PUBLISHED
UNITED STATES COURT OF APPEALS
FOR THE FOURTH CIRCUIT
HOMELAND TRAINING CENTER, LLC,
a Tennessee Limited Liability
Company,
Plaintiff-Appellant,
v.
SUMMIT POINT AUTOMOTIVE
RESEARCH CENTER, a West Virginia
Limited Liability Company,
individually and in its capacity as
No. 08-2272
Trustee of the William Scott Inter
Vivos Trust,
Defendant-Appellee,
and
WILLIAM SCOTT INTER VIVOS TRUST,
Defendant.
2 HOMELAND TRAINING CENTER v. SUMMIT POINT
HOMELAND TRAINING CENTER, LLC,
a Tennessee Limited Liability
Company,
Plaintiff-Appellee,
v.
SUMMIT POINT AUTOMOTIVE
RESEARCH CENTER, a West Virginia
Limited Liability Company,
individually and in its capacity as
No. 08-2273
Trustee of the William Scott Inter
Vivos Trust,
Defendant-Appellant,
and
WILLIAM SCOTT INTER VIVOS TRUST,
Defendant.
Appeals from the United States District Court
for the Northern District of West Virginia, at Martinsburg.
John Preston Bailey, Chief District Judge.
(3:07-cv-00160-JPB)
Argued: October 27, 2009
Decided: February 3, 2010
Before WILKINSON, DUNCAN, and DAVIS,
Circuit Judges.
Affirmed in part, reversed in part, and remanded by published
opinion. Judge Wilkinson wrote the opinion, in which Judge
HOMELAND TRAINING CENTER v. SUMMIT POINT 3
Duncan joined. Judge Davis wrote a separate opinion dissent-
ing in part and concurring in part.
COUNSEL
ARGUED: John Harlan Mahaney, II, HUDDLESTON &
BOLEN, LLP, Huntington, West Virginia, for Homeland
Training Center, LLC. William Richard McCune, Jr.,
Martinsburg, West Virginia, for Summit Point Automotive
Research Center. ON BRIEF: J. Jarrod Jordan, HUDDLES-
TON & BOLEN, LLP, Huntington, West Virginia, for Home-
land Training Center, LLC. Peter L. Chakmakian, PETER L.
CHAKMAKIAN, LC, Charles Town, West Virginia; Alex A.
Tsiatsos, WM. RICHARD MCCUNE, JR., PLLC, Martins-
burg, West Virginia, for Summit Point Automotive Research
Center.
OPINION
WILKINSON, Circuit Judge:
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 pros-
pect 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 origi-
nal decision to seek specific performance precluded the non-
repudiating 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
4 HOMELAND TRAINING CENTER v. SUMMIT POINT
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 commit-
ments. We therefore remand this case for trial on the issue of
damages occasioned by the repudiation.
I.
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 pro-
vided 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 ordi-
nance. 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 recorda-
tion unless the tenant indicated that it had not obtained satis-
factory 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’
HOMELAND TRAINING CENTER v. SUMMIT POINT 5
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 noti-
fied, 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."
HTC entered into negotiations in early 2007 with an invest-
ment company it hoped would finance the project. SPARC,
however, formed the opinion that HTC was not doing enough
to position itself to proceed with the lease, and in June 2007
it communicated its concerns to HTC in writing. HTC
responded by letter several days later, describing its efforts up
to that point. The parties met to discuss the issue on July 23,
2007, and in the course of the meeting, SPARC told HTC that
it would probably be filing a "merger plat" soon. This was
thought to be faster than the subdivision process associated
with preparation of a "final plat." On August 7, 2007, SPARC
filed a merger plat in the Jefferson County Clerk’s Office, but
it did not notify HTC that it had done so. Shortly thereafter,
SPARC also asked to amend the lease to provide that the ini-
tial term of the lease would begin no later than December 1,
2007, but HTC denied the request.
SPARC first notified HTC that it had actually filed the
merger plat in a letter dated October 17, 2007. That letter
stated that the lease had terminated because HTC had failed
to provide notice of its determination to proceed within sixty
days of the plat recording. HTC responded on October 26,
2007, stating that the merger plat was not a "final plat" within
the meaning of the lease, that the lease remained "in full force
6 HOMELAND TRAINING CENTER v. SUMMIT POINT
and effect," and that it intended "to perform under the Lease
as such." SPARC replied on October 31, stating that "[t]he
Lease has been terminated by [HTC’s] inability or refusal to
adhere to its terms." That same day, HTC received a commit-
ment letter from the investment company with which it had
been negotiating since the start of the year. The letter expired
before it could be acted upon, however.
