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Contract claim sustained, fraud counterclaims dismissed

Where the buyer of a firearms business only paid a portion of the sales price, the seller prevails on a breach of contract claim. The buyer’s counterclaim for fraud is dismissed with prejudice.

Statement of the case

“Before the Court is Plaintiff’s Second Amended Complaint asserting Breach of Contract (Count I), Reformation of Contract (Count II), Fraud (Count III), and Breach of Oral Contract (Count IV) in the alternative to Count I.

“Also before the Court is Defendants’ Amended Counterclaim and Third-Party Complaint asserting Fraud (Count II) and Fraud in the Inducement (Count III).

“During trial, the Court struck with prejudice the Reformation of Contract claim (Count II) and the Fraud claim (Count III) of Plaintiff’s Second Amended Complaint. The Court took both parties’ remaining motions to strike under advisement.”

Binding contract

“After considering the evidence and briefs submitted by both parties, and for the reasons stated in this Letter Opinion, the Court makes the following findings:

“The Court finds that the One-Time Sale of Goods Agreement (‘the Sales Contract’) is a binding written contract between the plaintiff Signal Hill Supply, LLC and the defendant Signal Hill Supply & Services, Inc (‘SHSS’) to sell the inventory of Signal Hill Supply to SHSS for $139,147.02.

“The Court further finds that the signature of defendant Samuel Wayne Hillenburg, as authorized signer for his business SHSS, on page two of the Sales Contract, is a true and genuine signature and was not a forgery.”

Late fees and interest

Because the parties have made an enforceable contract, “the Court finds that the late fee provision and attorney fee provision included in the Sales Contract are enforceable and must be applied in this matter.

“Additionally, the Court finds that around May of 2014 the parties entered into an oral agreement to modify the payment schedule set out in the Sales Contract from $5,000 a month to $2,500 a month.

“Furthermore, the Court finds the evidence produced demonstrates defendant SHSS made a total of $60,000.00 in payments towards its debt under the Sales Contract. Pursuant to the Sales Contract, all late payments beginning in June of 2014 shall receive interest at five percent … simple interest rate.

“However, based on the oral modification to the Sales Contract, no late fee shall be associated with the $2,500 payments until such payments were missed.

“The Court also finds, that as the prevailing party, Plaintiff is entitled to recover reasonable attorney’s fees and costs per the Sales Contract.

“Since the Court has found the existence of a valid, binding written contract, Defendants’ motion to strike Plaintiff’s Breach of Oral Contract claim (Count IV) is granted and this count is dismissed with prejudice. …

“Defendants’ motion to strike Plaintiff’s Breach of Contract claim (Count I) is denied.”

Counterclaim

“As to Defendants’ Amended Counterclaim and Third-Party Complaint, the Court grants Plaintiff’s motion to strike Defendants’ Fraud claim (Count II) and Fraud in the Inducement claim (Count III) and dismisses these counts with prejudice. …

Plaintiff is entitled to recover $79,147.02 in damages plus interest at five percent … simple interest rate on all late payments beginning in June of 2014. Plaintiff is also entitled to recover attorney’s fees and costs associated with litigating this count.”

Signal Hill Supply v. Furr, et al., Signal Hill Supply and Services v. Hillenburg, Signal Hill Supply v. Signal Hill Supply Services, Case No. CL-2019-7319, July 25, 2022, Fairfax County Circuit Court (Bellows). Alexander Laufer, Stephen P. Pierce for the parties. VLW 022-8-048, 17 pp.

VLW 022-8-048