Present: All the Justices 

LANSDOWNE DEVELOPMENT COMPANY, L.L.C. 

 OPINION BY 

v. Record No. 981043 JUSTICE LAWRENCE L. KOONTZ, JR. 

February 26, 1999 

XEROX REALTY CORPORATION, ET AL. 

FROM THE CIRCUIT COURT OF LOUDOUN COUNTY 

Thomas D. Horne, Judge 

In this appeal, we consider whether the contract between 

the parties to a real estate transaction required the purchaser 

to provide a deed of trust to the seller to secure the 

purchaser’s performance of rezoning proffers made by the seller 

to the local government, where the contract required the 

purchaser to assume the seller’s liability for the proffers. 

BACKGROUND

Although the record in this complex land development case 

is quite extensive, we recount only those facts relevant to our 

resolution of the appeal. Xerox Realty Corporation (Xerox 

Realty), a wholly owned subsidiary of Xerox Corporation, is the 

owner of approximately 1,350 acres of undeveloped land in 

Loudoun County (the property). Xerox Realty also owns an 

adjacent developed parcel leased to another Xerox subsidiary, 

the Xerox Document University (the XDU parcel). Xerox Realty 

had planned to use the undeveloped property for expansion and 

mixed commercial and residential development. However, due to 

changes in market conditions, Xerox Realty determined that 
commercial development of the property was not feasible and 

began exploring the possibility of selling the property to a 

developer for use exclusively as a residential development. 

This change in the development concept required rezoning of the 

property. 

At the time the decision to change the development concept 

was made, Xerox Realty had already made various proffers to 

Loudoun County concerning the development of the property and 

had entered into contracts and conservancy documents relevant to 

the use of both the property and the XDU parcel. In the summer 

of 1993, Xerox Realty entered into negotiations with Lansdowne 

Development Company, L.L.C. (Lansdowne)1 for the sale of the 

property. The completion of the sale was conditioned upon the 

successful rezoning of the property for residential development, 

and Xerox Realty was to “take the lead on the rezoning effort 

with the cooperation and input of [Lansdowne].” During the 

negotiations and in the final contract, the parties referred to 

the development plan for the property, including the existing 

and anticipated proffer obligations, as “the Project.” 

During the negotiations between Xerox Realty and Lansdowne, 

Xerox Realty estimated the total value of the project prior to 

 

1

Xerox Realty initially negotiated with Parity Partners, a 

California partnership controlled by Lansdowne’s principal. 

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development at 40 million dollars, of which approximately 18.5 

million dollars represented Xerox Realty’s obligation to 

complete the proffers it had previously made or would make to 

secure the necessary rezoning. In a letter of intent dated 

September 30, 1993, Lansdowne agreed to a cash purchase price of 

21.5 million dollars and the assumption “of [Xerox Realty’s] 

liabilities and obligations with respect to the Project 

(including, without limitation, those arising under contracts, 

proffers, bonds, conservancy documents and other matters related 

to the [property]) and [to] secure a release of [Xerox Realty] 

therefrom, if possible.” Lansdowne’s letter of intent further 

specified that Lansdowne’s “agreement to perform such proffer 

obligations will be secured by [a] Deed of Trust . . . and by a 

reserve account.” 

In the final contract, dated December 30, 1993, between 

Xerox Realty and Lansdowne, these aspects of the negotiations 

regarding the purchase price of the property and the assumption 

of liability for the rezoning proffers were memorialized in the 

following terms: 

Purchaser shall assume the Liabilities and, to the 

extent Seller has not been released from the 

Liabilities, shall pay, honor and discharge such 

Liabilities when due and payable or otherwise required 

to be performed under the relevant agreements and 

instruments. . . . 

[A]t Closing Purchaser shall assume all proffer 

obligations with respect to the Project provided for 

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in the Development Concept Plan . . . (“Proffer 

Obligations”). All such Proffer Obligations shall be 

performed by Purchaser as and when required under the 

Development Concept Plan. Proffer Obligations that 

require expenditures of sums of money in connection 

with their performance . . . are referred to herein as 

“Monetary Proffers.” Purchaser’s obligations 

hereunder to perform the Monetary Proffers shall be 

secured by the Purchase Money Trust (as hereinafter 

defined). The amount to be secured shall be 

determined prior to Closing by christopher consultants 

or by another engineer mutually acceptable to the 

parties. . . . 

