Present: All the Justices
BROOKS & COMPANY
GENERAL CONTRACTORS, INC.
OPINION BY
v. Record No. 980953 CHIEF JUSTICE HARRY L. CARRICO
February 26, 1999
RANDY ROBINSON
CONTRACTING, INC.
FROM THE CIRCUIT COURT OF THE CITY OF RICHMOND
Melvin R. Hughes, Jr., Judge
This building construction case involves a controversy
between Brooks & Company General Contractors, Inc. (Brooks)
and Randy Robinson Contracting, Inc. (Robinson) over
whether the agreement between them included a requirement
that disputes should be submitted to arbitration. When a
dispute arose and Brooks demanded arbitration, Robinson
moved the trial court for a stay pursuant to Code § 8.01-
581.02(B). 1 From an order staying arbitration permanently,
we awarded Brooks this appeal.
The controversy relates to the construction of the
Swift Creek Presbyterian Church in Chesterfield County. In
October 1995, Brooks was in the process of submitting a bid
to become the general contractor on the project and Randy
1
Code § 8.01-581.02(B) provides, in pertinent part, that
“[o]n application, the court may stay an arbitration
proceeding commenced or threatened on a showing that there
is no agreement to arbitrate.”
Robinson Contracting submitted a written bid to Brooks in
hopes of becoming the sitework subcontractor. 2
Because the owner was not prepared to begin
construction immediately, commencement of the project was
delayed until the spring of 1996. In May of that year,
after Brooks was selected as the general contractor, it
contacted Robinson to ascertain whether Robinson’s October
1995 bid was still good. When Robinson indicated that the
bid was still good, Brooks’ representative, Rick Griffith,
advised Robinson that it would be given the work. Griffith
marked on his copy of Robinson’s bid document: “$ confirmed
by Randy Robinson 5/17/96.” Griffith testified below that
he told Randy Robinson a written contract would be sent to
Robinson. However, Randy Robinson testified that he did
not recall such a statement.
Two weeks later, Brooks sent Robinson an American
Institute of Architects (AIA) “Standard Form of Agreement
Between Contractor and Subcontractor.” The form contained
numerous terms not found in Robinson’s bid documents and
not previously discussed by the parties, including a clause
requiring arbitration of disputes.
2
At the time this bid was submitted in October 1995, Randy
Robinson apparently operated as a sole proprietorship under
the name of Randy Robinson Contracting but incorporated as
Randy Robinson Contracting, Inc. in March 1996.
2
Brooks had not executed the AIA form contract.
Griffith testified that Brooks did not execute contract
documents before mailing them to subcontractors because of
the possibility that subcontractors might mark changes on
the documents.
Robinson received the AIA form contract but did not
sign it or return it to Brooks. Randy Robinson testified
that he did not agree with the AIA form contract and that
his refusal to sign was purposeful, although he did not
communicate his disagreement to Brooks. Griffith testified
that Randy Robinson promised several times to sign the AIA
form contract and that once, at the beginning of Robinson’s
work, he, Griffith, went to the job site to get a signed
copy of the AIA form contract and Randy Robinson stated he
had left his copy at home. In his testimony, Randy
Robinson denied making these statements.
Robinson began work on the project on June 26, 1996,
and continued working until July 15, 1996. On the latter
date, Randy Robinson used a front-end loader to demolish
Brooks’ job-site trailer and then left the site. Robinson
performed no further work on the project.
Brooks completed the work Robinson left unfinished
and, citing the arbitration clause in the AIA form
contract, filed a demand with the American Arbitration
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Association for arbitration and for an award of damages for
Robinson’s failure to complete the work. Robinson then
filed its motion to stay arbitration, denying that the AIA
form contract represented any portion of the agreement
between the parties. Brooks argued in response that the
AIA form contract set forth the terms of the agreement
between the parties and that Robinson had accepted those
terms by performance. After hearing the testimony of Rick
Griffith and Randy Robinson, the trial court found that
“there was never a meeting of the minds as contained in the
AIA form contract and the parties are not bound by it.”
The court then ordered a permanent stay of arbitration.
