## Facts

- Appalachian Power Company, an electric public utility, operated a promotional program offering developers underground electric service with revenue-based credits that could result in free installation.
- John Stewart Walker, Inc., a developer, previously received free underground installations under written contracts prepared by Appalachian.
- Walker developed the Locksview Subdivision (Sections I and II) and, in fall 1969, requested underground service on the same terms as earlier projects.
- Two Appalachian representatives agreed orally and stated Appalachian would prepare a written contract within a reasonable time, but Appalachian never produced the written agreement.
- In May 1970, the State Corporation Commission issued an order prohibiting promotional practices that included the type of free or subsidized underground-service arrangement Walker sought.
- Walker claimed Appalachian’s failure to reduce the agreement to writing within a reasonable time led to nonperformance and reduced the marketability and value of his lots.
- Walker sought relief from the Commission; the Commission denied permission for Appalachian to carry out the oral commitment and did not award damages.
- Walker sued for breach of contract; a jury awarded $6,000, and the circuit court entered judgment for Walker.

## Issues

1. Whether the Commission’s authority over public utilities displaced the circuit court’s jurisdiction over Walker’s contract damages action.
2. Whether the Commission’s prior order barred Walker’s contract action under res judicata.
3. Whether Appalachian could assert impossibility/illegality based on the Commission’s later prohibition when Appalachian’s own delay arguably contributed to the inability to perform.
4. Whether sufficient evidence supported submitting to the jury the question of a “reasonable time” to reduce the agreement to writing.
5. Whether damages could be measured by diminution in property value rather than limiting recovery to the cost of installing underground facilities.

## Decision

- The Supreme Court of Virginia affirmed the judgment for Walker.
- The circuit court properly exercised jurisdiction over a common-law contract claim that did not arise from a utility’s failure to perform a public duty.
- The Commission’s order did not preclude Walker’s damages action because it did not adjudicate the damages claim.
- Impossibility based on supervening illegality was unavailable if Appalachian’s failure to act within a reasonable time contributed to the impossibility; that issue was for the jury.
- The evidence supported submitting “reasonable time” to the jury.
- The jury was properly instructed on a value-based measure of damages, and the $6,000 award was supported by the evidence.

## Legal Principles

- Circuit courts retain jurisdiction over common-law contract actions involving public utilities when the dispute concerns a private contractual undertaking rather than enforcement of a public duty.
- Res judicata applies only to matters actually adjudicated; administrative action that does not adjudicate a damages claim does not bar a later judicial damages action.
- A promisor may not invoke impossibility of performance due to illegality when the impossibility results from the promisor’s own fault, including unreasonable delay.
- When a contract specifies no time for performance, the law implies a requirement of performance within a reasonable time, typically a fact question for the jury.
- Contract damages may be awarded as those naturally and directly resulting from the breach; where promised performance was intended to increase marketability and value, diminution in value may be an appropriate measure when supported by evidence.

## Conclusion

The court sustained a developer’s jury award for loss in property value resulting from a utility’s failure to timely memorialize and perform an underground-service agreement, holding that the Commission’s regulatory action neither displaced judicial jurisdiction nor barred damages, and that supervening illegality did not excuse performance where the utility’s delay contributed to the inability to perform.


Appalachian Power Co. v. John Stewart Walker, Inc., 214 Va. 524 (1974)