T.S. ELLIS, III, District Judge.
In this consolidated federal question case, more than one hundred purchasers of condominiums in the heart of Fairfax County sued the developer of those condominiums alleging that violations of the Interstate Land Sales Full Disclosure Act, 15 U.S.C. § 1701 et seq. ("ILSFDA") entitle them to rescission of their condominium sales contracts and the return of their deposits. At issue on the basis of a Report and Recommendation of the Magistrate Judge pursuant to 28 U.S.C. § 636(b)(1) is whether plaintiffs, who did not timely seek automatic rescission under 15 U.S.C. §§ 1703(b), (c), or (d), are nonetheless entitled to an equitable remedy pursuant to 15 U.S.C. § 1709 given defendants' failure to comply with certain ILSFDA disclosure requirements.
Plaintiffs are approximately one hundred fifteen individuals who contracted to purchase condominium units from defendant Merrifield Town Center Limited Partnership ("Merrifield"), a Virginia limited partnership. The units were to be built as part of the Vantage Condominiums at Merrifield Town Center ("Vantage Condominiums") in Falls Church, Virginia. Buyers of the units signed one of two Unit Purchase Agreements ("UPAs"): (i) one UPA form required Merrifield to complete construction within 36 months of the date on which Merrifield signed the UPA; and (ii) a second UPA form required Merrifield to complete construction within 24 months of Merrifield's signing. In addition to Merrifield, this consolidated action includes four other defendants: (i) Uniwest Group, LLC, a Virginia limited liability company and Merrifield's sole general
On November 6, 2008, plaintiffs' motion to consolidate this case with Kim v. Merrifield Town Ctr. Ltd. P'ship, No. 1:08cv566, was granted. See Plant v. Merrifield Town Ctr. Ltd. P'ship, No. 1:08cv374 (E.D.Va. Nov. 6, 2008) (Consolidation Order). The original complaint in Kim identified more than one hundred plaintiffs, nine of whom were also plaintiffs in the Plant action. The Kim complaint also named two defendants in addition to those names in the Plant complaint: McWilliams-Ballard, LLC and Jonnie Jameson. Following consolidation, plaintiffs' motion for class certification was denied on November 12, 2008 for failure to meet any of the four class certification requirements, namely numerosity, commonality, typicality, and adequacy of representation. Plant v. Merrifield Town Ctr. Ltd. P'ship, No. 1:08cv374, 2008 WL 4951352 (E.D.Va. Nov. 12, 2008) (Order) (citing Rule 23, Fed. R.Civ.P.).
On December 16, 2008, the claims against defendants McWilliams-Ballard, LLC and Jonnie Jameson were dismissed with prejudice. Plant v. Merrifield Town Ctr. Ltd. P'ship, No. 1:08cv374 (E.D.Va. Dec. 16, 2008) (Order). On December 19, 2008, plaintiffs were granted leave to file a second amended complaint adding additional plaintiffs. The second amended complaint, filed January 12, 2009, named 126 plaintiffs who, individually or jointly, purchased 93 units in the Vantage Condominiums.
Both the Kim complaint and the Plant amended complaint alleged claims for (i) violation of ILSFDA; (ii) statutory business conspiracy to injure plaintiffs' reputation, trade, business or profession pursuant to Va.Code § 18.2-499 et seq.; and (iii) breach of contract. The claims in both cases for statutory business conspiracy were withdrawn on September 19, 2008, and the breach of contract claims in both cases were withdrawn on December 16, 2008.
