Zoby v. American Fidelity Co.

137 F. Supp. 38, 1955 U.S. Dist. LEXIS 2280
CourtDistrict Court, E.D. Virginia
DecidedDecember 28, 1955
DocketCiv. A. No. 1858
StatusPublished
Cited by6 cases

This text of 137 F. Supp. 38 (Zoby v. American Fidelity Co.) is published on Counsel Stack Legal Research, covering District Court, E.D. Virginia primary law. Counsel Stack provides free access to over 12 million legal documents including statutes, case law, regulations, and constitutions.

Bluebook
Zoby v. American Fidelity Co., 137 F. Supp. 38, 1955 U.S. Dist. LEXIS 2280 (E.D. Va. 1955).

Opinion

HOFFMAN, District Judge.

On October 8, 1954, plaintiff instituted this action against the defendant, American Fidelity Company, seeking damages for the breach of an alleged contract. The Regent Contracting Company, Inc. (hereinafter called Regent), had been awarded a contract by the United States Government (hereinafter referred to as the Navy) for the construction of a steam generator plant at the Naval Air Station, Oceana, Virginia. The named defendant, together with the New Hampshire Fire Insurance Company, executed as surety the customary payment and performance bond. Regent defaulted and the Navy called upon the surety. The matter was referred by the bonding company to one Alexander M. Heron, an attorney representing the American Fidelity Company and New Hampshire Fire Insurance Company (hereinafter respectively referred to as American and New Hampshire). The present status of the case turns on defendant’s motion for summary judgment and plaintiff’s motion to file an amended complaint alleging wrongful interference' on the part of Heron (as agent for American and New Hampshire) and seeking to make New Hampshire and Heron parties defendant. Plaintiff resists the motion for summary judgment and defendant has interposed a timely objection to plaintiff’s motion to amend in which plaintiff seeks to name additional parties defendant and, in effect, while not abandoning the cause of action on contract, now alleges a cause of action sounding in tort for wrongful interference with plaintiff’s entering into the contract with the Navy. Plaintiff’s motion was filed on September 7, 1955 — one week prior to the oral argument on the motion for summary judgment — and more than one year following the date the cause of action arose on or about August 20, 1954.

Certain discovery depositions and exhibits were filed with the Court and, pursuant to statements of counsel, are to be considered for the purpose of aiding the Court in arriving at its conclusions.

As to the original complaint and such portion of the amended complaint as alleges a binding contract with American, Heron, or New Hampshire, it is clear that the motion for summary judgment must be granted. It is a fundamental rule of law in Virginia that a [40]*40plaintiff’s case can rise no higher than is shown by his own testimony when the facts are within his knowledge. Massie v. Firmstone, 134 Va. 450, 114 S.E. 652; South Hill Motor Co. v. Gordon, 172 Va. 193, 200 S.E. 637; Chappell v. White, 182 Va. 625, 29 S.E.2d 858. While the sixth paragraph of the amended complaint alleges in substance that American and New Hampshire, acting through Heron, agreed with the Navy that work on the defaulted contract would be completed by a contractor chosen by American and New Hampshire, the evidence conclusively establishes that the contractual obligation was to be entered into by the Navy and not by the bonding companies. Plaintiff testified in discovery proceedings long prior to the filing of his motion to file an amended complaint. He is now bound by his admissions which clearly reveal that, irrespective of Heron’s statements, plaintiff knew his contractual obligations would be with the Navy.

Plaintiff responded to an invitation for bids to complete the work of Regent and, on August 18, 1954, submitted a bid in the sum of $268,783, which bid, at the time, appeared to be low. Heron obviously intimated that plaintiff was to be “given the job” and plaintiff immediately proceeded to place a watchman in charge, as well as to enter into certain other preliminaries, all of which would have been required if plaintiff had entered into a binding contract. The difficulty with plaintiff’s position is that he expressly concedes that Heron had previously advised him the Navy would be the sole contracting party. There is no suggestion that Heron was authorized by the Navy to close any contract, and the testimony points out that the Navy would consider the ability of the contractor, the time limit allocated for performance, the necessary payment and performance bond, and other factors, before entering into a contract with plaintiff or any other contractor.

There is evidence that, after Heron’s suggestion that plaintiff “had the job”, another contractor submitted a bid which was apparently less than plaintiff’s bid. It is not essential to consider this phase of the case in light of the Court’s views expressed herein. It is sufficient to state that plaintiff thereafter proposed a $5,000 reduction in his bid, and later made a fiat bid of $258,000. Defendant urges that the submission of the lower bids was tantamount to a withdrawal of the highest bid. If there was no meeting of the minds between the contracting parties, that is, those parties who were intended to be such, then the subsequent offers to reduce the bids become immaterial, although they do tend to confirm plaintiff’s understanding that the highest bid had not been accepted. Between the time plaintiff volunteered to reduce his bid by $5,000, Heron recommended to the Navy that the bid of Coe Construction Company in the sum of $261,000 be accepted, and the Navy proceeded accordingly.

Irrespective of the representations of Heron and the “contended” unethical practices, the alleged contract was never entered into. Plaintiff’s right to proceed on his claim for a breach of contract must stop at this stage of the proceedings. Without a valid contract there can be no breach thereof. This principle does not, however, preclude plaintiff’s right to establish with sufficient clearness that, but for the alleged wrongful interference of Heron, the Navy would have entered into the contract with plaintiff. This brings into focus the plaintiff’s motion to proceed on this latter ground, the right to add New Hampshire and Heron as parties defendant, and the pertinent question of the statute of limitations.

By letter dated August 18, 1954, Heron recommended to the Navy that plaintiff be awarded the contract in the sum of $268,783. The letter was signed by Heron as “attorney for American Fidelity Co. and Manchester Fire Insurance Co.” Actually there is no such company as “Manchester Fire Insurance Co.”; the error being explained as that of the typist in view of the fact that New Hamp[41]*41shire's home office is in Manchester, New Hampshire. The answer of American to the original complaint alleges that this defendant assumed one-eighth of the risk on the Regent bond — obviously the remaining seven-eighths must have been assumed by other companies. Defendant contends that plaintiff has failed to use due diligence in ascertaining the interest of New Hampshire and, in the exercise of the Court’s discretion, permission to amend should not now be granted. Disagreeing with defendant, the Court does not believe that permission to amend should be denied. It is apparent that Heron’s representations to plaintiff were confined to American, and plaintiff’s original letter submitting his bid of $268,783 tends to confirm this fact. While American’s answer was filed on November 2, 1954, approximately 20 days after process was served, thereafter followed a series of motions pursuant to Rule 34 of the Federal Rules of Civil Procedure, 28 U.S.C.A., interrogatories, objections to motions, etc. It will be noted that, in an affidavit filed by Heron on December 9, 1954, it was represented by Heron that he was employed by American and no mention is made of New Hampshire.

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Bluebook (online)
137 F. Supp. 38, 1955 U.S. Dist. LEXIS 2280, Counsel Stack Legal Research, https://law.counselstack.com/opinion/zoby-v-american-fidelity-co-vaed-1955.