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POLLARD & BAGBY v. PIERCE ARROW, et al.



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POLLARD & BAGBY

v.

PIERCE ARROW, et al.


November 5, 1999

Record No. 990137

POLLARD & BAGBY, INC.

v.

PIERCE ARROW, L.L.C., III, ET AL.

FROM THE CIRCUIT COURT OF THE CITY OF RICHMOND

Theodore J. Markow, Judge

Present: All the Justices

OPINION BY JUSTICE BARBARA MILANO KEENAN


In this appeal, we determine whether the new
owner of an apartment building is obligated by contract to pay
commissions to the agent who procured tenants for the former
owner, for as long as those tenants continue to reside in the
leased premises.

The following facts are not in dispute. Pollard
& Bagby, Inc. (Pollard) acted as the leasing agent for
Willard R. Simmons, the former owner of an apartment building
located on Stuart Avenue in Richmond (the property). As Simmons’s
agent, Pollard procured tenants for the property. Simmons,
Pollard, and each tenant procured by Pollard entered into a
written lease agreement. Each lease was identical in form and
contained the following provisions in Paragraph 15(A):

Lessor [Simmons] has agreed and does
hereby agree that in consideration of Agent’s [Pollard's] services rendered in procuring this Lease, Lessor will
pay to Agent a commission of 6% . . . per month
of the rental received from Lessee during the term of
this lease and during any renewal and extension thereof
or during the term of any new lease, or by the holding
over of the Lessee with the Lessor’s permission
respecting the premises between Lessor and Lessee. No
sale, transfer or assignment by Lessor shall affect
Agent’s right to receive commissions, provided that in
the event Lessor sells the premises, then upon Lessor’s
furnishing Agent with an agreement signed by the
purchaser assuming Lessor’s obligation to the Agent under
this Lease, Agent will release the original Lessor from
any further obligation to Agent hereunder.

In June 1996, Simmons sold the property to
Pierce Arrow, L.L.C., III (Pierce).
[1] Simmons did not obtain from Pollard a release from
further obligations under the leases, as permitted by Paragraph
15(A). After Pierce acquired the property, it retained the
services of a different leasing agent, but continued to pay the
commissions required under Paragraph 15(A) to Pollard until the
term of each existing lease expired. As each lease expired,
Pierce entered into a new lease with the same tenant and stopped
paying commissions to Pollard on the rent paid by that tenant
under the new lease.

Pollard filed a declaratory judgment action
against Pierce and Simmons, seeking a declaration that under the
terms of the leases, Pollard is entitled to continue to receive
commissions on rents paid by any tenant of the property who
initially was procured by Pollard. Pierce and Simmons alleged in
defense that their obligation to pay commissions to Pollard under
each lease ended when that tenant’s lease with Simmons expired
and the tenant entered into a new lease with Pierce.

The parties stipulated to the relevant facts
and filed cross motions for summary judgment. After determining
that there were no disputed issues of fact, the trial court ruled
that the obligation to pay commissions "applies only to
leases between a tenant procured by [Pollard] and Mr.
Simmons." The court held that the term "new lease"
as used in Paragraph 15(A) did not include leases executed
between the tenant and a new lessor, and that "[t]he
provision for ‘new leases’ is limited to those new leases that
are signed by the lessee and Mr. Simmons." The court
concluded that the "contract does not entitle [Pollard] to
any commissions on leases where Mr. Simmons is not the
lessor." The court granted summary judgment in favor of
Pierce and Simmons. We awarded Pollard this appeal.

Pollard argues that Simmons assigned the leases
to Pierce and, thus, that Pierce "stepped into the
shoes" of Simmons and acquired Simmons’s rights, duties, and
obligations under the leases. Pollard contends that the trial
court erred in granting summary judgment to Pierce since the
plain terms of Paragraph 15(A) extend the lessor’s obligation to
pay commissions to Pollard to "new leases" executed by
tenants procured by Pollard. Pollard further asserts that
Simmons, as assignor, remains jointly liable for payment of the
commissions since Simmons did not obtain a release from Pierce as
permitted by Paragraph 15(A).

In response, Pierce and Simmons contend that
the plain terms of the leases do not grant Pollard the right to
continue to receive commissions after a new owner of the property
executes a new lease with an existing tenant. In the alternative,
they argue that the lease provisions are ambiguous and,
therefore, must be construed against the drafter, Pollard, and in
favor of Pierce and Simmons.

We begin our analysis by noting that the trial
court held that there was an assignment of the leases from
Simmons to Pierce when Simmons conveyed the property.
[2]
Since Pierce and Simmons have not
asserted cross-error to this ruling, it became the law of the
case and is not before us in this appeal. See Hill v.
Hill
, 227 Va. 569, 578, 318 S.E.2d 292, 297 (1984); Twin
Lakes Mfg. Co. v. Coffey
, 222 Va. 467, 474, 281 S.E.2d 864,
867 (1981); Searles v. Gordon, 156 Va. 289, 294, 157
S.E.2d 759, 761 (1931).

