Total Quality Logistics v. Riverside Turf, LLC ( 2022 )

COURT OF APPEALS OF VIRGINIA
Present: Chief Judge Decker, Judges AtLee and Malveaux
UNPUBLISHED
TOTAL QUALITY LOGISTICS
MEMORANDUM OPINION* BY
v. Record No. 0009-22-2 CHIEF JUDGE MARLA GRAFF DECKER
NOVEMBER 1, 2022
RIVERSIDE TURF, LLC
FROM THE CIRCUIT COURT OF CHARLES CITY COUNTY
B. Elliott Bondurant, Judge
(Monica Taylor Monday; Jeffrey P. Miller; Gentry Locke, on briefs),
for appellant. Appellant submitting on briefs.
(Charles Arthur Gavin; Deskevich, Gavin & Harris, P.C., on brief),
for appellee. Appellee submitting on brief.
Riverside Turf, LLC, filed a warrant in debt against Total Quality Logistics for breach of
contract. The trial court found in favor of Riverside Turf and entered judgment against Total
Quality Logistics and awarded damages.
Total Quality Logistics argues that the trial court erred by not applying the forum
selection clause in a 2012 contract between it and Riverside Turf’s predecessor company. In
addition, Total Quality Logistics contends that the court erroneously concluded that a series of
emails exchanged by the parties in 2020 formed a contract. For the following reasons, we affirm
the judgment of the trial court.
*
Pursuant to Code § 17.1-413, this opinion is not designated for publication.
BACKGROUND1
In 2020, a representative from Total Quality Logistics, a freight broker, contacted
Riverside Turf, a sod company. The representative asked if Riverside Turf needed the
company’s services arranging freight transportation. As it happened, Riverside Turf wanted sod
from Kentucky delivered to a soccer field in Virginia. The parties agreed that Total Quality
Logistics would arrange the transportation. Through a series of emails, they set the particular
price, dates, times, locations, amount of sod to be transported, and types and number of trucks to
be used. When Total Quality Logistics could not find Riverside Turf in its credit records,
Riverside Turf prepaid for the transaction, which totaled $16,200.
On the pre-arranged day for the first pickup of the sod in Kentucky, however, Total
Quality Logistics could not secure the necessary trucks. The sod, already cut for transport, did
not survive and was unsalvageable. Total Quality Logistics refunded Riverside Turf the amount
paid for the freight transaction but did not reimburse it for the dead sod. Nor did it pay Riverside
Turf’s expenses incurred for the workers and equipment on site at the soccer field to install the
sod.
Riverside Turf filed a warrant in debt in general district court for the damages incurred
due to the failure to transport the sod. Through a special appearance, Total Quality Logistics
objected to venue. The general district court ruled in Riverside Turf’s favor and ultimately
awarded Riverside Turf damages.
Total Quality Logistics appealed to the circuit court and again objected to venue, moving
to dismiss the action on that ground. It relied on the terms and conditions in a 2012 contract. In
2012, Riverside Farm, doing business as Riverside Turf, submitted a credit application to Total
1
In accordance with well-established legal principles, an appellate court reviews the
evidence in the light most favorable to the prevailing party at trial, in this case, Riverside Turf.
Nichols Constr. Corp. v. Va. Mach. Tool Co., LLC, 276 Va. 81, 84 (2008).
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Quality Logistics through which it agreed to certain terms and conditions (the 2012 terms and
conditions). One of those terms was that “[t]he state courts located in Clermont County, Ohio
shall have exclusive and irrevocable jurisdiction and shall be the exclusive venue with respect to
any claim, counterclaim, or dispute arising in connection with any transactions, loads, or other
business between Total Quality Logistics and applicant.”
