Fidelity National Title Insurance Company v. Radford et al

Filing 62

MEMORANDUM OPINION. Signed by District Judge Elizabeth K. Dillon on 6/2/2016. (am)

IN THE UNITED STATES DISTRICT COURT
FOR THE WESTERN DISTRICT OF VIRGINIA
ROANOKE DIVISION
FIDELITY NATIONAL TITLE
INSURANCE COMPANY,
Plaintiff,
v.
FRANKLIN R. RADFORD and
MARY E. RADFORD,
Defendants/Third-Party Plaintiffs,
v.
COMPTON M. BIDDLE and
OSTERHOUDT, PRILLAMAN, NATT,
HELSCHER, YOST, MAXWELL &
FERGUSON, P.L.C.,
Third-Party Defendants.

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June 2, 2016
A. Melvin

Civil Action No. 7:15-cv-00018

By: Elizabeth K. Dillon
United States District Judge

MEMORANDUM OPINION
Pending before the court is the motion to dismiss of third-party defendants Compton M.
Biddle and the law firm where he is a partner, Osterhoudt, Prillaman, Natt, Helscher, Yost,
Maxwell & Ferguson, P.L.C. (the Firm). (Dkt. No. 45.) These defendants seek dismissal of the
sole remaining claim in the amended third-party complaint, a breach of contract claim.1 (Am.
Third-Party Compl. (Compl.), Dkt. No. 44.) The viability of the claim turns on a single issue:
whether there was a written contract between Franklin R. and Mary E. Radford—the third-party
plaintiffs—and Biddle and the Law Firm. If there was a written contract, then the claim is timely

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In their written submissions, the parties also addressed whether the Radfords improperly included an
implied indemnity claim in Count II of their amended third-party complaint. At the March 30, 2016 hearing before
this court, the parties explained that Judge Urbanski, the judge previously assigned to this case, had issued an oral
ruling on that claim, confirming that the implied indemnity claim had been dismissed by his prior order.
Accordingly, the breach of contract claim is the only remaining claim in the amended third-party complaint.

brought within Virginia’s five-year statute of limitations for breaches of written contracts. If
there was no written contract, but only an oral contract for services, then a three-year limitations
period applies and the breach of contract claim is time-barred. The motion has been fully briefed
and was argued before this court at a March 31, 2016 hearing. As explained below, the court
will grant the motion to dismiss because there was no written contract between the parties and
the claim is barred by the applicable three-year statute of limitations.
I. BACKGROUND
Before this case was reassigned, United States District Judge Michael F. Urbanski had
issued a memorandum opinion addressing a prior motion to dismiss by the third-party
defendants. (Dkt. No. 41.) The background of the case is well presented in that memorandum
opinion, as well as in an earlier opinion issued by Judge Urbanski addressing the defendants’
motion for a more definite statement (Dkt. No. 14 at 1–2), so the court will not restate it.
Succinctly summarized, the Radfords sold property in July 2010 to the Tinaglias, and Fidelity
issued a title insurance policy in connection with that real estate transaction. The deed purported
to convey an easement to the Tinaglias, but Fidelity claims that the easement was not properly
conveyed. Fidelity thus paid a sum to the Tinaglias, pursuant to its title insurance policy, and
then sued the Radfords in this action as the Tinaglias’ subrogee.
The Radfords filed a third-party complaint against Biddle and the Firm, who performed
legal work related to the July 2010 sale. In their breach of contract claim, the Radfords contend
that Biddle and the Firm “breached the applicable standard of professional care” in the
performance of legal services. (Compl. ¶ 35.) The Radfords claim that those breaches have
caused them to incur litigation expenses, such as counsel fees and court costs, and also caused
the loss of whatever amount they may owe to Fidelity. (Compl. ¶¶ 37–38.)

