## Facts

- Developers Conley J. Hall and Thomas M. Dana developed and sold units in a four-unit condominium at 313 Freemason Street in Norfolk, Virginia, through Freemason Associates, Inc.
- James Klaiber bought Unit 4 in February 1999 for $200,000; Richard Sienicki bought Unit 1 in January 1999 for $135,000; the seller’s agent was K.B.B. Corp., d/b/a Re/Max Central Realty.
- The unit owners alleged substantial construction defects, especially involving the roof, chimneys, fireplaces, and flues.
- A condominium association and unit owners filed suit on June 13, 2000; the circuit court later severed the association’s claims from the individual owners’ claims.
- Before severance, Klaiber resold his unit for $216,000 and Sienicki resold his unit for $170,000.
- The resale contracts included provisions addressing allocation of litigation proceeds and responsibility for certain special assessments imposed by the association.
- Klaiber and Sienicki alleged damages including special assessments for roof repairs and attorney’s fees, Klaiber’s costs to repair water damage, Sienicki’s cost to remove gas logs, and exposure to future special assessments and repair costs.
- They asserted claims for actual fraud, constructive fraud, fraudulent misrepresentation, and breach of warranty based on alleged misrepresentations and nondisclosures about the property’s condition.

## Issues

1. Whether the plaintiffs alleged or could prove cognizable damages—an essential element of fraud-based claims and related theories—despite reselling their units at a profit.
2. Whether summary judgment was proper on the record, viewed with reasonable inferences drawn in favor of the plaintiffs as nonmoving parties.

## Decision

- The Supreme Court of Virginia affirmed summary judgment for the defendants.
- The court held the plaintiffs failed, as a matter of law, to allege or establish resulting damage.
- The plaintiffs’ profits on resale, together with the contractual allocation of assessment responsibility, defeated the claim that the alleged defects and misrepresentations left them in a worse position.
- Because damage is indispensable to the pleaded causes of action, the absence of cognizable injury was fatal to all counts.

## Legal Principles

- Summary judgment may be granted only when no genuine dispute of material fact exists; on review, reasonable inferences are drawn for the nonmovant unless forced or contrary to reason.
- Actual fraud, constructive fraud, and fraudulent misrepresentation require resulting damage; reliance without compensable injury does not support liability.
- There is no actionable damage where the plaintiff’s position is no worse than it would have been absent the alleged misrepresentation.
- A profitable resale can negate the damages element when the record shows the plaintiff did not suffer a net, legally cognizable loss from the alleged defect or misrepresentation.

## Conclusion

The court concluded that the plaintiffs’ resale profits and the record concerning assessments and expenses did not show they were made worse off by the alleged misrepresentations; without resulting damages, their fraud-based and related claims could not proceed, making summary judgment appropriate.


Klaiber v. Freemason Assocs., Inc., 266 Va. 478, 587 S.E.2d 555 (2003)