On December 4, 2007, HTC wrote SPARC to say that it
had received commitments for financing, but that because of
SPARC’s having "taken the position that the Lease is termi-
nated, HTC will likely be unable to close on the funding and
to consummate the transactions with its funding sources."
HTC asked SPARC whether it would "acknowledge that the
Lease between the parties is still in effect and avoid this
impending problem." The next day, HTC filed a breach of
contract suit in federal district court for the Northern District
of West Virginia. The suit sought a preliminary injunction,
which was granted shortly thereafter, and requested an order
of specific performance. Later that same day, SPARC
responded to HTC’s December 4 letter by fax, stating that it
would neither admit nor deny the continued existence of the
lease, but offering to "accept the lease as it stands" if HTC
provided proof of financing by January 15, 2008. Three
weeks later, SPARC filed counterclaims for breach of con-
tract against HTC, alleging that HTC had breached the lease
by failing to make sufficient efforts to obtain financing and by
participating in the assignment from Homeland Security Cor-
poration.
In January 2008, HTC disclosed the litigation to the various
investors who had pledged to finance the project, prompting
them all to withdraw. Throughout the spring, HTC worked to
make alternative financing arrangements. SPARC, mean-
while, prepared a new plat of the property, one which indispu-
tably qualified as a "final plat," and duly recorded it after
approvals had been obtained. With two weeks to go before
HTC would be forced to notify SPARC that it wished to keep
HOMELAND TRAINING CENTER v. SUMMIT POINT 7
the deal alive, the venture capital firm that HTC saw as its last
chance to secure financing informed HTC that while it was
interested in financing the project, it would not become
involved unless the lease dispute was resolved. One week
later, HTC notified SPARC that it was exercising its option
to terminate the lease. Thereafter, HTC dropped its claim for
specific performance and instead asked the district court for
an award of damages.
Both sides filed motions for summary judgment. The dis-
trict court rejected each of SPARC’s counterclaims, holding
that HTC was under no duty to seek out financing within any
particular time frame and that, while the assignment was
improper, SPARC had waived any claim by assenting to it
after the fact. The district court also held that although
SPARC had repudiated the contract, HTC could not bring a
damages action based upon the repudiation because its earlier
decision to request specific performance constituted a binding
election not to terminate the contract. In short, the court held
that though both sides had breached the contract, neither side
could recover for breach. Both sides appealed from the district
court’s rulings.
II.
We review the grant or denial of motions for summary
judgment de novo, applying the same standard as the district
court. Holland v. Washington Homes, Inc., 487 F.3d 208, 213
(4th Cir. 2007). In general, the interpretation of a written con-
tract is a question of law. Williams v. Professional Transp.,
Inc. 294 F.3d 607, 613 (4th Cir. 2002). Jurisdiction is founded
on diversity of citizenship, and on questions of substantive
law, this court must apply the law that the forum state, West
Virginia, would apply if it heard the case. CACI Intern., Inc.
v. St. Paul Fire and Marine Ins. Co., 566 F.3d 150, 154 (4th
Cir. 2009) (citing Klaxon Co. v. Stentor Elec. Mfg Co., 313
U.S. 487, 496-97 (1941)). It is undisputed that West Virginia
would apply its own law to the questions before us.
8 HOMELAND TRAINING CENTER v. SUMMIT POINT
III.
We begin with SPARC’s arguments, raised by way of
cross-appeal. We conclude that the district court was correct
to reject each of these arguments, which we address in turn.
First, SPARC claims that HTC breached the lease by fail-
ing to make sufficient efforts within a "commercially reason-
able" period of time to line up financing. It is unnecessary for
us to determine whether HTC’s efforts to obtain financing
were so meager as to be "commercially unreasonable," for no
duty of commercial reasonableness of the sort SPARC asserts
existed. Under West Virginia law, commercial reasonableness
is a "gap filler," invoked only when a disputed issue is not
addressed in explicit terms by the parties. See First Nat’l
Bank of Bluefield v. Clark, 447 S.E.2d 558, 562 (W. Va.
1994) ("[W]here a contract fixes no definite time for perfor-
mance, the law usually implies that performance shall be
within a reasonable time."). In this case, the lease provided
that the initial term would begin 120 days after SPARC filed
a "final plat," unless HTC considered its financing options
unsatisfactory, in which case HTC could postpone the start of
the initial term. At a minimum, then, the lease gave HTC 120
days to attempt to secure financing. Any duty to act within a
"commercially reasonable" time would only apply if HTC
chose to delay the commencement of its obligations under the
lease beyond the 120-day mark.