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In his earlier dismissal opinion, Judge Urbanski dismissed all the claims asserted in the
third-party complaint, except for the breach of contract claim. As to that claim, he granted the
Radfords leave to amend so that they could allege additional facts to support their assertion that
there was a written contract between them and Biddle/the Firm. (Mem. Op., Dkt. No. 41.) In
their amended complaint, the Radfords point to a series of July 2010 e-mails between Frank
Radford and Biddle as evidence of this written contract. (Compl. ¶ 21 & Exs. 3A–3C.)
Specifically, the Radfords allege that Biddle made a written contract proposal to them via
e-mail, dated July 20, 2010, and time-stamped at 4:43 p.m., in which Biddle offered to handle the
issue that had arisen with Fidelity regarding the easement reservation. (Compl. ¶ 21.)
In its entirety, the 4:43 p.m. e-mail from Biddle to Frank Radford stated:
Frank,
The reason the title examiner did not include the easement
reservation was because it was recorded when Radford &
Company no longer owned the property.
We might be able to argue the title company should insure it
anyway. If that does not work, then in order to convey that
easement, we would likely need to get the HOA to sign off on the
Deed containing the right of way.
Time incurred in accomplishing this is outside of the scope of the
standard closing fee and would be charged at my hourly rate of
$200/hr. Let me know if you wish to retain me for this work.
(Compl. Ex. 3A at 1, Dkt. No. 44-4.)
According to the Radfords, this e-mail “constituted an offer, which was accepted by the
Radfords by their conduct and by the performance of the parties, as demonstrated in the ensuing
communications and by Biddle’s actions on behalf of the Radfords.” (Compl. ¶ 21.) The
complaint also points to various other e-mails that show that Biddle actually went on to perform
work for the Radfords on this issue. The Radfords rely on these additional communications, as

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well as their allegations that they were billed for and paid for “legal services concerning the
conveyance of the Property, including the easement set forth in the . . . deed to the Tinaglias”
(Compl. ¶ 29), in order to show that there was a written contract between the parties.2
Biddle and the Firm acknowledge that there was an offer by Biddle to do additional work
(the July 20, 2010, 4:43 p.m. e-mail), but contend that the offer was rejected by Frank Radford in
his response—a July 20, 2010, 10:26 p.m. e-mail with the same subject heading. Radford
responded as follows:
Compton,
Your info is incorrect, Radford and company had to own these
parcels according to Webster Day and confirmed by Roanoke
County. The parcels contained in the reserved easement were left
out of the recorded maps made for the auction and not sold at
auction. I do not wish to incur any further expence [sic] and will
void the closing and not sell the property if the buyer wants out of
the contract.
Frank
(Id. at 3.) The Radfords counter that this response was not a rejection, but is “better read to be
instructions to his lawyer regarding the goals of the representation proposed in Biddle’s email.”
(Opp’n Mem. 5, Dkt. No. 47.)
Other subsequent e-mails show that Radford and Biddle continued to discuss who owned
the property at the time of the prior easement and possible strategies for dealing with the problem
with the easement, and that Biddle communicated with individuals from the title company and
with the Tinaglias concerning the easement and the closing. (Compl. Exs. 3A–3C.)

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Biddle and the Firm contend that, as a factual matter, the Radfords were never billed for—and never paid
them—for any of this work; instead, the HUD-1 statement from closing reflects that the Tinaglias paid all legal fees
associated with the closing. (Mem. Supp. Mot. Dismiss 5 n.2, Dkt. No. 46.) The complaint, however, contains
contrary allegations (Compl. ¶ 21 (alleging that the Radfords paid for additional time and work)), and the court is
obliged to credit “the well-pleaded, nonclusory factual allegations in the complaint” as true. Aziz v. Alcolac, Inc.,
658 F.3d 388, 391 (4th Cir. 2011).

