Valley Landscape Co., Inc. v. Rolland

• Citation: 218 Va. 257,237 S.E.2d 120
• Decision Date: 01 September 1977
• Docket Number: No. 761064,761064
• Parties: VALLEY LANDSCAPE COMPANY, INC. v. Peter G. ROLLAND. Record
• Court: Virginia Supreme Court

Page 120

237 S.E.2d 120

218 Va. 257

VALLEY LANDSCAPE COMPANY, INC. v. Peter G. ROLLAND.

Record No. 761064.

Supreme Court of Virginia.

Sept. 1, 1977.

Anita O. Poston, Norfolk (Joseph A. Gawrys, Vandeventer, Black, Meredith & Martin, Norfolk, on briefs), for plaintiff in error.

Murray H. Wright, Richmond (John B. McCammon, McGuire, Woods & Battle, Richmond, on brief), for defendant in error.

Before I'ANSON, C. J., and CARRICO, HARRISON, COCHRAN, HARMAN, POFF and COMPTON, JJ.

HARRISON, Justice.

Old Dominion University (ODU or owner) filed an action against Valley Landscape Company, Inc. (Valley or contractor) and its surety, alleging the breach of a construction contract. Valley filed a third party motion for judgment against Peter G. Rolland (Rolland or architect). Rolland filed a demurrer which was sustained by the trial court. Valley was granted leave to and filed an amended motion. Rolland then successfully demurred to Valley's amended motion, the trial court holding that

"the amended third party motion for judgment fails to state sufficient facts which, if true, would entitle (Valley) to a judgment against (Rolland)."

Valley has appealed this judgment on the ground that its motion sufficiently alleged that it was entitled to recover as a third-party beneficiary of a contract between ODU and Rolland.

Valley, a landscaping contractor, was awarded a contract by ODU to construct the mall improvement project at the college's Norfolk campus. Rolland was the landscape architect employed by ODU to provide plans and specifications for, and to supervise the construction of, this project. Prior to completion, Valley ceased performance and terminated its contract with ODU. Thereafter, ODU employed another contractor to complete the work and instituted an action to recover $400,000 damages from Valley and the surety on the payment and performance bond given by the contractor. Valley then attempted to add Rolland as a third-party defendant to the action under Rule of Court 3:10. ¹

Valley bases its right to recover against Rolland on the theory that it was a third-party beneficiary of the contract between Rolland and ODU. The only paragraph of the amended motion for judgment which addresses this question is paragraph 4, which states "4. That certain provisions of (Rolland's) contract with (ODU) were for the benefit of the general contractor."

The amended motion does not set forth any such "provisions", and the contract between ODU and Rolland was not made a part of the record. While ODU contracted with the architect Rolland to draw plans and specifications and to make periodic site inspections, their contract was made prior to the employment by ODU of a contractor to build the project. It was a separate and independent construction contract that was thereafter made by ODU and Valley.

The right to sue as a third-party beneficiary is governed by Code § 55-22, which provides, in relevant part, that:

"(I)f a covenant or promise be made for the benefit, in whole or in part, of a person with whom it is not made, or with whom it is made jointly with others, such person, whether named in the instrument or not, may maintain in his own name any action thereon which he might maintain in case it had been made with him only and the consideration had moved from him to the party making such covenant or promise. * * * "

Valley concedes that in order to maintain an action under this section "it must be shown that the contract was intended at least in part to benefit the non-contracting party".

The question whether a building contractor is a third-party beneficiary of a contract between the architect and the owner is one of first impression for this Court. Nonetheless, we have on numerous occasions applied the third-party beneficiary doctrine, and we are guided by certain well established principles.

"The third party beneficiary doctrine is subject to the limitation that the third party must show that the parties to the contract clearly and definitely intended it to confer a benefit upon him. * * * " Professional Realty v. Bender, 216 Va. 737, 739, 222 S.E.2d 810, 812 (1976).

" 'A clear intent to benefit the third person must appear to enable him to sue on the contract; incidental beneficiaries cannot maintain an action thereon.' " N.-P. Newspapers v. Stott, 208 Va. 228, 231, 156 S.E.2d 610, 612 (1967).

Consonant with these principles is the rule that the third-party beneficiary statute,

" * * * has no application unless the party sought to be held liable has assumed an obligation for the benefit of a third party. The statute does not purport to create a contract when no contract exists. * * * " Burton v. Chesapeake Box, etc., Corp., 190 Va. 755, 767, 57 S.E.2d 904, 909 (1950).

Appellant argues that the conclusionary allegation, that "certain provisions" of the architect's contract with ODU "were for the benefit of" Valley, was sufficient to meet the above standards. Appellant also contended in oral argument that the standard owner-architect contract gives rise to a third-party beneficiary contract in favor of the contractor.

On the other hand, Rolland contends that facts must be alleged in a motion for judgment which tend to prove that the architect and owner, in reaching their agreement, intended to bestow a direct benefit upon the contractor. It is a matter of common knowledge that any contract for construction is usually of incidental benefit to numerous persons. However, the crucial question in this case is whether the standard owner-architectural contract, without any special provisions inuring to the direct benefit of the contractor, is intended to, and directly benefits, the contractor.

Architects are employed to design a project of a kind, type and style desired by the owner. They draw plans to accomplish this object and once the plans are agreed upon, the owner customarily employs the architect to monitor the performance by the builder. The purpose of this employment is to assure that the owner will get a finished product in accordance with the plans which he has approved. The duty of the architect is to protect the owner to the end that the quality of the workmanship that goes into the project, and the kind and quality of the materials that are used, will be in accordance with the plans and specifications upon which the owner and architect have agreed.

These undertakings by the architect are not designed to protect and enhance the profit or any other interest of the contractor. The fact that a contractor will benefit and profit from plans that are carefully and professionally drawn, and from specifications that are clear and precise, is an incidental benefit that accrues to the contractor. But it is not the benefit that is primarily envisioned by the architect and the owner. The reason is obvious when the adverse interests of the parties are considered. The owner employs an architect, to a degree, to protect himself from the contractor.

Numerous out-of-state and federal decisions have considered the third-party beneficiary doctrine as it applies to the owner-architect-contractor relationship. In A. R. Moyer, Inc. v. Graham, 285 So.2d 397 (Fla.1973), one of the questions certified to the court was whether a general contractor could be a third-party beneficiary of a contract between the owner and the supervising architect where the general contractor, under his contract with the owner, was obligated to construct the project in accordance with the architect's plans and specifications. The court observed that whether a contract was intended for the benefit of a third person was generally regarded...