It is well settled that an assignee of a
contract obtains his rights from the assignor and, thus,
"stands in the shoes" of the assignor and acquires the
same rights and liabilities as if he had been an original party
to the contract. See Union Recovery Ltd. Partnership v.
Horton
, 252 Va. 418, 423, 477 S.E.2d 521, 523 (1996); Fidelity
& Cas. Co. of N.Y. v. First Nat’l Exchange Bank of Va.
,
213 Va. 531, 538, 193 S.E.2d 678, 684 (1973); National Bank
& Trust Co. at Charlottesville v. Castle
, 196 Va. 686,
692-93, 85 S.E.2d 228, 232 (1955). Therefore, under the
assignment from Simmons, Pierce acquired the rights and
liabilities of the lessor as set forth in the leases at issue.

In determining the extent of the lessor’s duty
to pay commissions under the leases, we consider the plain
meaning of the language employed in the contract. See Waynesboro
Village, L.L.C. v. BMC Properties
, 255 Va. 75, 79-80, 496
S.E.2d 64, 67 (1998); Chawla v. BurgerBusters, Inc., 255
Va. 616, 620, 499 S.E.2d 829, 831 (1998); Amos v. Coffey,
228 Va. 88, 92-93, 320 S.E.2d 335, 337 (1984). When a contract’s
terms are clear and unambiguous, the interpretation of those
terms presents a question of law. Gordonsville Energy, L.P. v.
Virginia Elec. & Power Co.
, 257 Va. 344, 352-53, 512
S.E.2d 811, 816 (1999); D.C. McClain, Inc. v. Arlington County,
249 Va. 131, 135, 452 S.E.2d 659, 662 (1995). The issue whether a
particular writing is ambiguous is also a question of law. Westmoreland-LG&E
Partners v. Virginia Elec. & Power Co.
, 254 Va. 1, 10,
486 S.E.2d 289, 294 (1997); Tuomala v. Regent Univ., 252
Va. 368, 374, 477 S.E.2d 501, 505 (1996). On appeal, we are not
bound by the trial court’s determination of these questions of
law, and we are afforded the same opportunity as the trial court
to consider the contract provisions. Gordonsville Energy, L.P.,
257 Va. at 353, 512 S.E.2d at 816; Westmoreland-LG&E
Partners
, 254 Va. at 10, 486 S.E.2d at 294; Langman v.
Alumni Ass’n of the Univ. of Virginia
, 247 Va. 491, 498, 442
S.E.2d 669, 674 (1994).

We conclude that Paragraph 15(A) of the leases
is unambiguous and that the plain meaning of its terms obligate
the lessor to pay commissions to Pollard on all rental payments
received from tenants procured by Pollard. Under that language,
this obligation continues during the term of the original lease
and "during any renewal and extension thereof or during the
term of any new lease." Further, "[n]o sale, transfer
or assignment . . . shall affect" Pollard’s right
to receive commissions.

By this language, Simmons is obligated to pay
commissions as long as a tenant procured by Pollard continues to
be a tenant of the leased premises. This obligation remains
unchanged if an existing tenant executes a new lease for the
leased premises. Since Simmons failed to obtain a release from
this obligation upon sale of the property, as permitted by
Paragraph 15(A), he remains liable for the performance of that
obligation because the assignment had no effect on Simmons’s
privity of contract with Pollard. See Cavalier Square
Ltd. Partnership v. Virginia Alcoholic Beverage Control Bd.
,
246 Va. 227, 231, 435 S.E.2d 392, 395 (1993); Jones v. Dokos
Enterprises
, 233 Va. 555, 557, 357 S.E.2d 203, 205 (1987).
Pierce, as an assignee "standing in the shoes" of
Simmons, also is liable for Simmons’s obligation to pay
commissions under the leases. See Union Recovery Ltd.
Partnership
, 252 Va. at 423, 477 S.E.2d at 523; National
Bank & Trust Co. at Charlottesville
, 196 Va. at 692-93,
85 S.E.2d at 232.

Pierce and Simmons argue, however, that the
above lease provisions concerning commissions due Pollard did not
continue beyond the sale of the property, because the purchase
agreement between Simmons and Pierce provided that the property
would be conveyed "free and clear of any management
agreements at settlement." We find no merit in this
contention since the plain terms of the leases provided that the
commissions were paid "in consideration of [Pollard's] services
rendered in procuring this [l]ease
," and not as payment
for management services. (Emphasis added.)

For these reasons, we will reverse the trial
court’s judgment in favor of Simmons and Pierce, enter judgment
in favor of Pollard, and remand the case for further proceedings
to determine damages, and any attorney’s fees and costs, due
Pollard under the leases.

Reversed and remanded.

 

FOOTNOTES:

[1] Barbara C. Simmons, the personal
representative of the estate of Willard R. Simmons, was named as
a defendant in this action because Willard R. Simmons died
several months after the sale of the property. The decedent and
the personal representative of his estate will be referred to
collectively as "Simmons" in this opinion.

[2] There is no verification
or documentation of any assignment in this record.

 

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