Mongold v. Woods

• Decision Date: 04 June 2009
• Docket Number: Record No. 081827.
• Citation: 278 Va. 196,677 S.E.2d 288
• Parties: Virgil MONGOLD, Co-Executor and Beneficiary of the Estate of Nina M. Dove, Deceased, et al. v. Terry V. WOODS.
• Court: Virginia Supreme Court

677 S.E.2d 288

278 Va. 196

Virgil MONGOLD, Co-Executor and Beneficiary of the Estate of Nina M. Dove, Deceased, et al. v. Terry V. WOODS.

Record No. 081827.

Supreme Court of Virginia.

June 4, 2009.

Glenn M. Hodge (David C. Nahm; Wharton Aldhizer & Weaver, on briefs), Harrisonburg, for appellants.

Jacob T. Penrod (M. Bruce Wallinger; Hoover Penrod, on brief), Harrisonburg, for appellee.

Present: HASSELL, C.J., KEENAN, KOONTZ, KINSER, GOODWYN, and MILLETTE, JJ., and RUSSELL, S.J.

OPINION BY Senior Justice CHARLES S. RUSSELL.

This appeal presents questions concerning the interplay between theories of recovery based on promissory estoppel and quantum meruit. It also involves the determination of quantum meruit damages.

Facts and Proceedings

In accordance with familiar principles of appellate review, the facts will be stated in the light most favorable to the party prevailing in the trial court. Paul and Nina Dove, husband and wife, purchased a tract of land in Rockingham County as tenants by the entireties in 1985. They moved into a home on part of the property and conducted a chicken-raising business on another part, as well as raising sheep and cattle and growing a hay crop. Terry V. Woods had worked as a farm laborer for Paul Dove since Terry's childhood, helping each summer with the hay crop on other land owned by the Doves.

In 1985, Woods was 21 years old and was employed in the chicken-raising operations of the Rockingham Poultry Cooperative. He had left school in the tenth grade. Paul Dove was employed elsewhere, but wanted to continue the chicken-raising operation already located on the farm he had acquired. He asked Woods to work for him, tending the chickens, mowing around the chicken houses, making some hay, and tending to the livestock. Paul Dove intended to continue with his employment until he qualified for full retirement, after which he would return and share with Woods the responsibilities of the chicken-raising operation.

The Doves paid Woods a salary of $7,850 in 1985. It was contemplated by the parties at the inception of the relationship that Woods' duties would occupy 35 to 40 hours per week, with every other weekend off. In subsequent years, Woods received an annual raise, plus a cash bonus based on the year's profit from the chicken-raising operation.

About six months after Woods began to work for the Doves on a salary in 1985, during the hay-making season it became apparent that Woods' duties would consume far more that 40 hours per week. He began to work every weekend. He worked 11 hours a day, six days per week during the spring lambing season and 13 or 14 hours a day during the hay-making season. He had to work all night during the times when chickens were being sold. He also worked six to eight hours on Sundays during these peak seasons.

The Doves had no children. They were very fond of Woods and, according to neighbors, treated him nearly like a son. At the time in 1985 when Woods' duties nearly doubled, the Doves could not afford to increase his salary to compensate him fully for his work. Paul Dove, however, told Woods that he and his wife, having no children, would, if he "stayed and stuck with them ... take care of [him]." Woods and his wife lived on an adjoining farm. Paul Dove had told him at the beginning: "75,000 chickens ought to be able to provide two families with a good, comfortable living."

Woods' employment by the Doves continued for the next 21 years. About halfway through that relationship, Paul Dove became more specific as to his intentions, telling Woods that when he retired from raising chickens, he would turn the chicken houses over to Woods so that Woods could continue the operation and earn his living from them. Paul Dove also told Woods that the Doves would leave the entire farm property to him when they died. Woods, in reliance on that assurance, considered it his responsibility to perform extra work for the Doves, beyond that compensated by his salary, during their lifetimes. Woods, without further compensation, tended the sheep and cattle, sheared sheep, did gardening and landscaping work around the Doves' home, removed a wall in their house to enlarge a bedroom, cleaned the exterior of the house, built sheds, repaired fencing around the farm, and helped Paul Dove entirely fence a 180-acre tract of mountain land the Doves also owned.

Notwithstanding this additional workload, Woods' salary, after annual raises, had only increased to $8.96 per hour for a 40-hour week by 2004.¹ Woods testified that when Paul Dove discussed annual raises with him, he told Paul that he was making a living, and in view of his expectancy of inheriting the farm, "that's all that I was concerned about."