On appeal, Brooks stakes its case on the proposition
that Robinson accepted the terms of the AIA form contract
by performance. Brooks acknowledges that the “question in
any case in which a contract is asserted by one party and
denied by the other is whether there has been a meeting of
the minds.” However, Brooks asserts that the determination
whether there has been a meeting of the minds always
depends upon the intention of the parties “as objectively
manifested.” See Snyder-Falkinham v. Stockburger, 249 Va.
376, 381, 457 S.E.2d 36, 39 (1995); Montagna v. Holiday
Inns, Inc., 221 Va. 336, 346, 269 S.E.2d 838, 844 (1980).
Here, Brooks says, “not only was there no objective
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manifestation of disagreement, but to the contrary, [Randy]
Robinson actually began the work after having received the
contract without indicating in any way that he disagreed
with the written contract documents.”
Nor does it make any difference, Brooks maintains,
that Robinson “did not sign the contract documents.”
Brooks states that “[w]hen a party undertakes the
performance of a contract according to its terms,
acceptance by performance results, even if the party failed
to sign the final contract.”
Robinson argues, on the other hand, that the doctrine
of acceptance by performance is inapplicable here because
the sole agreement between the parties consisted of an oral
contract entered into prior to the delivery of the AIA form
contract by Brooks to Robinson. The oral contract arose,
Robinson maintains, when Brooks contacted Robinson in May
of 1996 to inquire if the October 1995 bid was still good,
Robinson answered in the affirmative, and Brooks advised
that Robinson would be given the work. And its
“performance on the project,” Robinson insists, “was
completely in accordance with the terms of that parol
contract.”
In support of its argument that Robinson accepted the
terms of the AIA form contract by performance, Brooks cites
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Galloway Corp. v. S.B. Ballard Construction Co., 250 Va.
493, 464 S.E.2d 349 (1995). Galloway involved a dispute
between a general contractor and several of its
subcontractors, including Empire Granite Corporation
(Empire). The president of Empire, through apparent
oversight, had failed to sign the final contract documents
as proposed by the general contractor. We held that, “[a]s
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 . . . .” 250 Va. at 505, 464 S.E.2d at 356.
In Galloway, however, the final contract documents,
although not signed by Empire, had been signed by the
general contractor, objectively manifesting its intention
to be bound by the documents, and this was the contract we
said Empire had accepted by performance. Here, no
objective manifestation of Brooks’ intention appears.
Brooks did not sign the AIA form contract it sent to
Robinson, and Griffith, Brooks’ representative, testified
this was the firm’s practice because it expected
subcontractors to make changes in the documents.
Furthermore, there was no issue in Galloway concerning
whether Empire had performed pursuant to a preexisting
parol contract rather than the written document it had
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failed to sign. Here, Robinson makes the preexisting parol
contract the pivotal element in the case, saying it was the
sole agreement between the parties and the one under which
it performed.
During oral argument, Brooks conceded there was “an
oral contract” between the parties but stated Brooks
“indicated by sending this written document that the
intention was to replace the oral contract with a written
contract.” Brooks also conceded that Robinson was under no
duty to reject the modifications contained in the AIA form
contract, but maintained that because Robinson started work
“without objection, . . . that’s acceptance by
performance.”
We disagree with Brooks. While Brooks may have
intended that the AIA form contract would replace the oral
contract, there is nothing in the record indicating that
Brooks ever conveyed that intention to Robinson or that
Robinson shared the intention. A form letter of
transmittal accompanying the AIA form contract was checked
only in a box labeled “[f]or approval.” And although Rick
Griffith testified that Randy Robinson promised to sign the
AIA form contract, Randy Robinson contradicted Griffith’s
testimony, and the trial court resolved the conflict in
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Robinson’s favor when it awarded Robinson a stay of
arbitration.
This case reduces itself, therefore, to the
proposition that a valid and binding oral contract existed
between the parties after Robinson said it stood by its
October 1995 bid and Brooks said Robinson would be given
the work, that Brooks simply failed to show there was a
meeting of the minds on the modifications that later
appeared in the AIA form contract, and that, without such a
showing, it cannot be said that Robinson accepted the terms
of the modified contract by performance. Hence, as
Robinson maintains, the oral contract was the sole
subsisting agreement between the parties, and it did not
require arbitration in the event of a dispute.
For these reasons, we will affirm the trial court’s
permanent stay of arbitration.
Affirmed.
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