Present: Hassell, C.J., Keenan, Koontz, Kinser, Lemons, and
Agee, ∗ JJ., and Carrico, S.J.
NEXTEL WIP LEASE CORPORATION
v. Record No. 071653
ROSCOE NEAL SAUNDERS,
EXECUTOR OF THE
ESTATE OF CORA BELL MEADOR
SAUNDERS, ET AL.
OPINION BY
SENIOR JUSTICE HARRY L. CARRICO
September 12, 2008
TOWERCO LLC
v. Record No. 071655
ROSCOE NEAL SAUNDERS,
EXECUTOR OF THE
ESTATE OF CORA BELL MEADOR
SAUNDERS, ET AL.
FROM THE CIRUIT COURT OF BEDFORD COUNTY
James W. Updike, Jr., Judge
The issue in these appeals is whether the lease of a parcel
of land atop a mountain in Bedford County permits the erection
of one telecommunications tower or two such towers. In a
declaratory judgment proceeding, the circuit court held that the
lease permitted only one tower. We agree with the circuit court
and will affirm its judgment.
∗
Justice Agee participated in the hearing and decision of
this case prior to his retirement from the Court on June 30,
2008.
The parcel of land, measuring approximately 50’ by 50’, is
part of a larger tract owned by Roscoe Neal Saunders and Ralph
Edward Saunders, Executors of the Estate of Cora Bell Meador
Saunders (the Saunders). In an Option and Ground Lease
Agreement dated July 13, 2004 (the lease agreement), the
Saunders, as lessors, leased the parcel to Nextel WIP Lease
Corporation (Nextel), as lessee, for a term of five years, with
five successive five-year options to renew for a monthly rental
of $670.00.
Nextel constructed an 80’ high telecommunications tower on
the property and then on June 30, 2005, assigned the lease to
TowerCo, LLC (TowerCo), as the lease agreement permitted. In
March 2006, an application was filed with the Bedford County
Department of Planning for an amended special use permit to
allow TowerCo to increase the height of the 80’ tower to 100
feet. Another application was filed for a special use permit to
allow the construction of a second 80’ tower on the leased
premises. On April 24, 2006, the County’s Board of Supervisors
denied the application to increase the height of the existing
tower because a zoning regulation forbade any height above 80
feet. However, the Board approved the construction of a second
80’ tower on the leased premises.
Construction was begun on the new tower, and on September
12, 2006, Nextel and TowerCo were confronted with a motion for
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declaratory judgment filed by the Saunders in the circuit court.
The motion alleged that the “lease provided for the construction
of one communication tower on the lease[d] premises” but “the
lessee and its assignees have commenced construction of a second
tower on the lease[d] premises contrary to the provisions of the
lease agreement and has [sic] refused to forego construction
upon confrontation by the plaintiffs.” The Saunders prayed that
the circuit court “determine the number of towers permitted
pursuant to the aforementioned Lease Agreement dated July 13,
2004.”
Nextel and TowerCo filed answers to the motion for
declaratory judgment and also filed motions for summary
judgment. Nextel alleged in its motion that it was entitled to
summary judgment because there were no material facts in dispute
and “the Lease at issue is unambiguous, and it clearly allows
Nextel and its assignees to build a second telecommunications
tower on the Premises.” In its motion, TowerCo alleged that it
was entitled to summary judgment “because the only issue to be
resolved is a question of law – interpretation of three clear
and unambiguous provisions of the Lease Agreement” expressing
the parties’ intent “that more than one tower may be constructed
on the Leased Premises.”
The three paragraphs referenced by TowerCo provide in
pertinent part as follows:
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10. Use. The premises may be used by Lessee for the
transmission and receipt of wireless communication signals
in any and all frequencies and the construction and
maintenance of towers, antennas, or buildings, and related
facilities and activities (“Intended Use”). Lessor agrees
to cooperate with Lessee in obtaining, at Lessee’s expense,
all licenses and permits required for Lessee’s use of the
Premises (the “Governmental Approvals”). Lessee may
construct additional improvements, demolish and reconstruct
improvements, or restore replace and reconfigure
improvements at any time during the Initial Term or any
Renewal Term of this Lease. [Emphasis added.]
