Quadros & Associates v. City of Hampton

PRESENT: All the Justices

QUADROS & ASSOCIATES, P.C.

v. Record No. 032213 OPINION BY JUSTICE BARBARA MILANO KEENAN
June 10, 2004
CITY OF HAMPTON

FROM THE CIRCUIT COURT OF THE CITY OF HAMPTON
Louis R. Lerner, Judge

In this appeal involving a contract dispute, we consider

whether the circuit court erred in granting the defendant’s

motion for summary judgment.

Because this case was decided by summary judgment, we will

state the facts, and the inferences fairly drawn from those

facts, in the light most favorable to the nonmoving party,

Quadros & Associates, P.C. (Quadros). However, we are not

permitted to draw inferences that are forced, strained, or

contrary to reason. Hansen v. Stanley Martin Cos., 266 Va. 345,

351, 585 S.E.2d 567, 571 (2003); Thurmond v. Prince William

Prof’l Baseball Club, Inc., 265 Va. 59, 61, 574 S.E.2d 246, 248

(2003); Dudas v. Glenwood Golf Club, Inc., 261 Va. 133, 136, 540

S.E.2d 129, 130-31 (2001).

In August 1997, Quadros, a law firm formerly known as

Quadros & Swanson, P.C., entered into a three-year contract with

the City of Hampton (the City) to collect delinquent taxes,

fees, and other obligations owed to the City. The contract

required the City to pay Quadros a percentage of the amounts
Quadros recovered, and to reimburse Quadros "for all third party

out-of-pocket expenses."

Quadros’ duties were specified in "Section Three" of the

contract, entitled "Duties of Attorney," which provided in

relevant part:

The Attorney shall:

(1) Send one “Demand Letter” to the delinquent debtor
after the Treasurer has provided the Attorney with the
name and address of delinquent taxpayers, the amount
of delinquent taxes, fees and other obligations owed,
the period for which taxes are owe[d] and a brief
description of the reason for which taxes, fees and
other obligations are owed.

(2) The Attorney shall then institute proceedings to
collect taxes, fees and other obligations . . .
against the delinquent debtor.

The contract further provided that either party could terminate

the contract by giving a 30-day notice to the other party.

Prior to March 1999, the Treasurer’s Office for the City

routinely provided Quadros with a computer disk that contained

detailed records relating to the delinquent tax accounts,

including information on abatements and credits. An abatement

is an adjustment of tax liability made by the Commissioner of

the Revenue, which results in a reduction in the total amount

owed on a particular account. A credit is a reduction in tax

liability based on a payment made by a taxpayer. Such abatement

and credit information was necessary for Quadros to make an

2
accurate determination of the total amount of taxes due on a

particular account.

In March 1999, after new computer software was installed in

the City Treasurer’s Office, the City no longer provided Quadros

with abatement and credit information for the delinquent tax

accounts. Quadros informed the City that collection actions on

the delinquent accounts could not be initiated without the

necessary data on abatements and credits, and requested the City

to provide this information.

The City refused Quadros’ request. However, the City

continued to refer new accounts to Quadros for collection

through the beginning of the year 2000.

In July 2000, frustrated by its inability to take action on

the delinquent accounts, Quadros stopped all work on the

collection of accounts for tax years prior to 1999. Quadros

turned over to the City all materials and files in its

possession relating to those accounts.

Quadros filed a motion for judgment against the City

alleging that the City breached the parties’ contract by the

City’s “failure and refusal” to provide Quadros with the

necessary abatement and credit information for the delinquent

accounts. Quadros asserted that the City’s failure to provide

the required data prevented Quadros from fulfilling its

obligations under the parties’ contract, resulting in

3
“substantial losses of revenues and profits.” Quadros sought

damages “in the amount of at least $160,000.00” to recover “net

profits” that Quadros alleged it would have earned on delinquent

accounts through the end of August 2000.

In response, the City filed a motion for summary judgment

based on various grounds, including that the City had no

obligation under the contract to refer any accounts to Quadros

for collection. The City asserted that under the plain and

unambiguous language of the contract, Quadros was not required

to begin collection action on an account until after the City

had provided all the information outlined in “Section Three” of

the parties’ contract.

At a hearing on the City’s motion, counsel for Quadros

conceded that the contract did not require the City to refer a

particular number of delinquent accounts to Quadros for

collection. However, he asserted that “[t]here was an

expectation on the part of Quadros . . . that the City would

cooperate in the process,” and that the City failed to provide

such cooperation. Counsel for Quadros also stated that he did

not think that the City had failed to pay Quadros for any

amounts Quadros had already collected.

