Contract: Extrinsic evidence used to construe bill of sale

Where the parties disputed whether a bill of sale was for the sale of a nail salon or only certain items in the nail salon, but extrinsic evidence showed the intent was to sell the entire business, the circuit court’s finding was affirmed.

Background

Tim Duy Pham and Leanna L. Cao appeal the circuit court’s order enforcing the sale of a nail salon, DL Nails, to Xuan Nguyen and Phi Ni Thach; rescinding the related rental contract and awarding Nguyen and Thach $12,335.87 for unjust enrichment and attorney’s fees.

Sale

The main issue in this case is whether the ambiguous term “NAI1S” in Cao’s bill of sale referred to a sale of the entire business or to a sale of only the listed personal property. Pham argues that construing the bill and contract for rent together as one transaction shows that Pham did not intend to sell the business.

He asserts that by demonstrating his intention to rent his assets to Nguyen, the contract forecloses the possibility that the bill was meant to transfer all of Pham’s rights because otherwise he would not have any remaining interest to lease out to Nguyen. He also argues that the term “goods” before “NAI1S” limits the meaning of “NAI1S” to tangible assets only and excludes intangible assets like trade names or customer lists as well as liabilities. And tangible assets alone are not the “business,” which includes intangible property and liabilities.

The bill of sale’s term “NAI1S” is ambiguous because it can be read to cover either the entire business or the personal property only. Since “NAI1S” is ambiguous, the court considers the relevant extrinsic evidence. The business advertised itself with a large, storefront sign that read “NAILS.” In messages to Nguyen, Cao wrote that she would sell the salon for $80,000. The bill offered “NAI1S” for $80,000, consistent with Cao’s messages.

Cao and Pham both endorsed the $75,000 cashier’s check that explicitly stated that the check’s purpose was to “purchase [the] nail business.” Cao drafted the bill and then translated it into Vietnamese for Nguyen. Given the extrinsic evidence and that any ambiguity “must be construed against” Cao, the trial court correctly concluded that the bill of sale was for the business.

Rent

Pham argues that the trial court erred in voiding the contract for rent for fraud, in refusing to grant Pham’s counterclaim for unpaid rent and in awarding the $7,106.87 in damages to Nguyen for unjust enrichment.

Having sold the business, Pham had no remaining interest in the property. But Cao falsely claimed that Pham was the “landlord,” leading Nguyen and Thach to believe that they had to pay Pham rent for the business. Pham had no authority to rent a property he did not own; moreover, his lease agreement did not permit him to sublease the property. Pham’s agent, Cao, fraudulently asserted that Pham owned the property, an assertion on which Nguyen relied in agreeing to the contract for rent. Thus, the trial court did not err in voiding the Contract and dismissing Pham’s counterclaim for unpaid rent.

The evidence at trial established that Nguyen paid Pham $5,000 in rent per month for 16 months. In a post-trial letter, Pham conceded that, during the same period, he had paid rent to for that parcel totaling $72,893.13. From the difference between these amounts, Pham profited $7,106.87. The trial court did not err in “restor[ing the parties] to the status quo ante” by ordering Pham to repay that amount to Nguyen after voiding the contract.

Pham and Cao next argue that only Pham is liable for that $7,106.87 because only he received the benefit. Nguyen concedes this point. This court agrees and therefore reverses the trial court’s finding of joint liability for the $7,106.87 and remand for entry of a corrected judgment order holding Pham alone liable for that sum.

Interpreter fees

Pham’s final argument alleges that the trial court erred in awarding interpreter’s fees to Nguyen by erroneously holding the bill of sale to convey the whole business and voiding the contract for rent. But this argument rests on Pham’s now-rejected arguments that the trial court erred in its rulings on the bill and the contract. Having found that those rulings were correct, this court upholds the trial court’s award of interpreter’s fees to Nguyen.

Affirmed in part, reversed in part and remanded.

Pham v. Nguyen, Record No. 0892-24-3, March 4, 2025. CAV (unpublished opinion) (White). From the Circuit Court of Botetourt County (Branscom). Wilson C. Pasley (Wilson C. Pasley, PLC, on briefs), for appellants. Justin A. Steele (John S. Koehler; The Law Office of James Steele, PLLC, on brief), for appellees. VLW 025-7-048. 10 pp.