Riverside Turf defended against the motion on two grounds. First, it argued that the 2012
terms and conditions did not apply because Riverside Turf did not use credit with Total Quality
Logistics for the transaction. Second, Riverside Turf contended that it was not a party to the
2012 contract. In 2012, Riverside Turf did not exist as a legal entity. Instead, Riverside Farm
operated under the trade name Riverside Turf. In 2013, the owner of Riverside Farm formed a
limited liability company named Riverside Turf. The original entity, Riverside Farm, was the
“row crop division,” and the new entity, Riverside Turf, was the “sod division.” The two
companies operate under the same ownership but are separate legal entities. They have separate
employer identification numbers and file separate tax returns. Riverside Turf used Total Quality
Logistics to deliver freight intermittently over the years, in 2014, 2016, and 2019. During that
time, Total Quality Logistics was not informed of the change in corporate structure.
The trial court held that the 2012 terms and conditions did not apply to the instant dispute
because Riverside Turf was “a totally different company” than Riverside Farm. After hearing
the evidence, the court, sitting without a jury, concluded that a separate 2020 contract existed
between the parties. It further found that Total Quality Logistics had breached that contract.
Consequently, the court entered judgment for Riverside Turf and ordered Total Quality Logistics
to pay Riverside Turf $13,567, plus interest and costs.
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ANALYSIS
On appeal, Total Quality Logistics argues that the trial court erroneously held that the
terms and conditions in the agreement signed in 2012 did not form part of the contract between
the parties. Alternatively, Total Quality Logistics contends that the court erred in holding that
the parties formed a contract based on their emails in 2020.
“We begin our analysis by recognizing the well-established principle that all trial court
rulings come to an appellate court with a presumption of correctness.” Wynnycky v. Kozel, 71
Va. App. 177, 192 (2019) (quoting Stiles v. Stiles, 48 Va. App. 449, 453 (2006)). Nonetheless,
appellate courts apply de novo review to legal questions such as “whether [a valid] contract
exists.” Spectra-4, LLP v. Uniwest Com. Realty, Inc., 290 Va. 36, 42 (2015) (alteration in
original) (quoting Mission Residential, LLC v. Triple Net Props., LLC, 275 Va. 157, 161 (2008));
see Phillips v. Mazyck, 273 Va. 630, 635 (2007). Similarly, “what the terms of a contract are”
and “how those terms apply [to] the facts of the case” are “purely legal issues” subject to the
same standard of review. Spectra-4, 290 Va. at 43. In contrast, when reviewing factual
determinations, an appellate court defers to the trial court’s judgment, as it would “a jury
verdict[,] and uphold[s its] findings unless they are plainly wrong or without evidence to support
them.” Davis v. Holsten, 270 Va. 389, 397-98 (2005). When conducting this analysis, the
reviewing court views the facts in the light most favorable to the party that prevailed below. Id.
at 398.
I. 2012 Terms and Conditions
Total Quality Logistics challenges the trial court’s conclusion that the 2012 terms and
conditions did not bind Riverside Turf because it was a different entity than Riverside Farm and
therefore not a party to the 2012 agreement. Total Quality Logistics argues that Riverside Turf,
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LLC, was a party to the 2012 contract because it is “but a mere continuation” of the “Riverside
Turf” division that operated under Riverside Farm until 2013.2
This issue presents a mixed question of law and fact. See Spectra-4, 290 Va. at 44-45
(considering whether the express contracts between two entities affected the relationship between
one of those companies and a third entity); J. Maury Dove Co. v. New River Coal Co., 150 Va. 796,
827 (1928) (explaining the principles of assigning a contract to a third party). See generally Eure v.
Norfolk Shipbuilding & Drydock Corp., 263 Va. 624, 631, 635 (2002) (applying a mixed standard
of review to determine whether to “disregard” the separate corporate natures of a parent and
subsidiary entity). The party asserting that a court should “disregard” the separate legal identity of a
corporation or limited liability company bears the burden to prove facts supporting that proposition.
Cf. Eure, 263 Va. at 634 (applying this burden of proof in the context of piercing the corporate veil).