14. Lessor’s Representations and Warranties. Lessor
represents and warrants that (i) Lessee’s Intended Use of
the Premises as a site for the transmission and receipt of
wireless communication signals; for the construction and
maintenance of towers, antennas or buildings; and related
facilities is not prohibited by any covenants,
restrictions, reciprocal easements, servitudes, subdivision
rules or regulations. [Emphasis added.]
17. Improvements; Utilities; Access. (a) Lessee
shall have the right, at Lessee’s sole cost and expense, to
erect and maintain on the Premises improvements, personal
property and facilities, including without limitation, one
(1) tower, a structural tower base, radio transmitting and
receiving antennas, communications equipment, an equipment
cabinet or shelter and related facilities. [Emphasis
added.]
The circuit court heard oral argument on the motions for
summary judgment and denied them, holding that the lease
agreement was ambiguous and that parol evidence would be
admissible to determine the parties’ intent when the lease was
negotiated. At the conclusion of an ore tenus hearing held for
the taking of parol evidence, the circuit court ruled in its
final order that “said Lease Agreement permits the construction
of one communication tower, and only one communication tower, on
4
the leased premises.” We awarded Nextel and TowerCo each an
appeal.
We first must clarify the record. During oral argument
before this Court, counsel for TowerCo made an argument based
upon our decision in Scott v. Walker, 274 Va. 209, 645 S.E.2d
278 (2007), decided after the present case was decided in the
circuit court. There, we held that a restrictive covenant
providing that no lot in a subdivision “shall be used except for
residential purposes” was ambiguous and did not prevent the
lot’s owners from leasing their single-family dwelling by the
day or by the week. We stated as follows:
It is . . . the general rule that while courts of
equity will enforce restrictive covenants where the
intention of the parties is clear and the restrictions are
reasonable, they are not favored, and the burden is on him
who would enforce such covenants to establish that the
activity objected to is within their terms. They are to be
construed most strictly against the grantor and substantial
doubt or ambiguity is to be resolved in favor of the free
use of property and against restrictions.
274 Va. at 212-13, 645 S.E.2d at 280 (quoting Schwarzschild v.
Welborne, 186 Va. 1052, 1058, 45 S.E.2d 152, 155 (1947)).
We also said there is an exception, as follows:
[I]f it is apparent from a reading of the whole instrument
that the restrictions carry a certain meaning by definite
and necessary implication, then the thing denied may be
said to be clearly forbidden, as if the language had been
in positive terms of express inhibition.
5
Scott, 274 Va. at 213, 645 S.E.2d at 280-81 (quoting Bauer v.
Harn, 223 Va. 31, 39, 286 S.E.2d 192, 196 (1982) (internal
quotation marks omitted)).
In oral argument before us, TowerCo claimed that the
circuit court held that paragraph 17(a) of the lease agreement,
containing the “one (1) tower” language, was ambiguous.
Therefore, counsel argued, the circuit court should have
construed the paragraph in favor of the free use of the property
and against any restriction as a matter of law, thus barring the
court from admitting parol evidence or drawing necessary
implications. When asked whether this argument had been made in
the circuit court, counsel for TowerCo answered affirmatively
and named three places in the record where the argument would
appear. We have yet to find any argument based upon a purported
holding by the circuit court that paragraph 17(a) was ambiguous.
We will not, therefore, consider TowerCo’s argument. Rule 5:25.
However, while the circuit court did not hold paragraph
17(a) ambiguous, it did, as noted above, hold the lease
agreement ambiguous, and that ambiguity alone will serve as the
focus of our analysis. Whether contractual provisions are
ambiguous is a question of law and not of fact, and we do not on
appeal accord the circuit court’s resolution any deference since
we are afforded the same opportunity to consider the provisions.
Video Zone, Inc. v. KF&F Properties, L.C., 267 Va. 621, 625, 594
6
S.E.2d 921, 923 (2004). Thus, we conduct a de novo review.
