Title: Baysden v. Roche

State: virginia

Issuer: Virginia Supreme Court

Document:

PRESENT:  All the Justices 
 
PHILIP B. BAYSDEN 
 
v.  Record No. 011880 
OPINION BY JUSTICE ELIZABETH B. LACY 
 
 
 
June 7, 2002 
JAMES F. ROCHE, III 
 
 
FROM THE CIRCUIT COURT OF STAFFORD COUNTY 
James W. Haley, Jr., Judge 
 
 
This case arises out of a claim Philip B. Baysden brought 
against James F. Roche, III, for failure to repay a $50,000 
loan that Baysden obtained for the purpose of advancing the 
proceeds to Roche, pursuant to the parties' oral agreement.  
The trial court granted Roche's motion to strike at the 
conclusion of Baysden's case-in-chief.  We hold that, when 
viewed in the light most favorable to Baysden, there was 
sufficient evidence to raise an issue for the jury as to 
whether the parties had entered into an oral agreement, and 
that two check endorsements were evidence that the oral 
agreement was performed, not writings setting forth partial 
terms of a written contract.  Therefore, the trial court 
improperly granted the motion to strike. 
 
Baysden filed a motion for judgment against Roche 
alleging inter alia breach of an oral contract.  At trial 
Baysden produced the following evidence.  Roche owned a 
construction business called Embassy Homes, Inc. (Embassy 
Homes).  Baysden worked as a real estate agent for Jack Baker 
and Associates d/b/a Why USA and was assigned to work as a 
salesperson for Embassy Homes.  While serving in that 
capacity, Baysden spent five to six days a week in the Embassy 
Homes office and became friendly with Roche.  Roche had 
confided in Baysden that Embassy Homes was suffering from 
serious cash flow problems.  Roche invested a significant 
portion of his personal money in the business in an effort to 
save the project and could not qualify for any further loans. 
 
Baysden testified that he made an oral agreement to lend 
$50,000 to Roche personally in order that Roche could, in 
turn, use the money to help Embassy Homes overcome its 
financial problems.  The terms of the oral agreement, 
according to Baysden, were that he would obtain a $50,000 loan 
and advance the money to Roche for use in Embassy Homes.  In 
exchange, Roche would make all principal and interest payments 
on the loan and he would pay Baysden $5,000 per year for each 
year that the loan was actually outstanding, up to four years. 
 
Thomas M. Heck-Howard, a commercial loan officer at 
Central Fidelity Bank and mutual friend of Baysden and Roche, 
processed the loan.  The loan documents recited that Baysden's 
purpose in taking the loan was for a "business investment," 
but Baysden testified that the investment was not an 
investment in Embassy Homes.  Heck-Howard testified that when 
Baysden discussed obtaining the loan he said, "he was going to 
 
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give the money to [Roche] for the business."  Roche, Baysden, 
and Heck-Howard were all present when Baysden received the 
loan in the form of two $25,000 cashier's checks issued by 
Central Fidelity.  At Roche's request, Baysden endorsed the 
checks to Embassy Homes directly. 
 
Eight interest payments were made on the loan before 
Embassy Homes and Roche and his wife declared bankruptcy.  At 
that point, Heck-Howard contacted Baysden and informed him 
that, as a result of the bankruptcy, "[Roche] and Embassy 
[Homes] were no longer making the payments and that [Baysden] 
would have to start making the payments himself."  Over the 
next four years, Baysden paid $50,000 in principal and 
$9,367.18 in interest to satisfy the loan.  In his motion for 
judgment, Baysden seeks recovery of these amounts from Roche. 
 
In considering a motion to strike for failure to 
establish a prima facie case, the trial court was required to 
view the facts in the light most favorable to Baysden and to 
draw all fair inferences therefrom.  Hadeed v. Medic-24, Ltd., 
237 Va. 277, 285-86, 377 S.E.2d 589, 593 (1989) (relying upon 
Walton v. Walton, 168 Va. 418, 423, 191 S.E. 768, 770 (1937)).  
That same standard is applicable to our review of the decision 
of the trial court granting the motion to strike.  Washburn v. 
Klara, 263 Va. 586, 561 S.E.2d 682 (2002) (applying these 
principles on appellate review); see also Walton, 168 Va. at 
 
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423, 191 S.E. at 770.  Applying that standard, we hold that 
Baysden's evidence established a prima facie case on his 
breach of contract claim.  The evidence, taken in the light 
most favorable to Baysden with all reasonable inferences drawn 
in his favor, demonstrated that the parties had an oral 
contract, which Roche breached, and that Baysden was damaged 
by the breach. 
 
The trial court granted the motion to strike on the 
premise that the cancelled checks were "documentary evidence 
of the loan."  Applying the partial integration doctrine, the 
trial court concluded that Baysden's parol evidence that Roche 
and Baysden were the parties to the contract was inadmissible 
to vary the written terms of the contract which, according to 
the trial court, clearly and unambiguously indicated that the 
contract was between Baysden and Embassy Homes.  This was 
error.  The partial integration rule applies to instances in 
which part of the contract is written.  Under that doctrine, 
parol evidence may be considered to show additional terms or 
the entire agreement, as long as those terms are not 
inconsistent with the written part of the contract.  High 
Knob, Inc. v. Allen, 205 Va. 503, 506, 138 S.E.2d 49, 52 
(1964).  However, in this case Baysden did not allege a 
written contract or that the checks and endorsements at issue 
were part of a written contract.  Rather, Baysden asserted the 
 
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contract was oral and that the checks and endorsements were 
simply evidence of the performance of the oral contract.  
Documentary evidence of the existence of a contract may be 
evidence that is separate and apart from the contract itself.  
In ruling on the motion to strike, the trial court was 
required to consider the evidence in the light most favorable 
to Baysden and, therefore, should have considered the checks 
and endorsements as evidence of the existence of a contract, 
not as the terms of the contract itself. 
 
Accordingly, for the above reasons, we will reverse the 
judgment of the trial court and remand the case for further 
proceedings. 
Reversed and remanded.
 
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