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Nonrepudiating Contract Party May Choose Performance or Damages


Homeland Training Center v. Summit Point Automotive, Case No. 08-2272/2273 (C.A. 4, Feb. 3, 2010)

After one party to a contract repudiated it, the other party filed an action for breach of contract and requested an order of specific performance. As the litigation progressed, it became apparent that the repudiation had destroyed any prospect of salvaging the contract, prompting the non-repudiating party to abandon its earlier request for specific performance and to seek monetary damages instead. The district court, however, held that as a matter of West Virginia law, the original decision to seek specific performance precluded the nonrepudiating party from being able to claim monetary damages. This was error. The theory of waiver on which the district court predicated its ruling is not supported by West Virginia contract law or the law of contracts generally. The district court’s ruling lets a party who repudiates a contract force a non-repudiating party into a premature election of remedies. Allowing the repudiating party to gain the upper hand in this manner would undermine the value of contractual commitments. We therefore remand this case for trial on the issue of damages occasioned by the repudiation.

Defendants Summit Point Automotive Research Center, LLC, and the William Scott Inter Vivos Trust, (collectively, “SPARC”) own a training facility in Jefferson County, West Virginia, that is used by government security personnel. On July 25, 2006, as part of a plan to have certain complementary services provided on-site, SPARC agreed to lease 12 acres of undeveloped land at the facility to another company. Although the lease agreement took effect upon signing, it provided that the initial term would not begin unless SPARC’s tenant chose to initiate it. The lease also provided, however, that SPARC could force a decision one way or the other by obtaining the necessary permits for the site and recording a “final plat,” a term described at some length by local ordinance. See Jefferson County, W. Va., Subdivision Ordinance, art. 3, § 1a; art. 8, § 1c. This worked in two ways. First, the lease would automatically terminate once a plat was recorded unless the tenant notified SPARC within sixty days that it desired to proceed. Second, if the lease were kept alive, the initial term would automatically begin 120 days after recordation unless the tenant indicated that it had not obtained satisfactory financing.

The lease allowed the tenant to assign its interest if SPARC consented to the assignment in advance. SPARC could not unreasonably withhold its consent, but the tenant would remain liable under the lease unless the beneficiary of the assignment had a net worth greater than $10 million. The lease also provided that each party could request that the other affirm or deny the contract’s continued validity on ten days’ notice. Finally, it allowed for an award of attorneys’ fees to a “prevailing party” in litigation.

On October 3, 2006, Homeland Security Corporation, SPARC’s original tenant, executed an assignment of its rights under the lease to Homeland Training Center, LLC, (”HTC”), the plaintiff in this suit. SPARC was not asked for its written consent prior to the assignment, but it was informed of the assignment in December 2006. Nine months after being notified, SPARC sent a letter requesting verification that HTC had a net worth of at least $10 million, but also stating that if SPARC had known of the assignment ahead of time, “[w]e would, of course, have consented to this transaction.”



 

Jurisdiction: U.S. Court of Appeals, Fourth Circuit
Related Categories: Civil-Procedure, Contracts, Damages
 
District Court Judge(s)District Court Judge Jurisdiction(s)
John Preston BaileyNorthern District of West Virginia, at Martinsburg

 
Circuit Court Judge(s)Circuit Court Judge Jurisdiction(s)
Andre M. DavisU.S. Court of Appeals, Fourth Circuit
Allyson Kay DuncanU.S. Court of Appeals, Fourth Circuit
J. Harvie Wilkinson IIIU.S. Court of Appeals, Fourth Circuit

 
Appellant Lawyer(s)Appellant Law Firm(s)
Charles F. BellomyHuddleston Bolen LLP
James Jarrod JordanHuddleston Bolen LLP
John Harlan Mahaney, IIHuddleston Bolen LLP

 
Appellee Lawyer(s)Appellee Law Firm(s)
Peter L. Chakmakian
William Richard McCune, Jr.
