Decided: May 4, 2016
The Fourth Circuit affirmed in part, vacated in part, and remanded the case for further proceedings.
The parties entered into a ninety-nine year lease in an effort to construct a Zoroastrian worship center. The defendant ended lease, and the plaintiff sought a declaratory judgment to reinstate the lease. The defendant removed the case to federal court, and the district court granted summary judgment in favor of the defendant. The defendant was also awarded attorneys’ fees. The plaintiffs appealed, raising lacking of federal subject matter jurisdiction and X as claims of error.
The Fourth Circuit agreed with the district court, holding the defendant provided sufficient evidence to prove complete diversity between the parties to establish federal subject matter jurisdiction. The Fourth Circuit also affirmed the district court’s finding that the undisputed material facts show the plaintiff breached the lease.
However, the Fourth Circuit determined that the district court erred when it granted the defendant’s attorney’s fees. While the district court correctly determined that the defendant was the prevailing party according to Virginia’s law on fee-shifting provisions, the court failed to limit the attorneys’ fee to the defendant’s successful claims.
Accordingly, the Fourth Circuit affirmed the district court’s judgment on the merits, but vacated the district court’s attorneys’ fee award and remanded for further proceedings.