Musselman v. Glass Works, L.L.C.

Present:    All the Justices

PEGGY A. MUSSELMAN, EXECUTOR OF THE
ESTATE OF ROBERT C. YOUNG, ET AL.

v.   Record No. 992887  OPINION BY JUSTICE BARBARA MILANO KEENAN
                                       September 15, 2000
THE GLASS WORKS, L.L.C., ET AL.

            FROM THE CIRCUIT COURT OF THE CITY OF ROANOKE
                    Robert P. Doherty, Jr., Judge


      In this appeal, we consider the issue whether the death of

a party to a non-competition agreement, which was executed as

part of the sale of a business, relieved the purchaser of the

business of its obligation to make payments under the agreement.

      The facts in this case are undisputed.    In July 1995, The

Glass Works, L.L.C. (Glass Works) entered into an Asset Purchase

Agreement (the purchase agreement) with B & L Auto Glass &

Mirror, Inc. (B & L Auto) and its principals, Robert C. Young,

Peggy A. Musselman, and Marian L. Gray (collectively, the

sellers).   Under the purchase agreement, Glass Works purchased

from the sellers, among other things, the inventory, equipment,

and business name of B & L Auto in Roanoke. *

      In paragraph 2 of the purchase agreement, Glass Works

agreed to pay B & L Auto a total purchase price of $515,000.    As

provided in that paragraph, the purchase price was payable as

follows: $1,000 deposit, $114,000 cash at closing, $340,000 in
the form of a secured promissory note to the sellers, and a

total of $60,000 in payments to Young, Musselman, and Gray under

three non-competition agreements.

     The non-competition agreements were executed at the same

time as the purchase agreement.   Young agreed in his non-

competition agreement with Glass Works (the non-competition

agreement) not to engage for five years in any business similar

to that of B & L Auto as an owner, shareholder, employee, or

consultant within a 100-mile radius of Roanoke.   The non-

competition agreement provided that "in consideration of

[Young's] agreements," Glass Works would pay Young $615 per

month for 60 months, for a total payment of $36,900.   The

principals of Glass Works, Lury W. Goodall, Jr., Charles C.

Nimmo, and Michael E. Puckett, also executed a Guarantee

Agreement, personally guaranteeing Glass Works' obligations

under the purchase agreement, the promissory note, and the non-

competition agreements.

     After its purchase of the business in July 1995, Glass

Works began making the monthly payments to Young under the non-

competition agreement.    When Young died on April 18, 1998, Glass

Works stopped making the payments.    Musselman qualified as

executor of Young's estate and filed this breach of contract


     *
      After the sale, B & L Auto Glass & Mirror, Inc. changed its
corporate name to Bobs, Inc.

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action against Glass Works, Goodall, Nimmo, and Puckett

(collectively, the defendants), seeking recovery of the amounts

allegedly due Young's estate under the non-competition

agreement.

     Musselman alleged in her motion for judgment that the

amount due under the non-competition agreement was "part of the

purchase price" for B & L Auto and, thus, did not abate when

Young died.   She also alleged that B & L Auto agreed to

"separate the value for the Non-Competition Agreement out of the

principal balance of the [promissory] note . . . to allow [Glass

Works], at its request, to report a lower 'notes payable' for

credit reporting purposes."

     The parties submitted the case to the trial court on

stipulated evidence.   The trial court ruled that the purchase

agreement was ambiguous because its initial declaration, that

the purchase price was consideration for the sale of the

specified business assets, conflicted with the purchase

agreement's later recitation that the purchase price included

consideration for the non-competition agreements.   The trial

court concluded from this language that the parties intended

"separate contracts and separate consideration for the non-

competition agreements."   The trial court held that the non-

competition agreement was a personal service contract that

terminated on Young's death, and that no further payments were


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due under the agreement.   The court entered final judgment in

favor of the defendants.

     On appeal, Musselman argues that the payments due under the

non-competition agreement were an integral part of the purchase

price of B & L Auto's assets, which effectively represented

payment for the good will of the business, and did not

constitute consideration for a separate personal service

contract.   She asserts that Glass Works should not receive a

lesser price for the business simply because Young agreed to

accept monthly payments under the non-competition agreement

rather than a lump sum payment.   Musselman also contends that

since the non-competition agreement did not require Young to

provide any personal service to Glass Works, but simply required

him to refrain from competing with Glass Works, the agreement

did not constitute a personal service contract that terminated

on his death.

     In response, the defendants contend that the non-

competition agreement was a separate, personal service contract

that required Glass Works to make payments only to Young, rather

than to B & L Auto, and that Young's death prevented him from

fully performing the contract.    The defendants also assert that

Young's estate is not entitled to further payment under the non-

competition agreement because that agreement did not obligate




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Glass Works to continue making payments in the event of Young's

death.    We disagree with the defendants' arguments.

