PUBLISHED
UNITED STATES COURT OF APPEALS
FOR THE FOURTH CIRCUIT
No. 13-2234
DAN RYAN BUILDERS, INC., a Maryland Corporation,
Plaintiff - Appellant,
v.
CRYSTAL RIDGE DEVELOPMENT, INC., a West Virginia
Corporation; LANG BROTHERS, INC., a West Virginia
Corporation; ROBERT S. LANG, an individual,
Defendants - Appellees,
v.
HORNOR BROTHERS ENGINEERS,
Third Party Defendant - Appellee,
and
BRYCO BORE & PIPE, INC.; LOUDOUN VALLEY CONCRETE, INC.;
DINGESS TRANSPORT, INC.; NORTH STAR FOUNDATION, INC.;
PENNSYLVANIA SOIL AND ROCK INCORPORATED,
Third Party Defendants.
Appeal from the United States District Court for the Northern
District of West Virginia, at Clarksburg. Irene M. Keeley,
District Judge. (1:09-cv-00161-IMK-JSK)
Argued: December 10, 2014 Decided: April 20, 2015
Before MOTZ, GREGORY, and WYNN, Circuit Judges.
Affirmed by published opinion. Judge Motz wrote the majority
opinion, in which Judge Wynn joined. Judge Gregory wrote a
separate opinion concurring in part and dissenting in part.
ARGUED: Avrum Levicoff, LEVICOFF, SILKO & DEEMER, P.C.,
Pittsburgh, Pennsylvania, for Appellant. Tiffany R. Durst,
PULLIN, FOWLER, FLANAGAN, BROWN & POE, PLLC, Morgantown, West
Virginia, for Appellees. ON BRIEF: Julie A. Brennan, LEVICOFF,
SILKO & DEEMER, P.C., Pittsburgh, Pennsylvania, for Appellant.
Nathaniel D. Griffith, PULLIN, FOWLER, FLANAGAN, BROWN & POE,
PLLC, Morgantown, West Virginia, for Appellees Crystal Ridge
Development, Inc., Lang Brothers, Inc., and Robert S. Lang.
Frank E. Simmerman, Jr., Chad L. Taylor, SIMMERMAN LAW OFFICE,
PLLC, Clarksburg, West Virginia, for Appellee Hornor Brothers
Engineers.
2
DIANA GRIBBON MOTZ, Circuit Judge:
After a bench trial in this diversity case, the district
court ordered Robert Lang and his construction business, Lang
Brothers, Inc. (collectively “Lang”) to pay Dan Ryan Builders,
Inc. (“Dan Ryan”) limited damages for breach of contract. Dan
Ryan appeals, seeking additional damages. We affirm.
I.
We briefly summarize the relevant facts, which are
undisputed. 1
Lang owned seventy acres of land in West Virginia, on which
he sought to build a housing development, Crystal Ridge
Development. In 2005, pursuant to a Lot Purchase Agreement
(“LPA”), Lang subdivided the land and contracted to sell Dan
Ryan all 143 lots in Crystal Ridge. The LPA detailed the
responsibilities of both parties, including lot inspection, fill
compaction, and building schedules.
The parties also entered into a number of other written
contracts in connection with the development, including a
Contract with Independent Contractor (“fill slope contract”).
They agreed in that contract that Lang would construct a fill
1
Dan Ryan concedes that “[t]he district court’s findings of
fact are beyond reproach.” Appellant’s Br. 52. Similarly, Lang
does not challenge them in any way.
3
slope that would provide grading on certain lots to accommodate
the construction of houses. Lang completed the grading work and
was paid in full by Dan Ryan.
In 2006, Dan Ryan paid Lang for the first twelve lots in
accord with the LPA. Dan Ryan also entered into additional
contracts with Lang including a second fill slope contract. In
2007, Dan Ryan purchased another five lots, and Lang continued
to work on the infrastructure of the Crystal Ridge Development.
In March 2007, cracks appeared in the basement slab and
foundation walls of a partially constructed house on one of the
first lots that Dan Ryan had purchased. An engineering firm
engaged by Dan Ryan concluded that stabilization of that house,
as well as of another house displaying similar cracks, required
remediation. These problems and their associated costs
exacerbated existing tensions between Dan Ryan and Lang,
ultimately leading to a “divorce” (the parties’ term) between
the two. The parties memorialized the divorce in the “First
Amendment to Lot Purchase Agreement” (the Amendment). Under the
Amendment, Dan Ryan agreed to purchase from Lang the remaining
thirty-three lots in Crystal Ridge, and the parties’ development
responsibilities were apportioned differently.