The circuit court granted the City’s motion for summary

judgment. Quadros appeals.

4
 Quadros argues that the circuit court erred in granting the

City’s motion for summary judgment because there were material

facts in dispute concerning whether the City had withheld from

Quadros abatement and credit information on the delinquent

accounts. Quadros contends that the contract obligated the City

to provide Quadros with this information for tax accounts that

had been referred for collection because such information was

necessary to determine the amount of delinquent taxes owed.∗

In response, the City argues that the circuit court

properly granted the motion for summary judgment because there

were no material facts genuinely in dispute, and the plain

language of the contract did not require the City to furnish

Quadros with any particular number of accounts for collection.

The City further contends that it had no duty under the contract

to provide Quadros with abatement and credit information, or

with any other data, pursuant to a fixed time schedule.

Finally, the City observes that while the contract obligated the

City to pay Quadros a percentage of the taxes Quadros actually

collected, Quadros does not contend that the City failed to make

any such required payments. We agree with the City’s arguments.

∗
We do not consider Quadros’ additional arguments that the
City had a duty to perform its contractual obligations in “good
faith,” and that the City breached the parties’ contract by its
alleged failure to perform those obligations in “good faith.”
Those arguments were the subject of separate assignments of

5
 We construe the parties’ contract under established rules.

A contract must be construed as written, and courts are not at

liberty to add terms not included by the parties. Amchem

Prods., Inc. v. Newport News Circuit Court Asbestos Cases

Plaintiffs, 264 Va. 89, 98, 563 S.E.2d 739, 744 (2002); TM

Delmarva Power, L.L.C. v. NCP of Va., L.L.C., 263 Va. 116, 119,

557 S.E.2d 199, 200 (2002).

We consider the contract as a whole and do not place

emphasis on isolated terms. American Spirit Ins. Co. v. Owens,

261 Va. 270, 275, 541 S.E.2d 553, 555 (2001); Lansdowne Dev. Co.

v. Xerox Realty Corp., 257 Va. 392, 401, 514 S.E.2d 157, 161

(1999). When contract terms are clear and unambiguous, a court

must accord those terms their plain meaning. Standard Banner

Coal Corp. v. Rapoca Energy Co., LP, 265 Va. 320, 325, 576

S.E.2d 435, 437 (2003); Amchem Prods., Inc., 264 Va. at 98, 563

S.E.2d at 744; Owens, 261 Va. at 275, 541 S.E.2d at 555. As we

have stated, " '[t]he guiding light . . . is the intention of

the parties as expressed by them in the words they have used,

and courts are bound to say that the parties intended what the

written instrument plainly declares.' " Golding v. Floyd, 261

Va. 190, 192, 539 S.E.2d 735, 737 (2001) (quoting W.F. Magann

error, which we refused at the time we considered Quadros’
petition for appeal.

6
Corp. v. Virginia-Carolina Elec. Works, Inc., 203 Va. 259, 264,

123 S.E.2d 377, 381 (1962)).

We conclude that the terms of the parties’ contract are

plain and unambiguous. Under those terms, Quadros was required

to start collection procedures on accounts referred by the City

after receiving from the City the information necessary to

initiate action on those accounts. Quadros was entitled to

payment of a percentage of the amounts Quadros actually

recovered from delinquent taxpayers, plus reimbursement of

certain expenses.

Notably, the parties’ contract did not require the City to

refer to Quadros a fixed number or percentage of the City’s

delinquent tax accounts for collection, nor did the contract

require the City to provide data relating to the accounts

referred according to any particular time schedule. Therefore,

under the plain terms of the contract, the City’s provision of

incomplete information to Quadros for some of the delinquent

accounts did not constitute a breach of contract.

In addition, because the contract did not require the City

to provide the supporting data at any particular time, the

factual dispute regarding whether the City withheld certain data

from Quadros for some accounts on which collection proceedings

had not begun, was not material to a resolution of the City’s

duties under the contract. Therefore, we hold that the circuit

7
court did not err in deciding this action on the City’s summary

judgment motion. See Rule 3:18; Hansen, 266 Va. at 351, 585

S.E.2d at 571; Thurmond, 265 Va. at 64, 574 S.E.2d at 250.

For these reasons, we will affirm the circuit court’s

judgment.

Affirmed.

8