If Purchaser fails to timely perform its Proffer 

Obligations . . . and if Loudoun County requires 

Seller to perform such Proffer Obligations or if the 

failure to perform such Proffer Obligations has a 

material adverse effect on the use and operation of 

the XDU Parcel, . . . then Seller shall have the 

right, but not the obligation . . . to enter upon the 

Land . . . to perform such unperformed Proffer 

Obligations as may be deemed necessary by Seller in 

its sole discretion. 

The Purchase Money Trust as defined in the contract 

included a purchase money note “secured by a first lien deed of 

trust . . . on the Project.” Relevant to this appeal, the 

contract also provided that in the event of litigation arising 

from the contract, “any judgment awarded to the prevailing party 

shall include all litigation expenses, including actual 

attorney’s fees, which shall not be unreasonable, and court 

costs.” 

In order to obtain the rezoning required by the contract, 

Xerox Realty as owner of the property and the XDU parcel, along 

with other adjoining landowners and Lansdowne, made further 

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rezoning proffers to Loudoun County in an amendment to the 

original development plan dated May 24, 1995. Loudoun County 

accepted the amended development plan, which required the 

parties to put into effect certain escrow arrangements and trust 

funds to assure adequate funding of construction and 

improvements related to the proffers. 

Pursuant to the terms of the contract, christopher 

consultants2 was to develop “an estimate for the proffer 

commitments made with the recently approved Rezoning and Concept 

Plan Amendment for Lansdowne.” On September 7, 1995, 

christopher consultants provided Xerox Realty with a preliminary 

estimate of the construction cost of the proffers, placing that 

cost in excess of 18 million dollars. Xerox Realty forwarded 

this estimate to Lansdowne on September 26, 1995, indicating 

that Xerox Realty intended to use the estimate “in computing the 

final amount of the [Lansdowne] Deed of Trust” at the closing. 

Prior to closing, Lansdowne arranged to sell two sections 

of the property. Lansdowne requested that Xerox Realty release 

these sections from the deed of trust at closing. Xerox Realty 

refused this request, noting that the contract had specific 

terms for release of portions of the property, and that these 

requirements would not be met under Lansdowne’s proposal. 

 

2

The firm uses all lower case letters for its trade name. 

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After first obtaining an attorney’s opinion letter 

indicating that Xerox Realty could not “be required to perform 

obligations under the Monetary Proffers,” Lansdowne prepared a 

memorandum for christopher consultants requesting that it 

“determine the amount of security [Lansdowne] is to give in 

order to protect [Xerox Realty] from liability under the 

Monetary Proffers.” In this memorandum, Lansdowne further 

stated that “[t]he amount of security to be granted by 

[Lansdowne] is to be distinguished from the projected cost of 

construction or comp[l]etion of the Monetary Proffers, which the 

[contract] does not request.” 

On January 22, 1996, Dr. Henry Grausz, Lansdowne’s 

principal, met with Louis Canonico, a vice president of 

christopher consultants, and gave him the memorandum requesting 

an opinion as to the liability to be secured. Canonico told 

Grausz that, as an engineering firm, christopher consultants was 

not qualified to give an opinion as to liability. 

On January 25, 1996, Canonico prepared a letter for 

Lansdowne stating that, while christopher consultants “cannot 

speak to legal issues relating to proffers or sales contracts,” 

it had “retained the services” of the attorney who had provided 

Lansdowne with the opinion letter. Relying on the attorney’s 

opinion that Xerox Realty would have no liability to perform the 

proffers after the sale of the property, the letter goes on to 

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state that “we find that there is zero dollars liability, in 

terms of the value of what would need to be secured relating to 

[M]onetary [P]roffers as it impacts the seller of the Lansdowne 

project.” At trial, Canonico admitted that christopher 

consultants had not retained the services of the attorney, and 

that he had relied on the opinion letter obtained by Lansdowne 

in drafting the January 25, 1996 letter. He further testified 

that in writing the letter, christopher consultants was not 

“taking any position as to what the contract [between Xerox 

Realty and Lansdowne] required” christopher consultants to 

perform. Lansdowne did not provide Xerox Realty with a copy of 

this letter. 

