Rule 3:25(b) Requires Pleading the Fee Basis: Notice, Incorporation by Reference, or Attachment Is Not Enough

Case: Pinnacle Flooring Solutions, LLC v. Premier Homes Group, LLC
Court: Supreme Court of Virginia
Date: July 30, 2026

I. Introduction

This appeal concerns a recurring Virginia practice problem: how, exactly, must a party plead a claim for attorney fees. Pinnacle Flooring Solutions, LLC (“Pinnacle”) sued Premier Homes Group, LLC (“Premier”) for nonpayment under three nearly identical flooring subcontracts. Premier counterclaimed for breach, alleging Pinnacle’s work was defective and incomplete, and it asked the trial court to award Premier “those attorney’s fees incurred by it in prosecuting this matter.”

Each subcontract contained a fees clause in Section 8(b) permitting Premier, upon Pinnacle’s default, to recover “reasonable overhead, profit, and attorney fees.” The central issue was whether Premier’s counterclaim complied with Rule 3:25(b) by adequately identifying the basis for fees—despite not expressly referencing Section 8(b), and despite Premier later emailing Pinnacle’s counsel identifying Section 8(b) as the source of the fee claim.

The trial court denied fees for failure to comply with Rule 3:25(b). The Court of Appeals reversed (unpublished), reasoning Pinnacle was on notice because the contract was (in its view) attached or otherwise before the court. The Supreme Court of Virginia reversed, holding Premier waived its fee claim by not pleading the basis as the Rule requires.

II. Summary of the Opinion

Applying the rule’s plain language, the Court held Premier’s counterclaim demanded fees but did not identify any contractual provision (Section 8(b)) or statutory ground authorizing fees. Because Virginia follows the American Rule, a party must point to a contract or statute authorizing a fee award. Premier did not amend under Rule 1:8. Accordingly, the trial court correctly denied fees, and the Court of Appeals erred.

III. Analysis

A. Precedents Cited

1. Graham v. Community Mgmt. Corp.

Graham v. Community Mgmt. Corp. supplied both the interpretive method and the policy backbone of the decision. The Court quoted Graham for the proposition that Rule 3:25’s language is “plain,” and emphasized Graham’s broader practice principle: no litigant may recover on a right not pled. The Opinion also relied on Graham’s explanation that Rule 3:25’s pleading requirement serves structural case-management functions—enabling pretrial procedures under Rule 3:25(d), avoiding duplication, promoting efficient judicial management, and preserving jury-trial-related interests where applicable.

In short, Graham was used to reject a “functional notice” approach and to reaffirm a “plead it or waive it” approach.

2. Amin v. County of Henrico

Amin v. County of Henrico was cited (via Graham) for the de novo standard of review on questions of law. While not substantive on fees, it supports the Court’s posture that interpreting the Rules of Court is reviewed like statutory interpretation—without deference to lower courts.

3. St. John v. Thompson and Chacey v. Garvey

St. John v. Thompson (quoting Chacey v. Garvey) grounded the decision in the “American Rule”: each party bears its own attorney fees unless a contract or statute provides otherwise. The Court used these cases to explain why Rule 3:25(b) necessarily demands identification of a contractual or statutory provision—because without one, fees are not recoverable at all.

4. Online Resources Corporation v. Lawlor

Premier’s main escape hatch was Online Resources Corporation v. Lawlor. The Court rejected that reliance and clarified Lawlor’s limits:

• Procedural posture: In Lawlor, the trial court allowed an amendment to plead fees with greater specificity, and the appeal concerned whether permitting that amendment was an abuse of discretion. Here, Premier never sought leave to amend under Rule 1:8.
• Concession/knowledge: In Lawlor, the opposing party admitted it knew the basis and was not surprised. Here, Pinnacle did not concede knowledge (even if emails were received).
• Core clarification: The Court reiterated that Rule 3:25(b) is not satisfied merely because the opponent arguably “knew” the basis. Lawlor does not create a notice-based exception to the Rule’s pleading command.