On March 11, 2005, Paul Dove died by accidental electrocution while working on a thermostat in one of the chicken houses. Woods was working elsewhere on the farm at the time. Paul died intestate and all the Dove property passed to his wife, Nina.

Nina Dove had suffered a stroke before her husband's death and, although in poor health, outlived him by two years. After Paul Dove's death, Woods continued to work for Nina, taking on the work Paul Dove had formerly done in addition to his usual duties. Nina told him that she did not want the expense and aggravation, or the income, from the chicken-raising operation and that Woods should take it over. He paid for the electricity for her home and the propane to heat it. Nina was unable to walk, and Woods and his wife stayed with her night and day for about two weeks until her brothers and sisters made arrangements for her care. Nina told him that she had made a will leaving him everything except the mountain land.²

Nina had a second stroke in late 2005 and went into a nursing home for rehabilitation. She returned home thereafter and her family members stayed with her, or employed others to care for her, until she died as a result of a third stroke in April 2007. On March 7, 2006, while Nina was in the care of her family members, Woods received a letter from Lorene Biller, Nina's sister, writing as Nina's attorney in fact, terminating his "use of the poultry houses." After Nina's death, her last will, dated January 12, 2006, was admitted to probate. It divided her entire estate among her brothers and sisters, with a bequest to her church. Woods was not mentioned in the will. Virgil Mongold and Donald E. Showalter (the Executors) qualified as co-executors under the will.

Woods brought this action against the Executors and beneficiaries. His complaint contains two counts; the first count seeks to impose a constructive trust upon the estate based on a theory of unjust enrichment; the second seeks damages based on a theory of quantum meruit. Woods made no challenge to the validity of the will.

After hearing the evidence ore tenus, the circuit court, in a letter opinion, ruled that Woods' evidence "does not rise to the level of clear and convincing evidence necessary to create a constructive trust on the property." The court observed that Paul Dove had clearly intended to leave the property to Woods and had told Woods and other witnesses of his intention. The court found, however, that the property was not Paul's to give, being held by husband and wife as tenants by the entireties, and Nina's intentions were not sufficiently clear. Accordingly, the court denied relief on Woods' first count and declined to impose a constructive trust. Woods does not appeal that ruling.

Nevertheless, the circuit court found by a preponderance of the evidence that Woods had established a valid claim for quantum meruit damages beginning in 1996 and continuing through 2004, including the value of the electricity and propane Woods furnished to the Dove home after Paul's death. The court entered a final order awarding Woods a judgment in the amount of $115,172.57. We awarded the Executors an appeal. We also awarded an appeal to Woods on his assignment of cross-error to the circuit court's ruling that his right to quantum meruit damages did not accrue until 1996.

Analysis

The Executors present three assignments of error: (1) Woods' claims are based on promissory estoppel, for which there is no cause of action in Virginia; (2) quantum meruit damages are not recoverable where, as here, there is an express contract of employment; and (3) Woods presented no evidence of the reasonable value of the services he rendered.

A. Promissory Estoppel and Quantum Meruit

Where it is available, the cause of action based on promissory estoppel consists of four elements, recently defined as: "(1) a promise, (2) which the promisor should reasonably expect to cause action by the promisee, (3) which does cause such action, and (4) which should be enforced to prevent injustice to the promisee." Barnhill v. Veneman, 524 F.3d 458, 475-76 (4th Cir.2008). The Executors are correct in asserting that promissory estoppel is not a cognizable cause of action in Virginia. In a trio of cases decided on the same day in 1997, we observed that such a cause of action had never been held to exist in the Commonwealth and we expressly declined to create such a cause of action. W.J. Schafer Associates v. Cordant, Inc., 254 Va. 514, 521, 493 S.E.2d 512, 516 (1997). See Virginia School of the Arts v. Eichelbaum, 254 Va. 373, 377, 493 S.E.2d 510, 512 (1997); Ward's Equipment, Inc. v. New Holland North America, Inc., 254 Va. 379, 385, 493 S.E.2d 516, 520 (1997). We have not altered that position.

Promissory estoppel and quantum meruit are conceptually distinct. They require entirely different proof and result in entirely different remedies.

Where promissory estoppel is available, the promisee must prove, by the standard of evidence required in the jurisdiction, the four elements quoted above from Barnhill. If successful, the promisee is entitled to judicial enforcement of the promisor's promise. If that remedy were to be applied to the present case, it would have required a conveyance of...