Case Title: Gerald T. Dixon, Jr., L.L.C. v. Hassell & Folkes

Citation: 

Docket Number: 110187

State: virginia

Court: Virginia Supreme Court

Date: 2012-03-02T00:00:00Z

Document:
PRESENT:  All the Justices 
 
GERALD T. DIXON, JR., L.L.C. 
 
 
 
 
 
 
 
 OPINION BY  
v. 
Record No. 110187 
  
    JUSTICE WILLIAM C. MIMS 
 
 
 
 
 
 
 
     March 2, 2012 
HASSELL & FOLKES, P.C. 
 
 
FROM THE CIRCUIT COURT OF THE CITY OF CHESAPEAKE 
Randall D. Smith, Judge 
 
In this appeal, we consider whether an agreement was in 
writing for the purposes of the statute of limitations set 
forth in Code § 8.01-246. 
I. 
BACKGROUND AND MATERIAL PROCEEDINGS BELOW 
In March 2003, Gerald T. Dixon, Jr., L.L.C. (“Dixon”) 
retained Hassell & Folkes, P.C. (“Hassell”) to survey and mark 
the boundary lines of a parcel Dixon owned in the City of 
Chesapeake.  After completion of the survey, Dixon constructed 
a concrete slab foundation on the parcel.  In March 2006, Dixon 
conveyed the parcel by general warranty deed to Brat 
Development, L.L.C. (“Brat”), which began construction of an 
office building on the foundation slab. 
Soon thereafter, A & G Partnership t/a Chesapeake Pizza 
(“A&G”) commenced an action for injunctive relief alleging that 
Brat’s office building encroached upon its adjoining parcel.  
In January 2008, the circuit court entered final judgment 
finding that Brat’s office building encroached on A&G’s parcel, 
 
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ordered its removal, and permanently enjoined Brat from 
entering upon A&G’s parcel. 
In July 2008, Brat filed a complaint against Dixon 
alleging constructive fraud and breach of warranty deed 
pursuant to the deed from Dixon to Brat.  In August 2009, Dixon 
filed a complaint against Hassell alleging breach of contract 
due to Hassell’s erroneous determination of the parcel’s 
boundary lines.*  Dixon subsequently filed a supplemental bill 
of particulars in which it represented that a written contract 
existed between it and Hassell. 
The document attached and referred to in the supplemental 
bill of particulars is a letter addressed to Dixon signed by S. 
Grey Folkes, Jr., in his capacity as president of Hassell (“the 
Writing”).  The Writing began by stating, “[p]ursuant to your 
request, we are pleased to submit this proposal . . . .  If you 
find the following terms acceptable, an executed copy will 
serve as our agreement.”  Similarly, the Writing concluded by 
stating, “[s]hould you find this proposal acceptable, please 
sign both copies of this proposal in the space provided below 
and return a fully executed copy to us.  Receipt of the 
                                                 
 
* Dixon also filed a third-party complaint against Hassell 
in the ongoing litigation with Brat, and the two proceedings 
were consolidated by agreement of the parties.  Hassell filed a 
demurrer to the third-party complaint, which the circuit court 
sustained.  The court then dismissed Dixon’s third-party 
complaint with prejudice.  The demurrer to and dismissal of the 
third-party complaint are not presently before us. 
 
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executed copy will serve as the written agreement . . . .”  
While Dixon conceded it had never signed the Writing, Dixon 
asserted that it was a written contract which had been fully 
performed by both parties. 
Hassell filed a plea in bar of the statute of limitations 
to Dixon’s complaint for breach of contract.  Hassell asserted 
that the Writing was merely an unexecuted proposal to enter 
into a written contract but that no written contract had been 
formed.  Accordingly, Hassell argued, the only contract between 
the parties was an oral agreement consistent with the terms of 
the Writing.  Because there was no written contract, Hassell 
asserted that Code § 8.01-246(4) required Dixon to file its 
complaint within three years.  While all work under the 
contract was complete in March 2006, Dixon failed to file its 
breach of contract complaint until August 2009; therefore 
Hassell concluded that Dixon’s cause of action was barred by 
the statute of limitations.  After a hearing, the circuit court 
granted Hassell’s plea in bar and dismissed Dixon’s complaint 
with prejudice.  We awarded Dixon this appeal. 
II. ANALYSIS 
Code § 8.01-246(2) provides that “actions on any contract 
which is not otherwise specified and which is in writing and 
signed by the party to be charged thereby” shall be brought 
“within five years whether such writing be under seal or not.”  
 
