Pais v. Automation Products, Inc.

36 Va. Cir. 230, 1995 Va. Cir. LEXIS 1193
CourtNewport News County Circuit Court
DecidedApril 17, 1995
DocketCase No. (Chancery) 25273-RF
StatusPublished
Cited by13 cases

This text of 36 Va. Cir. 230 (Pais v. Automation Products, Inc.) is published on Counsel Stack Legal Research, covering Newport News County Circuit Court primary law. Counsel Stack provides free access to over 12 million legal documents including statutes, case law, regulations, and constitutions.

Bluebook
Pais v. Automation Products, Inc., 36 Va. Cir. 230, 1995 Va. Cir. LEXIS 1193 (Va. Super. Ct. 1995).

Opinion

By Judge Robert P. Frank

In September of 1993, Elwood A. Pais filed a Motion for Declaratory Judgment against Automation Products, Inc., t/a API Business Furniture, (“API”) asserting that the restrictive covenants contained in the Employment Agreement were invalid and unenforceable because (1) API had generally released and covenanted not to sue upon them; (2) the covenants as a matter of law were overbroad and unreasonable; and (3) the covenants could not properly be invoked by non-renewal of employment but instead required termination. Mr. Pais presently seeks summary judgment on these same issues.

In March of 1994, API filed a Bill of Complaint against Mr. Pais requesting injunctive relief for breach of the restrictive covenants contained in the Employment Agreement. In addition, API seeks liquidated damages of $50,000.00 under Paragraph 5 of the Employment Agreement. Third, die Bill of Complaint alleges breaches of both common law and fiduciary duties by Mr. Pais. Lastly, API asserts a breach of the Trade Secrets Act by the willful and malicious misappropriation of trade secrets.

I. Parol Evidence

At the time of the hearing, this Court reserved ruling on the underlying issue of parol evidence as it pertained to the Separation Agreement Counsel for API argued that such evidence was admissible under the partial integration and mutual mistake exceptions to the parol evidence rule. Mr. [231]*231Pais, however, contends that die Separation Agreement is complete on its face, and thus, parol testimony is inadmissible.

The parol evidence rule states that “extrinsic evidence will be excluded when offered to add to, subtract from, vary, or contradict the terms of a written contract” High Knob, Inc. v. Allen, 205 Va. 503, 506 (1964). Phrased another way, “evidence of prior or contemporaneous oral negotiations is generally inadmissible to alter, contradict, or explain the terms of a written instrument provided the document is complete, unambiguous, and unconditional.” Renner Plumbing, Heating & Air Conditioning v. Renner, 225 Va. 508, 516 (1983). Therefore, “when die parties set out the terms of their agreement in a clear and explicit writing, the document is the sole memorial of the contract and die sole evidence of the agreement.” Id.

There are, however, several well-recognized exceptions to the parol evidence rule. The doctrine of partial integration, for example, provides that “where the entire agreement has not been reduced to writing, parol evidence is admissible, not to contradict or vary its terms but to show additional independent facts contemporaneously agreed upon, in order to establish the entire contract between the parties.” Renner Plumbing at 515-16. Another exception, which arises on proof of the mutual mistake of die parties, states that “equity should give effect to the true intent of the parties, despite a contrary intent reflected by a writing the parties mistakenly believed to monument their bargain.” Gibbs v. Price, 207 Va. 448, 449-50 (1966).

While API asserts that the parol evidence is admissible under the doctrines of partial integration and mutual mistake, it does not contend that the Separation Agreement is unambiguous or incomplete on its face. Rather, API relies on the testimony of Mr. Barry as well as the numerous drafts of the Separation Agreement to demonstrate that the agreement was neither reduced completely to writing nor reflective of the parties’ true intentions. According to API’s parol evidence, the parties agreed that the Separation Agreement neither confirmed nor refuted the existence of the non-compete clause in the Employment Agreement and that the parties would be left to litigate that issue another day.

hi order for the partial integration doctrine to apply, however, the writing must be incomplete or unambiguous on its face, without assistance from the parol evidence. The law is clear that a court may not, where the contract language is clear, invite or accept the submission of extrinsic evidence, find ambiguity in the contractual text based upon that evidence, [232]*232and then resolve the found ambiguity by resorting to that same extrinsic evidence. Amos v. Coffey, 228 Va. 88, 93, (1984). Therefore, when the writing “upon its face is without any uncertainty as to the object or extent of the engagement, it is conclusively presumed that the whole engagement of the parties and the extent and manner of their undertaking was reduced to writing.” Adams v. Seymour, 191 Va. 372, 383 (1950).

Here, the Separation Agreement is plain, complete, and unambiguous on its face such that parol evidence is inadmissible under the partial integration doctrine. Paragraph 8B of the Separation Agreement clearly states that API:

releases, covenants not to sue, and holds harmless Pais, his heirs and assigns, of and from all manner of action and actions, caused and causes of action, suits, debts, sums of money, accounts, covenants, contracts, agreements, promises, damages, claims, and demands of every kind or character whatsoever, whether presently known or unknown, suspected or unsuspected, under state or federal laws, which API now has against Pais, his heirs, and assigns.

This provision by Mr. Barry’s own admission is a mirror image of Paragraph 8A which is intended as a general release of liability for API as against its employees. The language is clear and certain, and therefore, the parol evidence is inadmissible.

Furthermore, it should be noted that API’s parol evidence is not admissible under the partial integration doctrine for it attempts to alter the terms of the Separation Agreement. The partial integration doctrine is available “not to contradict or vary [the] terms [of the agreement] but to show additional independent facts contemporaneously agreed upon.” Renner at 516. Thus, API may not admit evidence to show that the release was intended to exclude the noncompete covenants because such testimony directly conflicts with the language of the agreement.

API also asserts that parol evidence is admissible to show mistake, namely that the parties intended the release to be prospective only and not to address the Employment Agreement. The defense of mistake, however, only applies to errors of fact and not law. In addition, in order for parol evidence to be admissible to demonstrate mistake, the mistake must be common to both contracting parties; “parol evidence is never competent to show merely what one of the parties thought.” Fox-Sadler Co. v. Norris Roofing Co., 229 Va. 106, 110 (1985).

[233]*233la the present case, the only error claimed by API is that the release was intended to be prospective and not to address the Employment Agreement Thus, the parties allegedly misunderstood the legal consequences and not some underlying factual presumption. As a result, relief will not be granted because the parties, operating with knowledge of all material facts, entered into the agreement only under a mutual mistake of law. Piedmont Trust Bank v. Aetna Cas. & Sur. Co., 210 Va. 396, 401 (1969).

Second, the evidence only shows mistake on the part of API in its drafting. While Mr. Barry may have erred because “I was not thinking in terms of die noncompete survivability” and “I did not focus on die specific individual terms,” (Transcript pp. 51-2), the evidence is clear that Mir. Pais did not make the same mistake, hi fact, Mr.

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Cite This Page — Counsel Stack

Bluebook (online)
36 Va. Cir. 230, 1995 Va. Cir. LEXIS 1193, Counsel Stack Legal Research, https://law.counselstack.com/opinion/pais-v-automation-products-inc-vaccnewportnew-1995.