In December 2007, the slope behind the lot that had first
exhibited cracks began sliding downhill toward a nearby highway.
A geotechnical study concluded that the slope had failed due to
4
its natural composition, soil type, and poor construction. Dan
Ryan also encountered difficulties related to Crystal Ridge’s
stormwater management system, development permits, and entrance
drive.
In December 2009, Dan Ryan filed this lawsuit against Lang
seeking monetary damages. In its complaint, Dan Ryan asserts
three causes of action. Initially and principally, Dan Ryan
alleges negligence by Lang in connection with construction of
the fill slope. Second, Dan Ryan alleges that Lang breached
several of its contractual duties under both the LPA and the
Amendment. The third cause of action alleges fraudulent
misrepresentation by Lang; Dan Ryan abandoned this last claim at
trial.
Following several pre-trial conferences and numerous pre-
trial submissions, the district court held a five-day bench
trial. The court admitted many exhibits and considered
testimony from more than a dozen witnesses. After extensive
post-trial submissions, 2 the court issued a detailed, ninety-page
order setting forth findings of fact and conclusions of law.
2
The court permitted the parties to submit up to eighty
pages of proposed findings of fact and conclusions of law.
After the deadline for these submissions had passed, Dan Ryan
moved for leave to file a supplemental post-trial memorandum.
The district court denied that motion.
5
On the contract claim, the district court awarded Dan Ryan
$175,646.25 in damages and $77,575.50 in pre-judgment interest
for breach of the LPA and the Amendment with respect to claims
for repairs on the road leading to Crystal Ridge. The court
found that Dan Ryan had failed to carry its burden of proof with
respect to other asserted breaches of the LPA and the Amendment,
i.e., those relating to an entrance easement, a stormwater
management and erosion control system, and other “miscellaneous
bad work.” J.A. 2353. 3 Accordingly, the court denied further
contract damages. The district court then rejected Dan Ryan’s
negligence claim. The court reasoned that this claim failed
under West Virginia’s “gist of the action” doctrine, which bars
recovery in tort when the duty that forms the basis of the
asserted tort claim arises solely from a contractual
relationship. Dan Ryan timely noted this appeal.
We “review a judgment following a bench trial under a mixed
standard of review -- factual findings may be reversed only if
clearly erroneous, while conclusions of law, including contract
construction, are examined de novo.” Roanoke Cement Co. v. Falk
Corp., 413 F.3d 431, 433 (4th Cir. 2005). On appeal, Dan Ryan
does not challenge the district court’s resolution of its claim
for breach of the LPA and the Amendment. Rather, Dan Ryan
3
Citations to the “J.A.” refer to the Joint Appendix filed
by the parties to this appeal.
6
appeals only the court’s determination that the “gist of the
action” doctrine bars its tort claim, and the court’s failure to
recognize that its tort claim was really a claim for breach of
the fill slope contracts. 4
II.
Dan Ryan offers two reasons why the district court erred in
its “gist of the action” holding. We consider each in turn.
A.
First, citing Greenlaw v. United States, 554 U.S. 237, 243
(2008), Dan Ryan contends that the “principle of party
presentation” ought to have prevented the district court from
relying on the “gist of the action” doctrine. The party
presentation principle generally cautions a federal court to
consider only the claims and contentions raised by the litigants
before it. Dan Ryan asserts that the party presentation
principle applies here because neither it nor Lang raised the
“gist of the action” doctrine in submissions to the district
court.
Greenlaw is the Supreme Court’s most robust articulation of
the party presentation principle. There, in language on which
4
The district court also dismissed as moot the derivative
claims Lang had brought against third-party defendant Hornor
Brothers Engineering for contribution. Dan Ryan does not appeal
that ruling.