Eure v. Norfolk Shipbuilding & Drydock Corp., 263 Va. 624, 631,
561 S.E.2d 663, 667 (2002).
Contractual provisions are ambiguous if they may be
understood in more than one way or if they may be construed
to refer to two or more things at the same time. Berry v.
Klinger, 225 Va. 201, 207, 300 S.E.2d 792, 796 (1983). The
ambiguity, if it exists, must appear on the face of the
instrument itself. Salzi v. Virginia Farm Bureau Mut. Ins.
Co., 263 Va. 52, 55, 556 S.E.2d 758, 760 (2002). In
determining whether the provisions are ambiguous, we give
the words employed their usual, ordinary, and popular
meaning. Pocahontas Mining, L.L.C. v. Jewell Ridge Coal
Corp., 263 Va. 169, 173, 556 S.E.2d 769, 772 (2002). And
contractual provisions are not ambiguous merely because the
parties disagree about their meaning. Dominion Savings
Bank, FSB v. Costello, 257 Va. 413, 416, 512 S.E.2d 564,
566 (1999).
In addition to Scott v. Walker, Nextel and TowerCo rely
heavily upon Parrish v. Robertson, 195 Va. 794, 80 S.E.2d 407
(1954), Oakwood Smokeless Coal Corp. v. Meadows, 184 Va. 168, 34
S.E.2d 392 (1945), and Stonegap Colliery Co. v. Kelly, 115 Va.
390, 79 S.E. 341 (1913). In Parrish, we stated as follows:
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In . . . an instrument, where uncertainties or ambiguities
exist, the tenant is favored by law . . . because the
landlord, having the power of providing expressly in his
own favor, has neglected to do so; and also upon the
general principle that every man’s grant is to be taken
most strongly against himself. Thus, the language of a
lease which is fairly susceptible of two constructions is
to be taken most against the lessor.
195 Va. at 800, 80 S.E.2d at 410-11 (citations and internal
quotation marks omitted).
In Oakwood Smokeless Coal Corp., we stated as follows:
A lessee of real property is entitled to exclusive use of
the demised premises for any purpose not prohibited by the
lease, not amounting to waste or destruction of the subject
matter.
. . . .
It has been stated as a general rule that where doubt
exists as to the meaning of lease restrictions as to the
use of property, such provisions are to be resolved in
favor of the lessee and against the lessor.
184 Va. at 177, 34 S.E.2d at 396 (citations and internal
quotation marks omitted).
And in Stonegap Colliery Co., a case Nextel says is
controlling, we stated as follows:
A covenant that premises shall be used by a lessee for a
particular specified purpose does not impliedly forbid that
they may be used for a similar lawful purpose which is not
injurious to the landlord’s rights, unless such other use
is expressly forbidden.
115 Va. at 394, 79 S.E. at 342.
Nextel and TowerCo argue that the provisions of the
lease are not ambiguous. They say that paragraphs 10 and
14, which permit “towers,” are consistent with and not
8
contradictory of paragraph 17(a), which permits
“improvements . . . including without limitation, one (1)
tower,” indicating, as Nextel puts it, that the lease
provides the lessee with “the right to construct a minimum
of one tower on the Premises,” or, as TowerCo puts it, that
“there simply is no basis to either ascribe ambiguity to
the provision or construe the provision as limiting use of
the leased property to the construction of one tower only.”
Nextel and TowerCo contend that the word “including,”
found in paragraph 17(a), implies that the list following
is not exhaustive and not exclusive. They cite several
cases for definitions of the word to support their claim
that the provision “including without limitation, one (1)
tower” unambiguously permits the erection of more than one
tower on the leased premises. For example, in Federal
Election Comm’n v. Mass. Citizens for Life, Inc., 769 F.2d
13 (1st Cir. 1985), aff’d, 479 U.S. 238 (1986), the United
States Court of Appeals for the First Circuit stated that
“the word ‘includes’ is usually a term of enlargement, and
not of limitation,” and therefore “conveys the conclusion
that there are other items includable, though not
specifically enumerated.” Id. at 17. Also cited is
Black’s Law Dictionary, 777 (8th ed. 2004) (“including
typically indicates a partial list”).
