Envtl. Staffing v. B & R Const. Mgmt.
725 S.E.2d 550
Va.2012Background
- PRHA contract between Developer and B&R for demolition/abatement; Section 4 required bonds or letters of credit.
- Section 4 states all rights under the contract benefit Developer and its successors and assigns, including PRHA.
- Addendum contains No Third Party Rights in Section 2.4, denying third-party claims or agency relation.
- B&R obtained Genesis bond; Beamon subcontracted to En-Staff for asbestos abatement work.
- Beamon failed to pay En-Staff; En-Staff sued B&R on the bond and asserted third-party beneficiary status.
- Court sustained demurrer, concluding En-Staff is not an intended third-party beneficiary of the PRHA Contract.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Whether En-Staff is a third-party beneficiary of the PRHA Contract | En-Staff is a beneficiary under bond provisions | Contract denies third-party benefits; no intention to benefit En-Staff | En-Staff not an intended third-party beneficiary |
| Whether incorporation of Code § 2.2-4337 creates beneficiary status | Statute creates beneficiary rights in subcontractors | Statute does not override contract language denying third-party rights | Statute incorporation does not confer third-party rights here |
| Whether Section 2.4 No Third Party Rights limits action against B&R | Addendum limits only PRHA/HUD actions, not against B&R | Limitation applies to third-party actions against PRHA/HUD | Trial court misinterpreted, but error harmless |
| Whether En-Staff may pursue third-party beneficiary theory given incidental benefit | Bond and contract parties intended benefit to En-Staff | Beneficiary must be intended, not incidental | Incidental beneficiary; no third-party right |
Key Cases Cited
- Levine v. Selective Ins. Co. of Am., 250 Va. 282 (1995) (establishes enforcement by nonparties in certain contexts)
- Copenhaver v. Rogers, 238 Va. 361 (1989) (beneficiary analysis; intent to benefit third party required)
- Valley Landscape Co. v. Rolland, 218 Va. 257 (1958) (distinguishes incidental from intended beneficiary)
- Century Indem. Co. v. Esso Standard Oil Co., 195 Va. 502 (1954) (emphasizes express negation of third-party rights)
- Collins v. First Union Nat'l Bank, 272 Va. 744 (2006) (need clear and definite intent to benefit third party)
- PMA Capital Ins. Co. v. U.S. Airways, Inc., 271 Va. 352 (2006) (contract interpreted by plain meaning)
- White v. Boundary Ass'n, Inc., 271 Va. 50 (2006) (intent governs when incorporating statutory language)