Riverside Farm is a separate legal entity from Riverside Turf. The two entities have
separate employment identification numbers and file separate tax returns. They operate
independently, despite their shared ownership, shared industry, and the fact that Riverside Turf
inherited its website from Riverside Farm. See Spectra-4, 290 Va. at 40 (holding that
2
In support of this assignment of error, Total Quality Logistics notes that it was not
informed of any change of corporate structure and had no reason to think it was dealing with a
different entity in 2020 than it had in 2012. It cites the proposition that an individual can act as an
agent for a company. See generally Equitable Variable Life Ins. Co. v. Wood, 234 Va. 535, 539
(1987) (“[W]hen an agent, acting within the scope of his apparent agency, enters into a contract
with a third person ‘the principal becomes immediately a contracting party, with both rights and
liabilities to the third person.’” (quoting Restatement (Second) of Agency § 8 cmt. d (1957)
(emphasis added))). However, Total Quality Logistics did not argue below that in 2012 Riverside
Farm was the agent of Riverside Turf, a limited liability company that had not yet been formed.
See Rule 5A:18. We decline to address the applicability of the agent-principal analytical
framework here for the first time on appeal. See Tackett v. Arlington Cnty. Dep’t of Human
Servs., 62 Va. App. 296, 324-25 (2013); see also RECP IV WG Land Invs. LLC v. Cap. One
Bank (USA), N.A., 295 Va. 268, 285 n.12 (2018) (applying Rule 5:25, the Supreme Court of
Virginia equivalent to Rule 5A:18).
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Jefferson/LBG, LLC, and Jefferson Commercial Real Estate Services, Inc., were two separate legal
entities despite similar titles, shared ownership, and same services).
In addition to the fact that the companies have separate identities, the record does not show
that Riverside Turf assumed the obligations of Riverside Farm under the terms and conditions in the
2012 contract. Cf. J. Maury Dove Co., 150 Va. at 826-27 (recognizing that a third party can assume
an obligation under a contract). We find no evidence in the record that Riverside Turf “succeeded
to or [was] assigned any rights and obligations created under” the 2012 terms and conditions
agreement. See Spectra-4, 290 Va. at 44. Compare Spectra-4, 290 Va. at 44 (concluding that the
contractual rights were not assigned or passed on to a successor), with Cygnus Newport-Phase 1B,
LLC v. City of Portsmouth, 292 Va. 573, 578 (2016) (involving a contract expressly providing that it
would likewise bind successors to a contractual party).
On the instant facts, the trial court did not err in concluding that Total Quality Logistics did
not establish that Riverside Turf, LLC, was bound by the 2012 terms and conditions signed and
agreed to by Riverside Farm. Cf. Eure, 263 Va. at 634 (placing the burden of proof on the party
asserting that a court should “disregard” the separate legal identity of a corporation).
Total Quality Logistics relies on Wright-Caesar Tobacco Co. v. A. Hoen & Co., 105 Va.
327, 332 (1906). In that case, the Supreme Court of Virginia held that the company’s name change
did not transform it into a new entity. However, there, it was undisputed that a single entity simply
changed its legal name. Wright-Caesar, 105 Va. at 333. In contrast, this case involves two separate
legal entities, Riverside Farm and Riverside Turf. Consequently, Wright-Caesar is not controlling.
In short, Riverside Farm agreed to the 2012 terms and conditions. Riverside Turf was not a
party to the 2012 agreement. There is no evidence that Riverside Turf assumed the obligations of
Riverside Farm under the 2012 contract. On this record, the trial court did not err in concluding that
Total Quality Logistics failed to establish that Riverside Turf was bound by the 2012 contract
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entered into by Riverside Farm.3 Therefore, the venue provision in the 2012 terms and conditions
did not control, and the trial court had proper venue.
II. 2020 Email Contract
Total Quality Logistics argues that the trial court erred in holding that a contract existed
between the parties through their 2020 emails. It suggests that the parties did not adequately form a
valid contract because they did not agree on all of the essential elements of the transaction,
specifically, the perishability of the sod.4
For an agreement to form a valid contract, there must be an offer, acceptance, and “valuable
consideration.”5 Dean v. Morris, 287 Va. 531, 536 (2014) (quoting Montagna v. Holiday Inns, Inc.,
221 Va. 336, 346 (1980)). In addition, for an agreement to be binding, it “must be sufficiently
definite to enable a court to give it an exact meaning.” Id. at 537 (quoting Smith v. Farrell, 199 Va.