Defendants initially claimed they were exempt from the disclosure requirements of ILSFDA. On March 16, 2009, an Order issued rejecting this argument and granting plaintiffs partial summary judgment with respect to the ILSFDA claims
See Plant v. Merrifield Town Ctr. Ltd. P'ship, No. 1:08cv374, 749 F.Supp.2d 404,
On March 24, 2009, the matter was referred to the Magistrate Judge to determine what remedies, if any, were appropriate for the plaintiffs to seek under ILSFDA. See Plant v. Merrifield Town Ctr. Ltd. P'ship, No. 1:08cv374, 2009 U.S. Dist. LEXIS 67687, at *6 (E.D.Va. Mar. 24, 2009) (Order). The subsequent Report and Recommendation from the Magistrate Judge ("First R & R") was adopted in part and modified in part by Order dated July 21, 2009, which permitted plaintiffs to seek rescission of the contracts and return of their deposits "provided that each plaintiff can establish a basis for such equitable relief with respect to the specific violation at issue." See Plant v. Merrifield Town Ctr. Ltd. P'ship, No. 1:08cv374, 2009 WL 2225415 at *3, 2009 U.S. Dist. LEXIS 65831 at *12 (E.D.Va. July 21, 2009) (Order) (emphasis in original). Plaintiffs were specifically denied relief under the automatic rescission provisions of §§ 1703(b), (c), or (d), because plaintiffs failed to submit notice of intent to revoke the UPAs within two years of their signing, as required by those subsections. Id.
Discovery was then allowed to proceed but was interrupted briefly when on October 7, 2009, the matter was stayed with respect to defendant Merrifield because plaintiffs filed an involuntary bankruptcy petition against Merrifield. See Plant v. Merrifield Town Ctr. Ltd. P'ship, No.
The question of the appropriate remedy for the ILSFDA violations was referred to the Magistrate Judge prior to the stay. The Magistrate Judge addressed this question in a September 29, 2009, 2009 WL 6059552, Report and Recommendation ("Second R & R"). Additionally, when the stay was lifted, defendants moved for sanctions against plaintiffs, which question was also referred to the Magistrate Judge and resulted in a third Report and Recommendation dated December 23, 2009, 2009 WL 6082878 ("Third R & R"). Objections to both the Second R & R and Third R & R were resolved in a Memorandum Opinion on March 18, 2010. See Plant v. Merrifield Town Ctr. Ltd. P'ship, 711 F.Supp.2d 576, 600 (E.D.Va.2010) (Memorandum Opinion) ("Merrifield III").
On to the question of sanctions, Merrifield III granted defendants' request for sanctions in light of plaintiffs' consistent defiance of the Court's discovery orders. Id. at 584, 587-88. In all, ninety-seven plaintiffs failed to comply with the Court's deadlines, eighty-two of whom still had not provided their required interrogatory responses at the time of the sanctions hearing. Id. The Magistrate Judge found that many of the plaintiffs had "undoubtedly acted in bad faith" by disregarding orders to compel, and further, that plaintiffs' counsel had made "representations to the court concerning the status of the plaintiffs' discovery responses that clearly were not correct." Id. at 584. Accordingly, costs and attorneys' fees were deemed appropriate against all ninety-seven plaintiffs who had failed to comply with discovery deadlines, and dismissal was ordered with respect to the subset of eighty-two plaintiffs who remained delinquent in responding to discovery at the time of the sanctions hearing. Id. at 587-88.
On the issue of remedy for the remaining plaintiffs, Merrifield III provided a framework for the elements of plaintiffs' claims and defendants' affirmative defenses based on the applicable law, and then referred the case back to the Magistrate Judge pursuant to 28 U.S.C. § 636(b)(1) for a report and recommendation on all remaining triable issues. The remaining triable issues included:
Merrifield III, 711 F.Supp.2d at 600. With respect to the equitable rescission remedy, Merrifield III set forth an explanation of the remedy and its elements. In this regard, Merrifield III noted that ILSFDA's rescission provisions parallel those found in the Securities Act of 1933 and the Employee Retirement Income Security Act of 1974 ("ERISA"), which the Supreme Court has interpreted to create an entitlement to equitable rescission where the necessary elements are established under federal common law. Id. at 591 (citing Harris Trust & Sav. Bank v.
