Contract – Breach of lease claim against non-signatories fails

Where a company filed a breach of lease claim, but none of the named defendants had signed the lease or was intended to be on the lease, the circuit court did not err in sustaining the pleas in bar to the breach of contract claim.

Background

Gourmet Gang argues on appeal that the circuit court erred by sustaining the pleas in bar to its breach of contract, tortious interference with a contract and conspiracy claims, because the evidence established that Sun Sunset Beach was the intended party to the lease, but for a misnomer.

Contract

The evidence belies Gourmet Gang’s assertion that Sun Sunset Beach was the intended lessor under the lease. Gourmet Gang stipulated to evidence showing that a different entity, Sunset Beach Investments, had leased the property from the owner since 2016 and was the only entity with authority to lease the property to Gourmet Gang when Gourmet Gang executed the agreement.

The record also shows that Sunset Beach Investments, not Sun Sunset Beach, deposited the rent checks. Guinan’s claim that she signed the lease in Ocean City, Maryland, where Sunset Beach Investments has an office, further demonstrates that Sunset Beach Investments was the intended party to the lease.

Nor does the record support Gourmet Gang’s claim that Sun Sunset Beach was the entity that had attempted to renegotiate the lease. Rather, Nichols testified in his deposition that he was unaware of Sun Sunset Beach and believed that he had negotiated for Sun Communities. Nor does the Bluewater defendants’ participation in executing the lease alter this conclusion.

Geracimos signed the lease as the representative of Sunset Beach Resort, an entity distinct from the named defendants, which binds only the undisclosed or misnamed principal. Thus, the circuit court did not err in sustaining the pleas in bar to the breach of contract claim because none of the named defendants had signed the lease or was intended to be on the lease.

Tort claims

To make a prima facie showing of tortious interference, a plaintiff must demonstrate: 1) the existence of a valid contractual relationship with an entity other than the defendant against whom the charge is brought; 2) the defendant’s knowledge of the contractual relationship; 3) a breach or termination of the contract caused by the defendant’s purposeful interference and 4) resulting damage or injury.

On the first element, the initial evidence supports a contract between Gourmet Gang and Sunset Beach Investments, a non-party to the complaint. The record also conveys the Bluewater defendants’ knowledge of the contractual relationship. The evidence showing a contractual relationship with Sunset Beach Investments and Bluewater’s knowledge of the relationship, together with Gourmet Gang’s allegation of an injurious breach, suggests a prima facie claim for tortious interference with contract.

As the record supports a potential claim for tortious interference with contract, the business conspiracy claim may also proceed against the Bluewater defendants. Under Code § 18.2-499, two or more entities engage in a business conspiracy when they take concerted action to injure another’s business, act with legal malice, and an injury results.

Here, Gourmet Gang successfully alleged all the requisite elements of a business conspiracy because it alleged that two or more distinct Bluewater entities acted in concert to injure Gourmet Gang’s business, that Bluewater acted out of spite and ill will and that damages resulted. Further, Virginia courts have held that tortious interference with contract is an “unlawful act” predicating a business conspiracy claim.

But agents cannot tortiously interfere with their principals’ contracts or conspire with their principals to injure another’s business. At this stage, it is unclear whether the Bluewater defendants acted as agents, and within the scope of their agency, for Sunset Beach Investments.

Thus, more factual development on the agency issue was necessary before the circuit court could determine whether the Bluewater defendants acted on behalf of Sunset Beach Investments. The circuit court erred by dismissing those claims at this early stage of litigation.

Affirmed in part, reversed in part, and remanded.

Gourmet Gang v. Sun Sunset Beach RV, LLC, Case No. 1881-24-1, May 26, 2026. CAV (unpublished opinion) (Atlee, Jr.). From the Circuit Court of Northhampton County (Lewis, Jr.). Richard S. Phillips (The Phillips Law Firm, on brief), for appellant. Douglas E. Kahle (Zachary A. Handlin; Kinser, Leftwich & Kahle, P.C., on brief), for appellee. VLW 026-7-221. 15 pp.

Full-Text Opinion
VLW 026-7-221