Case Title: Phillips v. Mazyck

Citation: 

Docket Number: 061183

State: virginia

Court: Virginia Supreme Court

Date: 2007-04-20T00:00:00Z

Document:
Present:  All the Justices 
SIDNEY E. PHILLIPS 
v.  Record No. 061183  OPINION BY JUSTICE CYNTHIA D. KINSER 
 
 
 
 
 
 
 
 
April 20, 2007 
SIMONA MAZYCK 
 
FROM THE CIRCUIT COURT OF FAIRFAX COUNTY 
R. Terrence Ney, Judge 
 
This appeal arises out of the circuit court’s judgment 
sustaining a plea in bar and ordering the parties to 
arbitrate the plaintiff’s personal injury claim.  Because 
the record fails to establish that the parties mutually 
assented to the terms of a purported arbitration agreement, 
we will reverse the judgment of the circuit court and 
remand the case for a trial on the merits. 
 
Sidney E. Phillips filed a motion for judgment against 
Simona Mazyck, seeking damages for personal injuries he 
allegedly sustained in an automobile accident involving 
Mazyck.  In response, Mazyck filed a plea in bar, 
requesting a dismissal of Phillips’ motion for judgment.  
Mazyck asserted that Phillips, before filing his motion for 
judgment, had entered into an agreement with Mazyck’s 
automobile liability insurance carrier, United Services 
Automobile Association (USAA), to arbitrate Phillips’ 
personal injury claim.  Mazyck argued that this agreement 
to arbitrate constituted an accord and satisfaction and/or 
 
2
a settlement of Phillips’ claim that barred Phillips from 
pursing the action he filed in the circuit court.  Mazyck 
further alleged that Phillips improperly and unilaterally 
withdrew from the arbitration agreement.  As an alternative 
to the relief sought in her plea in bar, Mazyck 
subsequently moved the circuit court to stay the 
proceedings and compel the parties to proceed to 
arbitration pursuant to Code § 8.01-581.02. 
 
Prior to a hearing on Mazyck’s plea in bar, Mazyck 
deposed Phillips’ attorney, Donald W. Marcari, regarding 
the events leading up to the alleged formation of the 
agreement to arbitrate Phillips’ personal injury claim.1  
Marcari indicated that, because he had been unable to reach 
an amicable settlement of Phillips’ claim with USAA’s 
senior casualty examiner, Terry W. Wier, he sent Wier a 
letter dated March 6, 2003, inquiring whether USAA would be 
willing to enter into binding arbitration with a “high-low” 
provision valuing Phillips’ damages between $12,000 and 
$45,000. 
According to Marcari, negotiations continued with 
regard to the details of an arbitration agreement and the 
“high-low” range.  Wier then replied in a letter dated May 
 
3
16, 2003, stating USAA would agree to binding arbitration 
with a “high of $32,500 and a low of $7,500.”  Wier 
indicated in his letter, however, that arbitration would be 
“subject to liability and damages [d]iscovery by [USAA’s] 
attorney,” and he pointed out that the parties needed to 
agree on a location where the arbitration would take place.  
Marcari testified that, at the time, he was “agreeable” to 
USAA deposing Phillips in conjunction with the proposed 
arbitration. 
 
Marcari subsequently received a letter from USAA’s 
attorney, Terry H. Davis, Jr., in which Davis stated his 
understanding that Marcari and Wier had agreed on a “high-
low” provision and asked Marcari to call him regarding 
additional discovery.  Marcari testified that, at the time 
he received Davis’ letter, he had agreed with Wier that 
they would employ the services of Arbitration Associates, 
Inc., but that they had not resolved who would serve as the 
arbitrator. 
In a subsequent letter, Davis reminded Marcari that 
the parties still needed to select an arbitrator and 
enclosed USAA’s interrogatories and requests for 
production.  Davis also requested that Phillips undergo an 
                                                             
1  At the hearing on the plea in bar, the circuit court 
considered Marcari’s deposition in addition to letters and 
 
4
independent medical examination (IME).  According to 
Marcari, that request was the first time anyone had 
mentioned an IME, but he had no objection to it.  Marcari 
did not recall any discussions suggesting the arbitration 
would be contingent on the results of either the discovery 
or the IME.  The parties subsequently agreed on an 
individual to serve as the arbitrator. 
Marcari and Davis then received a letter dated June 
23, 2003 from Debbie Dickerson-Nussbaum (Nussbaum), 
president of Arbitration Associates, Inc., along with a 
document titled “Arbitration Agreement.”  The letter read: 
Dear Gentlemen: 
 
 
Enclosed you will find the arbitration 
agreement for the above referenced case; all 
parties will receive a copy by facsimile.  The 
original will be mailed to Don.  Don, please sign 
same and forward to Terry as soon as possible. 
 
