DBA Reverses Dismissal of $13M Commercial Lease Dispute

Reviving Contract and Fraud Claims After a Motion to Strike

arrow
at a glance

The Case at a Glance

The Client: NB 333 W. Cork Street, LLC

The Dispute: Commercial lease dispute, breach of contract, fraud in the inducement, fraud, and veil-piercing issues

The Forum: Court of Appeals of Virginia; Supreme Court of Virginia

The Result: Trial court dismissal reversed; contract and fraud claims remanded for new trial

Attorneys: Christopher D. Davis, Justin Burch, and Nathan M. Hernandez

Case: NB 333 W. Cork Street, LLC v. Greenfield Holdings, LLC, et al., Record No. 0336-24-4

The Challenge:
Losing a Motion to Strike in a $13M Lease Dispute

The dispute arose from a proposed build-to-suit assisted living and memory care facility in a former hospital building in Winchester, Virginia. The parties had entered into a long-term lease and related amendment addressing design, construction, rent, cost-sharing, and tenant improvements.

After a three-day bench trial, the trial court granted the defendants’ motion to strike at the close of the client’s evidence. The court ruled that the lease was an unenforceable “agreement to agree” and dismissed the client’s breach of contract, fraud in the inducement, and alternative fraud claims.

That ruling did more than end the trial. It treated a complex commercial lease as legally unenforceable and wiped out claims involving more than $13 million in asserted damages before the defense ever put on evidence.


The Appellate Strategy:
Protecting the Deal and Correcting the Standard

The appeal required two arguments working together.

First, the trial court’s ruling created a concerning commercial lease precedent. If a build-to-suit lease could be declared unenforceable simply because design development, pricing mechanics, approvals, and construction details remained to be implemented, then many sophisticated commercial real estate deals would be vulnerable after the fact. The strategy was to show that the lease was not a loose promise to negotiate later. It was a binding deal with defined premises, rent formulas, cost-sharing provisions, approval standards, construction-deposit mechanics, and performance obligations.

Second, the trial court applied the wrong standard at the motion-to-strike stage. The question was not whether the court ultimately believed Cork would win. The question was whether Cork’s evidence, viewed in the light most favorable to Cork, was enough to reach the factfinder.

That distinction mattered. The appeal framed the dismissal as both a contract-enforceability error and a procedural error: the trial court treated disputed inferences as reasons to end the case, rather than reasons the case should continue.


The Contract Issue:
Build-to-Suit Does Not Equal Agreement to Agree

The defense argued that the lease left open material terms—especially design and price—and was therefore unenforceable under Virginia law.

The Court of Appeals disagreed.

It held that the lease contained reasonably certain terms defining the subject matter, the parties’ essential commitments, and formulas or methods for determining amounts payable. The court recognized that future design development, approvals, and construction pricing did not automatically convert a build-to-suit lease into a nonbinding agreement to agree.

That distinction was critical. Many commercial real estate and development agreements require later coordination among owner, tenant, architect, contractor, and lender. The presence of that process does not necessarily defeat enforceability if the agreement supplies enough structure for performance.


The Fraud Issue:
Prima Facie Evidence Was Enough

The Court of Appeals also reversed dismissal of the fraud and fraudulent inducement claims.

The evidence, viewed in Cork’s favor, supported an inference that Greenfield knew Cork was relying on an inaccurate depiction of Greenfield’s financial viability and did not correct otherwise misleading information until after the lease and amendment had been signed.

That was enough to survive a motion to strike.

The appellate court did not decide the merits. It restored the claims to the proper procedural posture: trial.


The Result:
Reversal Preserved in the Supreme Court of Virginia

The Court of Appeals reversed the trial court’s judgment and remanded the case for a new trial.

The defendants then petitioned the Supreme Court of Virginia for appeal. The Supreme Court refused the petition, leaving the Court of Appeals’ ruling in place.

The result revived the client’s contract and fraud claims and returned the $13M commercial lease dispute to the trial court.

Why This Case Matters

DBA Reverses Dismissal of $13M Commercial Lease Dispute

This case is a useful reminder that motions to strike are not miniature trials. When the plaintiff has introduced evidence supporting the elements of the claim, and reasonable inferences remain available, the case should not be resolved by weighing facts against the plaintiff.

It also matters for commercial lease and development disputes. A build-to-suit lease can leave room for later design coordination and still be enforceable if the document contains sufficient terms, formulas, approval standards, and obligations.

For litigators, the appellate lesson is practical: preserve the record, keep the standard of review front and center, and make the legal error easy to see. Here, that meant separating uncertainty in performance from indefiniteness in contract formation—and showing why the fraud evidence was enough to go forward.