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II. DISCUSSION
A. Rule 12(b)(6) Standard
To survive a motion to dismiss under Federal Rule of Civil Procedure 12(b)(6), a
plaintiff’s allegations must “state a claim to relief that is plausible on its face.” Ashcroft v. Iqbal,
556 U.S. 662, 678 (2009) (quoting Bell Atlantic Corp. v. Twombly, 550 U.S. 544, 570 (2007)).
This standard “requires the plaintiff to articulate facts, when accepted as true, that ‘show’ that the
plaintiff has stated a claim entitling him to relief, i.e., the ‘plausibility of entitlement to relief.’”
Francis v. Giacomelli, 588 F.3d 186, 193 (4th Cir. 2009) (quoting Iqbal, 556 U.S. at 678). The
plausibility standard requires more than “a sheer possibility that a defendant has acted
unlawfully.” Iqbal, 556 U.S. at 678.
In determining whether the Radfords have met this plausibility standard, the court must
accept as true all well-pleaded facts in their complaint and in any documents incorporated into or
attached to the complaint. Sec’y of State for Defence v. Trimble Navigation Ltd., 484 F.3d 700,
705 (4th Cir. 2007). Further, it must “draw[] all reasonable factual inferences from those facts in
[their] favor,” Edwards v. City of Goldsboro, 178 F.3d 231, 244 (4th Cir. 1999), but it need not
“accept legal conclusions couched as facts or unwarranted inferences, unreasonable conclusions,
or arguments.” Giarratano v. Johnson, 521 F.3d 298, 302 (4th Cir. 2008).
B. Biddle and the Firm’s Motion to Dismiss the Breach of Contract Claim
As Judge Urbanski explained in his November 10, 2015 Memorandum Opinion:
Under Virginia law, claims of legal professional liability are
governed by the statute of limitations applicable to actions for
breach of contract. Shipman v. Kruck, 593 S.E.2d 319, 322 (Va.
2004) (“The statue of limitations for legal malpractice actions is
the same as those for breach of contract because although legal
malpractice actions sound in tort, it is the contract that gives rise to
the duty.”). Actions for breach of an oral contract must be brought
within three years, Va. Code § 8.01-246(4), and actions for breach

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of a written contract must be brought within five years, Va. Code
§ 8.01-246(2). The limitations period “begins to run when the
attorney’s services rendered in connection with that particular
undertaking or transaction have terminated, notwithstanding the
continuation of a general attorney-client relationship.” MacLellan
v. Throckmorton, 367 S.E.2d 720, 722 (1998) (quoting Keller v.
Denny, 352 S.E.2d 327, 330 (1987)).
(Mem. Op. 4, Dkt. No. 41.)
The Radfords contend that a written contract was established through the e-mails
exchanged on July 20 between Biddle and Frank Radford and the parties’ subsequent course of
conduct. They claim that Radford’s response “gave Biddle directions regarding his goal to be
achieved in the course of the specific representation outlined in writing in Biddle’s email, and the
scope of his views about terminating the transaction, if necessary.” (Opp’n Mem. 3 (emphasis in
original).) They also emphasize that Biddle thereafter did exactly what his offer had proposed
and “engaged in a lengthy advocacy and legal opinion writing with Fidelity, in order to achieve
the goal set out in” Biddle’s e-mail. (Id.)
Biddle and the Firm acknowledge that Biddle’s 4:43 p.m. e-mail could be considered a
written offer to the Radfords. But they contend that Radford’s response, which included that he
“did not wish to incur any further expence [sic],” constituted a rejection of that offer under
Virginia law. They also contend that the correspondence here did not establish a contract
because it did not satisfy the requirement that it “correctly express all of the terms to which the
parties agree . . . .” (Mem. Supp. Mot. Dismiss 9 (quoting Chittum v. Potter, 219 S.E.2d 859,
863 (Va. 1975)).) That is, in order to establish a contract by correspondence, there must be a
meeting of the minds “on every material phase of the alleged agreement.” Chittum, 219 S.E.2d
at 863. And Biddle and the Firm point to the fact that there cannot be a variance between the
acceptance and the offer. (Mem. Supp. Mot. Dismiss 10.)

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Here, it is plain that Frank Radford’s response was not an acceptance of Biddle’s offer,
because “acceptance must be unqualified and no point left open for future consideration or
negotiation between the parties.” Lynchburg Hosiery Mills v. Chesterfield Mfg. Co., 57 S.E. 606,
607 (Va. 1907); see also Richeson v. Wilson, 47 S.E.2d 393, 398 (Va. 1948) (“It is elementary
that in order to form a contract, there must be no variance between the acceptance and the
offer.”). The 10:22 p.m. e-mail did not expressly accept the offer to perform the additional work
and instead stated that Frank Radford would be happy to void the sale if the buyer wanted out of
the contract. Thus, the two July 20 e-mails quoted above do not constitute an offer and
acceptance sufficient to establish a written contract. See Lynchburg Hosiery Mills, 57 S.E. at
607; Richeson, 47 S.E.2d at 398.
Further—and significantly—the content of the e-mails do not satisfy the high threshold to
show a written contract for purposes of applying the five-year statute of limitations. The
Supreme Court of Virginia has previously held that, even where a writing might satisfy the
statute of frauds, that same writing could fail to constitute a written contract for limitations
purposes. Newport News H. & O.P. Dev. Co. v. Newport News St. Ry. Co., 32 S.E. 789 (Va.
1899). In Newport News, a resolution of the board of directors signed by its president and
secretary satisfied the statute of frauds, but was insufficient to establish a written contract. Id. at
790. As the Newport News court explained, to satisfy the writing requirement for limitations
purposes, the contract “must show on its face a complete and concluded agreement between the
parties. Nothing must be left open for future negotiation and agreement: otherwise, it cannot be
enforced.” Id.
Although Newport News is an older decision, it remains good law and has been applied
by this court in the more recent past. See Marley Mouldings, Inc. v. Suyat, 970 F. Supp. 496,