 
Arbitration Associates, Inc. must receive 
the fully executed original no later than August 
6, 2003. 
 
According to his deposition testimony, Marcari changed the 
date specified in the agreement for the submission of 
evidence to the arbitrator and added the names of 
witnesses.  In a letter dated June 25, 2003, Davis advised 
Marcari that he wanted to change certain terms of the 
proposed arbitration agreement.  Although Marcari signed 
                                                             
documents that were deposition exhibits. 
 
5
the arbitration agreement, he never forwarded it to either 
Davis or Nussbaum.  Marcari stated that he chose not to do 
so because he first wanted to obtain the results of the 
IME.  Marcari admitted, however, that he never communicated 
that fact to anyone else. 
Marcari subsequently received a “Revised Arbitration 
Agreement” dated August 8, 2003.  As before, Marcari signed 
the agreement, this time without making any changes in its 
terms, but again, he did not send it to Davis because he 
was still waiting to receive the results of Phillips’ IME.  
Marcari acknowledged, however, that he never requested any 
amendment to the Revised Arbitration Agreement to reflect 
that arbitration would be contingent upon the results of 
the IME.  He also agreed that, other than the names of some 
witnesses that were not listed, the Revised Arbitration 
Agreement included the terms he had discussed with Davis 
and Wier. 
Sometime after receiving the Revised Arbitration 
Agreement, Marcari learned that the doctor who performed 
Phillips’ IME reported that Phillips would require surgery.  
According to Marcari, he then communicated to Davis that, 
because Phillips’ injuries were more severe than the 
parties had originally understood, Phillips was unwilling 
to proceed with the arbitration.  By a letter dated October 
 
6
14, 2003, Davis told Marcari, “Please be advised that we do 
protest the unilateral cancellation of the arbitration 
hearing on September 30th.  It is our position that the 
arbitration agreement is binding.” 
At the hearing on Mazyck’s plea in bar, the circuit 
court framed the issue as whether the absence of Davis’ 
signature on the arbitration agreement rendered it 
unenforceable.  Phillips, however, argued, among other 
things, that there was never a meeting of the minds and 
thus, the parties never reached an agreement.  The circuit 
court disagreed and ruled that the parties had an 
enforceable agreement to arbitrate.  Continuing, the court 
found that the agreement was in writing as required by Code 
§ 8.01-581.01,2 that it included all the essential terms, 
and that, under Code § 8.01-581.01, the agreement did not 
need to be signed by all the parties, especially since the 
attorney for the party to be charged in this case had 
signed it.  The circuit court thus sustained Mazyck’s plea 
in bar and stayed the proceeding pending the outcome of 
                     
2  In relevant part, Code § 8.01-581.01 provides: 
A written agreement to submit any existing controversy 
to arbitration or a provision in a written contract to 
submit to arbitration any controversy thereafter arising 
between the parties is valid, enforceable and irrevocable, 
except upon such grounds as exist at law or in equity for 
the revocation of any contract. 
 
7
arbitration.  After the parties completed arbitration, the 
circuit court entered a final order dismissing Phillips’ 
motion for judgment with prejudice.  We awarded Phillips 
this appeal. 
Phillips assigns two errors to the circuit court’s 
judgment.  First, he challenges the court’s finding that 
the Revised Arbitration Agreement satisfied the 
requirements of “[a] written agreement” to arbitrate 
pursuant to Code § 8.01-581.01 even though the document was 
never signed by both parties.  Second, Phillips asserts 
that the circuit court erred in binding him to the terms of 
the Revised Arbitration Agreement because the parties never 
reached a meeting of the minds as to its material terms. 
Mazyck, on the other hand, argues that the Revised 
Arbitration Agreement reduced to writing all material terms 
of the agreement between USAA and Phillips to arbitrate his 
personal injury claim, and therefore, it satisfied the 
requirements of Code § 8.01-581.01.  She further asserts 
that, while neither party’s signature was required in order 
for the agreement to be enforceable, Marcari’s signing the 
Revised Arbitration Agreement demonstrated that Phillips, 
the party to be charged in this case, assented to its 
terms. 
 