7
Dan Ryan rests its claim, the Court stated that “in the first
instance and on appeal, . . . we rely on the parties to frame
the issues for decision.” Greenlaw, 554 U.S. at 243. But
although Greenlaw paints the concept of party presentation in
broad brushstrokes, its holding is much narrower, i.e., “an
appellate court may not alter a judgment to benefit a
nonappealing party.” Greenlaw, 554 U.S. at 244. In fact, other
than in Greenlaw, the Court has invoked the party presentation
principle only twice, both times in stressing the limits of the
principle. See Wood v. Milyard, 132 S.Ct. 1826, 1833-34 (2012)
(courts may sua sponte consider statute-of-limitations defenses
overlooked by the State in habeas cases); Arizona v. California,
530 U.S. 392, 412-13 (2000) (courts may sua sponte raise a
preclusion defense the parties failed to raise in special
circumstances).
Moreover, neither in Greenlaw nor in any other case has the
Court ever suggested that the party presentation principle
constrains a court’s fundamental obligation to ascertain
controlling law. A party’s failure to identify the applicable
legal rule certainly does not diminish a court’s responsibility
to apply that rule. The judiciary would struggle to maintain
the rule of law were it limited to the parties’ competing
assertions about what the law requires. For this reason, it is
well established that “[w]hen an issue or claim is properly
8
before the court, the court is not limited to the particular
legal theories advanced by the parties, but rather retains the
independent power to identify and apply the proper construction
of governing law.” Kamen v. Kemper Fin. Servs., Inc., 500 U.S.
90, 99 (1991). Thus, the Supreme Court has long recognized that
a “court may consider an issue ‘antecedent to . . . and
ultimately dispositive of’ the dispute before it, even an issue
the parties fail to identify and brief.” U.S. Nat’l Bank of Or.
v. Indep. Ins. Agents of Am., Inc., 508 U.S. 439, 447 (1993)
(quoting Arcadia v. Ohio Power Co., 498 U.S. 73, 77 (1990)
(alterations in original)).
Here, West Virginia’s “gist of the action” doctrine is just
such an “antecedent” and “dispositive” issue, since it goes to
the duty element of any West Virginia tort claim. The “gist of
the action” doctrine requires plaintiffs seeking relief in tort
to identify a non-contractual duty breached by the alleged
tortfeasor. See Gaddy Eng’g Co. v. Bowles Rice McDavid Graff &
Love, LLP, 746 S.E.2d 568, 577 (W. Va. 2013). “[T]he
determination of whether a plaintiff is owed a duty of care by a
defendant must be rendered by the court as a matter of law.”
Lockhart v. Airco Heating & Cooling, Inc., 567 S.E.2d 619, 622
(W. Va. 2002) (internal quotation marks and citation omitted).
To determine whether Dan Ryan established all of the required
elements of a tort claim under West Virginia law, the district
9
court necessarily had to consider the “gist of the action”
doctrine and identify the source of any asserted duty.
We must therefore reject Dan Ryan’s contention that the
party presentation principle barred the district court, when
adjudicating a West Virginia tort claim, from considering
whether the elements of such a claim had been met. 5
B.
Dan Ryan also contends that the district court erred in
holding that the “gist of the action” doctrine dooms its tort
claim. This contention is meritless. Given that Dan Ryan’s
tort claim rests on Lang’s asserted negligence in performing two
contracts –- the LPA and the Amendment –- and not on any duty
independent of those contracts, the “gist of the action”
doctrine does indeed bar that claim.
“To prevail in a negligence suit, the plaintiff must prove
by a preponderance of the evidence that the defendant owed a
5
We note that third-party defendant Hornor Brothers
Engineering did develop the “gist of the action” doctrine in its
post-trial submissions to the district court. See J.A. 2186-88
(“[T]ort liability cannot arise from a breach of contractual
duty. . . . [T]he principle is that if a defendant would have
no duty of care to plaintiff but for the fact that the parties
have a contract, no independent professional negligence claim
may be maintained.” (citing Lockhart, 567 S.E.2d 619, and other
relevant West Virginia cases)). In so doing, Hornor alerted the
court (and other parties) to the principle and its application
to this case. Accordingly, this is hardly a case in which a
court has “sall[ied] forth . . . looking for wrongs to right.”
Greenlaw, 554 U.S. at 244 (internal quotation marks and citation
omitted).