Alex A. Tsiatsos

 





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nal complaint, it might well have done so. what election not. its claim for specific performance. tract, stating once again that the lease had been "terminated," stated that the lease had terminated because htc had failed published i take a different view of the record. just as b obtained the district court's injunction ordered: nent. see kansas state bank in holton v. citizens bank of a to sell to c and limit his damages claim against a to the mance, the law usually implies that performance shall be center. the prevailing view is that contract law typically should not ing in part and concurring in part. 1 dictions today have abandoned this dimension of election of deny the party who stuck by the bargain any remedy. the ing that the repudiation was making it impossible to get determination to proceed. sparc's failure to do so, and ised non-performance actually to occur, which could be some plat in march of 2008, that act came too late to nullify its ear- sparc had repudiated the contract, htc could not bring a court's rulings. be inappropriate to allow one who repudiates a contract and for the northern district of west virginia, at martinsburg. this way, it operates as a doctrine of accelerated ripeness. see district court held. that said, sparc never expressed any stone v. kaufman, it is clear that west virginia contract law note that, in issuing the preliminary injunction, the district 12 homeland training center v. summit point i. 24 homeland training center v. summit point agreement, its quest for financing that would have been criti- continue with the deal, notwithstanding the "make whole" damages occasioned by the repudiation. 17, 2007, repudiation of the contract, urging sparc to into a breach prior to the time for performance only if the and we consider the possibility that damages are now fore- ever suggested the lease had any continuing vitality. htc could not "change its mind" because it had already "sparc") own a training facility in jefferson county, west allowing the repudiating party to gain the upper hand in this 443 n.w.2d 451, 461 (mich. app. 1989); see also southern option two, that is, "it kept the contract alive." but how did to the record of each party's conduct after october 17, 2007, plat from the jefferson county planning commission and by summit point automotive mind during the litigation and recovering another. the period when htc would have been subject to a duty of for another. "only if the other party has materially changed here on the nature of the statement and the surrounding cir- it would be improper not to allow htc to amend its request factory financing. treated the repudiation as an actionable breach of contract and while the plaintiff in this case did not request both specific 3homeland training center v. summit point to landlord as provided herein, and this lease shall be of no fur- respect to the lease which are inconsistent with the terms of the on diversity of citizenship, and on questions of substantive cumstances at the time it was made. 23homeland training center v. summit point tracts § 322). annon had nothing to do with a suit for specific within sixty days of the "merger plat" filing, "the lease has is no reason why they should be categorically forbidden to ments. we therefore remand this case for trial on the issue of an award of damages. insistence, the court will compel a to go through with his deal 18 homeland training center v. summit point of course, it is not at all surprising that htc did not seek money dam- infra.) whether the letter amounted to a repudiation depends trict court's determination that a repudiation occurred. formance and damages. in particular, b can choose to allow vailing party in that it obtained an order for specific performance; ings] shall be freely given when justice so requires."). sparc it could," maj. op. at 10, is curious.2 sparc's letter of october 17, 2007, declared that because iss/breismeister architects v. westin hotel co.-plaza hotel ney's fees, in any one (or more) of three ways: (1) by winning the lawsuit; after the fact. the district court also held that although at the time of the preliminary injunction hearing that financing for the deal of contract, rather than a threatened, prospective one. we the doctrine of anticipatory breach has a well-defined "[t]here is no breach so long as the injured party elects to treat perform when performance comes due. see robert j. riley, that contradict one another or by recovering overlapping rem- sparc's original tenant, executed an assignment of its rights (2) by prevailing on the principal issues; and (3) when there is a causal the repudiation. . . . [i]t is uncontested that [sparc] continued this never occurred, however. the district court ruled that several weeks later, htc again wrote to sparc, explain- of the preliminary injunction.6 prevent a plaintiff whose cause of action was based upon a tual obligations, in essence promising ahead of time not to for damages, htc received all to which it was entitled. manner would undermine the value of contractual commit- election of remedies doctrine also has a sequencing compo- defendant. certainly, there is no evidence in the record htc was the very "order of specific performance" it sought ages (in the form of lost profits) in december 2007 because it almost cer- john preston bailey, chief district judge. however, formed the opinion that htc was not doing enough nance. see jefferson county, w. va., subdivision ordinance, many potential investors would not look benignly at the december litiga- time since west virginia law expressly allows specific perfor- mind and decides not to buy from b for the $200 he had 6 ment corp., 908 f.2d 1363, 1371 (7th cir. 1990). with the relief to which it was entitled by virtue of the preliminary injunction: make alternative financing arrangements. sparc, mean- indeed, in its preliminary injunction opinion, the district court specifi- a party may obtain either specific performance of a contract, other party to the contract from obtaining any relief. it is a 4 2004) (viewing the sequencing aspect of election of remedies doctrine as (1981) ("the injured party does not change the effect of a united states court of appeals to proceed after a repudiation. "[i]n a contract action where moved to seek damages in place of an injunction that sparc or damages flowing from a breach of a contract, but not both. breach of the contract. the lease agreement demanded that j.a. 346-47. appeals from the united states district court part laid out terms for the actual construction of the buildings and leasing to provide notice of its determination to proceed within sixty familiar maxim that "he who seeks equity must do equity." relevance are those undertaken after htc had received the provided proof of financing by january 15, 2008. three damages may be is a matter for remand. we hold only that 21homeland training center v. summit point objectively manifested an unwillingness to perform under the opinion. judge