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Friendly Ice Cream Corporation v. Beckner

Supreme Court of Virginia
597 S.E.2d 34 (2004)


Facts

In 1976, Beatrice Beckner (plaintiff) and her husband entered into a 15-year commercial-lease agreement with Friendly Ice Cream Corporation (Friendly) (defendant), under which Friendly was permitted to build and operate a retail ice-cream store on land owned by the Beckners. A Friendly subsidiary, FriendCo Restaurants, Inc. (FriendCo) (defendant), operated the store. The lease required the defendants to pay monthly rent as well as percentage rent, an annual payment based on a percentage of income generated by the store. Prior to the expiration of the lease, the defendants decided to close the store. Sandra Hughes, a FriendCo executive, approached the Beckners, seeking their consent to assign the lease to Riggs Bank, N.A. (Riggs). Riggs wanted to demolish the ice-cream store and construct a bank on the property. Subsequently, Beatrice’s husband died. Hughes initially worked with Beatrice, who was 80 years old, to amend the lease agreement. Later, Beatrice instructed Hughes to sort out the details with her attorney. Other individuals assisted Beatrice with the negotiations, including her son, her insurance agent, another lawyer, and a long-time friend. After some significant confusion regarding with whom Hughes should work, Beatrice and Hughes executed an amended agreement that assigned the lease to Riggs in exchange for a modest increase in base rent. However, Beatrice’s son claimed that the rent amount was well below fair market value and that Hughes had taken advantage of Beatrice. Beatrice filed suit against the defendants, seeking rescission of the amended lease on the grounds of gross inadequacy of consideration and undue influence. The trial court denied the defendants’ motion for summary judgment. Following a hearing, the trial court entered a decree in favor of Beatrice, concluding that the amended lease was the product of undue influence. The trial court rescinded the amended lease. The defendants appealed.

Rule of Law

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Issue

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Holding and Reasoning (Lacy, J.)

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  • A "yes" or "no" answer to the question framed in the issue section;
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