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498–99 (W.D. Va. 1997) (applying the reasoning of Newport News and explaining why it is
logical to impose more stringent requirements to establish a written contract for limitations
purposes than when determining whether a writing satisfies the statute of frauds); see also
Mulvey Constr., Inc. v. Bituminous Casualty Corp., 571 F. App’x 150, 162 (4th Cir. 2014)
(relying on Newport News to hold that the writings before the court did not represent a written
contract and thus, the three-year limitations period for oral contracts applied).
The facts of Marley Mouldings are similar to the facts here. In that case, the corporate
plaintiff argued that several letters between itself and a law firm established a written contract for
legal services. 970 F. Supp. at 499. There, as here, it was clear that legal services had been
performed and that the letters referenced those services. But the court noted that the scope of the
work was unclear and that there was no agreement as to what the consideration for the services
would be, nor an agreement as to the duration of the services. As that court stated, “this court is
left with the definite impression that there must be something more to this contract.” Id. at 499–
500.
There are similar deficiencies in the writings relied upon by the Radfords. In his “offer,”
Biddle suggested two possible courses of action to pursue: (1) negotiations with the title
company; and (2) negotiations with the HOA, if the title company could not be persuaded. There
is no subsequent writing in which Frank Radford affirmatively agrees to pursue one or the other,
or both. There is no subsequent writing where he says he is accepting the offer, even
conditionally. Nor is there any subsequent writing in which any limitation on the amount of
work is set forth, or in which the full scope of the work is defined. Thus, just as in Marley
Mouldings, the court believes “that there must be something more to this contract.” Id. at 499–
500.

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Nor is the court persuaded by the Radfords’ argument that Biddle’s actions in
subsequently undertaking the legal services discussed in his offer show that a written contract
exists. The Radfords and Biddle may have eventually reached an agreement of some sort
allowing Biddle to perform some legal services, perhaps in person or during a phone
conversation. Critically though, a written contract was not established by, or set forth in, any
writing that has been produced, and the scope of such work is not clear from any writing or
writings presented to the court. The mere fact that work was performed is not sufficient to
establish a written contract for limitations purposes. Laios v. Wasylik, 564 F. Supp. 2d 538, 543
(E.D. Va. 2008) (concluding there was no written contract for legal services where parties had
reached an oral agreement, but there was no writing that showed on its face a complete and
concluded agreement); Marley Mouldings, 970 F. Supp. at 499–500 (same); Dunavant v.
Bagwell, No. 15-0870 (Va. Feb. 12, 2016) (unpublished order) (concluding that the trial court
properly dismissed a claim for legal malpractice on limitations grounds where there was no
written contract, despite the fact that the attorney began and finished the performance). In sum,
the Radfords and Biddle may well have entered into a contract, but nothing in the written
correspondence constitutes a written contract that satisfies the Newport News requirement of a
“complete and concluded agreement.” 32 S.E. at 790.
For all of these reasons, the court concludes that the exchange of e-mails here does not
constitute a written contract enabling the Radfords to rely on the five-year limitations period.
Thus, the Radfords’ breach of contract claim, the only remaining claim against the third-party
defendants, will be dismissed as time-barred.

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III.

CONCLUSION

The court will grant the third-party defendants’ motion to dismiss for failure to state a
claim, will dismiss those defendants from this lawsuit, and will dismiss the amended third-party
complaint in its entirety.
An appropriate order will follow.
Entered: June 2, 2016.

/s/ Elizabeth K. Dillon
Elizabeth K. Dillon
United States District Judge

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