wilkinson wrote the opinion, in which judge election not to terminate the contract. in short, the court held christian leadership conference v. al malaikah auditorium we note that the sequencing component of election of remedies doc- mark would never have been reached. the deal alive, the venture capital firm that htc saw as its last after discovering the futility of its initial efforts to rescue the tract is a question of law. williams v. professional transp., first, while anticipatory breach doctrine provides that a company, tial term of the lease would begin no later than december 1, however. thus, the only efforts by sparc of any possible (1965), and that therefore the issue would likely be governed by federal however, concern the narrower doctrine of judicial estoppel. omissions inconsistent with the parties' agreement; and (3) it became apparent that the repudiation had destroyed any pros- plaintiff to sue for damages after dropping its earlier claim for first, sparc claims that htc breached the lease by fail- doctrine of election of remedies applies where two possible for a breach of a contract are not inconsistent. under the law, 1 to survive the termination of this lease and except for any pay- law anticipates. tive remedies or alternating between remedies once suit had before wilkinson, duncan, and davis, training center, llc. william richard mccune, jr., 8 davis, circuit judge, dissenting in part and concurring in if sparc had known of the assignment ahead of time, "[w]e a matter of federal law under erie); olympia hotels, 908 f.2d 1371 tenant chose to initiate it. the lease also provided, however, responded that it would accept the lease if htc could verify offered a, surely b could not then seek damages of $100 from parties had "continued to perform." see supra note 6.7 given effect because the waiver was made without knowledge separate claims or defenses as the party has regardless of con- which west virginia law permits it only one bite. id. ted). the basic purpose of the doctrine is to prevent a plaintiff and to seek monetary damages instead. the district court, this is true notwithstanding that htc repeatedly assured the district court a breach based on the assignment, as sparc itself concedes. seek damages in a situation in which the legal remedy may be to terminate the lease. thereafter, htc dropped its claim for before it could be acted upon, however. tract by stealth, further underscores the correctness of the dis- iii. failed to take action, it is equally the case that the commercial mance has never been decreed, there is no possibility of de sparc claims, however, that allowing htc to recover dam- that sparc owed htc some extra-contractual duty to display public performance is a valuable means for the plaintiff to secure the 10 homeland training center v. summit point co. v. tompkins, 304 u.s. 64 (1938), and hanna v. plumer, 380 u.s. 460 cally found that "[sparc] . . . has no present plans to re-lease or other- of htc's net worth. sparc, however, realized that it had not which was granted shortly thereafter, and requested an order within a reasonable time."). in this case, the lease provided remedy of specific performance and by an action for damages bring an action for anticipatory breach if the repudiating party see 17b c.j.s. contracts § 540 (1999). the record, however, 16 homeland training center v. summit point a proper "final plat" and to forebear from any further acts or performance, sue and recover under the contract; or the outset of his breach of contract action and later change his contract, after suit has been filed, is too late and is therefore 17homeland training center v. summit point the project going forward with respect to financing, inspection, vivos trust, performance and damages as alternative remedies in its origi- lease between the parties is still in effect and avoid this financing and asking once more for a retraction. sparc rather than sue then and there for lost profits and the benefit opposition to the assignment after learning of it in december inconsistent positions in the course of a suit." macdonald v. prevent a plaintiff from substituting one contractual remedy chakmakian, lc, charles town, west virginia; alex a. restatement (second) of contracts § 378, cmt a. in light of and thereby being relegated to seeking only specific perfor- edly reaffirmed it. after htc responded to sparc's october contains no indication that sparc performed under the lease interested in financing the project, it would not become third party; (2) it affirmatively required sparc to perform j.a. 32. franconia assocs. v. united states, 536 u.s. 129, 143 (2002) v. st. paul fire and marine ins. co., 566 f.3d 150, 154 (4th may not now obtain an award of damages occasioned by council of baltimore, 40 f.3d 677, 681 (4th cir. 1994); see retract, sparc reiterated its desire to put an end to the con- ii. in support of their respective claims concerning repudiation. tion unless the tenant indicated that it had not obtained satis- we conclude, therefore, that there is no reason why htc which, after all, is exactly what happened here. moreover, the ing to make sufficient efforts within a "commercially reason- had received commitments for financing, but that because of in error. particular time frame and that, while the assignment was repudiation or to retract his repudiation."). it is the non- tracts § 253(1). the doctrine gives the plaintiff the option to undeveloped land at the facility to another company. f. supp. 960, 967-69 (s.d.w. va. 1996). period, htc may exercise its rights under the lease to continue basis of a later actual breach, rather than the repudiation. cal declaration of fixed purpose not to perform the contract in any event to sparc that could not be satisfied by htc's $60,000 bond. cannot conclude that they precluded htc from altering its received what it wanted and what it proved it was entitled to: option to request assurances, the only reasonable conclusion law. similar devices have been treated as procedural. see allen v. zurich remedies doctrine. see schwartz v. rockey, 932 a.2d 885, 893 informed to be effective. repudiation if the non-repudiating party decides to sue on the moreover, sparc failed even to notify htc of its plat filing precluded from obtaining a damages award after it abandoned sparc claims that it continued to perform by filing a second to withdraw the repudiation without forfeiting the right to thus, with one exception, i would affirm the district court's have retracted its repudiation at any point between october merger plat in a letter dated october 17, 2007. that letter to consummate the transactions with its funding sources." marks omitted). this statement does not mean that failure to 9 mance to seek damages instead. to that point. the parties met to discuss the issue on july 23, trine would likely qualify as "procedural" for purposes of erie railroad district court was surely correct in reasoning that htc had achieved all the art. 3, § 1a; art. 8, § 1c. this worked in two ways. first, the entitlement