UNPUBLISHED
UNITED STATES COURT OF APPEALS
FOR THE FOURTH CIRCUIT
No. 08-1307
LAKE RIDGE APARTMENTS, LLC,
Plaintiff - Appellee,
v.
BIR LAKERIDGE, LLC,
Defendant - Appellant,
and
BERKSHIRE INCOME REALTY-OP, L.P.,
Defendant.
Appeal from the United States District Court for the Eastern
District of Virginia, at Newport News. Raymond A. Jackson,
District Judge. (4:07-cv-00008-RAJ-JEB)
Argued: May 14, 2009 Decided: July 1, 2009
Before SHEDD and DUNCAN, Circuit Judges, and Frederick P. STAMP,
Jr., Senior United States District Judge for the Northern
District of West Virginia, sitting by designation.
Affirmed by unpublished per curiam opinion.
ARGUED: James Bradford McCullough, LERCH, EARLY & BREWER,
CHARTERED, Bethesda, Maryland, for Appellant. Kristan Boyd
Burch, KAUFMAN & CANOLES, PC, Norfolk, Virginia, for Appellee.
ON BRIEF: Genevieve J. Quarfoot, LERCH, EARLY & BREWER,
CHARTERED, Bethesda, Maryland; Jonathan L. Hauser, TROUTMAN
SANDERS LLP, Virginia Beach, Virginia, for Appellant.
Unpublished opinions are not binding precedent in this circuit.
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PER CURIAM:
Lake Ridge Apartments, LLC (“Lake Ridge”) sued Berkshire
Income Realty-OP, L.P. and BIR Lakeridge, LLC (collectively,
“BIR”) for breach of a contract for the purchase and development
of a parcel of land. The district court granted Lake Ridge’s
summary judgment motion. After holding a bench trial on the
issue of damages, the district court entered a judgment of
$774,292 in favor of Lake Ridge. BIR now appeals the district
court’s grant of summary judgment and the award of damages. For
the reasons that follow, we affirm.
I.
This case arises out of a contract between BIR and Lake
Ridge for the sale of property, as well as an amendment to that
contract known as the “Sixth Amendment.” Under the contract,
BIR would purchase an apartment complex from Lake Ridge, and
Lake Ridge would build garages on the property for BIR. Under
the Sixth Amendment, BIR agreed to purchase an additional parcel
of land (“Parcel A-1”) for $234,000. Lake Ridge would “use its
best efforts to construct on Parcel A-1 an apartment building”
of eighteen units. J.A. 24.
BIR agreed to pay $144,000 of the total cost for Parcel A-1
at the closing of the parties’ general purchase and sale
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agreement on July 1, 2005. The Sixth Amendment set out several
factual scenarios governing BIR’s obligation to pay the
remaining $90,000 owed on the parcel. Each scenario was
conditioned upon the further action of at least one of the
parties. First, BIR could decide within 30 days of the parties’
closing -- that is, by August 1, 2005 -- to develop Parcel A-1
itself. If it gave written notice to Lake Ridge before August
1, 2005, BIR could pay Lake Ridge the remaining $90,000 and Lake
Ridge would “have no further rights or obligations with respect
to Parcel A-1.” J.A. 25. Second, if BIR did not opt to develop
Parcel A-1 itself, Lake Ridge had one year to obtain the
necessary building permits and approvals for the new eighteen-
unit building to be constructed on the parcel. If Lake Ridge
delivered the necessary permits before June 30, 2006, BIR would
pay the remaining $90,000. 1 Third, if BIR did not develop the
property itself and Lake Ridge could not deliver the necessary
permits and approvals by June 30, 2006, BIR had two options:
BIR could choose to require Lake Ridge to buy back Parcel A-1
for the original down-payment price of $144,000; or, BIR could
choose to pay Lake Ridge $90,000 for Parcel A-1. If BIR did not
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If Lake Ridge subsequently delivered the finished building
and a permanent certificate of occupancy for each of the
eighteen units, Lake Ridge would receive an additional
$1,926,000 under the Sixth Amendment.
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provide notice of its decision between these two options by July
31, 2006, under the Sixth Amendment BIR would be “deemed to have
elected” to pay Lake Ridge $90,000 for Parcel A-1. Id.
Lake Ridge contacted BIR several times in July and August
2005 to ascertain BIR’s plans for Parcel A-1, and the parties
exchanged e-mails on possibly altering the architectural plans
for the new building to be constructed on it. BIR did not
exercise its option to develop Parcel A-1 itself by the August
1, 2005 deadline. To the contrary, on October 13, 2005, BIR
informed Lake Ridge that it “would like to proceed with the
process of building the additional 18 units [on Parcel A-1].”