9
We are willing to adopt these definitions of the word
“including,” but we do not agree that as used in paragraph
17(a) the word has the effect Nextel and TowerCo claim for
it. In the context in which it appears, the “including
without limitation” language means that there could be no
limitation upon the maintenance, use, or improvement of the
one tower listed in paragraph 17(a). Nor could there be
any limitation upon the addition of some different item not
specifically enumerated that might be necessary or
convenient to the erection, maintenance, use, or
improvement of that one tower.
Furthermore, the “including without limitation”
language certainly does not require us to ignore that the
“usual, ordinary, and popular meaning” of the word “one,”
appearing in paragraph 17(a), is “one,” not “two.” See
Pocahontas Mining, 263 Va. at 173, 556 S.E.2d at 772.
However, we cannot view paragraph 17(a) in isolation but
must consider it along with all the other provisions of the
lease. Berry, 225 Va. at 208, 300 S.E.2d at 796 (contract
“must be read as a single document” and its meaning “is to
be gathered from all its associated parts”).
In this approach, paragraphs 10 and 14 come into play.
Paragraph 17(a) may be understood as permitting only one
10
tower while paragraphs 10 and 14 may be understood as
permitting more than one. Thus, there is an unmistakable
ambiguity in the provisions of the lease agreement. The
question then becomes how the ambiguity should be resolved.
TowerCo argues that “rather than admitting parol
evidence, the trial court should have considered whether
‘settled rules of interpretation, applied to the writing as
a whole, leave a genuine uncertainty as to which [of] two
or more possible meanings represents the contracting
parties’ true intent. Thus, if the words chosen by the
parties have an ordinary, plain meaning, the parol evidence
inquiry is ended; parol evidence is inadmissible.’ ”
The difficulty, however, is that it is impossible to
ascertain from a consideration of the lease agreement as a
whole which of the two possible meanings represents the
true intent of the parties. In the effort to ascertain the
appropriate meaning, Stonegap Colliery Co. is helpful, but
not to the position espoused by Nextel and TowerCo.
In Stonegap Colliery Co., this Court considered an
abundance of extrinsic evidence. At issue was a claim by a
lessor that a lease of land for the purpose of mining coal
thereon impliedly prohibited the construction of housing
for miners on a part of the land unusable for mining
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purposes. The Court stated that it “appears from the
testimony of numerous coal operators . . . that it is usual
and customary for the lessee to have the possession,
control and use of the surface of the leased premises . . .
for all purposes,” including “tenement houses.” 115 Va. at
395-96, 79 S.E. at 343. The Court also stated that “the
action of the parties is significant as showing their
intention, and that the construction of the lease now
contended for by the [lessors] is not warranted.” Id. at
396, 79 S.E. at 343. The Court then proceeded to recite a
lengthy list of activities supporting the view that
construction of the housing for miners was a use intended
by the parties. Id. at 396-97, 79 S.E. at 343.
In Dart Drug Corp. v. Nicholakos, 221 Va. 989, 277
S.E.2d 155 (1981), we indicated that when a case involves
the construction of covenants requiring strict construction
and the provisions are ambiguous, “the intention of the
parties is the controlling factor” and extrinsic evidence
is admissible to discern that intention. Id. at 993, 277
S.E.2d at 157. In a number of other cases involving
ambiguous contractual provisions, we have approved the use
of extrinsic evidence to resolve the ambiguity.
12
As recently as this past January, in Ott v. L&J
Holdings, LLC, 275 Va. 182, 654 S.E.2d 902 (2008), we said
that “[w]hen a document is ambiguous, . . . the court will
look to parol evidence in order to determine the intent of
the parties.” Id. at 187, 654 S.E.2d at 905. In Prospect
Dev. Co. v. Bershader, 258 Va. 75, 515 S.E.2d 291 (1999),
we said that “‘where the writing on its face is ambiguous,
. . . parol evidence is always admissible . . . to
establish the real contract between the parties.’ ” Id. at
84, 515 S.E.2d at 296. And in Cascades North Venture Ltd.
