Present: Hassell, C.J., Lacy, Keenan, Koontz, Lemons, and 

Agee, JJ., and Russell, S.J. 

CHARLES D. PARR, SR., ET AL. 

v. Record No. 032674 OPINION BY JUSTICE ELIZABETH B. LACY 

 November 5, 2004 

ALDERWOODS GROUP, INC., ET AL. 

ALDERWOODS GROUP, INC., ET AL. 

v. Record No. 032726 

CHARLES D. PARR, SR., ET AL. 

FROM THE CIRCUIT COURT OF THE CITY OF SUFFOLK 

Rodham T. Delk, Jr., Judge 

 The dispositive issue in these consolidated appeals is 

whether certain contemporaneously executed contracts were 

integrated for purposes of determining the enforceability of 

provisions in some of the contracts after a party's default 

under one of the contracts. 

I. FACTS 

 For a number of years Charles D. Parr, Sr. and C.D. Parr, 

Inc. d/b/a Hill Funeral Home (Parr, Inc.) operated a funeral 

home business, the Hill Funeral Home, at 447 West Washington 

Street in Suffolk. The property was owned by Hill Underwood 

Funeral Home, Inc. (Hill Underwood). In 1995, Loewen Group 

International, Inc. (Loewen) negotiated with Parr and Parr, 

Inc. for the purchase of the Hill Funeral Home business. The 

negotiations culminated in the execution of four agreements on 
2

November 27, 1995 between Loewen's designated buyer Mullins 

Holding Company (Mullins)1, Parr, Parr, Inc., and Hill 

Underwood: the More Formal Asset Purchase Agreement (Asset 

Purchase Agreement), the Non Competition Agreement (NonCompete Agreement), the Lease, and the Management Agreement. 

Pursuant to these agreements, Parr and Parr, Inc. sold the 

Hill Funeral Home business to Mullins. Hill Underwood leased 

the Hill Funeral Home property to Mullins and filed in the 

deed records of the City of Suffolk a memorandum of lease 

containing a covenant restricting the use of the property as a 

funeral home by persons other than Mullins without Mullins' 

consent. Parr began managing both the Hill Funeral Home and 

another funeral home in Suffolk, the Sidney F. Harrell Funeral 

Home, for Mullins. 

 The relevant portions of the agreements follow. The 

Asset Purchase Agreement provided that Mullins would purchase 

certain assets for a total price of $1,125,000. The 

identified assets included "a leasehold interest . . . and a 

restrictive covenant (with the terms and conditions contained 

in the Lease described in Paragraph 10 hereof which is to be 

entered into contemporaneously herewith)" and "covenants of 

[Parr, Inc.] and [Parr] not to compete with the business of 

Buyer." The purchase price included $100,000 payable under 

 1

 Mullins was a wholly-owned subsidiary of Loewen. 
3

identical provisions in both the Asset Purchase Agreement and 

the Non-Compete Agreement. 

 Under Paragraph 8 of the Asset Purchase Agreement, Parr 

agreed to execute a management agreement with Mullins. The 

provision contained the employment terms and annual salary 

under the Management Agreement and agreements by Parr and 

Parr, Inc. to execute a covenant not to compete with Mullins. 

The consideration and the duration of such covenant were also 

recited. Paragraph 10 of the Asset Purchase Agreement set out 

the duration and conditions of the Lease, including a 

restrictive covenant that the leased property would not be 

used as a funeral home or service business except by Mullins 

or "its successors and assigns" without Mullins' written 

consent to the modification or termination of the restrictive 

covenant. 

 The Non-Compete Agreement expressly provided that it was 

a condition of the Asset Purchase Agreement and that for ten 

years from the closing date of the Asset Purchase Agreement or 

three years following the date of termination of "any 

employment, management, or consulting relationship" with 

Mullins, neither Parr nor Parr, Inc. would engage in the 

funeral business within a 35-mile radius of the Hill Funeral 

Home. As consideration, Mullins was to pay Parr and Parr, 

Inc. a total of $10,000 per year for ten years under terms 
4

identical to those recited in and identified as an asset 

purchased in the Asset Purchase Agreement. Paragraph 16 of 

the Non-Compete Agreement stated that a continuing default by 

Mullins under the Asset Purchase Agreement or note executed 

pursuant to that agreement, if not cured, was "deemed" to be a 

default of the Non-Compete Agreement. 

