Virginia Circuit Court case summaries: September 18, 2006.(Colonial Marble Products v. Payne)(Squillaci v. Lewis-Gale Hospital Inc.)

Byline: Virginia Lawyers Weekly Staff

Contract

Specific Performance - Stock Purchase Agreement

A circuit court orders specific performance of a stock purchase agreement that required defendant to transfer 60 shares of his former employer's stock back to the company after he left its employ.

Plaintiff is a small, closely held family corporation, not publicly traded, in the business of selling and installing bathroom fixtures. Under the terms of the stock purchase agreement, defendant employee agreed to purchase the shares for $6,000 when he became employed as a customer service representative and installer. In fact, defendant, never did pay the $6,000 nor did plaintiff ever demand it. Plaintiff's representative stated that no demand was ever made because the stock was not worth anything. Both corporate representatives testified that the stock either has very little value or that value is difficult to ascertain. The agreement calls for the company to buy back the stock upon defendant's termination within five years of the date of the agreement. Defendant testified that since plaintiff's corporate officers never demanded payment and otherwise told him the arrangement was for a tax benefit for the corporation, he considers the shares a gift.

There is a showing of an inadequate remedy at law. The terms of the agreement to return the stock are clear and direct. Also, there is no showing of donative intent, despite defendant's acquisition without payment.

The court will order specific performance.