The Magistrate Judge conducted an evidentiary hearing on June 28 and 29, 2010 in which twenty-five plaintiffs and one defendant, Michael Collier, testified. In the case of jointly purchased units, only one joint purchaser testified, and no purchasers testified on behalf of five units.
Based on a de novo review of the record, it is appropriate to adopt the Magistrate Judge's Proposed Factual Findings, which are summarized as follows. The Vantage Condominiums development consisted of approximately 279 units. The sale of all units in the Vantage Condominiums was conducted as part of a single condominium project. Buyers of the units all signed either the 24-month UPA or the 36-month UPA; these UPAs were identical in every way except for the time required for Merrifield to complete construction of the units. In the case of the 24-month UPAs, Merrifield committed to complete construction within 24 months of Merrifield's "ratifying" (i.e., signing) the UPA, whereas the 36-month UPAs allowed Merrifield 36 months from ratification to complete construction.
In May 2005, before the first UPA was executed, Merrifield submitted both versions of the UPA to the Virginia Real Estate Board ("VREB") for review and approval. Yet, because Merrifield mistakenly believed that its units were exempt from ILSFDA, no statement of record was ever approved by the Department of Housing and Urban Development ("HUD") regarding the Vantage Condominiums, nor was any statement of record provided to the purchasers. In any event, Merrifield began selling units in May or June 2005, and by August 2005, purchasers had signed UPAs for all of the units.
Collier reviewed and signed each UPA, but he delayed in signing the 24-month UPAs until August or September 2005 because of delays in construction. Indeed, a series of delays plagued construction of the Vantage Condominiums practically from the start of the project. In the summer of
By December 31, 2006, the buildings were more than 50% finished. After that point, it was not realistically possible to stop construction of any one unit, since the structural components of each unit had to be completed to sustain the buildings.
Of the 279 units in the project, only twenty purchasers actually closed on their units. None of these purchases were made in cash. The units have continued to be marketed as condominiums, and since 2005, no material changes have been made to the exterior, the residential parking area, or other amenities such as the shuttle bus service, which is presently operational.
Plaintiffs admit that their decision to seek rescission of their contracts stemmed from the economic downturn and resulting loss in the condominiums' value, and not the defendants' nondisclosures. Indeed, none of the plaintiffs testified that the undisclosed information, had it been disclosed, would have affected their decision to sign the contracts.
The Fourth R & R also recommended the following conclusions of law:
Although the second recommendation, if adopted, would bar the equitable rescission claim for lack of materiality, the Magistrate
Analysis of the various objections to the legal conclusions appropriately begins with the relevant ILSFDA provisions. In this regard, ILSFDA provides that the sale of any lot not exempt from its provisions must comply with a number of disclosure requirements and sales practices. Under 15 U.S.C. § 1703(a)(1), developers of nonexempt properties are required, inter alia, to provide a "statement of record" and a "printed property report" to purchasers prior to sale. Section 1709(a) provides that a purchaser may bring an action to enforce his or her rights under § 1703 at law or in equity, and the court may order any "relief as the court deems fair, just, and equitable." 15 U.S.C. § 1709(a).
As reflected in Merrifield II, defendants violated ILSFDA in failing to provide purchasers a statement of record and printed property report prior to the sale. 749 F.Supp.2d at 409-10, 2009 WL 7076183, at *5, 2009 U.S. Dist. LEXIS 68113, at *20. And Merrifield III concluded that plaintiffs' remedy, if any, is the equitable remedy of rescission.
As an initial matter, the Magistrate Judge correctly concluded that defendants violated ILSFDA by failing to include a statement of record and printed property report, a finding consistent with the March 16, 2009 Order. See Fourth R & R, at 40. This is not surprising, of course, in light of the fact that defendants did not include these required disclosures because they mistakenly believed the Merrifield proprieties were exempt from ILSFDA. See Plant v. Merrifield Town Ctr. Ltd. P'ship, No. 1:08cv374, 749 F.Supp.2d 404, 2009 WL 7076183 (Mar. 16, 2009) (Order) (granting plaintiffs partial summary judgment insofar as defendants failed to comply with ILSFDA's reporting requirements).
