SIGNIFICANT CASE SUMMARY
Virginia Case Summary
Fortune-Johnson, Inc. v. QFS, LLC
Virginia Court of Appeals
No. 1757-23-4
Decided: February 25, 2025
Virginia’s anti-indemnity statute, Va. Code § 11-4.1, renders void any construction-contract indemnity clause that, on its face, requires a subcontractor to indemnify a contractor for the contractor’s own negligence, and courts are not permitted to “blue pencil” or reform such a clause even if it contains savings language.
Background
Plaintiff served as the general contractor on a large apartment project owned by Archstone Parkland Gardens, LLC. After the building was completed, Archstone alleged that widespread failures in the balconies’ weatherproofing caused water intrusion and damage to other parts of the structure. This required removal and reconstruction of nearly 200 balconies. Archstone sued Plaintiff for breach of contract and negligence, though its negligence claim was dismissed early in the litigation. In response to the suit, Plaintiff filed separate actions against several subcontractors, asserting that the subcontractors’ agreements obligated them to indemnify the contractor for Archstone’s claims, or, alternatively, to reimburse Plaintiff under principles of equitable indemnification. The subcontractors demurred, challenging both the validity of the contractual indemnity provisions and the legal sufficiency of the equitable indemnification theory.
The subcontractors demurred on the grounds that the contractual indemnity provision violated Virginia’s anti-indemnity statute, and that equitable indemnification could not lie absent an underlying negligence finding. The Circuit Court agreed and sustained the demurrers without leave to amend, holding that Article 16 of the subcontracts was void under Va. Code § 11-4.1. The Court further held that Article 18(c) was merely a performance warranty rather than an indemnity clause, and that equitable indemnification was unavailable because the owner’s negligence count had already been dismissed. Plaintiff appealed those rulings. The Court of Appeals of Virginia affirmed in full.
Holding
The Court of Appeals analyzed the subcontracts and concluded that Article 16, the primary indemnity clause, was void under Va. Code § 11-4.1 because it expressly required the subcontractors to indemnify Plaintiff for the contractor’s own negligence. This was an obligation the statute squarely prohibits. The Court rejected Plaintiff’s effort to rely on the phrase “to the fullest extent permitted by law” as a savings clause, explaining that Virginia Courts lack authority to blue-pencil or reform an overbroad indemnity provision to make it enforceable. An indemnification provision cannot be so broad as to indemnify “the indemnitee from its own negligence.” The Court also held that Article 18(c) did not supply an alternative basis for contractual indemnification, reasoning that its requirement that subcontractors “pay for” and “reimburse” repair costs was a performance warranty rather than a freestanding indemnity promise, consistent with the Supreme Court of Virginia’s approach in a prior case. Finally, the Court found equitable indemnification unavailable because Virginia requires an underlying finding of negligence by another tortfeasor, and Archstone’s negligence count had already been dismissed. The rule that emerges from the decision is that Virginia’s anti-indemnity statute voids any construction-contract indemnity clause that reaches a contractor’s own negligence and cannot be judicially narrowed. Further, warranty provisions cannot be repurposed into indemnity clauses, while equitable indemnification exists only where another party’s negligence has been established.
Questions about this case can be directed to Shadwal Jha at 703.344.7702 or sjha@tthlaw.com.