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No. 10-1514
No. 10-1518
Appeals from the United States District Court for the Eastern
District of Virginia, at Alexandria. Gerald Bruce Lee, District
Judge. (1:09-cv-00094-GBL-IDD)
Argued:
Decided:
PER CURIAM:
The IBCS Group, Inc., challenges the district courts grant
of
summary
Persauds
judgment
in
fraudulent
favor
of
inducement
Persaud
and
false
Companies,
Inc.,
advertising
on
claims.
We also agree
with
on
IBCS
that
advertising
the
claim
grant
was
of
summary
improper.
judgment
Therefore,
we
the
false
remand
for
further proceedings.
I.
On
October
3,
2008,
Persaud
Companies,
Inc.
(Persaud),
in
Texas.
The
subcontract
required
Persaud
to
post
Edmund
Scarborough,
an
individual
surety,
and
his
risk
contractor
pre-qualify
the
bonds,
ensuring
that
the
how
the
it
would
respond
if
general
3
contractor
rejected
the
bonds-i.e.,
whether
IBCS
would
provide
refund
of
any
bond
brokers
were
to
IBCS
brochure
about
Scarboroughs
bonds.
A.
We intend to pre-qualify all bonding requests to
minimize the possibility of bond rejection.
However,
we will reverse a transaction if a bond is promptly
rejected.
(JA at 44).
Persaud entered into a General Agreement of Indemnity (the
Agreement) with Scarborough on December 29, 2008.
The Agreement
(JA at 51).
The
modified
orally.
No
change
or
modification
shall
be
(JA at 53).
contractor
bond
premium
rejected
Scarboroughs assets.
of
the
$121,557.
bonds
Eventually,
because
of
its
the
general
concern
over
(JA
to request a refund.
Agreements
language
nonrefundable
and,
that
accordingly,
all
denied
payments
Persauds
were
request.
IBCS
refused
Persauds
refund
request,
Persaud
Following
discovery,
on
cross-motions,
the
court
and
false
advertising
claims,
and
granted
summary
The
II.
On appeal, IBCS challenges the award of summary judgment on
both the fraudulent inducement and false advertising claims. 1
Summary judgment is appropriate if the movant shows that there
is no genuine issue as to any material fact and the movant is
entitled to judgment as a matter of law.
56(a).
Fed. R. Civ. P.
judgment de novo. Bonds v. Leavitt, 629 F.3d 369, 379 (4th Cir.
2011).
A. Fraudulent Inducement
Under Virginia law, a false representation of a material
fact, constituting an inducement to the contract, on which the
purchaser had a right to rely, is always ground for rescission
of the contract.
Id.
A plaintiff asserting a
unequivocal
contract
language,
Persauds
We agree.
reliance
Given
on
the
As the Supreme
v.
Larsen,
29
S.E.2d
856,
858
(1944)
(internal
misled
the
plaintiff,
the
documents
that
[the
that the Agreement itself does not provide IBCSs actual refund
policy because Scarborough admitted that he has given more than
twenty
refunds
factually
over
correct,
the
past
legally
several
IBCS
and
years.
While
Scarborough
are
this
is
free
to
fit.
S.E.2d 704, 709 (Va. 1968) (noting that waiver may or may not
be exercised by the person holding it). 2
In sum, Persaud cannot establish, by clear and convincing
evidence, that it reasonably relied on the brochure or any oral
statements by IBCS because the Agreement clearly stated that the
bond
premium
was
nonrefundable.
Accordingly,
we
vacate
the
B. False Advertising
We next address IBCSs argument that the district court
erred
in
granting
summary
advertising claim.
judgment
to
Persaud
on
the
false
See Henry v.
Section
([Section
59.1-68.3]
by
its
express
terms
requires,
Henry,
254
S.E.2d
at
68
(internal
quotation
marks
omitted).
The
Supreme
distinctions
Court
between
of
fraud
Virginia
and
false
has
noted
two
advertising.
important
First,
S.E.2d
615,
619
(Va.
2001).
Second,
in
fraud,
the
Ann.
18.2-216
(promise,
assertion,
Id.
representation
or
statement of fact).
The district court concluded that the marketing brochure
qualified
as
misleading.
whether
an
advertisement
On
this
Persaud
under
the
statute
basis
alone,
and
without
suffer[ed]
loss
as
and
considering
result
of
with
the
district
court
that
the
was
marketing
the
We
brochure
district
whether
court
did
not
consider
the
brochure
made
10
III.
Accordingly, we vacate the award of $121,557 in favor of
Persaud and vacate the grant of summary judgment on Persauds
claims for fraudulent inducement and false advertisement.
remand,
the
district
court
is
instructed
to
grant
On
summary
11