The Fourth R & R next notes that plaintiffs did not present timely
Additionally, the Fourth R & R recommended concluding that defendants violated § 1703(c) by failing to provide "clearly" plaintiffs' statutory right to automatic rescission. Fourth R & R, at 43 (quoting 15 U.S.C. § 1703(c)). Defendants do not deny this omission; indeed, they admit they did not include such language in the UPA because they incorrectly believed that the properties were exempt from ILSFDA.
In sum, the Magistrate Judge recommended a finding that defendants violated § 1703(a)(1) and § 1703(c).
Merrifield III requires that plaintiffs demonstrate that the ILSFDA violations were material in that they would have influenced a reasonable purchaser's decision to enter into the contract for sale. Merrifield III, 711 F.Supp.2d at 592. Plaintiffs argue that all of the disclosures ILSFDA requires are per se material because ILSFDA and HUD regulations require such disclosures to be made prior to the sale of a nonexempt property. The Magistrate Judge correctly rejected this argument, pointing out that accepting plaintiffs' per se materiality argument would effectively erase the statutory distinction between equitable rescission under § 1709 and automatic rescission under § 1703(c).
Next, the Fourth R & R considered whether material not disclosed in this case, had it been disclosed, would have influenced a reasonable purchaser's decision to enter into the contract for sale. Fourth R & R, at 52. In this respect, the R & R correctly recommends concluding that none of the undisclosed information was material. Plaintiffs object to this finding, arguing that the Magistrate Judge failed to make this inquiry on an objective basis. According to plaintiffs, the Magistrate Judge improperly considered what the plaintiffs subjectively knew or believed rather than considering only what a reasonable purchaser would have known or believed. Yet, a review of the Fourth R & R shows no such error. Indeed, the Magistrate Judge framed the issue as:
Fourth R & R, at 45. This statement is consistent with Merrifield III and appropriately recognizes the objective nature of the equitable rescission inquiry.
After setting forth this standard, the Magistrate Judge identified seven specific nondisclosures to be analyzed for materiality:
In the end, the Magistrate Judge recommended a conclusion that none of the undisclosed
In this respect, plaintiffs' reliance on Rockefeller v. High Sky, Inc., 394 F.Supp. 303 (E.D.Pa.1975), and Gaudet v. Woodlake Development Co., 399 F.Supp. 1005 (E.D.La.1975), is misplaced. The plaintiffs in Rockefeller and Gaudet sought automatic statutory rescission pursuant to 15 U.S.C. § 1703(b), not equitable rescission pursuant to § 1709, and thus the only question in those cases was whether the defendants violated ILSFDA by failing to make the required disclosures. The courts in those cases found that defendants violated ILSFDA, and thus plaintiffs were entitled to statutory rescission. Rockefeller, 394 F.Supp. at 306; Gaudet, 399 F.Supp. at 1007. As in Rockefeller and Gaudet, defendants here violated ILSFDA, but unlike the plaintiffs in those cases, plaintiffs here are time-barred from seeking automatic statutory rescission under § 1703. Because plaintiffs here seek equitable rescission under § 1709, a broader question of materiality arises, and alternative disclosures, while not curative of the ILSFDA violations, are relevant to the equitable rescission materiality inquiry.
Plaintiffs also mistakenly rely on Burns v. Duplin Land Development, Inc., 621 F.Supp.2d 292 (E.D.N.C.2009), in support of their argument.
Plaintiffs' objections to the Magistrate Judge's recommendation concerning the materiality of defendants' nondisclosures, therefore, are overruled, and adopted instead is the Magistrate Judge's conclusion that plaintiffs have failed to show the materiality of any nondisclosures. And because plaintiffs have failed to show that defendants' nondisclosures would have influenced a reasonable purchaser's decision to enter the contract for sale, plaintiffs are not entitled to the remedy of equitable rescission.