8
We have held, both before and after the General 
Assembly’s enactment of the Uniform Arbitration Act, 1986 
Acts ch. 614, that “ ‘the initial duty to arbitrate . . . 
arises from contractual undertakings.’ ”  Weitz v. Hudson, 
262 Va. 224, 228, 546 S.E.2d 732, 734 (2001) (quoting Doyle 
& Russell, Inc. v. Roanoke Hosp. Ass’n, 213 Va. 489, 494, 
193 S.E.2d 662, 666 (1973)); see also Arrants v. Buck, 130 
F.3d 636, 640 (4th Cir. 1997) (“Courts decide whether there 
is an agreement to arbitrate according to common law 
principles of contract law); Meshel v. Ohev Sholom Talmud 
Torah, 869 A.2d 343, 354 (D.C. 2005) (“[W]hether the 
parties have an enforceable agreement to arbitrate . . . is 
governed by traditional principles of contract law.”); 
Routh v. Snap-On Tools Corp., 423 S.E.2d 791, 794 (N.C. Ct. 
App. 1992) (“The law of contracts governs the issue of 
whether there exists an agreement to arbitrate.”).  
Consequently, whether there existed between the parties an 
enforceable agreement to arbitrate Phillips’ personal 
injury claim depends on whether the Revised Arbitration 
Agreement contained the essential elements of a valid 
contract at common law.3 
                     
3  Since the Revised Arbitration Agreement was in 
writing, it satisfied the statutory requirement of “[a] 
written agreement.”  Code § 8.01-581.01. 
 
9
The material facts concerning the formation of the 
parties’ proposed arbitration agreement are not in dispute.  
Thus, “the issue of contract vel non is a question of law.”  
Valjar, Inc. v. Maritime Terminals, Inc., 220 Va. 1015, 
1018, 265 S.E.2d 734, 736 (1980) (citing Mullins v. Mingo 
Lime & Lumber Co., 176 Va. 44, 48, 10 S.E.2d 492, 493 
(1940)). We decide questions of law de novo.  Harrell v. 
Harrell, 272 Va. 652, 656, 636 S.E.2d 391, 393 (2006) 
(citing Westgate at Williamsburg Condo. Ass’n v. Philip 
Richardson Co., 270 Va. 566, 574, 621 S.E.2d 114, 118 
(2005)). 
“ 'It is elementary that mutuality of assent – the 
meeting of the minds of the parties – is an essential 
element of all contracts.’ ”  Lacey v. Cardwell, 216 Va. 
212, 223, 217 S.E.2d 835, 843 (1975) (quoting Green’s Ex’rs 
v. Smith, 146 Va. 442, 452, 131 S.E. 846, 848 (1926)).  
“Until the parties have a distinct intention common to both 
and without doubt or difference, there is a lack of mutual 
assent and, therefore, no contract.”  Persinger & Co. v. 
Larrowe, 252 Va. 404, 408, 477 S.E.2d 506, 509 (1996) 
(citing Progressive Constr. Co. v. Thumm, 209 Va. 24, 30, 
161 S.E.2d 687, 691 (1968)); see also Valjar, 220 Va. at 
1018, 265 S.E.2d at 736–37 (“A contract cannot exist if the 
parties never mutually assented to terms proposed by 
 
10
either.”); Chittum v. Potter, 216 Va. 463, 467, 219 S.E.2d 
859, 863 (1975) (“It is crucial to a determination that a 
contract exists . . . that the minds of the parties have 
met on every material phase of the alleged agreement.”); 
Routh, 423 S.E.2d at 794 (to support a finding that a valid 
contract to arbitrate exists, “the party seeking 
arbitration must show that the parties mutually agreed to 
arbitrate their disputes”).  We ascertain whether a party 
assented to the terms of a contract from that party’s words 
or acts, not from his or her unexpressed state of mind.  
Wells v. Weston, 229 Va. 72, 78, 326 S.E.2d 672, 676 
(1985); see also Lucy v. Zehmer, 196 Va. 493, 503, 84 
S.E.2d 516, 522 (1954) (“The law . . . judges of an 
agreement between two persons exclusively from those 
expressions of their intentions which are communicated 
between them.”) (citation and internal quotation marks 
omitted) (emphasis added). 
Our decision in Brooks & Co. General Contractors, Inc. 
v. Randy Robinson Contracting, Inc., 257 Va. 240, 513 
S.E.2d 858 (1999), illustrates these principles.  In that 
case, a general contractor sent to a subcontractor an 
unsigned form contract containing an arbitration provision 
that the parties had not previously discussed and that was 
not included in the subcontractor’s bid documents.  Id. at 
 