5. Premier Homes Group, LLC v. Pinnacle Flooring Solutions, LLC (Court of Appeals decision)

The Court treated the Court of Appeals’ analysis as fundamentally misframed. It noted the Court of Appeals repeatedly described the subcontracts as “attached” to Premier’s counterclaim and deemed that “attachment” dispositive because it put Pinnacle “on notice.” The Supreme Court corrected both the factual premise (the subcontracts were incorporated by reference rather than attached) and the legal premise (notice is not the test under Rule 3:25(b)).

B. Legal Reasoning

The Opinion proceeds as a straightforward textual and structural reading of Rule 3:25:

• Text: Rule 3:25(b) requires two things in the proper pleading: (1) a demand for attorney fees and (2) identification of “the basis” for that demand.
• Waiver consequence: Rule 3:25(c) makes noncompliance a waiver, absent leave to amend under Rule 1:8.
• American Rule context: Because fees are exceptional in Virginia, “basis” must mean a statute or a contract provision authorizing fees.
• Application to Premier’s counterclaim: Premier demanded fees but did not identify Section 8(b), did not cite any statute, and did not even mention the subcontracts in the fee demand. That is noncompliance—full stop.

The Court then clarified three points that function as the decision’s practical guidance:

• Rule 3:25(b) is pleading, not notice: Even perfect notice to the opponent does not replace a missing pleaded basis.
• Incorporation/attachment doesn’t cure a defective demand: Even if the contracts had been attached, Premier’s fee demand still did not “identify the basis” within the demand as the Rule requires.
• Lawlor is about amendments and discretion, not an exception: The correct mechanism for curing an insufficient fee pleading is a timely amendment under Rule 1:8—something Premier explicitly contemplated in emails but never pursued.

C. Impact

The decision tightens (and clarifies) Virginia attorney-fee pleading practice in several concrete ways:

• No “notice-based” compliance: Litigants cannot rely on informal communications, discovery, exhibits, incorporation by reference, or the “obviousness” of the only fee clause in a contract. Courts must enforce the pleaded-basis requirement.
• Drafting discipline in pleadings: Fee demands must expressly cite the contract provision (e.g., “Section 8(b) of the subcontract”) or the specific statute.
• Procedural planning: The holding reinforces Rule 3:25(d)’s case-management role: courts can only sensibly structure bifurcation and fee adjudication when the fee basis is clearly identified in the pleadings.
• Greater risk of waiver: Parties who plead “attorney fees” generically without identifying the basis now face a clearer, more predictable waiver ruling unless they timely amend under Rule 1:8.

IV. Complex Concepts Simplified

• American Rule: The default rule that each side pays its own lawyer; fee-shifting requires a contract clause or a statute.
• “Identify the basis” (Rule 3:25(b)): You must say why you are entitled to fees (e.g., “under Section 8(b) of the contract” or “under Code § X”), not merely ask for fees.
• Pleading requirement vs. notice requirement: A pleading requirement is satisfied only by what is properly stated in the pleadings. Notice—what the other side may have learned elsewhere—does not substitute for what the rules require to be pled.
• Incorporation by reference: A pleading can sometimes make another document part of it by referencing it, but that does not automatically satisfy a separate rule requiring an affirmative statement (here, identification of the fee basis in the demand).
• Waiver and amendment (Rules 3:25(c) and 1:8): If you do not comply, you lose the claim for fees unless the court allows you to amend your pleading to fix it.
• Bifurcation: Separating issues (liability/damages first, fees later). Bifurcation does not relax the requirement that the fee basis be properly pled from the start.

V. Conclusion

Pinnacle Flooring Solutions v. Premier Homes Group establishes a clear practice rule: to recover attorney fees in Virginia civil litigation, a party must do more than request fees—it must plead the specific contractual or statutory basis for fees in the appropriate pleading under Rule 3:25(b). “Notice” gleaned from incorporated contracts, attachments, or counsel communications cannot cure a missing pleaded basis. Failure to comply results in waiver under Rule 3:25(c), and the proper remedy is to seek leave to amend under Rule 1:8—something Premier did not do.