       When a business transaction is based on more than one

document executed by the parties, we will construe the documents

together to determine the intent of the parties.       First Am. Bank

of Va. v. J.S.C. Concrete Constr., Inc., 259 Va. 60, 67, 523

S.E.2d 496, 500 (2000); Daugherty v. Diment, 238 Va. 520, 524,

385 S.E.2d 572, 574 (1989); American Realty Trust v. Chase

Manhattan Bank, 222 Va. 392, 403, 281 S.E.2d 825, 830 (1981).

In ascertaining the parties' intent, we consider the plain

meaning of the language the parties used in the documents.

Pollard & Bagby, Inc. v. Pierce Arrow, L.L.C., 258 Va. 524, 528,

521 S.E.2d 761, 763 (1999); Waynesboro Village, L.L.C. v. BMC

Properties, 255 Va. 75, 79-80, 496 S.E.2d 64, 67 (1998).

       When the terms of the parties' documents are clear and

unambiguous, the interpretation of those terms presents a

question of law.     Pollard & Bagby, 258 Va. at 528, 521 S.E.2d at

763; Gordonsville Energy, L.P. v. Virginia Elec. & Power Co.,

257 Va. 344, 352-53, 512 S.E.2d 811, 816 (1999).      The issue

whether particular documents are ambiguous is also a question of

law.     Pollard & Bagby, 258 Va. at 528, 521 S.E.2d at 763;

Donnelly v. Donatelli & Klein, Inc., 258 Va. 171, 180, 519

S.E.2d 133, 138 (1999); Tuomala v. Regent Univ., 252 Va. 368,

374, 477 S.E.2d 501, 505 (1996).       Thus, on appeal, we are not


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bound by the trial court's resolution of these questions of law,

and we are afforded the same opportunity as the trial court to

consider the terms of the documents at issue.   Pollard & Bagby,

Inc., 258 Va. at 528, 521 S.E.2d at 763; Donnelly, 258 Va. at

180, 519 S.E.2d at 138; Gordonsville Energy, L.P., 257 Va. at

352-53, 512 S.E.2d at 816.

     We conclude that the purchase agreement and the non-

competition agreement are unambiguous, and that their terms

formed an integrated business transaction in which the various

non-competition agreements effectively represented a purchase of

the business good will of B & L Auto.   The language of the

purchase agreement demonstrates the integrated nature of the

purchase transaction by stating that the sum due under the three

non-competition agreements was part of the purchase price of the

business, B & L Auto.   Glass Works' payment of $60,000 for the

three non-competition agreements was referred to specifically as

part of "the purchase price for all of the property referred to

in Paragraph 1."   In that paragraph, which is entitled "Sale of

Business," the property purchased included all "inventory,

equipment, supplies, appliances, vehicles and office furniture

owned by [B & L Auto] and used in [its] business."

     Our conclusion that the non-competition agreement was an

integrated part of the purchase transaction, rather than a

separate, personal service contract, also is supported by the


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terms of the non-competition agreement.   Those terms did not

require Young to perform any affirmative duties or services for

Glass Works after it purchased B & L Auto.   Thus, the agreement

entered into by Glass Works and Young manifested only their

intent to benefit Glass Works in its purchase of the business,

and not to benefit Glass Works in obtaining Young's expertise or

skill in the performance of personal services related to the

conduct of the business.

     We find no merit in the defendants' argument that Glass

Works is not obligated to continue performing its duties under

the non-competition agreement because the agreement does not

state that Glass Works' duty to make payments under the

agreement would continue in the event of Young's death.    Since

the non-competition agreement represented part of the purchase

price of the business, Glass Works' payments under the non-

competition agreement remain due as part of that purchase, which

was fully executed and was not conditioned on Young's survival

for any period of time.    If Glass Works had intended to be

excused on Young's death from its duty to pay this particular

part of the purchase price for B & L Auto, Glass Works should

have inserted a provision to this effect in the purchase

agreement.   We will not, by construction, insert a term in a

contract that the parties to the contract omitted.    Lansdowne

Dev. Co. v. Xerox Realty Corp., 257 Va. 392, 400, 514 S.E.2d


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157, 161 (1999); Hutter v. Heilmann, 252 Va. 227, 231, 475

S.E.2d 267, 270 (1996); Bridgestone/Firestone, Inc. v. Prince

William Square Assocs., 250 Va. 402, 407, 463 S.E.2d 661, 664

(1995).

     Glass Works' argument that Young's death prevented him from

performing his duty of forbearance from competition does not

alter this result.   It is self-evident that Young's death did

not constitute a breach of his agreement to refrain from

competition with B & L Auto and did not deprive Glass Works of

the benefit of its bargain.

     For these reasons, we will reverse the trial court's

judgment and remand the case to the trial court for entry of

judgment in favor of Musselman, as executor of Young's estate,

for the remaining amount due under the non-competition

agreement.

                                            Reversed and remanded.




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