10
legal duty to the plaintiff.” Strahin v. Cleavenger, 603 S.E.2d
197, 205 (W. Va. 2004) (emphasis added). Under the “gist of the
action” doctrine, a party to a contract can prevail on a
negligence claim only if he can demonstrate “the breach of some
positive legal duty imposed by law because of the relationship
of the parties, rather than from a mere omission to perform a
contract obligation.” Lockhart, 567 S.E.2d at 624 (internal
quotation marks and citation omitted). 6 In other words, the
negligence “action in tort [must] arise independent of the
existence of the contract.” Id. (internal quotation marks and
citation omitted). “If the action is not maintainable without
pleading and proving the contract, where the gist of the action
is the breach of the contract, either by malfeasance or non-
feasance, it is, in substance, an action on the contract,
whatever may be the form of the pleading.” Cochran v.
Appalachian Power Co., 246 S.E.2d 624, 628 (W. Va. 1978)
(internal quotation marks and citation omitted).
6
This requirement -- that a tort claim must rest on a non-
contractual duty -- is hornbook law in most jurisdictions, even
if they do not employ the “gist of the action” nomenclature.
See Black’s Law Dictionary (10th ed. 2014)(defining “tort” as
“[a] civil wrong, other than breach of contract, for which a
remedy may be obtained, . . . a breach of a duty that the law
imposes”); Restatement (Third) of Torts: Liab. for Econ. Harm
§ 3 (Tentative Draft No. 1, 2012) (explaining the general rule
that “there is no liability in tort for economic loss caused by
negligence in the performance or negotiation of a contract
between the parties”).
11
Only two years ago, in Gaddy, the West Virginia Supreme
Court of Appeals reiterated this requirement. There, the court
unequivocally held that a plaintiff cannot recover in tort if
the complaint does no more than include “the bare bones averment
that ‘Defendants negligently . . . breached their agreement
with’ [the plaintiff].” 746 S.E.2d at 577. Here, a “bare
bones” recitation is all that the Amended Complaint offered with
respect to the fill slope claims: Dan Ryan alleged only that
Lang “negligently performed or failed to perform various
development obligations under the LPA and Amendment causing
substantial damage to [Dan Ryan]’s property.” J.A. 47 ¶ 39.
Gaddy further explains, in words that resonate here, that
recovery in tort will be barred if any of the following factors
is demonstrated: “(1) where liability arises solely from the
contractual relationship between the parties; (2) when the
alleged duties breached were grounded in the contract itself;
(3) where any liability stems from the contract; and (4) when
the tort claim essentially duplicates the breach of contract
claim or where the success of the tort claim is dependent on the
success of the breach of contract claim.” Gaddy, 746 S.E.2d at
577. Here, of course, Dan Ryan specifically alleges that Lang’s
liability for “negligent[] perform[ance]” of two contracts --
the LPA and the Amendment -- caused its damages, and thus that
12
its tort claim asserting negligence in constructing the fill
slope arises from these contracts.
In its briefing on appeal, Dan Ryan points to one
additional source of Lang’s supposed duty: “[t]he common law
duty of care owed by a contractor.” Appellant’s Br. 30. But
if, as Dan Ryan contends, “the gravamen of the breach was the
failure to construct the fill slope in a good and workmanlike
manner,” id. at 31, Lang breached not an independent legal duty
but an implied warranty arising out of –- in fact, created by --
the LPA and the Amendment. See Thacker v. Tyree, 297 S.E.2d
885, 887 (W. Va. 1982) (“In the area of construction contracts,
. . . there is general recognition that an implied warranty of
fitness and workmanlike quality attaches to such contracts.”).
In sum, this is precisely the kind of case in which
plaintiff’s claims are “simply breach of contract claims
masquerading as” tort claims. Gaddy, 746 S.E.2d at 577. See
also Covol Fuels No. 4, LLC v. Pinnacle Mining Co., LLC, No. 14-
1395, Slip Op. at 25 (4th Cir. 2015) (gist of the action
doctrine applicable where party’s tort claims “simply recast
[its] claim for breach of contract”). The district court did
not err in invoking the “gist of the action” doctrine, and in
concluding that Dan Ryan’s “negligence” claim was actually a
claim for breach of contract. Thus, Dan Ryan’s negligence claim
fails as a matter of law.
13
III.
Alternatively, Dan Ryan now seeks damages under contract
claims never alleged or even asserted before the district court.
Specifically, Dan Ryan contends that the district court should
have awarded it damages for a breach of the fill slope
contracts.