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By contrast, Code § 8.01-246(4) provides that “actions upon any 
unwritten contract, express or implied,” shall be brought 
“within three years.”  The sole issue in this appeal is whether 
the Writing is a “contract . . . in writing” within the meaning 
of Code § 8.01-246(2).  “There are no facts in dispute, so the 
applicability of the statute of limitations is a purely legal 
question of statutory construction which we review de novo.”  
Conger v. Barrett, 280 Va. 627, 630, 702 S.E.2d 117, 118 
(2010). 
Dixon argues that its failure to sign and return the 
Writing was a mere formality that did not prevent the formation 
of a contract.  We agree.  However, the issue in this case is 
not whether a contract existed between the parties but whether 
the contract was “in writing” for the purposes of the five-year 
statute of limitations.  We hold that it was not. 
Dixon principally relies on our decisions in Snyder-
Falkinham v. Stockburger, 249 Va. 376, 457 S.E.2d 36 (1995), 
and Golding v. Floyd, 261 Va. 190, 539 S.E2d 735 (2001).  In 
Snyder-Falkinham, we held that a settlement agreement orally 
agreed to by the parties was binding even though it 
contemplated the execution of a formal writing memorializing 
its terms and one of the parties subsequently refused to 
execute the written document.  249 Va. at 385, 457 S.E.2d at 
41.  Conversely, in Golding, we held that a settlement 
 
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agreement was unenforceable when a memorandum setting forth the 
terms of the agreement expressly provided that it was “subject 
to execution of a formal agreement consistent with the terms” 
of the memorandum and no such formal agreement was executed.  
261 Va. at 192, 194, 539 S.E.2d at 736-38 (emphasis omitted).  
Dixon also cites Galloway Corp. v. S. B. Ballard Construction 
Co., 250 Va. 493, 464 S.E.2d 349 (1995), in which we noted that 
the absence of a party’s signature did not undermine the 
existence of a contract which had been accepted by performance.  
Id. at 505, 464 S.E.2d at 356. 
In each of these cases, the question was whether the 
parties had formed an enforceable contract at all, not whether 
the contract was written or unwritten for the purposes of the 
statute of limitations.  But Hassell does not dispute that a 
contract existed in this case; it disputes only which statute 
of limitations applies.  Accordingly, these precedents are not 
relevant to our inquiry in this case.  This is equally true for 
each of the additional cases Dixon cites from federal courts 
and the courts of other states, with one exception. 
In Simmons & Simmons Construction Co. v. Rea, 286 S.W.2d 
415 (Tex. 1995), the Supreme Court of Texas stated that “[a]n 
unsigned agreement all the terms of which are embodied in a 
writing, unconditionally assented to by both parties, is a 
written contract.”  Id. at 418 (quoting 1 Corbin on Contracts 
 
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§§ 31 and 32) (emphasis in Simmons).  But that is not all the 
court said in that case.  It also said that “the making of a 
valid contract requires no writing whatever; and even if there 
is a writing, there need be no signatures unless the parties 
have made them necessary at the time they express their 
assent.”  Id. (quoting 1 Corbin on Contracts §§ 31 and 32) 
(emphasis added). 
In this case, Hassell specifically required Dixon to “sign 
both copies of this proposal . . . and return a fully executed 
copy to us.”  Moreover, Hassell conditioned the existence of a 
written contract upon its receipt of an executed copy of the 
Writing in two separate places:  at the beginning, where the 
Writing stated that “an executed copy will serve as our 
agreement,” and at the end, where it stated that “the executed 
copy will serve as the written agreement.” 
The fact that the Writing states the signature requirement 
twice underscores its importance to Hassell and clearly 
evidences Hassell’s intent that the Writing would not become a 
written contract without Dixon’s signature.  Dixon’s failure to 
sign and return the Writing as its terms required did not 
preclude the parties from forming a binding contract.  But 
Dixon’s failure to sign and return the Writing did preclude the 
Writing itself from becoming a written contract as contemplated 
by Code § 8.01-246(2). 
 