121, 127 (1957)). This principle requires that the agreement’s terms are certain and complete. Id.3
In light of this holding, we do not address the appellant’s related argument that those
2012 terms and conditions applied to all transactions between the parties, not just those
conducted on credit with Total Quality Logistics. See, e.g., Watson-Scott v. Commonwealth, 298
Va. 251, 258 n.2 (2019) (recognizing that appellate courts should decide cases “on the best and
narrowest grounds” (quoting Commonwealth v. White, 293 Va. 411, 419 (2017))).
4
In support of this proposition, Total Quality Logistics posits that the federal statutory
scheme should apply here and that under it, Riverside Turf, the shipper, bore the burden of
informing Total Quality Logistics, the carrier, of “any specific consequences or damages that
m[ight] result from delay prior to the time the bill of lading [was] issued.” See 49 U.S.C.
§§ 14706(a)(1), (b), 14501(c)(1). Despite this argument on appeal, in the court below, Total
Quality Logistics did not defend against the breach of contract claim based on federal law. See
Rule 5A:18; Jessee v. Jessee, 74 Va. App. 40, 51 n.8 (2021) (“Making one specific argument on
an issue does not preserve a separate legal point on the same issue for review.” (quoting Johnson
v. Commonwealth, 58 Va. App. 625, 637 (2011))). Therefore, the question of the applicability of
federal law in this case is procedurally barred under Rule 5A:18. See Tackett, 62 Va. App. at
324-25.
5
Total Quality Logistics does not dispute that a contract can be formed via email. See
Chittum v. Potter, 216 Va. 463, 467 (1975) (“Correspondence between parties can result in a
binding contract . . . .”). It simply argues that the emails do not constitute such in this case.
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“[C]ompleteness” means simply that “the contract embraces all the material terms.” Id. (quoting
Smith, 199 Va. at 127-28).
Succinctly stated, “[i]n order to be binding, an agreement must be definite and certain as to
its terms and requirements; it must identify the subject matter and spell out the essential
commitments and agreements with respect” to that arrangement. Dodge v. Trs. of Randolph-Macon
Woman’s Coll., 276 Va. 1, 5 (2008) (quoting Progressive Constr. Co. v. Thumm, 209 Va. 24, 30-31
(1968)).
The series of emails that the parties exchanged in 2020 provided the terms of their expected
transaction. Through these emails, the parties agreed that Total Quality Logistics would deliver
nine truckloads of sod, three each day, starting July 20 and ending July 22, 2020. The parties agreed
on the cost. In addition, they specified the pickup and delivery times, the pickup and delivery
addresses, the types of trucks needed, and the amount and weight of the cargo. These terms were
“sufficiently definite” for the trial court to give the agreement an “exact meaning.” See Dean, 287
Va. at 537 (quoting Smith, 199 Va. at 127). See generally 1 Williston on Contracts § 4:21 (4th ed.
2007) (giving examples of “[a] lack of definiteness in an agreement”).
We conclude that the contract’s terms, created through the series of emails, were complete.
The fact that the parties neglected to include a provision about the product’s perishability did not
render it invalid. See, e.g., Dean, 287 Va. at 538 (explaining that not all ambiguity renders a
contract incomplete).
CONCLUSION
Reviewing the record in the light most favorable to Riverside Turf, we hold that the trial
court did not err in ruling that Total Quality Logistics failed to prove that Riverside Turf was bound
by the 2012 contract signed by Riverside Farm. Therefore, the venue provision in the 2012 terms
and conditions did not control, and the trial court had proper venue. The emails the parties
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exchanged in 2020 formed the entire contract between Total Quality Logistics and Riverside
Turf. The parties formed a valid contract despite not including any provision about the
perishability of the sod. For these reasons, we affirm the judgment of the trial court.
Affirmed.
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