Primov v. Serco, Inc.
Primov v. Serco, Inc.
Opinion
In this appeal, we consider whether the circuit court abused its discretion when it dismissed a complaint with prejudice upon sustaining a plea in bar for failure to comply with a contractual condition precedent before filing suit.
BACKGROUND
On December 14, 2016, George Primov (Primov) filed a complaint in the Circuit *813 Court of Fairfax County against Serco, Inc. (Serco), alleging breach of contract (Current Action). Primov had filed a similar breach of contract action against Serco (Initial Action) on September 30, 2015, which he nonsuited in August 2016.
In the Current Action, Primov alleges that, on June 24, 2012, he entered into an employment agreement with Serco, a U.S. military contractor (Employment Agreement), pursuant to which he agreed to work in Afghanistan, a location designated an "imminent danger zone" by the United States Department of State (State Department). He alleges that Serco drafted the Employment Agreement, and after its execution, Primov worked in Afghanistan from November 7, 2012 until September 1, 2014.
Primov asserts that, because of the "hazardous and dangerous conditions," Serco agreed to "compensate him by paying 'uplifts' to his agreed hourly rate" of $22.00. He alleged that the Employment Agreement "define[d] and quantifie[d]" danger uplifts and hardship uplifts according to State Department regulations. Primov contends that instead of the 35% uplifts for danger and hardship designated by the State Department, he was only paid a 15% hardship uplift, and was not paid either the danger or hardship uplift on his overtime. Accordingly, Primov sought $61,014.80 in compensatory damages for Serco's alleged breach of the Employment Agreement.
Primov attached the Employment Agreement to his complaint. The Employment Agreement consists of an offer letter dated June 24, 2012 (Offer Letter) and a letter of assignment dated November 6, 2012 (Letter of Assignment). The Letter of Assignment states that it "confirm[ed]" Serco's and Primov's "mutual understanding of the terms and conditions" of Primov's employment and that the "provisions of [his] base compensation and employment terms are governed by the terms and conditions of [his] offer of employment." Paragraph 11 of the Letter of Assignment states that the Employment Agreement is governed by "the laws of the United States of America and the Commonwealth of Virginia," and also contains a mediation provision (Mediation Provision). The Mediation Provision states:
The parties shall attempt in good faith to resolve any dispute arising out of or relating to this Agreement promptly by confidential mediation. If the dispute has not been resolved by mediation within 60 days of a written request to mediate made by one of the parties, then either party may bring suit in the state or federal courts located in Fairfax County, Virginia.
On March 24, 2017, Serco filed a plea in bar to the complaint. 1 In the plea in bar, Serco alleged that, pursuant to the Mediation Provision, "a written request to mediate" was a "condition precedent to initiating legal action." It argued that, because Primov did not first make a written request to mediate, he "failed to satisfy the condition precedent to seeking judicial relief for the alleged breach of contract," which failure "serve[d] as an absolute bar to [his] ability to proceed with this lawsuit."
Serco attached an excerpt of a March 18, 2016 deposition of Primov that was conducted in the Initial Action. In the deposition, Primov admitted that he did not send a claim to Serco regarding his asserted damages prior to filing the Initial Action.
Primov filed a brief in opposition to the plea on June 9, 2017. Among other things, he argued that he satisfied the "condition precedent" when he sent a letter to Serco on February 1, 2016, stating that he "would not be opposed to pursuing mediation concurrently with the court proceedings, so long as Mr. Primov does not have to incur any portion of the expense related to that process." Primov also argued that Serco waived its right to require he comply with the Mediation Provision because Serco did not raise his noncompliance with the Mediation Provision as a defense to the Initial Action.
Attached to his brief in opposition, Primov provided a copy of his complaint filed in the Initial Action and a copy of Serco's demurrer in the Initial Action. Primov also attached letters and emails from January 2016, in which Serco demanded he nonsuit the Initial *814 Action for failing to state a claim, and because he had not complied with the Mediation Provision. Finally, Primov attached the February 1, 2016 letter, in which he stated that he "would not be opposed" to mediation and that Serco "should consider the bad publicity that likely will result should this lawsuit proceed."