11
242, 244, 513 S.E.2d at 858, 860.  The subcontractor 
testified that he did not agree with the terms of the form 
contract and that he purposefully refused to sign it, 
although he never communicated his disagreement to the 
contractor.  Id. at 242−43, 513 S.E.2d at 859.  The 
subcontractor began work on the project that the general 
contractor had awarded to it, but the subcontractor left 
the work unfinished.  Id. at 243, 513 S.E.2d at 859.  The 
general contractor completed the unfinished work and 
demanded arbitration of its claim for damages against the 
subcontractor.  Id. at 243, 513 S.E.2d at 859.  On the 
subcontractor’s motion, the trial court entered an order 
permanently staying arbitration.  Id.  The trial court 
found that there was no meeting of the minds between the 
parties as to the terms of the form contract, which neither 
party signed.  Id. 
On appeal to this Court, the general contractor argued 
that the subcontractor accepted the terms of the form 
contract by virtue of its commencement of work on the 
project.  Id.  The general contractor further asserted that 
the subcontractor’s failure to objectively manifest any 
disagreement on its part with the terms of the form 
contract demonstrated the subcontractor’s assent to those 
terms.  Id.  We rejected the general contractor’s argument 
 
12
and upheld the trial court’s finding that the parties did 
not mutually assent to a modification of their original 
oral contract.  Id. at 245, 513 S.E.2d at 860.  In doing 
so, we noted the lack of any evidence that the general 
contractor, i.e., the party seeking enforcement of the 
purported contract, objectively manifested its intention to 
be bound by the form contract.  Id. at 244, 513 S.E.2d at 
860.  In fact, the evidence showed that the general 
contractor did not sign the form contract before sending it 
to the subcontractor precisely because it expected that the 
subcontractor would make changes to the document.  Id. 
Our search of the record in this case reveals no words 
or acts on the part of USAA objectively manifesting its 
assent to the terms of the Revised Arbitration Agreement.  
Before Nussbaum forwarded the original agreement to Marcari 
and Davis, USAA’s senior casualty examiner, Wier, stated in 
a letter to Marcari that the arbitration was “subject to 
liability and damages [d]iscovery by [USAA’s] attorney.”  
Neither the original nor the revised agreement included 
this provision.  Also absent from the record is any 
indication whether USAA continued to insist on that 
contingency.  After Nussbaum sent the original agreement, 
Davis advised Marcari that he could not agree to certain 
provisions setting dates for disclosing new witnesses and 
 
13
submitting evidence to the arbitrator.  Although new 
disclosure and submission deadlines appeared in the Revised 
Arbitration Agreement, nothing in the record demonstrates 
USAA’s assent to the new dates. 
At oral argument before this Court, Mazyck suggested 
that Davis’ silence after the transmission of the Revised 
Arbitration Agreement indicated USAA’s assent to its terms.  
A party’s silence, however, is insufficient to show its 
intention to be bound by the terms of a contract.  See 
Wells, 229 Va. at 78, 326 S.E.2d at 676.  While Davis 
advised Marcari in a letter that USAA viewed the agreement 
as binding, that letter was dated October 14, 2003, well 
after Phillips’ alleged breach.  Thus, we conclude that 
USAA, like the general contractor in Brooks, did not 
objectively manifest its intention to be bound by the 
Revised Arbitration Agreement. 
Furthermore, under the facts of this case, we conclude 
that Marcari’s failure to comply with Nussbaum’s 
instruction to forward the signed agreement to Davis 
manifested Phillips’ lack of assent.  It is true that 
Marcari never communicated to either Davis or Wier his 
desire to wait on the results of Phillips’ IME before 
proceeding with arbitration.  Nevertheless, Marcari’s 
retention of both the original and the revised agreement, 
 
14
even though he signed each document, is not inconsequential 
in light of the specific instructions from Nussbaum 
directing him to sign the document and send it to Davis. 
Thus, we hold that, because the record does not 
disclose the mutual assent of Phillips and USAA to the 
terms of the Revised Arbitration Agreement, the parties did 
not have an enforceable written agreement to arbitrate 
Phillips’ personal injury claim.  The circuit court erred 
in finding otherwise and requiring Phillips to arbitrate 
his claim in lieu of pursuing it in the circuit court.  
Accordingly, we will reverse the judgment of the circuit 
court and remand the case for a trial on the merits. 
Reversed and remanded.