Although the conclusion reached here that plaintiffs are not entitled to equitable rescission disposes of this matter, the Magistrate Judge made additional findings, and the parties raise additional objections, that merit brief discussion.
The Magistrate Judge recommended a conclusion that plaintiffs satisfied the third element of equitable rescission by showing that rescission would restore the parties to the status quo ante. Fourth R & R, at 54. Defendants' objection to this recommendation is not persuasive. As the Fourth Circuit has stated, courts of equity generally require that rescission is appropriate only where "full or complete restoration of the benefits exchanged" can be achieved. Griggs v. E.I. DuPont de Nemours & Co., 385 F.3d 440, 447 (4th Cir.2004). Yet, this requirement is not without exceptions, and even if complete restoration is not possible, rescission is nevertheless appropriate "where the equities of the situation so demand[]." Id. at 448.
Defendants have argued that restoration to the status quo ante is not possible in this case because the Vantage Condominiums in issue have already been built, and many of the units were completed with specific finishes selected by various plaintiffs. Defendants suggest they would not have continued with the project had they known that plaintiffs intended to rescind their contracts. The problem with this argument, as the Magistrate Judge correctly noted, is that plaintiffs' decision to rescind their contracts came after the point at which defendants irrevocably committed themselves to finishing the Vantage Condominiums project. That is, by the summer of 2006, defendants had begun construction and could not simply abandon particular units. Defendants, not plaintiffs, thus placed themselves in a position that provided them little opportunity for mitigation in the event plaintiffs were able successfully to exercise their right to equitable rescission. Assuming, arguendo, that defendants' nondisclosures were material
The Magistrate Judge also recommended dismissal of those plaintiffs who did not appear at the evidentiary hearing.
To be sure, plaintiffs are correct that plaintiffs' presence at the evidentiary hearing is not a prerequisite to prevailing; yet, the issue is not plaintiffs' absence, but rather whether sufficient evidence was adduced at the hearing concerning the relevant plaintiffs' ownership of the condominiums. Absent such basic evidence, the record would be insufficient to support a finding in their favor on the ILSFDA claims.
Although it is unclear from the record precisely the nature of the parties' stipulation concerning the contract documents, plaintiffs' failure to introduce evidence proving the basic facts surrounding their ownership of condominium units appears to stem from a misunderstanding among the parties. Indeed, there is no reason the exhibits should not have been admitted, even without the presence of the individual plaintiffs. Accordingly, the analysis will proceed on the assumption that the Magistrate Judge was incorrect in recommending the dismissal of these plaintiffs. Because none of the plaintiffs are entitled to equitable rescission due to the lack of materiality in defendants' nondisclosures, the result is not affected by the decision on the absent plaintiffs' dismissal.
The Magistrate Judge also recommended dismissal of plaintiff Tia Young Johng's claims because she assigned all of her rights in the claims presented in this suit to a third party who is not named as a plaintiff. Plaintiffs object to this finding, and although their argument in this regard is almost unintelligible,
The Magistrate Judge found that each of the defendants is properly included in this suit. Defendants object to this recommendation, arguing (i) that defendant Collier was not acting in an individual capacity in signing the relevant documents and conducting development activities, and (ii) that defendant Uniwest Development was not acting as a developer or agent of a developer with regard to the Merrifield project.
