W. T. Weber, Jr.
Weston, West Virginia
Attorney for Appellant
Joseph M. Brown
Ronning & Brown
Parkersburg, West Virginia
Attorney for Appellee
This Opinion was delivered PER CURIAM.
SYLLABUS BY THE COURT
1. "Extrinsic evidence of statements and declarations of the
parties to an unambiguous written contract occurring
contemporaneously with or prior to its execution is inadmissible to
contradict, and to, detract from, vary or explain the terms of such
contract, in the absence of a showing of illegality, fraud, duress,
mistake or insufficiency of consideration." Syl. Pt. 1, Cardinal
State Bank, Nat'l Ass'n v. Crook, 184 W.Va. 152, 399 S.E.2d 863
(1990), quoting Syl. Pt. 1, Kanawha Banking and Trust Co. v.
Gilbert, 131 W.Va. 88, 46 S.E.2d 225 (1947).
2. "'Extrinsic evidence may be used to aid in the
construction of a contract if the matter in controversy is not
clearly expressed in the contract, and in such case the intention
of the parties is always important and the court may consider parol
evidence in connection therewith with regard to conditions and
objects relative to the matter involved . . . .' Syl. Pt. 2,
Berkeley Co. Pub. Ser. Dist. v. Vitro Corp.,  W.Va. ,
[162 S.E.2d 189] [(1968)]." Syl. Pt. 2, International Nickel Co.
v. Commonwealth Gas Corp., 152 W.Va. 296, 163 S.E.2d 677
This is an appeal by Kelley, Gidley, Blair & Wolfe, Inc.
("Kelley" or "the Appellant") from a December 11, 1992, order of
the Circuit Court of Marion County granting summary judgment to the
City of Parkersburg, acting by and through the Parkersburg Sanitary
Board ("Parkersburg" or "the Appellee"). The lower court ordered
that Parkersburg pay Kelley $36,839.78 rather than the $140,755.00
to which Kelley deems itself entitled. Kelley requests this Court
to reverse the lower court's decision and award it the entire
$140,755.00. We affirm the decision of the lower court.
On July 14, 1977, the Appellee and Kelley entered into an
agreement under which Kelley was to provide certain engineering
services with respect to the design and construction of
improvements to the Appellee's wastewater treatment system and
plant. The Appellee had been awarded a federal grant through the
Environmental Protection Agency and the West Virginia Department of
Natural Resources ("EPA/DNR") to upgrade the treatment plant to
comply with EPA/DNR standards. By August 1986, the parties had
experienced disagreements over the quality of work performed by
Kelley, and the Appellee instituted a civil action against Kelley
and other contractors for their negligence and unworkmanlike
construction on the project. The Appellee specifically contested
Kelley's counterclaim that Kelley was owed $284,375.56, and the
Appellee never agreed that the specified sum was in fact owed to
A pre-trial settlement between the parties was memorialized in an August 16, 1989, agreement entitled "Settlement Agreement and Release."See footnote 1 The only portion of the agreement presently in dispute is paragraph six which provides as follows:
6. Parkersburg and KGB&W agree, settle, and compromise KGB&W's counterclaim against Parkersburg as follows:
a. Parkersburg shall pay to Kelley,
Gidley, Blair & Wolfe the sum of
Ninety Thousand and 00/100
($90,000.00) upon receipt from KGB&W
of the One Hundred Fifty Thousand
and 00/100 Dollars ($150,000.00) to
be paid pursuant to Paragraph No.
b. Parkersburg has applied for a grant amendment with West Virginia Department of Natural Resources (hereinafter referred to as "DNR") and /or the United States Environmental Protection Agency (hereinafter referred to as "EPA") to obtain seventy-five percent (75%) or such percentage as may be allowed by DNR and/or EPA of the $284,375.56 invoiced and counterclaimed by KGB&W. The application for a grant amendment was approved by both Parkersburg and KGB&W and submitted to DNR and/or EPA. All parties will use their respective best efforts to expeditiously process said application.
c. Upon receipt by Parkersburg of
the payment of the federal share of
KGB&W's eligible engineering costs,
Parkersburg shall immediately pay to
KGB&W the amount received from DNR
Pursuant to paragraph six, the Appellee applied for an
amendment to the grant and received $140,755.00 from the EPA/DNR on
July 9, 1990.See footnote 2 The Appellee thereafter calculated the amount owed
to Kelley and tendered a check in the amount of $70,061.00 to
Kelley. The check was refused and returned to the Appellee with an
accompanying demand for payment of the entire amount of
$140,755.00. The Appellee refused to pay Kelley any additional
sum.See footnote 3
Kelley commenced this action in the Circuit Court of Kanawha
County, and both parties filed motions for summary judgment. Judge
Patrick Casey thereafter transferred this action, sua sponte, to
the Circuit Court of Marion County, and the parties renewed their
motions for summary judgment. Mike Johnson, a professional
engineer and Branch Head for the Department of Commerce, Labor and
Environmental Resources, Division of Natural Resources, Water
Resources Section, in Charleston, West Virginia, submitted two
affidavitsSee footnote 4 explaining the procedure for determining grant amounts.
