Title: Cardinal Development Co. v. Stanley Constr. Co.
Citation: N/A
Docket Number: 971001
State: Virginia
Issuer: Virginia Supreme Court
Date: February 27, 1998

Present:  All the Justices 
 
CARDINAL DEVELOPMENT COMPANY 
 
OPINION BY JUSTICE LEROY R. HASSELL, SR. 
v. 
Record No. 971001         February 27, 1998 
 
STANLEY CONSTRUCTION COMPANY, INC. 
 
FROM THE CIRCUIT COURT OF HANOVER COUNTY 
Richard H. C. Taylor, Judge 
 
I. 
 
In this appeal, we consider issues that arose during 
the trial of an action for breach of a construction 
contract. 
II. 
 
Stanley Construction Company, Inc. (Stanley 
Construction), filed its amended motion for judgment against 
Cardinal Development Company (Cardinal).  Stanley 
Construction alleged that Cardinal breached its construction 
contract by refusing to pay Stanley Construction for certain 
additional work it had performed.  Stanley Construction also 
alleged that it was entitled to recover damages from 
Cardinal under a theory of quantum meruit.  Cardinal denied 
that it was indebted to Stanley Construction and filed a 
counterclaim seeking to recover monies that it purportedly 
overpaid to Stanley Construction. 
 
At the conclusion of a bench trial, the trial court 
found that Cardinal had breached the contract, entered a 
judgment in favor of Stanley Construction in the amount of 
$99,894.80, and denied Cardinal’s counterclaim.  Cardinal 
appeals. 
III. 
 
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A. 
 
We will review the evidence in the light most favorable 
to Stanley Construction, the prevailing party below.  Horton 
v. Horton, 254 Va. 111, 115, 487 S.E.2d 200, 203 (1997).  
Because the trial court heard the evidence ore tenus, its 
findings based on an evaluation of the testimony have the 
same weight as a jury verdict.  Id.  We will affirm the 
trial court’s judgment unless it appears from the evidence 
that the judgment is plainly wrong or without evidence to 
support it.  Code § 8.01-680; Horton, 254 Va. at 115, 487 
S.E.2d at 203, Tuomala v. Regent Univ., 252 Va. 368, 375, 
477 S.E.2d 501, 505-06 (1996).   
B. 
 
Cardinal planned to develop a residential subdivision 
called Battlefield Green on a tract of land in Hanover 
County.  Cardinal divided the subdivision into several 
sections:  B-5, B-6, A-7, and A-8. Sections A-7 and A-8 are 
the subjects of this dispute.  Cardinal intended to 
construct single-family homes in Section A-7 and townhouses 
in Section A-8. 
 
Cardinal executed a contract with Holly & Associates, 
Ltd., an engineering and surveying firm, to prepare the 
subdivision plats and construction plans for the streets, 
sanitary sewer, storm drainage, water distribution, and 
erosion control.  Cardinal also executed a contract with 
Stanley Development to construct all the “improvements 
required by [Hanover] County to each section to include but 
 
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not limited to the roads, water, sewer, curbs, gutters, 
sidewalks, [and] drainage all pursuant to the plans and 
specifications prepared by Cardinal's engineers, Holly & 
Associates, Ltd.”   This contract was “subject to [Hanover] 
County not making any substantial changes to the storm 
drainage system in either Section A-7 or Section A-8.”  
Cardinal agreed to pay Stanley Construction $1,025,000 for 
performance of the work. 
 
Holly & Associates provided Stanley Construction with a 
building plan for Section A-7 in February 1991, before 
Stanley submitted its bid to Cardinal.  This building plan 
indicated that 42 lots would be created in Section A-7.  
Even though a plat existed which indicated that 62 lots 
would be constructed on Section A-7, this plat was not a 
building plan, and Stanley Construction based its price on 
the building plan for Section A-7.  Subsequently, Holly & 
Associates developed a building plan for Section A-7 which 
increased the number of lots from 42 to 62. 
 
Hanover County approved Cardinal’s subdivision plans 
for Section A-7 in 1993.  The approved plan differed 
substantially from the 42-lot plan that Holly & Associates  
had supplied to Stanley Construction in February 1991. 
 
Randolph L. Middleton, Stanley Construction’s 
estimator, testified that he compared the 1991 A-7 building 
plan with the County-approved plan and determined that the 
later plan significantly increased the scope of the work 
that Stanley Construction would be required to perform.  The 
 
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County-approved plan increased the number of building lots 
from 42 to 62, added a pedestrian path which was not shown 
in the original building plan, increased the amount of work 
necessary for erosion control and “clearing and grubbing” 
sites, added changes to the storm sewer system, and created 
an additional grade basin and an off-road right-of-way. 
 
Calvin L. Stanley, president of Stanley Construction, 
sent a letter dated November 9, 1993 to Charles E. Ayers, 
Cardinal’s vice-president, director, and major stockholder, 
which summarized the substantial changes in the scope of the 
work.  Later that November, Calvin Stanley met with Ayers, 
A. Wayland Stanley (chairman of the board of Stanley 
Construction), Middleton, and Vincent G. Robinson (a real 
estate broker and developer who performed work for 
Cardinal).  During this meeting, A. Wayland Stanley and 
Calvin Stanley informed Ayers about the changes in the scope 
of work in Section A-7.  After a discussion among the 
persons at the meeting, Ayers directed Stanley 
Construction’s employees to proceed with the work. 
 
