Virginia Lawyers Weekly VA Lawyers Weekly
Where the defendant’s CEO allegedly promised in July 2020 to satisfy all past due invoices (back to December 2017), Va. Code § 8.01-229(G) operated to restart the statute of limitations.
Background
According to the first amended complaint, Kiss Technologies Inc. requested quotes from Luna Innovations Inc. for certain goods in December 2017; June 7, 2018; Oct.25, 2018; June 7, 2018 and May 2, 2019. Kiss accepted the quotes for each of the orders and the accompanying terms and conditions, Luna shipped the goods, and Luna issued invoices to Kiss. Kiss did not pay Luna in full for any of the orders.
On July 16, 2020, Kiss’s Chief Executive Officer admitted to Luna through a signed writing that Kiss’s debt for the goods it ordered, received and accepted “was due and owing and promised that Kiss would pay that debt by making monthly payments of $5,000 until Kiss could pay the outstanding balance in full.” Kiss made one $5,000 payment to Luna in July 2020 and one in August 2020.
However, since then, Kiss has not made any more payments to Luna. Kiss still owes Luna no less than $246,492.26 for its orders. Luna has filed a motion to dismiss, arguing that paragraph 14(i) of the Luna sales terms and conditions contains a contractual period of limitations, stating “[a]ny cause of action arising out of or related to these Terms must be brought no later than one year after the cause of action has accrued.” Luna responds that Kiss’s July 16, 2020, admission of debt and promise to pay that debt was a “new promise” under Va. Code § 8.01-229(G), and that is thus “restarted any applicable limitations period for Luna to bring any cause of action against Kiss for failing or refusing to pay for those goods.”
Breach of contract
Kiss argues that while Va. Code § 8.01-229(G) applies to statutes of limitations, it has no impact on contractually set periods of limitations. The court disagrees. Nothing in the text of § 8.01-229(G) limits its application to statutes of limitations as opposed to contractual limitations periods. Accordingly, the court concludes that the accrual of a right of action on a contract is governed by § 8.01-229(G), regardless of whether the limitations period is set by a statute of limitations or by contract.
In this case, Luna alleges that Kiss made a new written promise to pay on July 16, 2020. Per § 8.01-229(G), Luna’s right of action accrued on that date. Because Luna brought suit on April 1, 2021, within one year of the accrual of its right of action, its claim is not barred by the contractual period of limitations in ¶ 14(i) of the Luna sales terms and conditions.
Implied contract
Kiss argues that Luna’s claim for breach of an implied contract should be dismissed because an express contract governs the relationship of the parties. Luna argues that though it cannot recover under both a breach of contract theory and an implied contract theory, it is permitted to plead alternative theories of relief. Importantly, Luna explains that it is permitted to plead breach of an implied contract because Kiss has not admitted the existence or validity of the express contract.
“[U]nder Virginia and federal law, a plaintiff is permitted to plead equitable theories of relief such as unjust enrichment or quantum meruit as alternatives to contract recovery.” At this stage, because Kiss has not conceded that the express contract was valid, Luna is permitted to plead breach of an implied contract as an alternative theory of recovery.
Defendant’s motion to dismiss denied.
Luna Innovations Inc. v. Kiss Technologies Inc., Case No. 7:21-cv-00188, May 3, 2022. WDVA at Roanoke (Urbanski). VLW 022-3-187. 9 pp.