Debbie Shreeves, treasurer for the Appellee, also submitted an
affidavit identifying which of Kelley's specific invoices were
affected by the increased time and dollar amounts reflected in the
grant amendment.See footnote 5
The lower court, based upon this information, concluded that the "eligible engineering costs" referenced in the settlement agreement included only $36,839.78 in unpaid invoices owed to Kelley. The remainder of the $140,755.00 federal amount received by the Appellee, or $103,915.22, had already been paid by the Appellee to Kelley. Thus, the lower court ordered the Appellee to pay Kelley only the sum of $36,839.78, without interest. The lower court found that the language of the settlement agreement was ambiguous and concluded that it "leaves open the question as to whether plaintiff is entitled to the entire sum of any grant increase received by defendant (6b) or only plaintiff's 'eligible engineering costs' (6c)." Given that ambiguity, the lower court deemed it necessary to refer to the granting agency for assistance in interpretation and found that the affidavit of Mike Johnson dated October 23, 1993, identified the purpose of the additional $140,755.00 grant as compensation to the Appellee for the costs it had previously paid Kelley ($103,915.22) as well as to provide funding for the outstanding debt of $36,839.78.
The Appellant contends that the language of paragraph six of
the settlement agreement is clear and unambiguous and that no
extrinsic evidence should have been permitted to contradict, add
to, detract from, or otherwise vary the unambiguous terms of the
settlement agreement. The Appellant further contends that failure
to compel payment of the entire $140,755.00 to Kelley constitutes
unjust enrichment to the Appellee.
We first address the alleged ambiguity of the settlement
agreement language, specifically considering the meaning of the
term "eligible engineering costs" within paragraph 6c of that
agreement. It is impossible to ascertain the precise meaning of
the term "eligible engineering costs" without some understanding of
the grant process which underlies this whole question. Did that
language, for instance, refer to the entire amount originally owed
to Kelley, the amount counterclaimed in the civil action, only the
remaining amount not previously paid by the Appellee, or the entire
amount received by the Appellee from EPA/DNR? That reference to
"eligible engineering costs" is susceptible to more than one
interpretation and must, as the lower court concluded, be deemed
We have consistently held the following:
"'When a written contract upon its face is couched in such terms as to import a legal obligation without any uncertainty as to the object or extent of the engagement, it is conclusively presumed that the whole engagement of the parties and the extent of the undertaking were reduced to writing. Parol evidence will not be admitted to vary its terms.' Syllabus point 1, Jones v. Kessler, 98 W.Va. 1, 126 S.E. 344 (1925)." Syllabus Point 1, W. L. Thaxton Constr. Co. v. O.K. Constr. Co.,  W.Va. , 295 S.E.2d 822 (1982).
Syl. Pt. 3, First Nat'l Bank v. Clark, 181 W.Va. 494,
383 S.E.2d 298 (1989), overruled on other grounds by Coonrod v.
Clark, W.Va. , 434 S.E.2d 29 (1993). We have also explained:
Extrinsic evidence of statements and declarations of the parties to an unambiguous written contract occurring contemporaneously with or prior to its execution is inadmissible to contradict, add to, detract from, vary or explain the terms of such contract, in the absence of a showing of illegality, fraud, duress, mistake or insufficiency of consideration.
Syl. Pt. 1, Cardinal State Bank, Nat'l Ass'n v. Crook, 184 W.Va.
152, 399 S.E.2d 863 (1990), quoting Syl. Pt. 1, Kanawha Banking and
Trust Co. v. Gilbert, 131 W.Va. 88, 46 S.E.2d 225 (1947). Judicial
construction in that circumstance is simply not warranted. See
Syl. Pt. 1, Cabot Oil & Gas Corp. v. Pocahontas Land Corp., 180
W.Va. 200, 376 S.E.2d 94 (1988).