to the apparent $100 increase in the value of the sparc was not going to perform under the lease, which learned htc's net worth, sparc's waiver was sufficiently we begin with sparc's arguments, raised by way of cal to its consummation of the deal.5 nary injunction (that is, the order of specific performance) responded by letter several days later, describing its efforts up would ultimately be enforced. to ignore the provisional char- performance. in january 2008, htc disclosed the litigation to the various the majority concludes, to the contrary, that htc chose seems exactly the message sparc was trying to convey. trustee of the william scott inter us to determine whether htc's efforts to obtain financing 5homeland training center v. summit point already made a ruling based on the party's earlier position and i agree with the disposition of sparc's cross-appeal in brought if one party to a contract renounces its future contrac- alleged breach, the preliminary injunction (despite the nomen- election clause, which effectively allowed htc to terminate the agreement sought. the preliminary injunction, however, was not effec- days to attempt to secure financing. any duty to act within a monetary damages against sparc was precluded by htc's with b and sell to b at $100. if, thereafter, c changes his right to sue for anticipatory breach. a party can certainly keep we reverse the district court's conclusion that an award of filed suit that a simple order of specific performance would vide a limitation that election of remedies doctrine does not. trict court rejected each of sparc's counterclaims, holding suaded that the preliminary injunction sought and obtained by 2007, and in the course of the meeting, sparc told htc that specific performance. with, and after delivery of, the october 17, 2007 letter consti- and unless that happened, it would "neither admit nor deny contrary to the majority's existed. under west virginia law, commercial reasonableness we also vacate the district court's denial of attorneys' fees to htc. a contract cannot be allowed to force a non-repudiating party under the lease. throughout the litigation, sparc maintained improper, sparc had waived any claim by assenting to it ward question of election of remedies law. the common law in its letter of october 31, 2007. the october 31 letter was as chose to delay the commencement of its obligations under the contracts § 378. sparc contends that it spent "hundreds of non-repudiating party loses the right to treat a repudiation as homeland training center, llc, that htc made a binding election of remedies in december 2007. obtaining the necessary permits for the site and recording a that sparc committed any further breach of contract after court. holland v. washington homes, inc., 487 f.3d 208, 213 in the mortgage market over the last year."). this is yet a further indication appellant's reply br. at 8. it is only conduct caused by closed because sparc changed position in reliance on co., 281 cal. rptr. 216, 226 (ct. app. 1991); pre- retraction. as a matter of law, a statement must be uncondi- bars a party from changing positions where the court has could recover for breach. both sides appealed from the district lease or otherwise affect the disputed property. . . ." we also 22 homeland training center v. summit point nately or hypothetically. . . a party may also state as many promisee elects to treat it as such."). 4 homeland training center v. summit point july 25, 2006, as part of a plan to have certain complementary court's conclusion that htc was entitled to treat the letter as 2 by failing to make sufficient efforts to obtain financing and by tion, and this would be particularly true during the nationwide economic and htc's filing suit, on december 4, 2007. thus, while (w. va. 1971). annon stated that, when a repudiation occurs, repudiation and expressed an intention not to terminate the ing without reservation and in full knowledge that it had not nor does west virginia's substantive law of contracts pro- sanguine, and it is now apparent that if htc cannot have ment, which did not occur. the assignment therefore violated sparc's position that the "merger plat" qualified as a "final his preferred relief to an award of damages in the event that htc had not expressed its intention to proceed with the lease 1994) ("[w]here a contract fixes no definite time for perfor- be the import of the majority's approach in this case. as the majority notes and as the district court recognized, the parties' (w. va. 1977) (quoting dingley v. oler, 117 u.s. 490, 502 (1886)) ("an htc would be forced to notify sparc that it wished to keep caveat or qualification and its tone was firm. furthermore, contract--not its actual, subjective intention. see record club the commencement of the suit, in the alternative, specific per- acter of a preliminary injunction in the context of election of j.a. 985. (4th cir. 2007). in general, the interpretation of a written con- as federal law, we decline to rule upon it. mance as a remedy for anticipatory breach. miller v. jones, 71 ing for the project, and to fashion and record the "final plat." the second complete relief (specific performance) in the above scenario, plaintiff-appellee, next, we consider sparc's claim that the assignment a on a theory of breach of contract. but that seems to me to circuit judges. affirm or deny the contract's continued validity on ten days' robertson, 618 s.e.2d 506, 513 (w. va 2005). that doctrine this is no small matter. regardless of whether a plaintiff 2006 and in fact acknowledged in its letter of september 2007 whether, even if the statement was a repudiation, htc was in homeland training center, llc, if [it] had not been prevented from performing. disputed $100 profit. on the other hand, however, at b's liminary injunction.9 namely, sparc's full performance of any and all of its con- of america, inc. v. united artists records, inc., 643 f. supp. point 1, syllabus, annon v. lucas, 185 s.e.2d 343 (w. va. assignment in december 2006. nine months after being noti- action immediately, rather than having to wait for the prom- (internal quotation marks omitted) ("[a] repudiation ripens chance to secure financing informed htc that while it was quantum meruit so far as [it] ha[d] performed; . . . typically applies only where the other party was misled by the we see no reason then why htc should be precluded from thereby cast something of a pall over the deal, possibly scaring off poten- plat" under the lease, and sparc has not challenged that rul- been negotiating since the start of the year. the letter expired obtaining permits. on the record of this case, however, we burg, west virginia, for summit point automotive research remain liable under the lease unless the beneficiary of the 20 homeland training center v. summit point doned, a claim for specific performance. this conclusion was judicata or where some element of estoppel is present, a con- would neither admit nor deny the continued existence of the later, htc notified sparc that it was exercising its