Phillips v. Mazyck - 273 Va. 630, 643 S.E.2d 172 (2007)

Rule:

It is elementary that mutuality of assent - the meeting of the minds of the parties - is an essential element of all contracts. Until the parties have a distinct intention common to both and without doubt or difference, there is a lack of mutual assent and, therefore, no contract. Courts ascertain whether a party assented to the terms of a contract from that party's words or acts, not from his or her unexpressed state of mind.

Facts:

The injured party, Sidney E. Phillips, filed a motion for judgment against the driver, Simona Mazyck, seeking damages for personal injuries he allegedly sustained in an automobile accident involving Mazyck. In response, Mazyck filed a plea in bar, requesting a dismissal of Phillips' motion for judgment. Mazyck asserted that Phillips, before filing his motion for judgment, had entered into an agreement with Mazyck's automobile liability insurance carrier, United Services Automobile Association (USAA), to arbitrate Phillips' personal injury claim. Mazyck argued that this agreement to arbitrate constituted an accord and satisfaction and/or a settlement of Phillips' claim that barred Phillips from pursing the action he filed in the circuit court. Mazyck further alleged that Phillips improperly and unilaterally withdrew from the arbitration agreement. As an alternative to the relief sought in her plea in bar, Mazyck subsequently moved the circuit court to stay the proceedings and compel the parties to proceed to arbitration pursuant to Code § 8.01-581.02. Phillips’ attorney argued that, although he had signed the agreements, there was no meeting of the minds, because he never returned the documents. Instead, he asserted that he was holding the documents until the results of an independent medical examination were revealed. The circuit court agreed with Mazyck and ordered arbitration. After Phillips’ motion for judgment with prejudice was dismissed, the present appeal followed.

Issue:

Did the injured party enter into a valid arbitration agreement with the driver’s insurance carrier, thereby warranting the dismissal of the injured party’s claims against the driver? 

Answer:

No.

Conclusion:

The decision of the circuit court was reversed. In reversing, the supreme court determined that there were not words or acts on the part of the insurance carrier objectively manifesting its assent to the terms of either an original or revised arbitration agreement. A provision regarding liability and damages discovery was not included; moreover, the carrier had not assented to the new disclosure and submission deadlines. Silence was insufficient to show the insurance carrier's intent to be bound. In addition, the attorney's failure to return the sign documents showed his lack of assent.