When, however, the terms of the written agreement are
ambiguous, leaving doubt as to the object or extent of the parties'
engagement, parol evidence may be admitted to permit appropriate
interpretation of the agreement and "to explain uncertain,
incomplete, or ambiguous contract terms." Yoho v. Borg-Warner
Chems., 185 W.Va. 265, 266, 406 S.E.2d 696, 697 (1991); accord,
Shafi v. St. Francis Hosp., 183 W.Va. 414, 396 S.E.2d 181 (1990);
Tri-State Asphalt Prods., Inc. v. McDonough Co., 182 W.Va. 757, 391
S.E.2d 907 (1990); Glenmark Assocs., Inc. v. Americare of West
Virginia, Inc., 179 W.Va. 632, 371 S.E.2d 353 (1988); Buckhannon
Sales Co. v. Appalantic Corp., 175 W.Va. 742, 338 S.E.2d 222
(1985). As we noted in Buckhannon Sales, upon a finding of
ambiguity, extrinsic evidence would be permitted to explain "'the
situation of the parties, the surrounding circumstances when the
writing was made, and the practical construction given to the
contract by the parties themselves either contemporaneously or
subsequently.'" Id. at 745, 338 S.E.2d at 224 (quoting Syl. Pt. 4,
Watson v. Buckhannon River Coal Co., 95 W.Va. 164, 120 S.E. 390
(1923)); accord, John D. Stump & Assocs., Inc. v. Cunningham
Memorial Park, Inc., 187 W.Va. 438, 419 S.E.2d 699 (1992); Hays and
Co. v. Ancro Oil & Gas, Inc., 186 W.Va. 153, 411 S.E.2d 478 (1991).
As we explained in syllabus point 2 of International Nickel
Co. v. Commonwealth Gas Corp., 152 W.Va. 296, 163 S.E.2d 677
"Extrinsic evidence may be used to aid in the construction of a contract if the matter in controversy is not clearly expressed in the contract, and in such case the intention of the parties is always important and the court may consider parol evidence in connection therewith with regard to conditions and objects relative to the matter involved . . . ." Syl. Pt. 2, Berkeley Co. Pub. Ser. Dist. v. Vitro Corp.,  W.Va. , [162 S.E.2d 189] [(1968)].
Accord, Bittorf v. Bittorf, 182 W.Va. 594, 390 S.E.2d 793 (1989).
As noted above, the lower court relied upon an affidavit submitted by Mike Johnson of the DNR. Mr. Johnson's comments, as well as other evidence reviewed by the lower court and this Court, indicated that the Appellee submitted $191,366.00 in the grant amendment. Of this amount, $141,279.39 had previously been paid to Kelley, leaving a balance of $50,086.61. The $140,755.00 received by the Appellee from EPA/DNR represented approximately 74% of the $191,366.00 submitted. Thus, applying that 74% to the $50,086.61 balance owed to Kelley, Kelley's portion of the federal share would be 74%, $36,839.78, as awarded by the lower court.See footnote 6
We concur with the reasoning employed by the lower court in
determining that the language of the settlement agreement was
ambiguous and that additional evidence was admissible to assist in
the ascertainment of the meaning of the language of that agreement.
Based upon the foregoing, we affirm the decision of the lower
Footnote: 1Pursuant to this agreement, the Appellee was paid $534,500.00 less $90,000.00 returned to Kelley (representing the deductible Kelley had on its $1,000,000.00 insurance coverage), for a net payment to the Appellee of $444,500.00 in incremental payments. The balance of $465,500.00 was paid by Kelley's insurer.
Footnote: 2The grant amendment extended the time covered by the grant and the dollar amounts which would be grant eligible for various types of engineering work. The specific subject of the amendment was grant eligible engineering fees of Kelley, those services performed within the extended grant time and within the increased grant eligible amounts. Parkersburg maintains that the request for the grant included both Kelley's invoice amounts which were the subject of the counterclaim and invoice amounts previously paid by Parkersburg and not the subject of the counterclaim or paragraph six of the settlement agreement.
Footnote: 3The calculation through which the Appellee determined the $70,061 amount was later deemed to be in error, according to the Appellee's brief. The $36,839.78 figure was thereafter calculated as the appropriate amount.
Footnote: 4As noted by the circuit court, the two affidavits of Mike Johnson appear at first glance to contradict one another. The March 12, 1992, affidavit would seem to indicate that the entire grant increase represents eligible engineering costs of Kelley, while the subsequent October 23, 1991, affidavit clearly provides that the purpose of the grant increase was to compensate the Appellee for the costs it had previously paid to Kelley ($103,915.22) and to provide an additional sum for payment of Kelley for debts due and owing ($36,839.78).
Footnote: 5No objections were made to the submission of these affidavits. Even on appeal to this Court, the only assertions regarding these affidavits involve the issue of whether they were admissible as extrinsic evidence of the negotiations, as addressed within the body of this opinion.
Footnote: 6The following chart demonstrates the percentages paid to the Appellee by the EPA/DNR:
Grant Eligible Percentage Paid
$191,366.00 total $140,755.00 total (74%)
$141,279.39 previously paid $103,915.22 (74%)
$ 50,086.61 unpaid balance $ 36,839.78 (74%) paid to Kelley