Opinion ID: 1060237
Heading Depth: 1
Heading Rank: 7

Heading: Cape Henry Mechanical, Empire Granite, and Sprinkle Masonry

Text: William A. Etheridge, Jr., Cape Henry's president, testified that he understood that Galloway's intent in altering the AIA contract was to not be obligated to pay [Cape Henry] until [Galloway] got paid. (Emphasis added.) Etheridge further conceded that subcontractors did not favor such terms, but that he understood that he had to accept pay when paid terms in order to be awarded the subcontract. Apparently through an oversight, Stephen C. Broocks, Empire's president, failed to sign the final contract proposed by Galloway. As Empire undertook to perform the contract according to its terms, an acceptance by performance resulted. The absence of an authorized signature does not defeat the existence of the contract and does not impact our analysis of the parties' awareness of and intention concerning the ambiguity. Broocks testified that he thought the language... as drafted ... [meant that] if something should go wrong with the job it would make it hard to get my money. He further testified that he understood Empire [would not] get paid until Galloway [was] paid. (Emphasis added.) Robert Hedrick, Sprinkle's vice-president, testified that his understanding of this contract... is that when [Galloway] received payment from the owner [Sprinkle] would receive [payment from Galloway]. He further testified that being familiar with Galloway and its relationship with Rowe, Sprinkle assented to these terms without concern that Rowe would not be able to fulfill its contract with Galloway. The testimony of the representatives of these subcontractors shows that, even though the terms of their contracts were legally ambiguous, each had a mutuality of understanding with Galloway in regard to the ambiguous terms. A plaintiff's case can rise no higher than his own testimony. Massie v. Firmstone, 134 Va. 450, 462, 114 S.E. 652, 655-56 (1922). Accordingly, since the evidence shows that the parties, by their negotiations and prior dealings, understood and intended their contracts to give Galloway an absolute pay when paid defense, the trial court's awards for breach of contract to these subcontractors were in error and will be reversed. In summary, we hold that in the absence of a clear and unambiguous statement of the parties' intent as to the meaning of the time of payment provision in a construction subcontract, an absolute pay when paid defense is available to a general contractor only if it can establish by parol evidence that the parties mutually intended the contract to create such a defense. Here, the evidence shows that such a defense was contemplated by each of the subcontractors and was agreed to by each subcontractor with the exception of Ballard. With respect to Ballard, the evidence shows express efforts to avoid such a defense. Accordingly, we will affirm the award to Ballard for breach of contract and will reverse the awards to Dover Elevator, Cape Henry Mechanical, Empire Granite, and Sprinkle Masonry. Record No. 942077, Affirmed in part, reversed in part, and final judgment. Record No. 950529, Reversed and final judgment.