Nowhere in its pleadings did Dan Ryan assert such a claim.
The district court pointed out that Dan Ryan did not reference
the fill slope contracts in its original complaint. Indeed,
neither Dan Ryan’s Amended Complaint, nor its pre-trial listing
of contested issues of fact and law, nor its seventy-eight-page
post-trial proposed findings of fact and conclusions of law even
mentions the fill slope contracts -- let alone alleges that Lang
breached them. Dan Ryan concedes, as it must, that this is so.
Nevertheless, Dan Ryan maintains that “the absence of explicit
reference to the [fill slope contracts] in the pleadings is of
no consequence,” because a claim as to breach of those contracts
was tried by consent, as permitted by Federal Rule of Civil
Procedure 15(b)(2). Appellant’s Br. 48.
That Rule provides that “an issue not raised by the
pleadings” will be treated as if it were raised, provided it is
“tried by the parties’ express or implied consent.” Fed. R.
Civ. P. 15(b)(2). Of course, Rule 15(b)(2) does not offer a
failsafe for any and every faulty pleading. Rather, the Rule
14
sets forth “an exception to the general rules of pleading . . .
when the facts proven at trial differ from those alleged in the
complaint, and thus support a cause of action that the claimant
did not plead.” Gilbane Bldg. Co. v. Fed. Reserve Bank of
Richmond, 80 F.3d 895, 901 (4th Cir. 1996). But “[b]ecause
notice to the defendant of the allegations to be proven is
essential to sustaining a cause of action, Rule 15(b) applies
only when the defendant has consented to trial of the non-pled
factual issues and will not be prejudiced by amendment of the
pleadings to include them.” Id. (emphasis added). Thus, Rule
15(b)(2) requires that a party expressly or impliedly consent to
trial on an unpled claim and not be prejudiced by doing so. Dan
Ryan cannot satisfy the Rule’s requirements.
First, the record offers no support for Dan Ryan’s
assertion on appeal that Lang expressly consented to trial of
any claim of breach of the fill slope contracts. Dan Ryan
maintains Lang did so by including, among its pre-trial
contested issues of fact, the question of whether “the Lang
Defendants [are] liable to [Dan Ryan] for breach of contract in
relation to” the fill slope contracts. J.A. 305. But Lang’s
single reference to a breach of the fill slope contract in its
15
pre-trial memorandum does not constitute consent. 7 This pre-
trial submission demonstrates only that Lang regarded breach of
the fill slope contracts as a potential issue, which might be
raised by Dan Ryan at trial. Dan Ryan mistakes Lang’s caution
in this regard for consent.
In fact, as early as the final pretrial conference, Lang
pointed out the absence of any reference to the fill slope
contracts in the Amended Complaint. Lang’s counsel specifically
noted that “there were additional agreements” that “were not
attached as exhibits to the complaint” and distinguished the
obligations in those unpled contracts from the obligations in
the LPA and the Amendment, on which Dan Ryan did rest its
contract claims. J.A. 380-81. Similarly, in its post-trial
submission, Lang noted that although the fill slope contracts
were introduced as evidence at trial, they were not “even
mentioned anywhere within the Complaint or Amended Complaint”
and so could not provide Dan Ryan with a basis for recovery.
Far from consenting to trial of unpled issues, then, Lang
consistently and expressly disclaimed any consent to trial on
the unpled claim of breach of the fill slope contracts.
7
We have said as much before. See Interstate Petroleum
Corp. v. Morgan, 249 F.3d 215, 221 (4th Cir. 2001) (en banc)
(noting that even where an issue was “discussed on occasion
during the course of [the] case,” that alone did not establish
trial by consent).
16
Moreover, in Dan Ryan’s own submissions to the district
court it confirmed that it did not advance such a claim.
Rather, when Dan Ryan raised contract claims at trial, it
expressly identified the pertinent contracts that formed the
source of the asserted breach -- the LPA and the Amendment --
not the fill slope contracts. Furthermore, after trial, in its
proposed findings of fact and conclusions of law, Dan Ryan set
forth in numbered paragraphs each of the damage awards sought
for breach of the LPA and the Amendment. Dan Ryan did not
devote a numbered paragraph to any damage claim under the fill
slope contracts. Dan Ryan did not propose that the district
court find that Lang breached the fill slope contracts. And Dan
Ryan did not ask the district court to hold that Lang had any
specific obligations arising out of the fill slope contracts.