option some way barred from obtaining the relief it sought. (see virginia, would apply if it heard the case. caci intern., inc. tably qualified as a "final plat," and duly recorded it after cant part to work to the advantage of the non-repudiating (3:07-cv-00160-jpb) b has a choice to make. b can sue a (because b claims an ther force or effect, except for such matters which are designated filed suit, and "an attempted retraction of a repudiation of a another remedy precluded by the election of the first." a preliminary injunction, which was granted shortly thereaf- and effect," and that it intended "to perform under the lease wise affect the disputed property." j.a. 346. parts to the agreement. the first part essentially required affirmative per- of its bargain, however, it sought and obtained the alternative would, of course, have consented to this transaction." lease has been terminated by [htc's] inability or refusal to v. miller, 21 s.e.2d 674, 678 (w. va. 1942) (citation omit- been terminated by the tenant." the statement contained no of the bargain after all. it is well settled in contract law that at that point, if htc elected not to go forward with the lease, the judgment de novo, applying the same standard as the district [1] treat the contract as rescinded, and recover on so that htc would be aware of the possible need to make a notice. finally, it allowed for an award of attorneys' fees to at 6. unlike the majority, but like the district court, i am per- ing on appeal. a duty of commercial reasonableness could not contract suit in federal district court for the northern district pect of salvaging the contract, prompting the non-repudiating 11homeland training center v. summit point research center, a west virginia would apply its own law to the questions before us. repudiating party who should generally be able to decide how htc keep the contract alive? it obtained an order of specific to be sure, whether sparc's posturing in connection participating in the assignment from homeland security cor- nullify its repudiation is by making a statement retracting it. lease beyond the 120-day mark. civil procedure, which largely replicate the equivalent federal a "final plat," unless htc considered its financing options was for the very same reason that it does not qualify as de man, no. 03-6437, 2004 wl 2106552, at *9 & n.10 (e.d.pa. sept. 21, or not the parties continued to perform under the lease following repudiation by urging the repudiator to perform in spite of his time well into the future. see restatement (second) of con- [3] treat the repudiation as putting an end to the con- relief it had obtained from the district court.8 in which it approved the assignment. having given its bless- performance and in no way suggested that when a non- consent prior to the assignment, but it was informed of the could it be said to have made then? in a system where plain- (same). as a matter of federal law, election of remedies doctrine no longer trict court whether fees should be awarded. consistent with also 25 am.jur.2d election of remedies § 3. virginia, that is used by government security personnel. on is seeking an injunction or damages, the right to go to court non-repudiating party into a premature election of remedies. rejected such a course. particularly in light of sparc's this case to plaintiff's amending its request for specific perfor- conclusion that sparc repudiated the lease. the doctrine of it is clear to me that htc chose option number three: it 9homeland training center v. summit point a matter of law.1 tional to be effective as a retraction. see anderson excavating hold otherwise would allow a party repudiating a contract to jure double recovery: it was "merely a temporary injunction unsatisfactory, in which case htc could postpone the start of 14 homeland training center v. summit point duty of commercial reasonableness of the sort sparc asserts his suit for specific performance." stone, 107 s.e. at 296. tutes an actionable repudiation of the agreement presents a long, 131 s.e. 252, 253 (w. va. 1926). those decisions, 7homeland training center v. summit point tion took place. the principal way for a repudiating party to htc could draw after receiving the october 17 letter was that from the december 18, 2007, hearing, or april 16, 2008. sparc ties, being at all times ready and able to perform, and had a net worth of at least $10 million, but also stating that of contract, it is clear that what htc was entitled to under unreasonably withhold its consent, but the tenant would see daily gazette co., inc. v. west virginia dev. office, 521 s.e.2d 543, eventu- a. choice to request one remedy will bar him from changing his west virginia law provides no per se bar or indeed a bar in for damages after filing its complaint. since specific perfor- ally, as it was entitled to do, htc elected to abandon the sought financing would not have caused any significant harm responded to htc's december 4 letter by fax, stating that it for the foregoing reasons, we affirm the district court's doubtless, there are some costs that sparc incurred as a is inconsistent with modern pleading practice. consider that law, this court must apply the law that the forum state, west connection between the lawsuit and a change in the defendant's conduct. sparc nonetheless argues that the waiver should not be renouncing a contract must be "positive, absolute and district court. j.a. 983-85. west virginia contract law is clear: all, sparc requested that information in the very same letter deal. htc was not unreasonable in supposing at the time it evidently seeking to get out of the contract as fast as it could, 553-54 (w. va. 1999) (construing statutory fee-shifting provision allow- court's ruling lets a party who repudiates a contract force a contract law or the law of contracts generally. the district instead to attempt to bring about the termination of the con- william scott inter vivos trust, u.s. 487, 496-97 (1941)). it is undisputed that west virginia pleadings that have supplanted the common law's more for- mind and ask for damages instead. turning to the facts of this case, we find that htc was not fied, sparc sent a letter requesting verification that htc an anticipatory repudiation, and thus as an actionable breach contract because it had initially brought, though later aban- although the lease agreement took effect upon signing, it pro- at the end of the time specified in the contract for 5 ing an award of fees to a "successful party"). arguably, htc was a pre- after one party to a contract repudiated it, the other party requires a party to elect a single remedy at the outset of suit. kansas state the district court recognized, this is not what west virginia decided: february 3, 2010 sparc also asked to amend the lease to provide that the ini- or "abandon[ ] its claim for specific performance." id. at 16. adoption of more flexible approaches to pleading and proce- generally adopts this view. stone is explicit on the point: "the party, cannot be turned on its head. a party who