Davison v. FastComm Communications, Inc.

46 Va. Cir. 25, 1998 Va. Cir. LEXIS 264
CourtFairfax County Circuit Court
DecidedApril 30, 1998
DocketCase No. L159733
StatusPublished

This text of 46 Va. Cir. 25 (Davison v. FastComm Communications, Inc.) is published on Counsel Stack Legal Research, covering Fairfax County Circuit Court primary law. Counsel Stack provides free access to over 12 million legal documents including statutes, case law, regulations, and constitutions.

Bluebook
Davison v. FastComm Communications, Inc., 46 Va. Cir. 25, 1998 Va. Cir. LEXIS 264 (Va. Super. Ct. 1998).

Opinion

By Judge Stanley P. Klein

This cause is before the court on defendant FastComm Communications, Inc.’s (“FastComm”), Motion to Set Aside the Verdict and to Enter Judgment for Defendant or in the alternative to Order a New Trial. Specifically, FastComm asserts that the jury’s verdict in plaintiff Gary H. Davison’s favor was not supported by the evidence and should be set aside as a matter of law. Based on the arguments of the parties, the relevant authorities, and the evidence adduced at trial, the Court agrees with FastComm in part and the jury’s verdict will be set aside, but only with respect to Davison’s bonuses claim.

I. Background

On a motion to set aside the verdict, a trial court is required to view the evidence in the light most favorable to the prevailing party. Graves v. National Cellulose Corp., 226 Va. 164, 169-70 (1983). Consistent with that principle, the Court will summarize the relevant evidence at trial.

This dispute arises from Davison’s employment tenure with FastComm as a high-level executive and member of the company’s board of directors. In June 1994, Davison was hired as Senior Vice President and Chief Operating Officer of FastComm by Peter Madsen, the corporation’s President and Chief Executive Officer. As part of Davison’s proposed compensation package, Madsen initially agreed to confer certain stock options, along with a base ¡salary and other incentives. Madsen and Davison also orally agreed to a bonus [26]*26plan, whereby Davison was to receive an unconditional $25,000 quarterly bonus. The basic proposed terms of employment were written by Madsen on a napkin or business card during a luncheon meeting. Madsen’s notes were then passed on to the Human Resources department at FastComm so that an appropriate written offer could be drafted. On April 28, 1994, Madsen signed and presented to Davison a letter setting forth the proposed terms of employment for Davison with FastComm (the “Contract”). The Contract provided, inter alia, that “During the first 30 days [of Davison’s employment], we will jointly develop an incentive bonus plan based on performance milestones.”

Between April 28, 1994, and June 6, 1994, the parties had numerous discussions about the wording of the Contract. Davison refused to commence his employment with FastComm until the parties reached agreement on each of the terms of the Contract. During those discussions, Madsen assured Davison that the bonuses provision of the Contract was consistent with the terms upon which they had previously agreed. On June 6, 1994, Davison signed the Contract and commenced his employment with FastComm. Over the ensuing months, Davison and Madsen discussed potential “performance milestones,” but no agreement on any such milestone was reached. No bonuses were paid to Davison until March 6, 1995, when he received a $25,000 bonus. This bonus was not described as a quarterly bonus, nor was it linked to any performance milestone as it was paid during FastComm’s worst financial quarter of Davison’s employment tenure. Davison’s employment was terminated by FastComm in October 1995. No other bonuses were paid to Davison during his employment with FastComm.

Davison filed a Motion for Judgment against FastComm on March 13, 1997, alleging, inter alia breach of contract for FastComm’s failure to confer each of the $25,000 quarterly bonuses discussed between Davison and Madsen.1 Davison also asserted a claim for breach of contract based on FastComm’s denial of certain stock options to which Davison was allegedly entitled pursuant to the parties’ employment agreement. In February 1998, a multi-day jury trial was held. Both sides presented evidence concerning the bonuses plan, and the discussions between Madsen and Davison which took place prior to the execution of the Contract were admitted without objection. At the conclusion of trial, the jury found in favor of Davison on both the stock options and bonuses claims. FastComm then filed the instant motion. After considering the arguments of the parties presented orally and in writing, the [27]*27court denied FastComm’s motion with respect to the stock options claim and took the issue of the bonuses claim under advisement.

II. The Parol Evidence Rule

The parol evidence rule is a basic principle of contract law, which provides that prior or contemporaneous negotiations or stipulations are not admissible to vary or contradict the terms of a complete and unambiguous2 written instrument. See, Amos v. Coffey, 228 Va. 88, 91-92 (1984); McComb v. McComb, 226 Va. 271, 274 (1983); 2 Charles E. Friend, Law of Evidence in Va. § 20-1 (4th ed. 1993). The parol evidence rule applies to both oral and written prior or contemporaneous stipulations. Id. § 20-1. Where a writing is clear and complete on its face, it is considered the whole contract between the parties, and no additional evidence will be allowed to construe the agreement. Durham v. National Pool Equipment Co., 205 Va. 441, 446-47 (1964); Coffey, 228 Va. at 92. The Virginia Supreme Court, however, has recognized certain exceptions to the rule. Under the “partial integration doctrine,” parol evidence may be admissible to show additional terms “not inconsistent with or contrary to” the writing, if the contract does not embody all prior or contemporaneous negotiations. Durham, 205 Va. at 447. Such terms must be “independent of and in addition to the written terms so that no merger has taken place.” Id. In addition, pursuant to the “collateral contract doctrine,” parol proof is admissible to establish a “prior or contemporaneous oral agreement that is independent of, collateral to and not inconsistent with the written contract, and which would not ordinarily be expected to be embodied in the writing.” Pierce v. Plogger 223 Va. 116, 119 (1982) (quoting High Knob, Inc. v. Allen, 205 Va. 503, 506-07 (1964)).

Although the parol evidence rule is commonly referred to and discussed in treatises on evidence, it is a principle of substantive contract law, not a rule of evidence. Zehler v. E. L. Bruce Co., 208 Va. 796, 797, n.2 (1968); Whitt v. Godwin, 205 Va. 797, 802 (1965); 2 Charles E. Friend, Law of Evidence in Va. § 20-1 (4th ed. 1993). Hence, where the parol evidence rule is applicable, parol evidence should not be considered on a proper post-trial motion to the court, even where it was admitted during trial without objection. Zehler, 208 Va. at 797, n. 2; Whitt, 205 Va. at 802.

[28]*28FastComm argues that the Contract is a clear and unambiguous recitation of the parties’ agreement on the bonuses issue. As such, FastComm asserts that under the parol evidence rule, any evidence of prior or contemporaneous discussions or stipulations, in writing or otherwise, cannot be considered by the Court for purposes of adjudicating the present motion, even though-such evidence was admitted at trial without objection. Even if the Court were to conclude that the Contract is incomplete or ambiguous, FastComm further contends that the Court, under Virginia law, cannot consider parol- evidence which is inconsistent with or contrary to the terms of the Contract. FastComm asserts that the alleged discussions between Madsen and Davison concerning an unconditional $25,000 per quarter bonus are inconsistent with and contrary to the plain language of the Contract.

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Bluebook (online)
46 Va. Cir. 25, 1998 Va. Cir. LEXIS 264, Counsel Stack Legal Research, https://law.counselstack.com/opinion/davison-v-fastcomm-communications-inc-vaccfairfax-1998.