A. Wayland Stanley testified that during the November 
1993 meeting, Ayers “told us to go ahead and proceed with 
the work, proceed with it.  The only thing he would expect 
from us was to treat him fairly . . . .  To my knowledge, 
the only thing he ever told us was to proceed with the work 
and . . . be fair with him in the billing.  That’s the only 
thing I remember him saying.”  Middleton and Calvin Stanley 
testified that Ayers directed them to proceed with the work. 
 
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Middleton testified that Ayers told him to bill Cardinal 
fairly for performance of the work. 
 
Hanover County also made changes to the plans for 
Section A-8 of the subdivision.  Middleton, who compared the 
County-approved plans to the original plans that Holly & 
Associates had provided to Stanley Construction for purposes 
of bidding on the contract, identified substantial 
differences in the plans.  The approved plans required, 
among other things, additional paving, curbs and gutters; 
construction of a turning lane; changes in sanitary sewer 
encasement; changes in the sewer system; clearing and 
grubbing; grading; soil erosion control; traffic control, 
and patching and excavation.  
 
Stanley Construction performed some of the additional 
work and submitted invoices to Cardinal for payment.  Some 
of those invoices specifically stated that the work 
performed was “extra work versus contract or original scope 
of work.”  On one invoice, the notation “extra work” 
appears.  Cardinal paid the invoices for extra work, even 
though occasionally it paid the bills late.  Calvin Stanley 
testified that in the fall of 1995, Charles Ayers informed 
him that Cardinal would pay the outstanding bills for 
Section A-7 “before Christmas” of 1995. 
 
Connie Z. Hawkes, Stanley Construction’s former office 
manager and secretary of the corporation, testified that the 
total amount of additional work that Stanley Construction 
performed because of changes in the scope of the work to 
 
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Sections A-7 and A-8 totaled $151,905.50.  Although Calvin 
Stanley testified that Stanley Construction expected the 
County to make some changes in the plans that Stanley 
Construction relied upon to make its bid, Stanley 
Construction did not expect that Cardinal or the County 
would significantly expand the scope of the project. 
IV. 
 
Cardinal argues that “[t]he [t]rial [c]ourt erred by 
admitting parol evidence to interpret the parties’ 
unambiguous lump sum, fixed price written contract.”  
Cardinal asserts that “[u]nder the parties’ contract, 
Stanley [Construction] bore the risk that performance might 
turn out to be more difficult or more expensive than it 
predicted,” and that “[p]arol or extrinsic evidence is 
generally inadmissible to alter, contradict, or explain the 
terms of a written contract . . . .”  We do not consider 
this assignment of error because Cardinal did not argue in 
the trial court that the parol evidence rule barred 
admission of any evidence.  Rule 5:25. 
V. 
 
Cardinal argues that Stanley Construction failed to 
present sufficient evidence to support the trial court’s 
finding that Cardinal agreed to modify the lump sum, fixed 
price contract and pay Stanley Construction for the 
additional work.  We disagree.   
 
In Stanley’s Cafeteria, Inc. v. Abramson, 226 Va. 68, 
73, 306 S.E.2d 870, 873 (1983), we stated the following 
 
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principles which are relevant here: 
“[A] course of dealing by contracting parties, 
considered in light of all the circumstances, may 
evince mutual intent to modify the terms of [a] 
contract.  See Kent v. Kent, 2 Va. Dec. 674, 678, 
34 S.E. 32, 33 (1899) . . . .  But the 
circumstances surrounding the conduct of the 
parties must be sufficient to support a finding of 
a ‘mutual intention’ that the modification be 
effective, Warren v. Goodrich, 133 Va. 366, 388, 
112 S.E. 687, 694 (1922), and such intention must 
be shown by ‘clear, unequivocal and convincing 
evidence, direct or implied’, id. at 389, 112 S.E. 
at 694.  And when one party claims that the other 
party has surrendered a right guaranteed by the 
contract, the party asserting such modification 
must prove either passage of valuable 
consideration, estoppel in pais, or waiver of the 
right.  See Atlantic Coast Line v. Bryan, 109 Va. 
523, 65 S.E. 30 (1909).” 
 