J.A. 174.
In December, BIR decided that it would prefer for Lake
Ridge to accept the $90,000 balance on Parcel A-1 but cancel
construction of both the new apartment building and the garages.
BIR informed Lake Ridge on December 23, 2005 that it was
“considering holding off” the Parcel A-1 development and
“considering delaying construction of the garages” -- both
“until some undetermined point in the future.” J.A. 211. As to
the Parcel A-1 building, BIR asked, “[W]e will owe you a payout
of +/- 90K if we elect not to build, correct?” Id.
Lake Ridge responded on January 5, 2006, confirming that
$90,000 was due as to Parcel A-1, but stating that it would also
5
request expenses and lost profits as to the garages. Lake Ridge
asked BIR to “let us know as soon as possible which way
Berkshire will be proceeding on these two items.” J.A. 211. On
the same day, BIR informed Lake Ridge that it had decided to
“hold[] off on proceeding” with both the Parcel A-1 project and
the garage project “until some undetermined point in the
future.” Id. BIR promised to “initiate payment for the 90K”
owed on Parcel A-1 and requested an itemization of Lake Ridge’s
costs for the garages. Id.
BIR began drafting a side letter agreement to memorialize
its new intentions as to Parcel A-1 and the garages. On March
1, 2006, BIR sent Lake Ridge a proposed agreement under which
BIR would pay Lake Ridge $90,000 and Lake Ridge “shall have no
further rights or obligations with respect to Parcel A-1.” J.A.
50. Three weeks later, Lake Ridge declined to sign the
agreement. It also indicated that it had been mistaken about
the $90,000 payment owed for the Parcel A-1 project. In
addition to the $90,000 balance, Lake Ridge stated that it
intended to seek out-of-pocket expenses and lost profits
approximating $1.5 million because BIR had “committed to” the
construction project. J.A. 225. BIR was unwilling to pay this
amount, and the parties’ communications subsequently
deteriorated.
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By the June 30, 2006 deadline, Lake Ridge had neither
applied for nor delivered the specified building permits.
Consequently, BIR attempted to exercise its option of paying
Lake Ridge $90,000 for Parcel A-1. Lake Ridge returned the
check and sued for breach of contract.
The district court granted summary judgment in favor of
Lake Ridge, finding that BIR had anticipatorily breached the
contract when it informed Lake Ridge in December 2005 and
January 2006 that it wished to delay both construction projects
for an undetermined period of time. The district court further
found that Lake Ridge had been willing and able to perform its
obligations under the contract and was entitled to damages.
After holding a hearing, the district court awarded Lake Ridge
$774,292 based on testimony from Lake Ridge corporate officers
as to the construction costs associated with the projects and
estimated lost profits.
BIR now appeals the district court’s grant of summary
judgment, certain evidentiary decisions, and the grant of
damages. We address these claims in turn.
II.
We review a district court’s grant of summary judgment de
novo. Jennings v. Univ. of N.C., 482 F.3d 686, 694 (4th Cir.
7
2007) (en banc) (citing Hill v. Lockheed Martin Logistics Mgmt.,
Inc., 354 F.3d 277, 283 (4th Cir. 2004) (en banc)). We review a
district court’s evidentiary decisions for abuse of discretion.
Robinson v. Equifax Info. Servs., LLC, 560 F.3d 235, 240 n.1
(4th Cir. 2009). We review a district court’s factual findings
at a bench trial for clear error. PCS Phosphate Co., Inc. v.
Norfolk S. Corp., 559 F.3d 212, 217 (4th Cir. 2009).
III.
BIR first argues that the district court erred in granting
summary judgment in favor of Lake Ridge based on BIR’s alleged
anticipatory breach. Relying on Virginia law, BIR argues that
it did not engage in anticipatory breach because it did not
repudiate the contract by unequivocally and unconditionally
announcing its intention to abandon the agreement. BIR contends
that its statements in December 2005 and January 2006,
indicating that it would delay developing Parcel A-1 for an
undetermined period of time, did not amount to an unequivocal
statement that BIR would refuse to perform under the agreement.
Rather, BIR asserts that its overtures offering to pay $90,000
for Lake Ridge to “hold off” on the construction project were
merely a “request to negotiate a cancellation of the
construction provision.” Petr.’s Br. at 44 (emphasis omitted).