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Dixon also argues that by its plain language, Code § 8.01-
246(2) requires only three elements for the five-year statute 
of limitations to apply:  (1) that the contract specify no 
alternative statute of limitations, (2) that the contract be in 
writing, and (3) that it be signed by the party charged with 
breach.  Dixon contends that because the third element requires 
that a contract be signed only by the party charged with 
breach, the statute does not require every party to sign the 
contract.  Based on the clear and specific terms set forth in 
the Writing in this specific case, we disagree. 
It is well-settled that the parties may contract as they 
choose so long as the terms they adopt are not prohibited by 
statute or public policy.  Barber v. VistaRMS, Inc., 272 Va. 
319, 329, 634 S.E.2d 706, 712 (2006).  No such prohibition 
barred Hassell from requiring Dixon to sign and return the 
Writing as a condition precedent to its becoming a written 
contract.  By failing to sign and return the Writing, Dixon 
rejected that term of the agreement Hassell proposed. 
Because the Writing expressly required Dixon’s signature 
as a condition precedent to becoming a written contract and 
Dixon failed to sign it, there was no written contract.  
Accordingly, Dixon’s cause of action was subject to the three-
year statute of limitations set forth in Code § 8.01-246(4) and 
 
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was time-barred when Dixon filed its complaint in August 2009.  
Accordingly, we will affirm the judgment of the circuit court. 
Affirmed. 
 
 
JUSTICE McCLANAHAN, dissenting. 
 
As Professor Corbin explains, “[a] memorandum of 
agreement, signed by one party and acted on by both is a 
binding written contract.”  Joseph M. Perillo, 1 Corbin on 
Contracts § 2.10, at 168-70 (Joseph M. Perillo, ed., rev. ed. 
1993) (emphasis added).  Dixon has alleged facts to that 
effect in its breach of contract action against Hassell, which 
action is now before us for review on Dixon’s pleadings.  The 
writing alleged by Dixon to be the written contract between 
the parties (the “Writing”) shows that it was executed by 
Hassell.  The Writing was thus signed “by the party to be 
charged” in this case.  Code § 8.01-246 (setting forth 
elements of statute of limitations for written contracts).  
Furthermore, Dixon has alleged that Hassell was performing 
services pursuant to the Writing that constituted the alleged 
breach of contract within five years of the filing of this 
action.   As such, the Writing, I believe, renders this action 
on a written contract timely filed under the Code § 8.01-
246(2) five-year statute of limitations. 
 
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Therefore, contrary to the majority, I would reverse the 
judgment of the trial court in granting Hassell’s demurrer and 
plea in bar on the grounds that Dixon’s action was barred 
under the Code § 8.01-246(4) three-year statute of limitations 
for oral contracts.  Both the trial court’s judgment and the 
majority opinion are based on what I believe to be an 
incorrect determination that Dixon merely presented 
allegations of a breach of an oral contract. 
 
Hassell presented no evidence in support of its plea in 
bar.  Thus, when “deciding both the plea in bar and 
[Hassell's] demurrer, we, like the trial court, must confine 
our consideration to the allegations” contained in Dixon’s 
complaint, as supplemented by its bill of particulars.  Bell 
Atlantic-Virginia, Inc. v. Arlington Cnty., 254 Va. 60, 63, 
486 S.E.2d 297, 298-99 (1997).  And, in doing so, we are 
required under familiar principles to view “as true all 
material facts well pleaded, facts impliedly alleged, and 
facts that may be fairly inferred from those alleged.”  Id. at 
63, 486 S.E.2d at 299 (citations omitted).  
 
Viewed in that light, Hassell sent the Writing, signed by 
Hassell’s president, to Dixon.  The Writing included Hassell’s 
detailed offer to perform engineering and surveying services 
for Dixon in the form of “preliminary and final site plans for 
[Dixon’s] proposed office building” in Chesapeake.  The 
 
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Writing specified, inter alia, the individual services to be 
provided by Hassell in conjunction with the office building 
project, the various fees for each of the services (e.g., 
“[p]reliminary plan preparation . . . $1,500.00”; 
“[v]erification of existing boundary $1,500.00”; 
“[t]opographic survey $900.00”; “[s]ite development plans 
$7,500.00”), and additional available services that would 
require “changes in scope of work and compensation.” 
 
Despite the fact that Dixon did not sign and return the 
Writing to Hassell, as confirmation of the parties’ agreement 
as Hassell requested, the parties proceeded with performance 
pursuant to the terms of the Writing.  Hassell provided to 
Dixon the services covered by the Writing, as well as 
additional services necessitating change orders, extending "as 
late as March 20, 2006," and Dixon paid Hassell for those 
services.∗  As documentary evidence of the same (submitted with 
Dixon’s bill of particulars), Hassell presented to Dixon, at 
least in certain instances, written invoices indicating 
completion of specific services, and requesting payment for 
those services, pursuant to the terms of the Writing.  Other 
invoices from Hassell to Dixon regarding the same project 
                                                 
 
∗ Dixon filed its third-party complaint in 2009, and 
therefore instituted its breach of contract action, on the 
facts alleged, within five years of the accrual of that action. 
 