The circuit court held a hearing on July 7, 2017, and issued a letter opinion on July 19, 2017. In its recitation of the facts, the circuit court noted that in the Initial Action, trial had been scheduled for August 15-17, 2016, but Primov had taken a voluntary nonsuit on August 16, 2016. Analyzing the plea, the court first found that the Mediation Provision was a condition precedent to filing suit, because the provision "clearly states the parties must attempt mediation outside of court at the written request of the aggrieved party at least 60 days prior to initiating litigation." The court reasoned that Primov did not satisfy this condition because the February 1, 2016 letter was "not a request to mediate but rather an expression of willingness to do so." The court concluded that, because Primov did not satisfy the contractually imposed condition precedent to bringing suit, the appropriate remedy was dismissal of the complaint. On July 19, 2017, the court entered an order sustaining Serco's plea in bar and dismissing the complaint with prejudice.
Primov appeals. This Court granted one assignment of error which states:
The circuit court erred by dismissing Primov's complaint with prejudice -an unduly harsh remedy-when it should have either declined to dismiss it at all, or else, dismiss it without prejudice.
ANALYSIS
Primov contends that, upon sustaining the plea in bar, the circuit court had two options: (1) permit the case to proceed "full steam ahead" or (2) "stay the proceedings for 60 days and order the parties to engage in good faith (but non-binding) mediation." He contends that dismissing the complaint with prejudice exceeded the available options and constituted an abuse of discretion as a matter of law. He further asserts that, under the circumstances, even a dismissal without prejudice would have constituted an abuse of discretion, and "would have been tantamount to a dismissal with prejudice."
A contract's condition precedent to initiating legal action is enforceable in Virginia.
TC MidAtlantic Dev., Inc. v. Commonwealth
,
While matters of contract interpretation are reviewed de novo,
William H. Gordon Associates v. Heritage Fellowship
,
Indeed, the United States Supreme Court has recognized that
the power to stay proceedings is incidental to the power inherent in every court to control the disposition of the causes on its docket with economy of time and effort for itself, for counsel, and for litigants. How this can best be done calls for the exercise of judgment, which must weigh competing interests and maintain an even balance.
Landis v. North American Co.
,
Courts confronted with similar mandatory pre-litigation dispute resolution provisions in contracts have addressed noncompliance with the provision in various ways, including staying or dismissing the court proceedings. In
Tattoo Art, Inc. v. TAT International, LLC
,
By contrast, in
American Technology Services v. Universal Travel Plan, Inc.
, Civil Action 1:05CV802(JCC),
In
Morrison
, this Court ruled that the 90-day waiting period for initiating litigation, required by Code § 8.01-581.2 after giving notice of a medical malpractice claim, was a "mandatory procedural requirement," for which the proper sanction for noncompliance would vary due to the circumstances of each case.
There are three primary ways a court can abuse its discretion:
when a relevant factor that should have been given significant weight is not considered; when an irrelevant or improper factor is considered and given significant weight; and when all proper factors, and no improper ones, are considered, but the court, in weighing those factors, commits a clear error of judgment .
Landrum v. Chippenham & Johnston-Willis Hosps., Inc.
,
*816
On appeal, "an appellee is free to defend [the court's] judgment on any ground supported by the record, whether or not that ground was relied upon, rejected, or even considered by the [circuit] court so long as additional factual findings are unnecessary."
Robert & Bertha Robinson Family, LLC v. Allen
,
The relevant circumstances in the case at bar include the terms of the contractually required condition precedent, the parties' compliance with the condition precedent, and the effects of a dismissal with and without prejudice.
In this instance, the Mediation Provision states that " if the dispute has not been resolved by mediation within 60 days of a written request to mediate ..., then either party may bring suit." The contract clearly requires that a written request to mediate be made prior to bringing suit on the contract. The circuit court granted a plea in bar based upon Primov's failure to abide by the terms of the contract. Dismissal of the action was a disposition within the discretion of the court. It is undisputed that Primov denied Serco the benefit of its bargain, and that, rather than being in its initial stages, this was a case in which extensive discovery had been conducted in the Initial Action. There is no evidence that the circuit court failed to consider a relevant factor or considered any irrelevant factor in exercising its discretion. Further, there is not a clear error in judgment apparent in the court's decision to dismiss the case upon granting the plea in bar. There is no support for the proposition that the circuit court abused its discretion by dismissing, rather than staying, the Current Action.