ILSFDA prohibits "any developer or agent" from conducting any of the activities prohibited by § 1703. See 15 U.S.C. § 1703(a). Section § 1701(5) defines a "developer" for the purposes of ILSFDA as "any person who, directly or indirectly, sells or leases, or offers to sell or lease, or advertises for sale or lease any lots in a subdivision." Section 1701(6) defines an agent to include "any person who represents, or acts for or on behalf of, a developer in selling or leasing, or offering to sell or lease, any lot or lots in a subdivision." Applying these provisions, the Magistrate Judge correctly concluded that Collier and Uniwest Development are both proper defendants. Uniwest Group is the managing general partner of Merrifield, and defendant Collier is the president of Uniwest Group. Collier also signed each of the UPAs. As to defendant Uniwest Development, the Magistrate Judge observed that Uniwest Development sent copies of the recorded condominium documents to plaintiffs in March 2008, and Uniwest Development also sent plaintiffs default notices when plaintiffs failed to appear at closing. The Magistrate Judge thus concluded that Uniwest Development was "either engaged in the selling effort or acting as agent for the seller." Fourth R & R, at 56-57.
Defendants' objections to this portion of the Magistrate Judge's Fourth R & R are without merit. The record establishes that Collier and Uniwest Development were acting as developers or agents within the meaning of §§ 1701(5) and (6), and accordingly, dismissal of these defendants is not warranted. This conclusion, of course, does not affect the ultimate result, which is that plaintiffs are not entitled to equitable relief—or any other relief—from any of the defendants.
With regard to defendants' three equitable defenses—laches, equitable estoppel, and unclean hands—the Magistrate Judge recommended a conclusion that none of these defenses would bar equitable rescission were plaintiffs to qualify for that remedy. A de novo review of the record as a whole supports the Magistrate Judge's recommendation in this regard.
As to the defense of laches, the Fourth Circuit has recognized that the defense of laches requires a showing (i) that the plaintiff unreasonably delayed in bringing the action and (ii) that this delay prejudiced the defendants. Griggs, 385 F.3d at 449-50. As explained in Merrifield III, for defendants here to assert the defense of laches, they must show (i) that each plaintiff inexplicably or inexcusably delayed
On this record, as the Magistrate Judge correctly noted, defendants failed to show inexplicable or inexcusable delay by plaintiffs in seeking rescission. Plaintiffs were not aware of ILSFDA until they met with an attorney in Spring 2008. In April 2008, plaintiffs brought suit against defendants in the form of a class action. Subsequent months saw the naming of additional plaintiffs to this action. Unlike the plaintiff in Griggs, who waited four years after learning of the defendant's breach of fiduciary duty to file suit, 385 F.3d at 450, plaintiffs here filed suit against defendants within months of learning they had potentially actionable rights under ILSFDA. Accordingly, the defense of laches is properly denied.
The Magistrate Judge also found no basis for defendants' assertion of equitable estoppel. The doctrine of equitable estoppel prevents a plaintiff from recovering property or damages on the basis of a "definite misrepresentation of fact to another person" having led the other person reasonably to rely and to act on the misrepresentation to their detriment. See Heckler v. Community Health Servs., 467 U.S. 51, 59, 104 S.Ct. 2218, 81 L.Ed.2d 42 (1984). Nothing of the sort is reflected in this record; no plaintiff represented that he or she intended to perform on the UPAs despite knowing of the ILSFDA violations. It follows that defendants could not show they changed position in reliance on any representation, or that any such reliance was reasonable. See Merrifield III, 711 F.Supp.2d at 596. As noted previously, the evidence showed that plaintiffs first became aware of ILSFDA in 2008; after this point, they did not communicate any further intention to continue with the purchase of the condominiums. Accordingly, the defense of equitable estoppel is unavailable to defendants.
Finally, defendants have asserted the defense of unclean hands. The doctrine of unclean hands requires that plaintiffs "have acted fairly and without fraud or deceit as to the controversy in issue." Precision Instrument Mfg. Co. v. Auto. Maint. Mach. Co., 324 U.S. 806, 815, 65 S.Ct. 993, 89 L.Ed. 1381 (1945). As the Supreme Court has stated, the doctrine "closes the doors of a court of equity to one tainted with inequitableness or bad faith relative to the matter in which he seeks relief." Id.