 
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indicated in the heading that they were for “Services Beyond 
Contract Scope.”  Similarly, Hassell presented to Dixon in 
writing certain change orders during its work on the project, 
each identified as “Notice of Additional Services to 
Contract.”  In providing its services to Dixon, Hassell 
breached its contract with Dixon under the Writing by 
preparing an “incorrect” boundary line survey, thereby causing 
an encroachment to be constructed upon the adjoining landowner 
for which Dixon has incurred monetary damages. 
 
In light of these allegations, Hassell’s counsel was asked 
at oral argument where this Court was to find the terms of the 
purported oral contract between the parties.  Hassell’s counsel 
responded that the terms were “reflected” in the Writing.  The 
majority, in fact, recognizes that Hassell contends the 
purported oral contract was “consistent with the terms of the 
Writing.”  This concession demonstrates why the threshold 
determination in support of the judgment in this case – that 
the contract between the parties was merely an oral contract – 
amounts to a legal fiction.  The Writing is what the parties 
mutually assented to as evidenced by their performance pursuant 
to its terms.  There are simply no facts, as alleged, before 
this Court indicating otherwise.  Under basic contract law, 
“[a]ssent may be inferred from the acts and conduct of the 
parties.”  Durham v. National Pool Equip. Co. of Va., 205 Va. 
 
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441, 445, 138 S.E.2d 55, 58 (1964) (citations omitted); see 
Marefield Meadows, Inc. v. Lorenz, 245 Va. 255, 260, 427 S.E.2d 
363, 365 (1993) (“A meeting of the minds is essential to the 
formation of a contract, but ‘the law imputes to a person an 
intention corresponding to the reasonable meaning of his words 
and acts.’ ” (quoting Lucy v. Zehmer, 196 Va. 493, 503, 84 
S.E.2d 516, 522 (1954))).  As “Justice Holmes once said: 
‘Conduct which imports acceptance is acceptance or assent, in 
the view of the law, whatever may have been the actual state of 
mind of the party.’ ”  NLRB v. Local 825, Int'l Union of 
Operating Eng'rs, 315 F.2d 695, 699 (3d Cir. 1963) (citation 
omitted). 
 
The fact that only Hassell signed the Writing should not 
be seen, therefore, as dispositive of the issue of whether 
Hassell and Dixon were parties to a written contract, given 
their subsequent conduct showing that they assented to the 
Writing.  To be sure, Hassell could have required that Dixon 
sign the Writing before Hassell rendered its performance, and 
accepted Dixon’s payment, under the terms of the Writing; but 
Hassell failed to do so, thereby waiving any such condition to 
consummation of the Writing.  Addressing analogous facts, the 
United States Court of Appeals for the Third Circuit in Local 
825 explained: “That the Union failed to sign the [subject] 
agreement is immaterial[,] for any written contract though 
 
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signed only  by one of the parties binds the other if he 
accepts it and both act in reliance on it as a valid 
contract.”  Id. (emphasis added).  See Coffey v. Mann, 585 
N.W.2d 518, 524 (Neb. Ct. App. 1998) (“Because the parties 
unconditionally manifested their assent to the terms of the 
written contract, although they did not sign it, there was no 
fatal variance between the pleadings and the proof in this 
case.  A written contract was pled, and a written contract was 
proved.”); Leonard v. Bennett, 674 S.W.2d 123, 127 (Mo. Ct. 
App. 1984) (“[T]hough a written contract be not signed by one 
or both of the parties, the acceptance by one of performance 
by the other validates the instrument, and imposes on the 
acceptor the corresponding obligation provided therein.” 
(quoting Sunbury v. Aaron, 116 S.W. 431, 432 (Mo. Ct. App. 
1909))); Rush v. Atomic Electric Co., 384 So.2d 1067, 1068 
(Ala. 1980) (“A party, by his actions and acceptance of the 
benefits of a contract and by operating under such agreement, 
may ratify and confirm a contract to which his actual 
signature is not affixed.” (citation omitted)); Whitters & 
Sons, Inc. v. Karr, 180 N.W.2d 444, 446 (Iowa 1970) (“Where a 
written agreement signed by one party is accepted and adopted 
by the other, and acted upon, it becomes their contract in the 
same sense as though both parties had signed.” (quoting 
McDermott v. Mahoney, 115 N.W. 32, 35 (Iowa 1908))). 
 
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For these reasons, I dissent.