 The Management Agreement provided that Parr would manage 

for Mullins both the Hill Funeral Home and the Sidney F. 

Harrell Funeral Home. The Management Agreement allowed 

Mullins to terminate Parr for cause if he materially breached 

any warranty or covenant contained in the Asset Purchase 

Agreement. The Management Agreement also contained the terms 

of a noncompetition agreement, the terms of which were 

identical to those contained in the Non-Compete Agreement and 

described in the Asset Purchase Agreement.

 The Lease, in addition to the various provisions defining 

the rights and responsibilities of the lessor and lessee, 

provided for an initial one-year term and five optional oneyear renewal periods, and specifying the rental payments, 

recited the restrictive covenant in language essentially 

identical to that contained in the Asset Purchase Agreement.2

 

In Paragraph 15 of the Lease, Parr and Parr, Inc. guaranteed 

 2

 The restrictive covenant is only applicable to the first 

floor of the 447 West Washington Street property. 
5

the landlord's obligations, including its obligations under 

the restrictive covenant. 

 In June 1999, Loewen filed for bankruptcy and, in 

November of that year, Mullins stopped making payments under 

the Asset Purchase and Non-Compete agreements. Parr submitted 

his resignation to Mullins on September 21, 2001. After the 

Lease ended by its terms in November 2001, Parr began to 

operate the Parr Funeral Home on the Hill Underwood property. 

II. PROCEEDINGS 

 On January 14, 2002, Mullins and Alderwoods Group, Inc.3

(collectively "Alderwoods") filed a bill of complaint seeking 

a temporary and permanent injunction against Parr and Parr, 

Inc. (collectively "Parr") to prohibit them from competing 

with Alderwoods and operating a funeral home on the Hill 

Underwood property.4

 Parr filed its answer asserting that 

Alderwoods materially breached the November 1995 agreements 

and, therefore, the noncompetition agreement was no longer in 

effect and the restrictive covenant should be declared null 

and void. 

 3

 Loewen changed its name to Alderwoods Group, Inc. 

effective in January 2002. 

4

 It appears from the record that Hill Underwood Funeral 

Home, Inc. no longer exists, but Parr and Parr, Inc. were 

guarantors of the landlord’s obligations pursuant to Paragraph 

15 of the Lease. 
6

The trial court entered an order in January 2002 

temporarily enjoining Parr from competing with Alderwoods 

pursuant to the terms of the covenants not to compete in the 

Asset Purchase, Management, and Non-Compete agreements, and, 

subsequently, on Alderwoods' motion, held Parr in contempt for 

violating that temporary injunction. Following a hearing on 

Parr's motion to set aside the temporary injunction, the trial 

court held that the four agreements, "although separate, 

should be regarded as and constructed as parts of one 

transaction and as if parts of one and the same instrument." 

The trial court found that Alderwoods defaulted its payment 

obligation under the Asset Purchase Agreement and that the 

default constituted "a default in the non-competition 

provisions of all of the sub-agreements as well." Based on 

these findings, the trial court concluded that the likelihood 

that Alderwoods would succeed on the merits was "substantially 

diminished" and, accordingly, set aside the temporary 

injunction. 

A hearing on the permanent injunction was held on June 

27, 2003. At this hearing Alderwoods sought to enforce the 

noncompetition provision contained in the Management Agreement 

and the restrictive covenant contained in the Lease. 

Alderwoods argued that these two contracts were separate 

contracts and, because Alderwoods had fulfilled its 
7

obligations under these non-integrated contracts, Parr should 

be required to comply with the noncompetition and restrictive 

covenants in those contracts. Parr replied that because 

Alderwoods breached a provision of one of the contracts, it 

could not enforce any other provisions of the integrated 

contracts. 

As relevant here, the trial court reaffirmed its earlier 

holding that the Management Agreement and Asset Purchase 

Agreement were integrated and that Alderwoods' default 

precluded enforcement of the noncompetition provisions of the 

Management Agreement. The trial court also found, however, 

that the restrictive covenant in the Lease was valid and 

enforceable against "the specific defendants" in this case and 

entered an order enjoining Parr from using the Hill Underwood 

property for a funeral business. We granted the petitions for 

appeal filed by both Parr and Alderwoods.5

In considering these consolidated appeals, we first note 

that Alderwoods did not assign error to the trial court's 

determination that it breached the Asset Purchase Agreement. 