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On a related note, BIR argues that Lake Ridge agreed to modify
the original agreement and cancel the construction project for
$90,000 in January 2006. BIR asserts that Lake Ridge ultimately
reneged on this agreement three months later when it requested
an additional $1.5 million in costs and lost profits. In
addition, BIR argues that because Lake Ridge failed to deliver
the necessary building permits before June 30, 2006, and because
BIR provided a timely notice that it elected to pay Lake Ridge
$90,000, BIR “has no additional payment obligations under the
Agreement.” Petr.’s Br. at 38.
Lake Ridge responds that BIR’s course of conduct
constituted anticipatory breach because neither the parties’
purchase agreement nor the Sixth Amendment gave BIR “the right
to simply hold off on proceeding with the Parcel A-1 Building
until some undetermined point in the future.” Respt.’s Br. at
27. Lake Ridge further points out that once it realized it had
made a mistake and informed BIR that it intended to request its
out-of-pocket expenses and lost profits related to Parcel A-1,
BIR “never indicated that it had changed its mind on holding off
on construction.” Id. at 28. Instead, BIR confirmed with Lake
Ridge that it was not interested in developing Parcel A-1 at
that time. Lake Ridge argues that because BIR repudiated the
parties’ agreement, Lake Ridge was excused from further
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performance under the contract, and in fact “properly mitigated
its damages by stopping work” on the project. Id. at 26.
The parties’ purchase agreement states that it will “be
governed by, and construed in accordance with the laws of the
state in which the Property is located [Virginia], without
regard to laws regarding choice of law.” J.A. 114. The
Virginia Supreme Court has held that “for a repudiation of a
contract to constitute a breach, the repudiation must be clear,
absolute, [and] unequivocal, and must cover the entire
performance of the contract.” Vahabzadeh v. Mooney, 399 S.E.2d
803, 805 (Va. 1991) (citations omitted). We find that standard
to be squarely met on these facts. On January 5, 2006, BIR
wrote to Lake Ridge:
At this time we are holding off on proceeding with
either of these projects until some undetermined point
in the future.[]
With respect to the building, we will initiate payment
for the 90K[.]
As for the garages, please provide me with an
itemization of the out of pocket expenses for
review[.]
J.A. 43. The message, taken as a whole, is unambiguous. The e-
mail clearly states BIR’s intent not to proceed with the
construction projects. This intent is further established by
the fact that BIR promised to “initiate payment for the 90K”
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owed on Parcel A-1 and invited Lake Ridge to submit an
itemization of expenses related to the garages for review. In
addition, BIR did not express any contrary intent between March
and June, even after Lake Ridge stated that it would request
out-of-pocket expenses and lost profits as to Parcel A-1 in
addition to the garages. J.A. 341. BIR’s January 5, 2006 e-
mail to Lake Ridge, bolstered and confirmed by its subsequent
course of conduct, constituted a clear, absolute, and
unequivocal repudiation of the contract.
BIR’s argument that the parties modified their purchase
agreement is similarly unpersuasive. BIR contends that the
parties modified their purchase agreement so that BIR could pay
Lake Ridge $90,000 and cancel the building project even after
the original August 1, 2005 deadline to do so had expired.
Based on this allegedly modified agreement, BIR argues that Lake
Ridge breached the contract by failing to timely deliver the
necessary building permits.
The record does not support BIR’s argument. The Virginia
Supreme Court has acknowledged that contracting parties may
“modify the terms of their contract by express mutual
agreement,” but there must be “clear, unequivocal and convincing
evidence” of the parties’ intent to modify the contract.
Stanley’s Cafeteria, Inc. v. Abramson, 306 S.E.2d 870, 872–73
11
(Va. 1983). Even if Lake Ridge and BIR did begin to negotiate a
modification of their purchase agreement, the record shows that
the parties never formally agreed to such a modification. BIR
attempted to memorialize this agreement in its proposed side
letter, which it sent to Lake Ridge in February and March. J.A.
44-46, 49-52. However, Lake Ridge never signed the letter
agreement.
Because BIR’s January 5, 2006 e-mail constituted an
anticipatory breach of the parties’ contract, we affirm the
district court’s grant of summary judgment in favor of Lake
Ridge.
IV.
BIR also challenges the district court’s decision to admit
testimony from David Rudiger and Everett Hoffman during the
damages hearing. These two claims are addressed separately
below.
A.
