The Virginia Business Litigation Blog
Federal Rule of Civil Procedure 8(a) requires a complaint to contain a short and plain statement of the claim showing that the pleader is entitled to relief so as to give the defendant fair notice of the claim and the ground upon which it rests. The Supreme Court has interpreted this rule to require factual allegations sufficient to demonstrate that a claim is plausible on its face. Rule 9(c), on the other hand, allows plaintiffs to plead contractual conditions precedent “generally.” In Chesapeake Square Hotel v. Logan’s Roadhouse, Inc., the court was faced with the question of whether Rule 9(c) permits a lesser pleading standard than Rule 8, permitting plaintiffs in such cases to avoid the plausibility requirement. While the court did not answer the question directly since it found the plaintiff had presented a plausible claim anyway, the court’s discussion suggests that Rule 8’s plausibility requirement cannot be avoided by pointing to a provision in the Rules permitting a “general” pleading.
Chesapeake Square involved a contract for the sale of commercial real estate to Logan’s Roadhouse. The contract imposed conditions on both parties to be performed prior to closing. Defendant allegedly terminated the contract claiming that plaintiff failed to satisfy contractual preconditions. Plaintiff alleged breach of contract and sought specific performance. Defendant moved to dismiss, arguing that the complaint failed to adequately allege that plaintiff satisfied contractual conditions precedent that would entitle it to specific performance of the contract.
The court noted that when the Rule 9(c) general pleading requirement for conditions precedent is read without restriction, it allows parties to allege generally that all conditions precedent have occurred. In this case, the plaintiff alleged generally that it satisfied all of the preconditions to defendant’s obligations under the contract and therefore met the Rule 9(c) pleading requirement when read without restriction.
The court next considered whether the Rule 9(c) pleading requirement should be read in light of Rule 8(a) such that Rule 9(c) is as stringent as Rule 8(a). To assist in interpreting Rule 9(c), the court looked to the text of Rule 9(b) which, like rule 9(c), contains both a particular and general pleading requirement. Pursuant to Rule 9(b), parties must plead circumstances constituting fraud or mistake with particularity but may plead malice, intent, knowledge and other conditions of a person’s mind generally. The United States Supreme Court has held that Rule 9(b)’s general pleading requirement does not create a lesser standard than Rule 8(a)’s plausibility requirement. Rather, the term “generally” is relative and must be compared to the particularity requirement of Rule 9(b). The Supreme Court interpreted the general pleading requirement as merely excusing a 
party from pleading under an elevated pleading standard. See Ashcroft v. Iqbal, 556 U.S. 662 (2009). Likewise, the Fourth Circuit has held that general pleadings under Rule 9(b) must still articulate sufficient facts to demonstrate a plausible claim for relief under Rule 8. Mayfield v. Nat’l Ass’n for Stock Car Auto Racing, Inc., 674 F.3d 369 (4th Cir. 2012).
The court in Chesapeake Square compared the text of Rule 9(c) to the text of Rule 9(b) and found them similar. Both rules allow parties to allege generally certain claims but require parties to plead others with particularity. Since the subsections contain similar language, the court reasoned that they should be interpreted similarly. The court noted that this conclusion is arguably dictated by the Supreme Court but has not been followed by lower courts.
When a contract contains a condition precedent, a party cannot compel specific performance without alleging that the conditions have been met or having an excuse for the conditions’ non-performance. To state a claim for specific performance, plaintiff’s complaint must include facts demonstrating that it was able, ready, prompt, eager and willing to perform the contract on its part. If the Rule 8(a) pleading requirement is applied, the conclusory allegation that plaintiff “satisfied all of the preconditions to defendant’s obligation to close under the contract” is not sufficient to state a claim for relief. However, the court reviewed the complaint in its entirety and found that plaintiff did not rest on a conclusory assertion but instead alleged detailed facts in its complaint. Based on these detailed facts (which the court was required to accept as true), the court found that plaintiff had plausibly stated a claim for specific performance as it had alleged either performance of the conditions precedent or that it was able, ready, prompt, eager and willing to perform such conditions. Even if the Rule 8(a) pleading requirement extended to pleading the fulfillment of conditions precedent under rule 9(c), plaintiff had alleged enough facts to state a claim to relief that is plausible on its face and therefore its complaint survived defendant’s motion to dismiss.