Furthermore, there is no challenge to the trial court's 

determination that the breach of the Asset Purchase Agreement 

was also a breach of the Non-Compete Agreement. Therefore, we 

 5

 We granted an appeal to only two of Parr's three 

assignments of error. 
8

consider only whether the Management Agreement and the Lease 

are integrated or separate and independent contracts. 

III. DISCUSSION 

In Countryside Orthopaedics, P.C. v. Peyton, 261 Va. 142, 

541 S.E.2d 279 (2001), we recited the principles to be applied 

when considering whether separate documents should be treated 

as an integrated instrument. "Where a business transaction is 

based on more than one document executed by the parties, the 

documents will be construed together to determine the intent 

of the parties," id. at 152, 541 S.E.2d at 284 (quoting 

Daugherty v. Diment, 238 Va. 520, 524, 385 S.E.2d 572, 574 

(1989)), and "[w]here two papers are executed at the same time 

or contemporaneously between the same parties in reference to 

the same subject matter, they must be regarded as parts of one 

transaction, and receive the same construction as if their 

several provisions were in one and the same instrument." 

Countryside, 261 Va. at 151, 541 S.E.2d at 284 (quoting Oliver 

Refining Co. v. Portsmouth Cotton Oil Refining Corp., 109 Va. 

513, 520, 64 S.E. 56, 59 (1909)); see Richmond Postal Credit 

Union, Inc. v. Booker, 170 Va. 129, 134, 195 S.E. 663, 665 

(1938). When such contracts are construed as if the 

provisions were in a single instrument, the first party to 

materially breach the contract cannot enforce the provisions 

of the integrated contract. A breach is material if it is "a 
9

failure to do something that is so fundamental to the contract 

that the failure to perform that obligation defeats an 

essential purpose of the contract." Countryside, 261 Va. at 

154, 541 S.E.2d at 285 (quoting Horton v. Horton, 254 Va. 111, 

115, 487 S.E.2d 200, 204 (1997)). We now apply these 

principles to the contracts at issue. 

A. The Management Agreement 

 Alderwoods asserts that the Management Agreement is a 

contract separate and apart from the Asset Purchase Agreement 

because it is not ambiguous, it is separate and distinct in 

its subject matter and consideration, the obligations are not 

interrelated, and the cross-references in the contracts do not 

require integration of the agreements.6 Alderwoods suggests 

that unless the four agreements are part of a single 

transaction "courts should not read the writings together as 

one contract because the parties may have had more than one 

transaction in one day of the same general nature." Hitachi 

Credit Am. Corp. v. Signet Bank, 166 F.3d 614, 626 (4th Cir. 

1999). 

 6

 At oral argument before this Court, Alderwoods also 

argued that because the Non-Compete agreement contained a 

cross-default provision, the absence of such a provision in 

the other agreements evidenced an intent that no cross-default 

existed among the other agreements. Because Alderwoods raises 

this argument for the first time on appeal, we will not 

consider it. Rule 5:25; see Faulknier v. Shafer, 264 Va. 210, 

218 n.6, 563 S.E.2d 755, 760 n.6 (2002). 
10

 Whether contemporaneously executed separate agreements 

should be construed as a single integrated contract depends on 

the facts of each case. Here, the Management Agreement and 

Asset Purchase Agreement cross-referenced each other and 

certain provisions were recited in both agreements using 

identical language. These references reflect the parties' 

knowledge and understanding of the interrelationship between 

the contracts and provide strong support for the proposition 

that the parties intended that the documents constitute a 

single transaction. 

Furthermore, while the four contracts identified discrete 

acts required of the parties, when considered as a whole, they 

show that the result and, therefore, presumably the purpose of 

the transaction was the elimination of competition between the 

funeral home interests held by Alderwoods and by Parr. The 

transaction required Alderwoods' ownership of Parr's funeral 

business interests and Parr's management of Alderwoods' 

funeral business interests − the Hill Funeral Home and the 

Sidney F. Harrell Funeral Home.7

 The provisions of the 

Management Agreement could not be performed without 

Alderwoods' acquisition of the Hill Funeral Home assets and a 

lease of the Hill Underwood property. The purchase of the 

 7

 The precise nature of Alderwoods' interest in the Sidney 

F. Harrell Funeral Home is not clear from this record. 
11

Hill Funeral Home assets alone would not eliminate the 

competition by Parr without the noncompetition and restrictive 

covenant agreements. The absence of any one of the agreements 

would frustrate the purpose of the transaction. On this 

record, we conclude that the parties intended to effectuate a 

single transaction which required execution of all the 

agreements. 