 
Applying these principles, we hold that there is clear, 
unequivocal, and convincing evidence in the record which 
shows that Cardinal and Stanley Construction intended to 
modify the terms of their contract and that Cardinal agreed 
to pay for the additional work that Stanley Construction had 
performed.  As we have already stated, the building plan 
that Holly & Associates provided to Stanley Construction in 
February 1991 indicated that 42 lots would be created in 
Section A-7, but the County-approved plan provided for the 
creation of 62 lots, as well as other substantial changes.   
Upon receiving these plans, Calvin Stanley forwarded a 
letter to Ayers, Cardinal’s vice-president, and at a 
subsequent meeting, Ayers directed Stanley Construction to 
“proceed with the work” on Section A-7 and to “treat 
[Cardinal] fairly” in billing Cardinal for the additional 
work.  Cardinal’s clear instructions that Stanley 
 
8
Construction bill Cardinal fairly mean that Cardinal agreed, 
by its conduct, to expand the scope of the work and to pay 
for the additional work.  Cardinal paid Stanley 
Construction’s detailed invoices for the additional work for 
one and one-half years without complaint and Ayers, on 
behalf of Cardinal, promised to pay for the completed work 
on A-7 “before Christmas of” 1995.  Cardinal’s agreement to 
pay for the additional work, along with Stanley 
Construction’s actual performance of that work, constitutes 
valuable consideration sufficient to modify the contract. 
 
After Calvin Stanley sent a letter to Ayers complaining 
about the substantial changes in the scope of the work for 
Section A-8, Cardinal further agreed to modify the contract 
when Ayers informed Stanley by letter:  “I am in receipt of 
your letter with the price increases and assuming that they 
are items that you could not determine initially we will pay 
whatever the cost increase is based on unit pricing.”  
Calvin Stanley and Middleton testified that the changes in 
the scope of the work, including the substantial increases 
in the quantity of work and the materials required by the 
County-approved plans, were not items that they could have 
determined when the construction contract was executed.  
Cardinal also paid bills that Stanley Construction had 
submitted to it for work performed for Section A-8.   
VI. 
 
Cardinal argues that Stanley Construction “presented 
insufficient evidence to prove ‘substantial changes to the 
 
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storm drainage systems’” and, thus, the trial court erred by 
awarding Stanley Construction damages for additional work 
associated with these items.  We disagree.  As we have 
already stated twice, at least two witnesses testified on 
behalf of Stanley Construction that the scope of the work 
shown on the County-approved plans for Section A-8 changed 
substantially, including the scope of the storm drainage 
work.  Additionally, Cardinal, by its conduct, agreed to 
enlarge the scope of the work and pay Stanley Construction 
for that work.  Thus, we find no merit in this contention. 
VII. 
 
We reject Cardinal’s argument that the “trial court 
erred by allowing Stanley to recover on a theory not raised 
in Stanley’s motion for judgment.”  Cardinal says that the 
trial court’s judgment is “flawed because it appears to be 
based on some sort of estoppel or waiver theory -- theories 
never raised by Stanley . . . .”  Our review of the record 
indicates that the trial court considered this case as a 
breach of contract action and that the trial court’s 
judgment was not based upon principles of estoppel or 
waiver.   
VIII. 
 
Cardinal argues that Stanley Construction presented 
insufficient evidence to prove its damage claims.  We 
disagree. 
 
Stanley Construction adduced extensive testimony in 
support of its damages.  Stanley Construction presented 
 
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evidence of the amounts it billed to Cardinal for additional 
work performed on Sections A-7 and A-8, payments made by 
Cardinal, and the balance due.  In addition, the trial court 
admitted Stanley Construction’s billing records in evidence. 
The trial court considered this evidence, which was disputed 
by Cardinal, and awarded Stanley Construction $54,319.76 in 
damages for work performed in Section A-7 and $45,575.04 for 
damages related to Section A-8.  We cannot say, from our 
review of the record, that the trial court’s award is 
plainly wrong or without evidence to support it.  Horton, 
254 Va. at 115, 487 S.E.2d at 203. 
 
We also disagree with Cardinal’s contention that the 
trial court made an erroneous damage calculation.  Cardinal 
argues that one of Stanley Construction’s trial exhibits 
contained mathematical errors and that the trial court 
relied upon this erroneous exhibit when calculating the 
award of damages.  However, Stanley Construction responded 
at trial, and here, that its evidence of damages was based 
on actual work performed and invoices mailed, not on the 
errors contained in the challenged exhibit.  Upon our review 
of this record, which contains disputed evidence, we cannot 
say that the trial court, as the trier of fact, erred by 
accepting Stanley Construction’s explanation of the errors 
contained in the challenged exhibit.*
                     
* During a colloquy between counsel at trial, Stanley 
Construction’s counsel offered to make certain stipulations 
if Cardinal’s counsel could identify mathematical errors.  
The record is devoid of a stipulation of any figures which 
 
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IX. 
 
Cardinal argues that the trial court erred by failing 
to grant judgment on its counterclaim.  Cardinal contends 
that the undisputed evidence adduced at trial demonstrated 
that it made overpayments to Stanley Construction in the 
amount of $87,346.67 and that Cardinal is entitled to 
repayment of those funds.  The trial court, however, 
implicitly held that the monies that Cardinal purportedly 
overpaid were actually payments that Cardinal made to 
Stanley Construction for the additional work that Stanley 
Construction had performed.  This is a factual issue which 
was resolved by the trial court, and we cannot say, based 
upon the evidence of record, that the trial court was 
plainly wrong.  
X. 
 
For the foregoing reasons, the judgment of the trial 
court will be affirmed. 
Affirmed. 
                                                             
would form the basis for any credits or deductions related 
to the alleged errors.