P’ship v. PRC Inc., 249 Va. 574, 457 S.E.2d 370 (1995), we
said that “where the writing on its face is ambiguous,
. . . the court should receive extrinsic evidence to
ascertain the intention of the parties.” Id. at 579, 457
S.E.2d at 373. See also Video Zone, 267 Va. at 626, 594
S.E.2d at 924; Tuomala v. Regent University, 252 Va. 368,
374-75, 477 S.E.2d 501, 505 (1996); Georgiades v. Biggs,
197 Va. 630, 634, 90 S.E.2d 850, 854 (1956); Young v.
Schriner, 190 Va. 374, 379, 57 S.E.2d 33, 35 (1950);
Shockey v. Westcott, 189 Va. 381, 389, 53 S.E.2d 17, 20
(1949); Stewart-Warner Corp. v. Smithey, 163 Va. 476, 487,
175 S.E. 882, 886 (1934).
We hold that the trial court did not err in admitting
parol evidence. We will now consider that evidence,
13
viewing it in the light most favorable to the Saunders, who
prevailed at trial. Tuomala, 252 Va. at 375, 477 S.E.2d at
505.
The record shows that on some unspecified date, a
representative of Nextel approached the Saunders brothers
and told them that Nextel was interested in the mountain on
their property “because of its height for a
telecommunications tower.” (Emphasis added.) Later, over
a period of several months beginning in the summer or
autumn of 2003, the Saunders negotiated numerous times with
as many as five or six different representatives of Nextel.
A summary of the matters that the Saunders and
Nextel’s representatives negotiated is important for it is
indicative of their intentions at the time they signed the
lease agreement. Ultimately, Nextel presented the Saunders
with a draft of a lease agreement, included in the record
as Exhibit A. Ralph Saunders, with the agreement of his
brother, Roscoe, made numerous changes in the draft,
including in paragraph 18(a), which is now paragraph 17(a).
Originally, paragraph 18(a) provided in part that
“Lessee shall have the right, at Lessee’s sole cost and
expense, to erect and maintain on the Premises
improvements, personal property and facilities, including
14
without limitation, towers.” However, the Saunders struck
through the words “including without limitation,” struck
the “s” from the end of the word “towers,” and placed ”1-”
before the new word “tower.”
Roscoe Neal Saunders testified that these changes were
made because “we figured . . . it needed to be with
limitations,” and where on “the original it says towers
. . . we changed that over to one because negotiating on
one tower was all that Nextel was doing at that point . . .
one tower only . . . [o]ne tower was negotiated.” And,
significantly, when Roscoe Saunders was asked “how many
towers did Nextel represent to you was going to be built up
there,” he replied: “One only.” And he affirmed that Paul
Tobias, a Nextel representative, “said during the
negotiations that they were planning on building one tower
on the property.”
On cross-examination, Roscoe Saunders was asked
whether he had discussed with anyone on behalf of Nextel
concerning the possibility that Nextel would construct more
than one tower. He responded that there was not a
discussion but only a mention by a Nextel representative
that there “may be a possibility but he didn’t think so”
and “it was not discussed as a possibility of a contract.”
15
Later on, Nextel asked the Saunders to return the
“including without limitation” language to the lease
agreement. A Nextel representative explained that the
return was necessary to allow Nextel to upgrade its
equipment and “lease part of [its] tower to . . . someone
else,” and the removal of the language “would have stopped
[it] from doing so.” Accordingly, Roscoe Saunders
testified, “we put that back into the contract for that
reason.”
The Saunders then received from Nextel another draft
of the lease agreement, included in the record as Exhibit
B. This draft returned the “including without limitation”
language to the text of what then became paragraph 17(a),
but, significantly, Nextel included in paragraph 17(a) the
“one (1) tower” change the Saunders had made in Exhibit A.
As Ralph Saunders put it in his testimony, “they brought
[the draft] back with the one wrote in it.”