In sum, Dan Ryan’s own statements about the theory of its
case, as well as its repeated omission of the now-asserted
breach of the fill slope contracts from any argument at trial or
post-trial confirm what Lang’s submissions make clear: Lang did
not consent to trial of claims for breach of the fill slope
contracts. See Pinkley, Inc. v. City of Frederick, 191 F.3d
394, 401 (4th Cir. 1999) (when a party “sets out in [a list of]
numbered paragraphs . . . its legal theories for recovery,” its
omission of a particular legal theory from those numbered
paragraphs militates against a finding of trial by consent); see
17
also Elmore v. Corcoran, 913 F.2d 170, 173 (4th Cir. 1990).
Accordingly, Dan Ryan did not put Lang on notice of any
potential liability under those contracts.
Moreover, Dan Ryan cannot establish Lang’s implied consent
by demonstrating that evidence at trial clearly supported only
this unpled claim. We have previously explained that admission
without objection of evidence related to the unpled claim may be
“an indicium of implied consent” to trial of that claim. McLeod
v. Stevens, 617 F.2d 1038, 1040 (4th Cir. 1980). But if that
evidence is also “germane” to claims expressly in the pleadings,
its admission “cannot be treated as implied consent” to trial of
the unpled claim. Id. at 1040-41. Accord, Trinity Carton Co.
v. Falstaff Brewing Corp., 767 F.2d 184, 193 (5th Cir. 1985);
see also 6A Charles Alan Wright & Arthur R. Miller, Federal
Practice & Procedure § 1493 (3d ed. 2014).
Dan Ryan contends that consent to trial of a breach claim
under the fill slope contracts may be implied from its evidence
related generally to the slope failure and from the admission of
the two fill slope contracts themselves. But evidence of the
slope failure was admitted in support of the claim that Lang
negligently constructed the slopes, not that it breached the
18
fill slope contracts. 8 Accordingly, the evidence was “germane”
to an asserted tort claim actually present in Dan Ryan’s
pleadings and cannot establish trial by consent of a phantom
contract claim. Admission of the fill slope contracts, without
more, cannot establish consent to trial of a claim that those
contracts were breached.
Moreover, Lang would undoubtedly be prejudiced if we were
to accept Dan Ryan’s contention on appeal that the opposite is
true. See Withrow v. Williams, 507 U.S. 680, 696 (1993)
(holding that where the record “reveals neither thought, word,
nor deed . . . that could be taken as any sort of consent” to
trial of an unpled claim, the party “was manifestly
prejudiced”).
Dan Ryan had opportunities before, during, and after trial
to clarify its contract claims against Lang. 9 Yet at none of
8
Nor does the district court’s observation that Lang
“failed to live up to its contractual obligations” under the
fill slope contracts establish that breach of those contracts
was tried by consent. J.A. 2375. For the court had earlier
identified the LPA and the Amendment as the sole bases for all
breach of contract claims alleged by Dan Ryan. See J.A. 2324-
56. Further, the court explained that any “[m]ention of the
Fill Slope Contract[s] was conspicuously absent from” Dan Ryan’s
complaint. J.A. 2373. Thus the court was clear that the claims
Dan Ryan might have alleged are distinct from the claims it
actually did allege.
9
Dan Ryan repeatedly failed to clarify the precise claims
under which it sought relief and the specific evidence
supporting each claim. Examination of the trial transcript
(Continued)
19
these junctures did Dan Ryan contend that Lang breached the fill
slope contracts. The omission of the claim at one of these
stages in the litigation –- in the amended complaint, or in the
pre-trial submissions, or in the presentation of the theory of
the case, or in the post-trial submissions –- might evince
inadvertence and so allow the district court to consider the
claim. But the repeated omission of the claim permits only one
conclusion: Dan Ryan’s now-asserted claim that Lang breached
the fill slope contracts was not tried by consent, it was simply
omitted. 10
IV.
This is a messy case, spanning four years and thousands of
pages of trial submissions. During the course of such
reveals the district court’s frustration with Dan Ryan’s
haphazard submissions throughout the trial. For example, in an
order issued after trial, the court instructed that “Dan Ryan
shall clarify, within its proposed findings of fact and
conclusions of law/post-trial legal memorandum, or in an
attachment thereto, which of its claimed damages flow from its
breach of contract theory and which flow from its negligence
theory.” Summ. Order 4, Aug. 30, 2012, ECF No. 249. But Dan
Ryan utterly failed to do this.