On the day of the scheduled closing, Lansdowne refused to 

provide Xerox Realty with the deed of trust called for in the 

contract. Based on this refusal, Xerox Realty terminated the 

contract. 

On March 27, 1996, Lansdowne filed a bill of complaint 

against Xerox Realty seeking specific performance of the 

contract. Lansdowne alleged that the contract required it to 

secure by deed of trust Xerox Realty’s post-transfer liability 

for the “Monetary Proffers,” not the actual cost of completing 

those proffers. Lansdowne further alleged that christopher 

consultants was to determine the amount of liability, if any, to 

be secured. Asserting that the January 25, 1996 letter from 

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christopher consultants established that Xerox Realty’s posttransfer liability was “‘zero dollars,’” Lansdowne alleged that 

it was entitled to specific performance of the contract without 

having to provide Xerox Realty with the deed of trust.3 In its 

answer, Xerox Realty denied that a plain reading of the contract 

would support Lansdowne’s interpretation that only Xerox 

Realty's liability was to be secured by the deed of trust. 

Xerox Realty also sought an award of attorney’s fees and costs 

for having to defend the suit. 

A hearing was held before the chancellor in which evidence 

in accord with the above recounted facts was received. In an 

opinion letter dated April 22, 1997, the chancellor indicated 

that he would rule in favor of Xerox Realty, stating: 

[T]he Court can find no justification to vary the 

express terms of the contract of sale. That agreement 

requires that Lansdowne Development Corporation . . . 

secure the monetary proffer obligations to be 

performed in connection with the development of the 

property with a purchase money trust securing 

completion of over eighteen million dollars in 

proffers as determined by the engineering firm agreed 

upon by the parties. The lengthy record is devoid of 

evidence that it was the understanding of the parties 

to leave open for further consideration the legal 

determination as to whether, and to what extent, 

[Xerox Realty] would have a continuing obligation to 

perform the proffers after the land had been conveyed. 

Lansdowne failed to tender such a deed of trust and 

was in default of its obligation to settle in 

 

3

Lansdowne also sought monetary damages under various 

theories. These claims are not at issue in this appeal. 

8
accordance with the terms of the contract. . . . It 

is not for this court to rewrite the contract for the 

parties. 

In a decree referencing his opinion letter, the chancellor 

awarded judgment to Xerox Realty and appointed a commissioner in 

chancery to determine “attorney’s fees and costs to which [Xerox 

Realty] is entitled pursuant to [the contract].” After 

receiving expert testimony and reviewing the claims made by 

Xerox Realty, the commissioner deleted certain specific claims, 

reduced certain other claims by ten percent, and recommended an 

award of $908,007.73 for attorney’s fees and $234,100.32 for 

other litigation expenses to Xerox Realty. 

Prior to the commissioner’s hearing, Lansdowne filed 

numerous pleadings objecting to Xerox Realty’s claims for 

attorney’s fees and costs. Subsequent to the filing of the 

commissioner’s report, Lansdowne filed its exceptions to the 

report, incorporating its prior objections. Relevant to this 

appeal, Lansdowne asserted that Xerox Realty had not incurred 

any “litigation expenses” since all of the attorney’s fees and 

costs had been billed to and paid by Xerox Realty’s parent 

corporation. Lansdowne further asserted generally that the 

attorney’s fees and costs claimed by Xerox Realty were 

unreasonable, contending that the case “could have been handled 

at typical Loudoun County rates.” 

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In an opinion letter dated January 29, 1998, the chancellor 

found that Xerox Realty as “a wholly owned subsidiary of the 

Xerox Corporation, and not its parent company, was liable for, 

and ultimately held accountable for the legal services rendered 

in connection with this case.” The chancellor further found 

that the fee schedules of the individual attorneys were 

reasonable and that “given the limited number of large law firms 

in Loudoun County and the relationship which [Xerox Realty] 

previously enjoyed with [a Washington, D.C.-based law firm], it 

was not unreasonable that Xerox would seek the services of that 

firm,” when a local firm was required to withdraw from 

representation. Accordingly, the chancellor rejected 

Lansdowne’s exceptions to the commissioner’s report and awarded 

attorney’s fees and costs to Xerox Realty in the amount 

determined by the commissioner. This appeal followed. 

DISCUSSION

Several familiar principles govern our resolution of this 

appeal. First, when contract terms are clear and unambiguous, 

we must construe those terms according to their plain meaning. 