This draft became the final lease agreement without
further change. This agreement and a memorandum of
agreement were signed by the Saunders on July 2, 2004.
Before signing, they saw attached to the memorandum a
“blueprint drawing of one tower and its equipment.”
16
The Saunders learned in notices from Bedford County
dated March 3, 2006, that TowerCo had filed applications
for an amended special use permit to increase the height of
the existing tower from 80’ to 100’ and for a special use
permit to construct a second tower. Roscoe Saunders
attended the first hearing on the applications and opposed
the second tower but did not oppose increasing the height
of the existing tower.
The Saunders’ counsel also sent a letter to TowerCo
stating that his clients “do not want the obstruction of
another tower on the skyline or the additional burden on
the road.” Counsel concluded with the statement that if
TowerCo considered “another tower a necessity, it may be
that these issues could be addressed in negotiation.” No
negotiation ensued, and the Saunders filed their motion for
declaratory judgment.
In their case in chief, Nextel and TowerCo each called
only one witness. Nextel called Marsha Monique Fruit, its
project manager for southern Virginia and all of West
Virginia. However, Nextel does not mention Fruit’s name or
set forth any of her testimony in either its opening brief
or its reply brief. The same is true of the one witness
TowerCo called, its co-location manager, Martha Province,
17
whose job was to lease space on towers that TowerCo owned.
We must assume, therefore, that Nextel does not intend to
rely on Fruit’s testimony on appeal and that TowerCo does
not intend to rely on Province’s.
TowerCo did mention Fruit’s name in one of its briefs
and advanced an argument based upon her testimony. TowerCo
quoted Fruit as having testified that “the Lease contained
nothing to restrict the ‘use of the property at all . . .
in particular the number of towers’” and that “a one-tower
restriction would have caused her to flag the Lease as a
‘non-standard’ Lease.”
However, there is a problem with Fruit’s testimony.
The evidence showed that five or six Nextel representatives
negotiated with the Saunders, but Fruit admitted that she
did not “participate directly” in the negotiations with the
Saunders, and she did not claim that she was present during
any discussion between them and any other Nextel
representative.
Furthermore, Fruit denied ever having seen Exhibit A,
the draft of the lease agreement the Saunders returned to
Nextel “all marked-up,” and she disavowed knowing anything
about paragraph 18(a), now paragraph 17(a), “where it has
marked out towers and going into one tower.” Her testimony
18
was insufficient, therefore, to contradict the testimony of
the Saunders that they and Nextel’s representatives
negotiated for only one tower or to show that the change in
paragraph 17(a) from “towers” to “one (1) tower” did not
reflect the true intent of the parties.
In the end, under cross-examination, all Fruit could
say was she knew that anything in the lease agreement
limiting the number of towers would be “non-standard.” But
this is beside the point. The point is that, standard or
not, Nextel kept the “one (1) tower” provision in Exhibit
B, the final version that it prepared of the lease
agreement and that was signed by the parties.
Finally, we must address a contention made by TowerCo
that “[a]t best, the evidence at trial points only to what
was in Lessors’ heads contrary to both Nextel’s
understanding and the language of the Lease, which
represents what the parties bargained for and agreed to.”
However, there is the evidence of Nextel’s first contact
with the Saunders, when its representative told them Nextel
was interested in their mountain for “a,” meaning one,
“tower,” there is the evidence that the Saunders and
Nextel’s representatives negotiated for only one tower, and
there is the evidence of the representation made by a
19
Nextel representative that only one tower would be built,
all uncontradicted and all showing what was in the “heads”
not only of the lessors but of the lessee’s personnel as
well. It is this evidence, coupled with the evidence of
Nextel’s retention of the “one (1) tower” language in the
lease agreement, that truly “represents what the parties
bargained for and agreed to.”
We hold that the circuit court did not err in denying
the motions for summary judgment and in holding that the
lease agreement “permits the construction of one
communication tower, and only one communication tower.”
Accordingly, we will affirm the circuit court’s judgment.
Affirmed.
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