10
In the alternative, we hold that Dan Ryan has waived any
breach of contract claim based on the fill slope contracts. See
Helton v. AT&T Inc., 709 F.3d 343, 360 (4th Cir. 2013) (holding
that appellant’s argument not raised during a bench trial or in
proposed findings of fact and conclusions of law is waived on
appeal).
20
protracted litigation, parties must be vigilant not to lose
sight of the necessity of pleading and proving all of the
elements of each cause of action.
The district court properly dismissed Dan Ryan’s tort
claim, alleging negligence in construction of the fill slope,
because Dan Ryan rested that claim solely on asserted breach of
two contracts -- the LPA and the Amendment. We now hold that
Dan Ryan never alleged, and the parties never consented to trial
on, a claim of breach of the fill slope contracts. Contrary to
Dan Ryan’s contention, this result does not unfairly penalize it
for a purely formal error. Rather, it simply holds Dan Ryan to
the requirements of the law. A claim grounded on breach of
contract (here, the LAP and the Amendment) does not give rise to
tort liability, and a claim never pled (here, breach of the fill
slope contracts) will not be regarded as pled unless actually
tried by consent. These are the only fair standards, for
without them litigants and courts alike would be unable to ever
adequately prepare for trial. Parties would be forced to defend
against shadow claims, and trial courts would be forced to
search, as for a needle in a haystack, for unpled causes of
action purportedly hiding in the parties’ submissions.
It is not the responsibility of a trial court to wade
through ambiguously or incorrectly labeled allegations in
pursuit of any potential basis for awarding relief. In the case
21
at hand, the district court did a commendable job of sorting
through a museum of non-sequiturs to identify the plaintiff’s
meritorious claims. Notwithstanding Dan Ryan’s dissatisfaction
with the resulting judgment, it is clear that the district court
committed no error.
The judgment of the district court is
AFFIRMED.
22
GREGORY, Circuit Judge, concurring in part and dissenting in
part:
Dan Ryan Builders, Inc. (“Dan Ryan”) contracted with Robert
Lang and his construction business, Lang Brothers, Inc.
(collectively “Lang”) to fix the steep gradation of a portion of
land that would not have otherwise supported the construction of
homes. Lang botched the job, and Dan Ryan had to pay
$1,722,104.91 to fix it. * The district court found all the
elements of a breach of contract: that the contract was
enforceable, J.A. 2369 n.43, that Dan Ryan paid Lang in full for
the work, J.A. 2307, and that Lang “[u]nquestionably . . .
failed to live up to its contractual obligations, and [Dan Ryan]
suffered damages as a result,” J.A. 2375. Yet, because Dan Ryan
did not formally amend its complaint to name one of the several
contracts at issue, the district court allowed Lang to escape
liability. I cannot agree with this inequitable result, which
is exactly what Rule 15(b) of the Federal Rules of Civil
Procedure was designed to prevent. I therefore must dissent
from Part III of my good colleagues’ opinion.
Rule 15(b) allows liberal amendment of the pleadings to
conform to the evidence presented at trial. See Equal Emp’t
*
This figure is based on Dan Ryan’s post-trial submission
asserting that expenses related to the slope remediation totaled
$1,772,104.91 before prejudgment interest. Pl.’s Proposed
Findings of Fact and Conclusions of Law at 70, ECF No. 256.
23
Opportunity Comm’n v. Gen. Elec. Co., 532 F.2d 359, 367 n.17
(4th Cir. 1976). Formal amendment, however, is not always
required. See Fed. R. Civ. P. 15(b)(2). “When an issue not
raised by the pleadings is tried by the parties’ express or
implied consent, it must be treated in all respects as if raised
in the pleadings,” and “failure to amend does not affect the
result of the trial of that issue.” Id. This liberalism was
meant to obviate the necessity of a new trial every time an
opposing party points to a technical deficiency in pleading.