Bridgestone/Firestone v. Prince William Square, 250 Va. 402, 

407, 463 S.E.2d 661, 664 (1995). Additionally, we will not 

insert by construction, for the benefit of a party, a term not 

express in the contract. See id. Moreover, when considering 

the meaning of any part of a contract, we will construe the 

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contract as a whole. See Vega v. Chattan Associates, 246 Va. 

196, 199, 435 S.E.2d 142, 143 (1993). 

Although the chancellor permitted the parties to present 

extensive parol evidence, his ultimate resolution rested on “the 

express terms of the contract of sale” and, thus, the chancellor 

implicitly found the contract to be clear and unambiguous. 

Moreover, neither party now contends that parol evidence is 

necessary to construe the contract in its favor. Rather, 

Lansdowne contends that the plain meaning of the contract is 

that the Purchase Money Trust would secure Xerox Realty’s postsale liability4 on the Monetary Proffers and that christopher 

consultants was to determine the amount of that liability. 

Xerox Realty contends that the plain meaning of the contract is 

that the Purchase Money Trust would secure Lansdowne’s 

performance of the Monetary Proffers and that christopher 

consultants was to determine the cost of that performance. We 

agree with Xerox Realty. 

Under the terms of the contract, Lansdowne was to assume 

all liabilities relevant to the development and rezoning 

proffers made by Xerox Realty including the “Monetary Proffers.” 

 

4

Although a local zoning administrator may bring a legal 

action to enforce zoning conditions, see Code § 15.2-2299, we 

need not, and do not, express an opinion on the applicability of 

this statute to Xerox Realty’s post-sale liability on the 

Monetary Proffers in this case. 

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The contract plainly states that Lansdowne’s “obligations . . . 

to perform the Monetary Proffers shall be secured by the 

Purchase Money Trust.” (Emphasis added.) Nothing in this 

language, or in any other provision of the contract, suggests 

that the parties intended the Purchase Money Trust to secure 

Xerox Realty’s post-sale liability, and we will not insert such 

language for the benefit of Lansdowne. Bridgestone/Firestone, 

supra. 

Lansdowne further contends that regardless of the purpose 

of the security to be provided for the Monetary Proffers, the 

determination by christopher consultants in the January 25, 1996 

letter that there was “zero dollars . . . to be secured relating 

to the [M]onetary [P]roffers” was binding on Xerox Realty since 

the parties agreed that christopher consultants would determine 

“[t]he amount to be secured.” We disagree with Lansdowne. 

The January 25, 1996 letter Lansdowne procured from 

christopher consultants merely expresses an opinion as to Xerox 

Realty’s post-sale liability. Nothing in the contract suggests 

that the parties contemplated that christopher consultants, an 

engineering firm, would provide a legal opinion as to liability 

or that such an opinion was relevant to the determination of 

“[t]he amount to be secured” for Lansdowne’s performance of the 

Monetary Proffers. The September 7, 1995 letter provided by 

christopher consultants to Xerox Realty and sent by Xerox Realty 

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to Lansdowne established “[t]he amount to be secured,” and, as 

Canonico’s testimony confirms, nothing in the January 25, 1996 

letter was intended to contradict or displace the estimate given 

in the earlier letter. 

Lansdowne further contends that Xerox Realty should be 

estopped from asserting its right to have Lansdowne’s 

performance of the Monetary Proffers secured by the deed of 

trust because of the terms of the amended development plan 

agreed to by Loudoun County, Xerox Realty, Lansdowne, and the 

other landowners. Lansdowne contends that the establishment of 

the escrow accounts and trust funds under the amended 

development plan eliminated any risk that the proffers would not 

be completed and, thus, that Xerox Realty, as a party to this 

agreement, waived its right to have completion of the proffers 

secured by the deed of trust. 

Again, Lansdowne confuses the bargain of the contract, 

which required it to secure its performance of the Monetary 

Proffers, with the unrelated issue of whether Xerox Realty might 

ultimately incur liability as a result of Lansdowne’s failure to 

perform. Under the contract, Lansdowne was obligated to perform 

the Monetary Proffers and was required to secure that obligation 

by providing Xerox Realty with a deed of trust. This obligation 

was part of the consideration Lansdowne was to give in return 

for the transfer of the property. It is simply not relevant 

13
that Loudoun County, with Xerox Realty’s agreement, obtained 

additional means to secure the ultimate completion of the 

proffers. 