BIR asserts that the district court ordered Lake Ridge to
proffer the testimony of its witnesses, but that Lake Ridge
failed to do so properly. Citing Md. Cas. Co. v. Therm-O-Disc,
Inc., 137 F.3d 780, 783 (4th Cir. 1998), and other cases, BIR
contends that a proffer must indicate what a witness is expected
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to say, and that Lake Ridge did not provide this information.
Petr.’s Br. at 55-56. BIR further contends that Everett
Hoffman’s testimony constituted expert testimony based on his
industry-wide experience. BIR argues that the district court
should have excluded Hoffman’s testimony because Lake Ridge had
indicated that it would offer only lay opinions.
BIR’s assertions mischaracterize the record. Contrary to
BIR’s contentions, Lake Ridge provided a three-page proffer
clearly detailing the testimony each of its three witnesses
would give. With respect to Everett Hoffman specifically, Lake
Ridge’s proffer stated that he would testify about the costs of
construction for the Parcel A-1 building and the garages and his
method for determining these costs. This information was more
than sufficient to give BIR notice of the substance of Hoffman’s
testimony. Moreover, the district court did not err in
admitting Hoffman’s testimony as a lay opinion. As the district
court pointed out, “[t]here’s no way under the sun that you can
call any lay witness who will not have some experience external
to the job he or she is working in.” J.A. 460. Hoffman
testified about his cost calculations for the Parcel A-1 project
and based his rationale for these calculations on his previous
experience in the industry. The district court did not abuse
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its discretion in finding that his testimony did not constitute
expert testimony under Rule 701.
B.
BIR’s arguments as to David Rudiger are similarly
unpersuasive. BIR contends that under Federal Rule of Evidence
701, the district court should not have admitted David Rudiger’s
testimony on Lake Ridge’s ability to obtain the necessary
building permits by June 30, 2006. BIR emphasizes that under
Rule 701, a lay witness’s testimony must be based on personal
knowledge and perceptions. BIR highlights that Rudiger “did not
testify to any personal experience with seeking or obtaining
building permits, either in connection with this project or
generally,” or testify about his knowledge regarding the process
for obtaining such permits in Virginia. Petr.’s Br. at 51.
Because Lake Ridge did not lay a proper foundation for Rudiger’s
testimony, BIR argues that the district court should have
excluded it.
BIR exaggerates the alleged deficiency in the foundation
for Rudiger’s lay witness testimony. Rudiger testified that
Lake Ridge would have had to prepare architectural plans,
perform test borings to determine the building’s foundation
requirements, draw up structural foundation plans and site
plans, and get approval from Virginia Power because part of the
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proposed parking lot for the building fell on a Virginia Power
easement. He stated that because Lake Ridge had “previously
dealt with Virginia Power on the same site in getting their
approval for the location of parking lots underneath of their
easement . . . we didn’t perceive any problem in that regard.”
J.A. 3924. At trial, the district court overruled BIR’s
objection to Rudiger’s testimony, noting that “if [Rudiger’s]
been involved in this project, he knows what is required to get
a building permit.” Id. at 390.
The record shows that Rudiger testified in sufficient
detail about the process for obtaining permits, and about his
involvement in this and other similar construction projects, to
lay a foundation for his opinion that Lake Ridge would have been
able to obtain the necessary building permits by June 30, 2006.
The district court did not abuse its discretion in admitting
Rudiger’s testimony.
V.
Lastly, BIR argues that the district court should not have
awarded damages to Lake Ridge because Lake Ridge failed to show
that it would have been able to obtain the necessary building
approvals by June 30, 2006. Citing the Second Restatement of
Contracts and relying on the asserted inadmissibility of
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Rudiger’s testimony, BIR argues that an injured party may not
recover damages after an anticipatory breach of contract by the
other party if the injured party could not perform its promise.
BIR further argues that Rudiger’s testimony, even if admissible,
“falls far short of establishing” that Lake Ridge could have
timely obtained the permits. Petr.’s Br. at 55.
We affirm the district court’s award of damages. As noted
above, the district court did not err in admitting Rudiger’s
testimony. Rudiger’s testimony demonstrated his knowledge,
gained through prior experience, of the steps necessary to
obtain the proper permits. Based on his experience, Rudiger
testified that Lake Ridge could have obtained the necessary
permits by June 30, 2006. BIR failed to present any contrary
evidence showing that Lake Ridge could not have timely obtained
the permits. Based on the evidence presented at trial, the
district court’s factual findings were not clear error.
VI.
For the foregoing reasons, the judgment of the district
court is
AFFIRMED.
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