute of limitations defense by not refiling or incorporating the plea in bar in its response to Furr’s second amended complaint. The court also faulted Ferguson for never seeking a hearing. The court ruled that the proposed jury instruction was inaccurate.

Ferguson appealed.

No waiver

The parties agree that the issue on appeal is whether the jury should have heard Ferguson’s statute of limitations defense.

Ferguson properly raised the statute of limitations in a plea in bar while responding to an amended complaint. When Furr filed a second amended complaint, the court required Furr to refile the fraud counts “verbatim” and required Ferguson to answer the existing fraud counts and “file responsive pleadings to all additional counts.”

The circuit court “did not require that Ferguson refile any responsive pleadings previously lodged against the fraud counts. … Because Ferguson had an outstanding plea in bar filed in response to the previous pleading that had been held over for an ‘evidentiary hearing’ and was not specifically directed to refile its special plea, the circuit court erred in finding that Ferguson waived its plea by not refiling it.”

Ferguson’s failure to seek a hearing did not waive its limitations defense. “The issue raised by a plea in bar may be submitted to the circuit court for decision based on a discrete body of facts … or developed through the presentation of evidence supporting or opposing the plea. … If the facts underlying the plea in bar are contested, a party may demand that a jury decide the factual issues raised by the plea. …

“Ferguson raised a statute of limitations defense and Furr demanded a trial by jury[.] … Since that demand did not specify any limits on the issues on which a jury trial was requested, Ferguson had no obligation … to make an additional demand. … Therefore, Ferguson was entitled to have its statute of limitations defense heard by a jury. This is especially true here where the issue was initially presented to the trial judge for decision and the judge declined to decide the matter because evidence was required.”

The statute of limitations issue should have gone to the jury. On remand, the jury must determine whether all or some of Furr’s fraud claims are timed-barred.

Ferguson Enterprises v. F.H. Furr Plumbing, Heating and Air Conditioning. Record No. 171192 (Powell) Aug. 1, 2019 (Appeal from Prince William Circuit Court). Thomas Arthur Clare, Elizabeth Marie Locke, Joseph Ronald Oliveri, Megan Lambart Meier for Appellant, Jeffrey Alan Vogelman, Ciara Ann Miller, Matthew James Ling, John David Quinn, John Patrick Camillo Quinn for Appellee. VLW 019-6-053,12 pp.