This never occurred, however. The district court ruled that
the "merger plat" filed by SPARC did not qualify as "final
plat" under the lease, and SPARC has not challenged that rul-
ing on appeal. A duty of commercial reasonableness could not
arise until 120 days after the filing of the second plat in the
spring of 2008, but by that point, HTC had already exercised
its contractual right to terminate the lease due to difficulties
with financing. The lease therefore was never held open into
the period when HTC would have been subject to a duty of
commercial reasonableness. Moreover, even if we accepted
HOMELAND TRAINING CENTER v. SUMMIT POINT 9
SPARC’s position that the "merger plat" qualified as a "final
plat" and the lease terminated sixty days later after HTC
failed to take action, it is equally the case that the commercial
reasonableness duty would be inapplicable since the 120-day
mark would never have been reached.
Next, we consider SPARC’s claim that the assignment
from Homeland Security Corporation to HTC constituted a
breach of the contract. The lease agreement demanded that
SPARC’s written consent be obtained prior to any assign-
ment, which did not occur. The assignment therefore violated
the terms of the lease and clearly constituted a breach, as the
district court held. That said, SPARC never expressed any
opposition to the assignment after learning of it in December
2006 and in fact acknowledged in its letter of September 2007
that it would "of course" have assented to the assignment if
notice had been given. SPARC thus waived any right to claim
a breach based on the assignment, as SPARC itself concedes.
SPARC nonetheless argues that the waiver should not be
given effect because the waiver was made without knowledge
of HTC’s net worth. SPARC, however, realized that it had not
ascertained HTC’s net worth at the time of its waiver. After
all, SPARC requested that information in the very same letter
in which it approved the assignment. Having given its bless-
ing without reservation and in full knowledge that it had not
learned HTC’s net worth, SPARC’s waiver was sufficiently
informed to be effective.
Finally, SPARC contends that the district court erred in its
conclusion that SPARC repudiated the lease. The doctrine of
anticipatory breach allows a suit for breach of contract to be
brought if one party to a contract renounces its future contrac-
tual obligations, in essence promising ahead of time not to
perform when performance comes due. See Robert J. Riley,
The Doctrine of Anticipatory Breach as Applied in West Vir-
ginia, 31 W. Va. L.Q. 182, 183 (1925). Under West Virginia
law, to constitute a contractual repudiation, a statement
renouncing a contract must be "positive, absolute and
10 HOMELAND TRAINING CENTER v. SUMMIT POINT
unequivocal." Mollohan v. Black Rock Contracting, Inc., 235
S.E.2d 813, 816 (W. Va. 1977). Both SPARC and HTC point
to the record of each party’s conduct after October 17, 2007,
in support of their respective claims concerning repudiation.
The dispositive consideration, however, is whether SPARC
objectively manifested an unwillingness to perform under the
contract—not its actual, subjective intention. See Record Club
of America, Inc. v. United Artists Records, Inc., 643 F. Supp.
925, 940 n.10 (S.D.N.Y. 1986), vacated on other grounds by
890 F.2d 1264 (2d Cir. 1989). The post-October 17 evidence
is relevant only to the separate and secondary issues of
whether, even if the statement was a repudiation, HTC was in
some way barred from obtaining the relief it sought. (See
infra.) Whether the letter amounted to a repudiation depends
here on the nature of the statement and the surrounding cir-
cumstances at the time it was made.
The district court was correct to find a repudiation.
SPARC’s letter of October 17, 2007, declared that because
HTC had not expressed its intention to proceed with the lease
within sixty days of the "merger plat" filing, "the lease has
been terminated by the tenant." The statement contained no
caveat or qualification and its tone was firm. Furthermore,
SPARC was not compelled to take such a precipitous course
of action, since the lease allowed either party to request verifi-
cation from the other that the lease was still in effect. SPARC,
evidently seeking to get out of the contract as fast as it could,
rejected such a course. Particularly in light of SPARC’s
option to request assurances, the only reasonable conclusion
HTC could draw after receiving the October 17 letter was that
SPARC was not going to perform under the lease, which
seems exactly the message SPARC was trying to convey.
Moreover, SPARC failed even to notify HTC of its plat filing
so that HTC would be aware of the possible need to make a
determination to proceed. SPARC’s failure to do so, and
instead to attempt to bring about the termination of the con-
tract by stealth, further underscores the correctness of the dis-
trict court’s determination that a repudiation occurred.
HOMELAND TRAINING CENTER v. SUMMIT POINT 11
IV.
We turn then to the crux of this dispute. The district court
found that while SPARC had unjustifiably repudiated the con-
tract, HTC could not obtain monetary damages for breach of
contract because it had initially brought, though later aban-
doned, a claim for specific performance. This conclusion was
in error.