Defendants assert that plaintiffs have unclean hands in bringing this suit because, in the case of numerous plaintiffs, their decisions not to close on the condominiums was entirely a strategic economic decision based on changed market conditions; their decisions not to close had nothing to do with the ILSFDA violations. As the Magistrate Judge correctly noted, plaintiffs' decisions in this regard do not amount to inequitable conduct. This result is not surprising when one considers other provisions of ILSFDA. The Act's automatic rescission provisions allow purchasers to rescind contracts for any reason—or no reason at all—if certain disclosures are not made as required by the statute. See 15 U.S.C. § 1703(b), (c). Although plaintiffs here seek equitable rescission, not automatic statutory rescission, the fact that ILSFDA would allow purchasers to rescind a land sale contract for purely economic reasons undercuts defendants' argument that such behavior is per se inequitable. Simply put, were defendants' nondisclosures material for the purposes of equitable rescission, which they are not, plaintiffs would be entitled to rescind
Of course, while defendants' objections to the Magistrate Judge's recommendation regarding the equitable defenses are overruled, the availability of such defenses is immaterial to the outcome here because, for the reasons already stated, plaintiffs are not entitled to equitable rescission.
In addition to the objections already resolved, defendants assert a number of objections that essentially renew and preserve a number of arguments for appeal. These objections are as follows:
Each of these objections have either already been raised and resolved in previous
A brief summary of this litigation provides useful context. In the summer of 2005, the eighty-five plaintiffs in this case signed sales contracts to purchase condominiums in a well-developed and affluent area of Fairfax, Virginia. Construction of the units, some of which included custom finishes selected by plaintiffs, began sometime in August or September 2005. After construction commenced, but prior to the date fixed for closing, the real estate market plummeted drastically, reducing the market value of plaintiffs' units. Rather than close on the units, as required by their sales contracts, plaintiffs chose instead to sue sellers on various claims seeking rescission of the sales contracts, return of their deposits, and damages. In the course of the litigation, all of plaintiffs' claims, except the ILSFDA claim, were dismissed. Defendants, who mistakenly believed that the properties were not subject to ILSFDA, did not provide purchasers with the ILSFDA-required disclosures prior to sale. Defendants admitted that the disclosures had not been made, arguing instead that the sales contracts were exempt from ILSFDA. This argument failed, and plaintiffs received partial summary judgment in this regard, leaving only the question of remedy to be resolved. Because plaintiffs did not bring their action for automatic statutory rescission within the required two years, they were time-barred from seeking this remedy, and left only with the prospect of equitable rescission. To establish a basis for equitable rescission, plaintiffs had to make a showing that the undisclosed information, had it been disclosed, would have influenced a reasonable decision-maker in the decision to purchase these condominiums. Yet, plaintiffs were not able to make any such showing. Instead, an evidentiary hearing revealed that the undisclosed information required by ILSFDA would have been well-known or unimportant to a reasonable purchaser of these relatively expensive condominiums in a well-established, affluent area of Fairfax. This result is unsurprising given that the purpose of ILSFDA was to prevent fraud in the sales of real property in more undeveloped areas, such property in a flood plain or more than one hundred miles from the nearest fire station. A different result might have been obtained had sales of the property been located in some area where the information required by ILSFDA would likely have been objectively material. Given the lack of objective materiality, plaintiffs cannot demonstrate an entitlement to equitable rescission. Simply put, the circumstances of this case do not call for the exercise of the court's broad equitable powers in pursuit of "general fairness." Cf. Hilton Davis Chemical Co. v. Warner-Jenkinson Co., 62 F.3d 1512, 1521 (Fed.Cir.1995) ("The term `equitable' can have many meanings.... [T]his court's allusions to equity invoke equity in its broadest sense—equity as general fairness."). Therefore, plaintiffs' only surviving claim fails, and it is appropriate to grant defendants summary judgment.
An appropriate Order will issue.
Pls. Objections, at 23.