Primov's assignment of error also asserts that the circuit court erred in dismissing the action with prejudice rather than without prejudice.
"A dismissal of a suit 'without prejudice' is no decision of a controversy on its merits, and leaves the whole subject of litigation as much open to another suit
as if no suit had ever been brought
."
Newberry v. Ruffin
,
By contrast, "[d]ismissal of a suit 'with prejudice' is defined as an adjudication on the merits, and final disposition, barring the right to bring or maintain an action on the same claim or cause."
Reed v. Liverman
,
is that when a plaintiff's claim against a defendant has been resolved adversely to the plaintiff, whether on the merits or because of another bar to recovery such as sovereign immunity or the statute of limitations, the plaintiff is not allowed to subject the defendant to repetitive litigation on the same, previously resolved claim.
Lambert v. Javed
,
A dismissal based on a plea in bar, such as a plea of sovereign immunity , is a dismissal with prejudice. In these circumstances, the ability of a plaintiff to pursue a claim against the defendant is finally determined, although not on the merits of the plaintiff's claim against the defendant.
Gilbreath v. Brewster
,
In similar discretionary contexts, such as whether to grant a motion to reconsider or leave to amend, this Court has affirmed the circuit court's discretion to dismiss the claim with prejudice when amendment or reconsideration "would accomplish nothing more than provide an opportunity for reargument of the question already decided."
*817
Hechler Chevrolet, Inc. v. General Motors Corp.
,
Additionally, a circuit court does not abuse its discretion where it finds that permitting an amendment or granting leave to file a late pleading would unfairly prejudice the opposing party.
Hetland v. Worcester Mut. Ins. Co.
,
Unlike a plea of the statute of limitations or sovereign immunity, in which instances the basis for the plea cannot be remedied even if the case is refiled, in the case of a plea in bar based upon a condition precedent to suit the party not in compliance could subsequently satisfy the condition precedent and file a new action or claim. In giving the opportunity to correct the noncompliance, the court is not simply giving the litigant another "opportunity for reargument of the question already decided,"
see
Hechler Chevrolet, Inc.
,
Here, however, there is evidence to support the circuit court's decision to dismiss Primov's complaint with prejudice for failing to comply with the Mediation Provision. Primov had the opportunity to fully litigate his claim in the Initial Action, a similar action, that he nonsuited at the trial date, and Primov filed the Initial Action without requesting mediation as required by the Employment Agreement. After being made aware of the Mediation Provision four months into the Initial Action, Primov did not request mediation, but continued litigating the Initial Action for another five months before nonsuiting on the trial date. Even after nonsuiting the Initial Action, Primov still failed to request mediation before filing the Current Action, thus depriving Serco of the benefit of its contracted bargain, despite sending Serco a letter stating that he knew Serco did not want the publicity of a lawsuit. Further, Primov states in his brief and upon oral argument that he believes the practical effects of a dismissal without prejudice would be the same as a dismissal with prejudice in this case. 3
Considering the efforts expended by the parties in the Initial Action and Primov's repeated failures to comply with the Mediation Provision, we cannot say that the circuit court committed "a clear error of judgment" by dismissing this case with prejudice.
CONCLUSION
Under the circumstances of this case, the circuit court did not abuse its discretion when it dismissed the complaint with prejudice due to Primov's failure to comply with a mandatory condition precedent to filing suit.
*818 The decision of the circuit court dismissing the complaint with prejudice is affirmed.
Affirmed.
Serco also filed a demurrer on March 24, 2017, but that is not before this Court on appeal.
We note that courts of other jurisdictions have similarly held that the remedy for noncompliance with a condition precedent to initiating a legal action is reviewable for an abuse of discretion.
See
Advanced Bodycare Solutions, LLC v. Thione Int'l, Inc.
,
This Court need not and does not resolve whether this statement is accurate, as a matter of law, in this instance.
Reference
- Full Case Name
- George PRIMOV v. SERCO, INC.
- Cited By
- 3 cases
- Status
- Published