repudiates remedies would be to impose upon plaintiffs a hobson's it was a "prevailing party" because it persuaded the district approvals had been obtained. with two weeks to go before order dismissing this case as fully heard and resolved. i would the lease allowed the tenant to assign its interest if sparc claim. j.a. 985. whether or not that characterization is the most apt, the b. filed an action for breach of contract and requested an order (citations omitted). out the hope that the repudiating party would honor its side performance could not succeed. sparc refused to provide a "prevailing party" in litigation. ascertained htc's net worth at the time of its waiver. after vacate the district court's order insofar as it denied attorney's if a contracts to sell land to b for $100, but a gets a better it appears that the unspoken theory of htc, implicitly embraced by the thought to be faster than the subdivision process associated must therefore determine whether the doctrine of anticipatory as the district court recognized, at the time of sparc's nal decision to seek specific performance precluded the non- changing its request from one for specific performance to one inadequate." jim-bob, 443 n.w.2d at 461. summit point automotive finally, sparc contends that the district court erred in its contract in consequence of which it sought a remedy from the performed under the lease by filing the second plat. cross- is a "gap filler," invoked only when a disputed issue is not damages action based upon the repudiation because its earlier structure before and after the alleged repudiation" and that it sparc was not compelled to take such a precipitous course is relevant only to the separate and secondary issues of mance, particularly as relates to surveying the property and william scott inter vivos trust, presumably, any award of attorney's fees would cover only the fees mission of jefferson county. 2 homeland training center v. summit point htc obtained complete relief before the district court, statute of limitations will not begin to run from the time of notion that an election has to be made at the time suit is filed tract, and sue for the profits [it] would have realized tions omitted). tainly would have encountered a wholesale failure of proof at that time. advanced to judgment. see olympia hotels, 908 f.2d at 1371 reasonableness duty would be inapplicable since the 120-day martinsburg, west virginia, for summit point automotive of the land. j.a. 30-47. bifurcating the two parts of the contract was an tial lenders and investors. as a matter of west virginia law, it is doubtful however, held that as a matter of west virginia law, the origi- a party may prevail, for the purposes of an award of contractual attor- involved unless the lease dispute was resolved. one week bolen, llp, huntington, west virginia, for homeland persuaded the district court to accept that characterization. [n]o genuine issue of material fact exists with regard to whether malistic approach. see w. va. r. civ. p. 8(e) ("a party may the views expressed above, i would permit htc to argue that that "[p]arties will not be permitted to assume successive arrangement contemplated in the lease. in such circumstances, one has been wronged and has a number of remedies, he may with certainty concerning their contractual rights and obliga- but the doctrine of anticipatory breach, intended in signifi- 925, 940 n.10 (s.d.n.y. 1986), vacated on other grounds by see west virginia dept. of transp., div. of highways v. forms of relief that are premised on legal or factual theories party has not yet elected to treat the repudiation as a breach. trustee of the william scott inter cross-appeal. we conclude that the district court was correct services provided on-site, sparc agreed to lease 12 acres of them all to withdraw. throughout the spring, htc worked to the district court was correct to find a repudiation. argued: john harlan mahaney, ii, huddleston & performance under the lease by securing approval of the final restatement (second) of contracts § 256, no such nullifica- "[t]he syllabus . . . is the law in west virginia." union trust co. of everly v. peters, 397 s.e.2d 416, 418 (w. va. 1989) (cita- thousands of dollars improving the lease property's infra- that sparc had changed course and decided to perform 17, when it was sent, and december 4, when suit was filed. west virginia law was to make a choice: was threefold: (1) it precluded sparc from entering into any was well in hand. j.a. 346 ("htc has secured acceptable financing for the (w. va. 1921), the west virginia supreme court allowed a ages gives htc two bites of an apple under circumstances in v. and a tennessee limited liability with respect, i dissent. plead alternative theories of remediation. specific performance is rendered impractical or impossible-- both sides filed motions for summary judgment. the dis- opinion to position itself to proceed with the lease, and in june 2007 iv. bank in holton v. citizens bank of windsor, 737 f.2d 1490, 1499 (8th cir. performance requiring sparc to perform. most assuredly, as annon, 185 s.e.2d at 351 (citing restatement (first) of con- and remanded. court specifically found that if sparc were to prevail on the affirmed in part, reversed in part, and remanded by published fully its contractual undertakings going forward, i.e., to record sistency."); w. va. r. civ. p. 15 ("[l]eave [to amend plead- decision to request specific performance constituted a binding v. mooney, 399 s.e.2d 803, 805 (va. 1991). sparc could with financing. the lease therefore was never held open into co., 206 s.e.2d 410, 415 (w. va. 1974). the repudiating htc's earlier manifestations. see restatement (second) of until all of the conditions set forth in paragraph 3 herein are sat- jure double compensation if damages are now awarded. remedy of specific performance and by an action for damages affirmed in part, cites statements from earlier west virginia cases to the effect tiffs are allowed to plead alternative theories of liability, there pleading in the alternative, and the liberal amendment of commercial reasonableness. moreover, even if we accepted assignment had a net worth greater than $10 million. the lease would automatically terminate once a plat was recorded desired to proceed. second, if the lease were kept alive, the trial on the issue of damages caused by sparc's breach.2 misreading of language in annon v. lucas, 185 s.e.2d 343 1984). the parties did not raise the erie issue, however, and since we it appears that the district court's ruling was based upon a notice had been given. sparc thus waived any right to claim result of sparc's decision initially to seek specific perfor- benefit of his bargain in the manner that is best for him and, entered to preserve the status quo." jim-bob, inc. v. mehling, bank of bluefield v. clark, 447 s.e.2d 558, 562 (w. va. maryland v. townshend, 101 f.2d 903, 910 (4th cir. 1939). weeks later, sparc filed counterclaims for breach of con- 2007, stating that the merger plat was not a "final plat" within fails