Printer Friendly

Contract claim can't be recast as tort suit.

Byline: Virginia Lawyers Weekly

Plaintiffs who prevailed on their contract claim against the defendant and were awarded more than $28 million in damages could not now sue the same defendant for essentially, fraudulently breaching the contract. Because the gravamen of the suit sounded in contract, the plaintiffs were made whole by the prior jury decision and award.

Background

In January 2004, Charlie Bresler and the Wilmington Trust Company entered into a contract that required, among other things, that Charlie make a pledge of collateral to cover certain loans.

Charlie, and his son and wife who continued the suit after his death in the name of his estate, maintained that the contract only required a single pledge of collateral. When Wilmington asked the Breslers to make yearly, on-going, collateral payments, they refused and eventually sued, advancing theories of liability sounding in tort and contract.

The district court decided to bifurcate the Breslers' claims and deal with the contract claims first, leaving the tort claims to be dealt with later. The Breslers did not oppose bifurcation and proceeded to trial on the contract claims alone, with the understanding that the tort claims would be disposed of at a later date. At the trial, the jury found that the contract only required a single collateral payment. The jury found for the Breslers, and they ultimately received a total monetary award in excess of $28 million. The court also ordered Wilmington to continue performing its side of the bargain without on-going collateral payments.

After obtaining this favorable judgment in the contract action, the Breslers returned to court to press their tort claims. But the district court granted Wilmington's motion for summary judgment on the grounds that the Breslers had been made whole by the earlier judgment and were therefore barred from pressing their tort claims by "the acceptance of benefits doctrine or the doctrine of judicial estoppel."

Analysis

This case helps illustrate a straightforward axiom of commercial law: injuries that result from a breach of contract are remedied by an action in contract law; injuries that result from tortious conduct are remedied by an action in tort. No amount of artful pleading should allow a plaintiff to obtain a double recovery in tort and contract for the same injury. In order to prevail on a tort claim that is brought alongside a contract claim, a party must show that it has suffered some injury over and above that caused by the breach of contract.

This rule of law serves to defeat appellants' claims. The Breslers argued at trial that they had suffered an injury as a result of Wilmington's breach of contract. This injury was remedied by an award of $28 million and an order that Wilmington live up to its end of the bargain. Now the Breslers have returned to court to press their tort claims, alleging that Wilmington and its employees deliberately misled Charlie Bresler by telling him that only a one-time collateral payment would be required when, in reality, they always intended to solicit on-going payments. The Breslers allege as well that Wilmington and its employees had a fiduciary relationship to Charlie and his son, which they breached.

We need not reach the veracity of these allegations because the tort claims are premised entirely on the failure to live up to a contractual promise. The Breslers do not allege that tortious misconduct on the part of Wilmington, or its employees, caused them any injury beyond that already remedied in the contract action.

The Breslers made a tactical decision when they declined to object to the district court's decision to bifurcate their tort and contract claims and proceed to trial on the latter. The division yielded the appellants tactical benefits: a faster trial, a more straightforward theory of liability and the possibility of a second trial had the contract action not gone their way. But it came with risks too. The district court made the Breslers aware of the possibility that nothing would remain of their tort claims once the contract claims were satisfied. That is indeed what has come to pass.

Affirmed.

Bresler v. Wilmington Trust Company, Appeal No. 18-1431, Feb. 19, 2019. 4th Cir. (Wilkinson), from DMD at Greenbelt (Messitte). Philip M. Musolino for Appellants, James Lindsay Shea for Appellees. VLW No. 019-2-065, 9 pp.

Copyright {c} 2019 BridgeTower Media. All Rights Reserved.
COPYRIGHT 2019 BridgeTower Media Holding Company, LLC
No portion of this article can be reproduced without the express written permission from the copyright holder.
Copyright 2019 Gale, Cengage Learning. All rights reserved.

Article Details
Printer friendly Cite/link Email Feedback
Title Annotation:Bresler v. Wilmington Trust Co., U.S. Court of Appeals for the 4th Circuit
Publication:Virginia Lawyers Weekly
Date:Mar 17, 2019
Words:723
Previous Article:Panel urges Fourth Circuit to revisit Massenburg.
Next Article:Wife of State Dep't employee liable for abuse overseas.
Topics:

Terms of use | Privacy policy | Copyright © 2019 Farlex, Inc. | Feedback | For webmasters