In J.A. Peregoy Roofing & Construction Co. v. Deaton, the plantiff company sued over work performed on a roof in 2001, instituted a suit in 2005 under its fictitious name instead of its real name, and in 2009 sought to have that problem corrected at the beginning of trial. The plaintiff had to do that because even though Va. Code § 59.1-69 allows corporations to transact business under a fictitious name, Virginia requires corporations to sue under their real names. There was a lot riding on this — if the plaintiff was not allowed to amend its Complaint at this late date, the lawsuit would have to be dismissed and the plaintiff, through its real name, would be unable to bring a second lawsuit because the statute of limitations had elapsed.
Fortunately for the plaintiff, Judge Melvin R. Hughes, Jr. for the Richmond Circuit Court ruled that the fictitious name was a misnomer under Va. Code § 8.01-6, and thus could be amended at any time before trial. A misnomer is when the right party is cited under the wrong name, and not when the wrong party is named. In other words, had it been the case that the plaintiff here sued under a subsidiary’s name instead of its own, there would not have been a misnomer and the case would have been dismissed since the subsidiary has a separate corporate identity from the parent company. A fictitious name or d/b/a has no separate existence from the company that uses the name, and thus are merely misnomers.
The plaintiff fares less well in the rest of the case. The Court agreed with Deaton that the plaintiff negligently caused the damage the plaintiff complained of, and ruled that Deaton was accordingly entitled to a $145,000 set-off under Va. Code § 8.01-422. Since the plaintiff was only suing for $11,000 in the first place, the result was a big win for the defense. Normally in Virginia law, a set-off is a cause of action, not an affirmative defense. However, where the set-off arises specifically from the contract that is the subject of the case, Va. Code § 8.01-422 allows for a set-off as a defense instead of a claim. The Virginia Supreme Court, in Dexter-Portland Cement Co. v. Acme Supply Co., 147 Va. 758, 133 S.E. 788 (1926), noted that the statutory right to a set-off was actually “a mere enlargement of the common-law right of recoupment” under a contract, which sometimes causes confusion between the typical set-off action and the statutory set-off defense.