to do so. see restatement (second) of contracts § 257 majority, is that simply by requiring htc to file a lawsuit, sparc 2007, but htc denied the request. obtain specific performance by sparc as a "forfeiture" of its damages and other issues preliminary to construction. colleagues in the majority, however, in the disposition of the n.w.2d 376, 383 (neb. 2002) (citation omitted); vahabzadeh incurred in obtaining the preliminary injunction. & wrecking co. v. sanitary improvement dist. no. 177, 654 there is not a scintilla of evidence in the record to suggest it never did so, and no retraction was ever effected. sparc's written consent be obtained prior to any assign- sparc first notified htc that it had actually filed the both but either remedy, as our cases on the subject so hold. thus, the effect of the majority's remand for a trial on dam- of west virginia. the suit sought a preliminary injunction, nated, htc will likely be unable to close on the funding and its contractual right to terminate the lease due to difficulties the case before us presents what is in essence a straightfor- lease also provided that each party could request that the other able" period of time to line up financing. it is unnecessary for a party to a contract breached by the other may pursue not measure of damages in the unusual circumstances of this case will be for found that while sparc had unjustifiably repudiated the con- earlier position. id. at 513-14 & n. 18. it is clear that as an 25homeland training center v. summit point repudiation from abandoning an initial claim for specific per- alternative arrangement with respect to the land with a willing limited liability company, no. 08-2272individually and in its capacity as possibly, the repudiating party as well. it provides both sides plaintiff-appellant, with preparation of a "final plat." on august 7, 2007, sparc have the law treat the promise to breach as a breach itself. in 13homeland training center v. summit point ordinary matter, a plaintiff may seek specific performance at select the most efficient one." cochran v. ollis creek coal land, and thus the benefit of his bargain) and b can seek, at s.e.2d 813, 816 (w. va. 1977). both sparc and htc point anticipatory repudiation must be `a positive, unconditional, and unequivo- this was error. the theory of waiver on which the district it did not notify htc that it had done so. shortly thereafter, sparc's repudiation of the contract. what the measure of conclusion that sparc has no valid breach of contract claims project."). in any event, as the majority acknowledges, maj. op. at 19, the counsel repudiating party does bring an anticipatory suit, his initial tractual undertakings that were due on and after the issuance vivos trust, assurance to htc or its prospective creditors that the lease llc, and the william scott inter vivos trust, (collectively, ages would amount to de facto double recovery because the company, ton & bolen, llp, huntington, west virginia, for home- repudiation had cast over htc's business plans. this likely going forward if it was unable to secure financing: earlier request for specific performance, and we remand for appeal by htc. the majority asserts that htc's suit "sought that sparc could force a decision one way or the other by that the lease had terminated. it was not until after htc defendant-appellee, the "merger plat" filed by sparc did not qualify as "final law, the doctrine prevented a plaintiff from pleading alterna- argued: october 27, 2009 to under the lease to homeland training center, llc, ("htc"), offer in the meantime and threatens to sell to c for $200, then that htc was under no duty to seek out financing within any 890 f.2d 1264 (2d cir. 1989). the post-october 17 evidence lease, but offering to "accept the lease as it stands" if htc having foregone a claim initial term would automatically begin 120 days after recorda- the lease. not only that, the response was sent after htc had the assurances that htc needed in order to salvage the of specific performance. later that same day, sparc arise until 120 days after the filing of the second plat in the a tennessee limited liability court to issue an order of specific performance, i.e., the pre- clature) afforded htc complete relief for the very breach of ment obligations pursuant to paragraph 6(b) herein. mance or foregoing the injunction and risking being forced to defendant. [2] keep the contract alive for the benefit of both par- estoppel); hogue v. sam's club, 114 f. supp.2d 389, 391 n. 1 (d. md. vided that the initial term would not begin unless sparc's the district court issued its preliminary injunction and after the or re-leasing the property in question for a period of 120 days unless the tenant notified sparc within sixty days that it for a breach of contract, are not inconsistent. under the law, the district court to fathom in the first instance. were so meager as to be "commercially unreasonable," for no close question in my view, one not comfortably resolved as the dispositive consideration, however, is whether sparc spring of 2008, but by that point, htc had already exercised damages, it can have no remedy at all. in our view, it would a contract alive and sue for anticipatory breach at the same that it had obtained financing within six weeks' time, but until both but either remedy, as our cases on the subject all hold."). isfied, tenant may terminate this lease by giving written notice inc. 294 f.3d 607, 613 (4th cir. 2002). jurisdiction is founded remedies are available for the same legal injury. see harrison formance in favor of a claim for damages. we find that it does part iii of the majority opinion. i am unable to join my fine of action, since the lease allowed either party to request verifi- place the project back on track. this, of course, proved too that it would "of course" have assented to the assignment if unequivocal." mollohan v. black rock contracting, inc., 235 contract. in this regard, we call attention to sparc's own research center, a west virginia by filing this suit in december 2007. on december 4, 2007, htc wrote sparc to say that it cir. 2009) (citing klaxon co. v. stentor elec. mfg co., 313 stone v. kaufman, 107 s.e. 295, 296 (w. va. 1921) ("the "final plat," a term described at some length by local ordi- as such." sparc replied on october 31, stating that "[t]he remedy of specific performance.4 a party to a contract breached by the other may pursue not so we find no merit in the point that plaintiff was barred by merits, a provisional order to keep the lease alive while htc the effect of the prelimi- anticipatory breach allows a suit for breach of contract to be 3 repudiating party from being able to claim monetary damages. tion by performing under the contract if the non-repudiating tions. agreement was structured such that there were two separate and distinct part: from obtaining a windfall recovery, either by recovering two it is clear that in west virginia, election of remedies doc- ment letter from the investment company with which it had ginia, 31 w. va. l.q. 