See 6A Fed. Prac. & Proc. Civ. § 1491 (3d ed. 2014) [hereinafter
Fed. Prac. & Proc.]; see also Deere & Co. v. Johnson, 271 F.3d
613, 621 (5th Cir. 2001) (“As has been often said, the principal
purpose of Rule 15(b) is judicial economy.”). In fact, the rule
has always been construed to promote resolution of cases on the
merits, rather than on the pleading skills of counsel. See Fed.
Prac. & Proc. § 1493. In other words, Rule 15(b) helps
litigants and the courts “avoid the tyranny of formalism.”
Kirkland v. District of Columbia, 70 F.3d 629, 634 (D.C. Cir.
1995); Dunn v. Ewell (In re Santa Fe Downs, Inc.), 611 F.2d 815,
817 (10th Cir. 1980).
The majority insists on formalism, finding no implied
consent to try the issue of whether Lang breached the Fill Slope
Contract. However, this was the entire gravamen of the five-day
trial. We may find implied consent where the defendant: 1)
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fails to object to evidence relating to the unpleaded issue; 2)
actually produces evidence bearing on the issue; or 3) offers
direct arguments contesting the issue. See Fed. Prac. & Proc.
§ 1493; see also McLeod v. Stevens, 617 F.2d 1038, 1040 (4th
Cir. 1980) (finding admission of evidence without objection an
indicium of implied consent). All three criteria are present
here. Even though Dan Ryan’s post-trial submission omitted
mention of the Fill Slope Contract, Lang did not object to
introduction of the contract into evidence, and the issue also
had been teed up since at least the parties’ pre-trial
statement. Dan Ryan specified in its brief statement of its
claims that “the Lang Defendants owed legal duties to [Dan Ryan]
from four separate and distinct contractual undertakings.” J.A.
293-94. Dan Ryan’s theory was unambiguously that Lang breached
these duties by “[i]mproper placement and compaction of fill
material.” J.A. 294. Lang confronted these arguments head on
in its own section of the pre-trial statement: “The Lang
Defendants did not breach any contract with [Dan Ryan].” J.A.
296. Lang’s theory was that even if it had followed proper
construction practices, “the slope would have still failed due
to a layer of colluvium in the soil.” J.A. 301. It thus sought
to place the blame on Horner Brothers Engineering, which Lang
alleged drew up lot grading plans that did not take into account
certain soil properties.
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In this way, Lang was fully prepared to litigate, and
indeed litigated in substance, whether it was “liable to [Dan
Ryan] for breach of contract in relation to [the Fill Slope
Contract].” J.A. 305 (contested issue from pre-trial statement
proposed by Lang). During the trial, “[t]he experts all
agree[d] that [Lang Brothers Inc.] did not employ the standard
construction practices that, if applied in the first instance,
would have ensured the slope’s stability.” J.A. 2374 n.44. It
turns out that Lang built the fill slope based on rudimentary
drawings that were never meant to serve as a full set of
engineering plans and specifications. Lang did not ensure the
slope foundation was built according to the proper ratio, and
did not install the appropriate draining system, among other
failings. Basically, Lang picked up dirt from one part of the
development and set it on top of another. The district court
had no trouble ascertaining that, according to the “credible
evidence,” Lang’s “poor construction practices were the sole
proximate cause of the slope failure.” J.A. 2374 n.44.
This is not a case where the evidence “incidentally tends”
to establish that Lang’s shoddy construction breached a
contractual duty to build a viable fill slope. Pinkley, Inc. v.
City of Frederick, 191 F.3d 394, 401 (4th Cir. 1999). In
determining whether an issue has been tried by consent, we
rightly should be concerned with the defendant’s potential lack
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of opportunity to defend against a new allegation. But here, in
addition to Lang having had adequate notice of just what was at
issue, treating the Fill Slope Contract as if it had been
included in the pleadings in no way prejudices Lang. Prejudice
occurs, like in the Withrow case cited by the majority, where
there is “failure to afford [a litigant] an opportunity to
present evidence bearing on that [new] claim’s resolution.”
Withrow v. Williams, 507 U.S. 680, 696 (1993). Lang does not
even claim any potential prejudice, perhaps because it must
admit that inclusion of the Fill Slope Contract in Dan Ryan’s
complaint would not have compelled presentation of any different
evidence, or reliance on any alternative theory of defense.
Given the ample notice, implied consent, and utter lack of
prejudice to Lang, I would reverse the district court and find a
breach of the Fill Slope Contract.
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