Finally, Lansdowne contends that the chancellor erred in 

awarding certain items as “litigation expenses” to Xerox Realty.5 

Citing Advanced Marine Enterprises v. PRC Inc., 256 Va. 106, 

126, 501 S.E.2d 148, 160 (1998), Lansdowne contends that 

“library research, meals, courier services and the like” should 

not have been included in the award. 

In Advanced Marine, we held that “a trial court’s 

discretion to award costs under . . . the relevant provisions of 

Code §§ 14.1-177 through –201 [now § 17.1-600, et seq.], is 

limited only to those costs essential for prosecution of the 

suit, such as filing fees or charges for service of process,” 

id., where the statute granting the trial court such authority 

limited the award to “costs of suit, including reasonable 

counsel fees.” Code § 18.2-500. In doing so, we noted that the 

 

5

Lansdowne also reasserts its contentions that the 

litigation expenses were actually incurred by Xerox Realty’s 

parent corporation and that the fee schedules of the attorneys 

were unreasonable. On appeal, the chancellor’s decree approving 

a commissioner’s report will be affirmed unless plainly wrong or 

without support in the evidence. Chesapeake Builders, Inc. v. 

Lee, 254 Va. 294, 299, 492 S.E.2d 141, 144 (1997). The record 

here adequately supports the reasonableness of the attorney’s 

fees recommended by the commissioner and the chancellor’s 

determination that Xerox Reality was ultimately liable for these 

fees and the other litigation expenses incurred on its behalf. 

14
authority for such awards is in derogation of the common law 

and, thus, subject to a strict interpretation. Id. at 125, 501 

S.E.2d at 159. 

Here, the award of costs is not made pursuant to a statute, 

but under a provision of the contract permitting the prevailing 

party to recover “all litigation expenses, including actual 

attorney’s fees, which shall not be unreasonable, and court 

costs.” This language is more comprehensive than that of the 

statute at issue in Advanced Marine. Moreover, we are not 

required to apply the same narrow construction to a contract 

that we apply to a statute in derogation of the common law. 

Nonetheless, we agree with Lansdowne that “all litigation 

expenses” cannot be so broadly construed as to include any 

charge made by an attorney to a client in the course of 

litigation. The record in this case shows that among other 

items, Xerox Realty’s attorneys invoiced several “Conference 

Room Expenses” in amounts ranging from $1.50 to $11.00. During 

the commissioner’s hearing, one of the attorneys indicated that 

this charge was for “sodas and coffee and things of that 

nature.” Additional items found in the invoices submitted by 

Xerox Realty to the commissioner in chancery, apart from the 

actual legal work of the attorneys and their paraprofessional 

staff, include “Consulting Fees,” “Office Supplies,” “Local 

15
Meals,” “Local Transportation,” “Binding,” “Miscellaneous,” and 

“Cash Expense.” 

Clearly, some of these charges are not direct costs of 

litigation and arguably should have been excluded from the award 

of costs recommended by the commissioner and approved by the 

chancellor. However, as presented to this Court, the record 

does not show that Lansdowne made an adequate, particularized 

objection to any of these charges during the commissioner’s 

hearing or in its exceptions to the commissioner’s report. 

Lansdowne’s generalized exception to the “reasonableness” of the 

award of costs was insufficient to direct the chancellor, or 

this Court, to which of the myriad individual charges Lansdowne 

now objects. A principal function of a commissioner’s hearing 

is to relieve the chancellor of the burden of assessing the 

minutiae of a complex evidentiary record. Thus, the 

commissioner’s hearing was the proper forum in which to assert 

challenges to individual items or classes of items of the costs 

claimed as “litigation expenses,” and it is not the duty of the 

chancellor, or of this Court, sua sponte to conduct a review of 

the record of the commissioner’s hearing to determine the 

legitimacy of every individual item. Accordingly, we hold that 

Lansdowne failed to adequately preserve this issue for appeal. 

Rule 5:25. 

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CONCLUSION

For these reasons, we find no reversible error in the 

judgment, and we will affirm the chancellor’s decree denying 

Lansdowne specific performance of the contract and awarding 

litigation expenses to Xerox Realty. 

Affirmed

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