Present: All the Justices
MID-ATLANTIC BUSINESS
COMMUNICATIONS, INC.
v. Record No. 040967 OPINION BY JUSTICE ELIZABETH B. LACY
January 14, 2005
VIRGINIA DEPARTMENT OF
MOTOR VEHICLES
FROM THE CIRCUIT COURT OF THE CITY OF RICHMOND
Theodore J. Markow, Judge
The Virginia Public Procurement Act, Code §§ 2.2-4300
through -4377 (VPPA or the Act), requires that a claim against
a public body based on a contract awarded under the Act must
be filed within six months of the final decision of the public
body. Code § 2.2-4363(D). Mid-Atlantic Business
Communications, Inc.'s (MABC) claim against the Virginia
Department of Motor Vehicles (the Department) was denied in a
letter from the Department dated August 22, 2002 and in a
letter from the Comptroller dated January 31, 2003. MABC
filed this litigation on February 27, 2003. Because the
August 22, 2002 letter was the final decision of the
Department, the trial court correctly dismissed MABC's motion
for judgment because it was not filed within the Act's six-
month limitation period.
Facts
The Department awarded MABC a contract to create and
install an Internet Call Center. The terms of the Vendors
Manual were incorporated into the Contract. Code § 2.2-
4363(B) and (C); Department of General Services, Commonwealth
of Virginia, Vendors Manual (Dec. 1998). The contract was for
a fixed price of $207,111.78 and was to be performed and paid
in two phases. The first phase was completed and paid for
without incident. In June 2002, the Department's Manager of
MIS Budget and Procurement, George S. Goodman, Jr., notified
MABC by letter that the Department was rejecting the work done
under the second phase because MABC's product had a number of
security issues. MABC was given 30 days to redesign the
system to meet the Department's requirements. In a July 23,
2002 letter, Goodman told MABC that its response was
unsatisfactory, that the contract was cancelled, and that the
Department would not pay the remaining $102,451.67 due under
the contract for the second phase.
MABC appealed the Department's decision to the
Procurement Appeals Board but was notified that the Board had
no jurisdiction to entertain the appeal. MABC then sent a
letter, dated July 31, 2002, to the Department arguing that
the alleged security problems were new requirements not
previously listed in the contract and requesting that the
Department honor the full payment price under the contract.
Goodman responded by letter on August 22, 2002, stating, "Your
claim for payment is hereby denied."
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MABC then sent a letter, dated August 26, 2002, to Asbury
W. Quillan, Commissioner of the Department, requesting payment
of the second phase amount. The letter stated that legal
action would be taken if no response was received within 10
days. On August 30, 2002, Thomas P. Falat, Assistant
Commissioner of the Department, notified MABC that "the DMV
stands by the decision to cancel." On October 23, 2002, MABC
mailed a certified letter to the Comptroller of the
Commonwealth and the Commissioner of the Department seeking
payment pursuant to Code § 2.2-814 (formerly Code § 2.1-
223.1). As required by Code § 2.2-815, the Commissioner
informed the Comptroller on January 29, 2003 that MABC's claim
had been previously denied and he recommended that the
Comptroller deny MABC's pecuniary claim. In a letter dated
January 31, 2003, the Comptroller denied MABC's claim.
Proceedings
MABC instituted this litigation on February 27, 2003
against the Department and the Comptroller claiming breach of
contract and seeking damages in the amount of $102,451.67, the
remainder of the contract price for the second phase. The
defendants filed a Plea in Bar, Demurrer, and Grounds of
Defense, arguing that the Comptroller was not a proper party
and that the claim was filed beyond the Act's six-month
limitations period and therefore was time-barred. The trial
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court sustained the defendants' Demurrer and Plea in Bar,
dismissed the Comptroller as a party, and held that because
the August 22, 2002 letter was the final decision of the
Department, MABC's action was untimely. The trial court also
held that Code § 8.01-229(D) did not toll the running of the
limitations period. We awarded MABC an appeal.
Discussion
On appeal, MABC contends that the action was timely filed
first because the January 31, 2003 letter from the Comptroller
was the Department's final decision. The VPPA states that a
decision by a "public body" is final unless appealed within
six months of the final decision of the "public body." Code
§ 2.2-4363(D). MABC's first argument is based on the
definition of "public body." The Vendors Manual, which was
promulgated pursuant to the VPPA and incorporated into the
contract between the Department and MABC, recites that a claim
denial is final if issued by an agency's "purchasing office."
"Purchasing office" is not defined in the Manual, and MABC
argues that "because of the significance attached to the final
decision," the phrase should be interpreted as meaning the
head of the agency involved.
This interpretation is further supported, according to
MABC, when considered in conjunction with the procedure for
filing a pecuniary claim against the Commonwealth. This
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procedure, Code §§ 2.2-814 and –815, provides that pecuniary
claims against the Commonwealth must be presented first to the
"head of the . . . agency" against which the claim is lodged
and that officer must make a recommendation on the claim to
the Comptroller. Reading these provisions together, MABC
concludes that the only decision of the head of the Department
was contained in the January 31, 2003 letter and that letter,
therefore, constitutes the final decision by the Department.
This argument fails first because the absence of a
definition of "purchasing office" in the Vendors Manual does
not make the term ambiguous or in need of further
interpretation. As applied to these facts, there was no
ambiguity about the position held by Goodman. Each letter
Goodman signed stated his title as Manager of the MIS/ITS
Budget and Procurement Office. This designation is also
recited on the signature line of the contract.