182, 183 (1925). under west virginia defendant-appellant, lier repudiation. nor, for that matter, did it in any way suggest his position in reliance on the original choice is a shift to lease as if the same remain in full force and effect. during this limited liability company, no. 08-2273individually and in its capacity as enthusiasm for the deal. at all events, htc surely foresaw that some if not specific performance. moreover, west virginia's rules of party should not be given the power to force the other's hand. preliminary injunction provided htc the injunctive relief it . . . that sparc and the trust are hereby enjoined from selling of specific performance. as the litigation progressed, it court predicated its ruling is not supported by west virginia 1971) (brackets and alteration added).3 impending problem." the next day, htc filed a breach of terminate a contract after it has been repudiated waives the filed a merger plat in the jefferson county clerk's office, but or at any time.'"); wood county airport auth. v. crown airways, inc., 919 sparc's having "taken the position that the lease is termi- reversed in part, that sparc had a third party waiting in the wings with which in sum, we see no reason why, as a general matter, a party law, to constitute a contractual repudiation, a statement it communicated its concerns to htc in writing. htc ter, and requested an order of specific performance." maj. op. htc entered into negotiations in early 2007 with an invest- dure and the merger of law and equity, however, most juris- the continued existence of the lease." this certainly was no wilkinson, circuit judge: windsor, 737 f.2d 1490, 1499 (8th cir. 1984). at common trine follows this trend.1 19homeland training center v. summit point for the fourth circuit in the period between its repudiation on october 17, 2007, investors who had pledged to finance the project, prompting function. it allows a plaintiff to bring a breach of contract we turn then to the crux of this dispute. the district court a non-repudiating party can encourage the repudiating party insurance, 667 f.2d 1162, 1167 n. 4 (4th cir. 1982) (rules of judicial breach, as construed by the courts of west virginia, would agreement when it failed to obtain the financing necessary to research center. on brief: j. jarrod jordan, huddles- that sparc "was seeking to get out of the contract as fast as set forth two or more statements of a claim or defense alter- claim at the outset of this litigation that it had "no plans to re- to reject each of these arguments, which we address in turn. edies for the same legal injury. see dionne v. mayor and city from homeland security corporation to htc constituted a and and bring an action on the basis of threatened non- formance by both parties, i.e., to obtain the necessary permits and financ- election of remedies doctrine is also grounded in estoppel, the very conditions it helped to create in order to prevent the poration. cient to disperse the cloud of legal uncertainty that sparc's days of the plat recording. htc responded on october 26, party to abandon its earlier request for specific performance v. 6 homeland training center v. summit point we review the grant or denial of motions for summary clusive election typically is made only where a suit has remedial request. sparc's own conduct ensured that specific 7 provisions, embrace the modern principles of notice pleading, "commercially reasonable" time would only apply if htc id. not only did sparc not retract its repudiation, it repeat- land training center, llc. peter l. chakmakian, peter l. see mollohan v. black rock contracting, inc., 235 s.e.2d 813, 816 and the trust are further enjoined from taking any actions with commenced. olympia hotels corp. v. johnson wax develop- a repudiating party may also be able to nullify its repudia- htc asked sparc whether it would "acknowledge that the plat" and the lease terminated sixty days later after htc who initially seeks specific performance cannot later switch in stone v. kaufman, 107 s.e. 295 that though both sides had breached the contract, neither side 2 it could quickly do business. thus, the majority's assertion 8 homeland training center v. summit point to bring against htc and that sparc repudiated the contract. addressed in explicit terms by the parties. see first nat'l v. c. on october 3, 2006, homeland security corporation, choice "of seeking the injunction to preserve the status quo the district court described the effect of htc's decision to seek and but accepting the district the contract as continuing." id. at 350 (internal quotation 2000) (rules concerning amendment of pleadings); see also green v. alt- not nullify its repudiation by trying to add new conditions to collapse of late 2007. see j.a. 346 ("this court recognizes the difficulties believe west virginia election of remedies law provides the same result recording the same in the office of the clerk of the county com- tract, htc could not obtain monetary damages for breach of (pa. 2007). under the modern view, apart from issues of res htc's decision to pursue specific performance that matters, ineffectual." 17a am. jur. 2d contracts § 718. sparc could while, prepared a new plat of the property, one which indispu- thereby irreparably damages the contractual venture to invoke consented to the assignment in advance. sparc could not tsiatsos, wm. richard mccune, jr., pllc, martins- it would probably be filing a "merger plat" soon. this was permitted htc to continue, as contemplated by the parties' cation from the other that the lease was still in effect. sparc, adhere to its terms." that same day, htc received a commit- a breach if the repudiating party nullifies the repudiation, see view, htc did not "change its mind" see maj. op. at 12-13, defendants summit point automotive research center, s.e. 248, 249 (w. va. 1911). all that annon meant is that the the initial term. at a minimum, then, the lease gave htc 120 the meaning of the lease, that the lease remained "in full force ment company it hoped would finance the project. sparc, the doctrine of anticipatory breach as applied in west vir- tive in giving htc the benefit of its bargain. it proved insuffi- the terms of the lease and clearly constituted a breach, as the the plaintiff in this suit. sparc was not asked for its written unlike this case, however, stone involved an actual breach tract against htc, alleging that htc had breached the lease 15homeland training center v. summit point agreement would naturally terminate, releasing both parties from further div., 437 n.e.2d 1154, 1154 (n.y. 1982). it provided no unequivocal as the original repudiation, if not more so. duncan joined. judge davis wrote a separate opinion dissent- that the initial term would begin 120 days after sparc filed judgment is hereby specific performance and instead asked the district court for fees to htc and remand the case for consideration by the dis- to forfeit a claim for damages simply because it initially held


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