 Accordingly, the trial court did not err in concluding 

that the Management Agreement and the Asset Purchase Agreement 

were part of an integrated contract. We will affirm the trial 

court's judgment holding the noncompetition provision of the 

Management Agreement was unenforceable because Alderwoods 

breached the Asset Purchase Agreement when it defaulted its 

payment obligations under that Agreement. 

B. The Lease 

Parr asserts that the trial court erred in enforcing the 

restrictive covenant contained in the Lease because, like the 

Management Agreement, the Lease was part of an integrated 

contract. Parr argues he was relieved of any obligation to 

comply with the restrictive covenant because of Alderwoods' 

default of the Asset Purchase Agreement. Alderwoods replies 

that the Lease was a separate contract and not integrated with 

the other contemporaneously executed contracts, raising the 

same arguments put forth regarding the Management Agreement: 
12

the Lease was not ambiguous; it was separate and distinct in 

its subject matter and consideration; the obligations were not 

interrelated; and the cross-references in the contracts did 

not require integration of the agreements. Alderwoods, 

relying on Bayside Corp. v. Virginia Super Food Fair Stores, 

Inc., 203 Va. 908, 128 S.E.2d 263 (1962), also argues that 

because it had fully performed its obligations under the 

Lease, it was entitled to enforce the restrictive covenant in 

the Lease even though by its terms the Lease had expired. 

We reject Alderwoods' arguments that the Lease was a 

separate contract. First, like the Management Agreement, 

there were significant cross-references between the Asset 

Purchase Agreement and the Lease. The Asset Purchase 

Agreement listed the Lease as "an asset" purchased. The 

material terms of the restrictive covenant in the Lease were 

also recited in the Asset Purchase Agreement. And, as we have 

already discussed, the transaction's purpose of eliminating 

competition between Parr and Alderwoods' interests in the 

funeral home business could not be accomplished without 

execution of all four agreements. Therefore, we hold that the 

Lease was not a separate contract but, like the Management 

Agreement, was integrated with the Asset Purchase Agreement. 

Assuming without deciding that the restrictive covenant in 

this case would be enforceable absent a breach of the 
13

integrated contracts here, the restrictive covenant is not 

enforceable against Parr, because Alderwoods breached a 

material provision of the integrated contract. 

Neither the expiration of the lease nor our conclusion in 

Bayside require a different result. The lease in Bayside

included a provision prohibiting the landlord from leasing any 

space in a shopping center to a competitor of the lessee for 

three years after the lessee terminated the lease. Bayside, 

203 Va. at 910, 128 S.E.2d at 265. This Court enforced that 

provision even though the lease had been terminated, finding 

that the covenant was a reasonable personal covenant. Id. at 

911, 128 S.E.2d at 266. 

In Bayside, unlike this case, neither the landlord nor 

the lessee defaulted under the lease. The Bayside lease 

provided that the lessee could terminate the lease if the 

landlord failed to meet certain conditions. Id. at 910, 128 

S.E.2d at 265. The landlord failed to meet the conditions and 

the lessee terminated the lease. Id. The landlord's 

inability to meet the conditions was not a breach of the 

lease, but a circumstance which the parties anticipated and 

addressed by allowing the lessee to terminate the lease. In 

the absence of a default or breach, a reasonable personal 

covenant contained in the lease was enforceable. 
14

Like Bayside, the instant case involves an agreement 

restricting the use of the land as a term of the lease 

agreement. Unlike Bayside, however, the instant case involves 

a breach or default by one of the parties which precluded the 

defaulting party from enforcing the remaining provisions of 

the integrated contract. Consequently, Bayside is not the 

controlling precedent here. 

IV. CONCLUSION 

Because we hold that Alderwoods' breach of the integrated 

contract relieved Parr of any obligation under the restrictive 

covenant, we need not address Parr's assignment of error 

challenging the trial court's holding that the restrictive 

covenant was a valid covenant. 

Accordingly, for the reasons stated, we will affirm that 

portion of the trial court's judgment holding that the 

covenants not to compete are unenforceable and we will reverse 

that portion of the trial court's judgment enforcing the 

restrictive covenant of the lease. 

 Affirmed in part,

 reversed in part,

 and final judgment.