MABC's argument also fails because it seeks to
incorporate into the VPPA terms contained in a separate,
unrelated procedure. The VPPA is a specific statute relating
to the acquisition of goods and services by public bodies. We
have previously held that the provisions of that Act, not the
predecessors to Code §§ 2.2-814 and 2.2-815, apply to disputes
arising from goods or services provided under the VPPA. The
Dr. William E.S. Flory Small Bus. Dev. Ctr. v. Commonwealth,
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261 Va. 230, 239, 541 S.E.2d 915, 920 (2001). Therefore, we
decline to interpret provisions of the VPPA by incorporating
provisions relating to filing pecuniary claims against the
Commonwealth.
The next argument advanced by MABC in support of its
position is that the Department did not consider its August 22
letter to be a final decision because, by filing a
recommendation on MABC's claim with the Comptroller, it
acknowledged that MABC's claim was "authorized" under Code
§ 2.2-814, and therefore, the Comptroller's letter of January
31, 2003 was the final agency decision. This argument is also
without merit because it ignores the separate nature of the
two statutory processes and would allow a litigant to extend
the time limitations of the VPAA by instituting a claim under
an entirely separate procedure. The Department's
recommendation to the Comptroller regarding MABC's claim was a
task required by Code § 2.2-815 and had no effect on the
finality of the Department's previous rejection of the claim
under the VPPA.
The trial court correctly concluded that the August 22,
2002 letter was the final decision of the Department and the
VPPA's six-month limitations period for filing suit began on
that date.
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MABC also argues that its suit was timely filed because
the date for filing an action against DMV was tolled under
Code § 8.01-229(D) which provides that if a defendant
obstructs the filing of an action by any "direct or indirect
means," the "time that such obstruction has continued shall
not be counted as any part of the period within which the
action must be brought." The trial court refused to apply the
tolling provisions of Code § 8.01-229(D) because it concluded
that tolling provisions "[c]an't run against the
Commonwealth." MABC assigns error to this holding. We agree
that the holding of the trial court is in error.
We are aware of no case in which a plaintiff was denied
the ability to assert the tolling provisions of Code § 8.01-
229 solely because the defendant was the Commonwealth or one
of its agencies. To the contrary, for example, in Douglas v.
Chesterfield County Police Dept., 251 Va. 363, 467 S.E.2d 474
(1996), the plaintiff sought to rely on the tolling provisions
of Code § 8.01-229(B)(6) for the timely filing of its actions
against the Chesterfield County Police Department. Id. at
365, 467 S.E.2d at 475. Although this Court, in responding to
a certified question from the United States District Court for
the Eastern District of Virginia, determined that the tolling
provisions were not available to the plaintiff because the
plaintiff did not qualify as a personal representative at the
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time she filed her federal action, the ability to raise the
tolling provision against the governmental defendant was never
questioned. Moreover, the Court recognized the possibility
that the plaintiff would also have been entitled to seek the
benefit of the tolling provisions of Code § 8.01-229(E)(3).
Id. at 367-68 & n.4, 467 S.E.2d at 476-77 & n.4. The legal
status of the defendant does not determine whether a plaintiff
is entitled to seek the protection of the tolling provision
provided by statute, and the trial court erred in holding
otherwise. Nevertheless, a plaintiff must meet its burden of
proof under the statute to establish entitlement to its
protection.
To secure the tolling authorized by Code § 8.01-229(D),
MABC had to establish that the Department "undertook an
affirmative act designed or intended, directly or indirectly,
to obstruct the [MABC's] right to file [its] action." Grimes
v. Suzukawa, 262 Va. 330, 332, 551 S.E.2d 644, 646 (2001).
"Constructive fraud is not such as will toll the running of
the statute of limitations . . . . A defendant must intend to
conceal the discovery of the cause of action by trick or
artifice and must have thus actually concealed it from the
plaintiff in order for the exception to apply." Richmond
Redevelopment and Housing Authority v. Laburnum Const. Corp.,
195 Va. 827, 840, 80 S.E.2d 574, 582 (1954).
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MABC argued at trial, as it does here, that internal
documents obtained during discovery showed that the Department
continued to consider MABC's claim unresolved after Goodman's
August letter but did not reply to MABC's August 26 letter,
and did not reply to MABC's October 23, 2002 letter to the
Comptroller until January 29, 2003. This evidence, according
to MABC, shows that the Department "purposefully misled" MABC
and "intended to prevent MABC from instituting litigation
within six months" of Goodman's August 22, 2002 letter.
Neither the failure to reply to MABC's letters nor the
time taken to reply to the Comptroller's request is evidence
of an affirmative act that was designed to thwart MABC's
ability to file a lawsuit against the Department. As the
Department points out, the provisions of the Act allow the
contractor to file suit, if the contractor has not received a
response from the agency within the period specified in the
contract at issue. Code § 2.2-4363. In this case, a 30-day
period was set by § 7.19 of the Vendors Manual which was
incorporated into the parties' contract. Therefore,
regardless of the Department's actions, if MABC did not
believe that the August 22 letter was the final denial of
MABC's claim, it was free to file an action 30 days after it
failed to receive a response to its August 26 letter.
Furthermore, MABC, not the Department, chose to seek relief
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under two separate procedures. Nothing in the pecuniary
claims process prohibited MABC from filing its claim under the
VPPA. Therefore, the tolling provisions of Code § 8.01-229(D)
were not available to MABC and the trial court did not err in
refusing to apply those provisions in this case.*
For the reasons stated, we will affirm the trial court's
judgment sustaining the plea in bar and dismissing MABC's
motion for judgment with prejudice.
Affirmed.
*
In light of this holding, we need not address whether
the Department would be bound by actions of its agents in this
circumstance.
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