A.
The case before us presents what is in essence a straightfor-
ward question of election of remedies law. The common law
doctrine of election of remedies applies where two possible
remedies are available for the same legal injury. See Harrison
v. Miller, 21 S.E.2d 674, 678 (W. Va. 1942) (citation omit-
ted). The basic purpose of the doctrine is to prevent a plaintiff
from obtaining a windfall recovery, either by recovering two
forms of relief that are premised on legal or factual theories
that contradict one another or by recovering overlapping rem-
edies for the same legal injury. See Dionne v. Mayor and City
Council of Baltimore, 40 F.3d 677, 681 (4th Cir. 1994); see
also 25 Am.Jur.2d Election of Remedies § 3.
Election of remedies doctrine also has a sequencing compo-
nent. See Kansas State Bank in Holton v. Citizens Bank of
Windsor, 737 F.2d 1490, 1499 (8th Cir. 1984). At common
law, the doctrine prevented a plaintiff from pleading alterna-
tive remedies or alternating between remedies once suit had
commenced. Olympia Hotels Corp. v. Johnson Wax Develop-
ment Corp., 908 F.2d 1363, 1371 (7th Cir. 1990). With the
adoption of more flexible approaches to pleading and proce-
dure and the merger of law and equity, however, most juris-
dictions today have abandoned this dimension of election of
remedies doctrine. See Schwartz v. Rockey, 932 A.2d 885, 893
(Pa. 2007). Under the modern view, apart from issues of res
judicata or where some element of estoppel is present, a con-
clusive election typically is made only where a suit has
12 HOMELAND TRAINING CENTER v. SUMMIT POINT
advanced to judgment. See Olympia Hotels, 908 F.2d at 1371
(citations omitted).
It is clear that in West Virginia, election of remedies doc-
trine follows this trend.1 In Stone v. Kaufman, 107 S.E. 295
(W. Va. 1921), the West Virginia Supreme Court allowed a
plaintiff to sue for damages after dropping its earlier claim for
specific performance. Moreover, West Virginia’s Rules of
Civil Procedure, which largely replicate the equivalent federal
provisions, embrace the modern principles of notice pleading,
pleading in the alternative, and the liberal amendment of
pleadings that have supplanted the common law’s more for-
malistic approach. See W. Va. R. Civ. P. 8(e) ("A party may
set forth two or more statements of a claim or defense alter-
nately or hypothetically. . . A party may also state as many
separate claims or defenses as the party has regardless of con-
sistency."); W. Va. R. Civ. P. 15 ("[L]eave [to amend plead-
ings] shall be freely given when justice so requires."). SPARC
cites statements from earlier West Virginia cases to the effect
that "[p]arties will not be permitted to assume successive
inconsistent positions in the course of a suit." MacDonald v.
Long, 131 S.E. 252, 253 (W. Va. 1926). Those decisions,
1
We note that the sequencing component of election of remedies doc-
trine would likely qualify as "procedural" for purposes of Erie Railroad
Co. v. Tompkins, 304 U.S. 64 (1938), and Hanna v. Plumer, 380 U.S. 460
(1965), and that therefore the issue would likely be governed by federal
law. Similar devices have been treated as procedural. See Allen v. Zurich
Insurance, 667 F.2d 1162, 1167 n. 4 (4th Cir. 1982) (rules of judicial
estoppel); Hogue v. Sam’s Club, 114 F. Supp.2d 389, 391 n. 1 (D. Md.
2000) (rules concerning amendment of pleadings); see also Green v. Alt-
man, No. 03-6437, 2004 WL 2106552, at *9 & n.10 (E.D.Pa. Sept. 21,
2004) (viewing the sequencing aspect of election of remedies doctrine as
a matter of federal law under Erie); Olympia Hotels, 908 F.2d 1371
(same). As a matter of federal law, election of remedies doctrine no longer
requires a party to elect a single remedy at the outset of suit. Kansas State
Bank in Holton v. Citizens Bank of Windsor, 737 F.2d 1490, 1499 (8th Cir.
1984). The parties did not raise the Erie issue, however, and since we
believe West Virginia election of remedies law provides the same result
as federal law, we decline to rule upon it.
HOMELAND TRAINING CENTER v. SUMMIT POINT 13
however, concern the narrower doctrine of judicial estoppel.
See West Virginia Dept. of Transp., Div. of Highways v.
Robertson, 618 S.E.2d 506, 513 (W. Va 2005). That doctrine
bars a party from changing positions where the court has
already made a ruling based on the party’s earlier position and
typically applies only where the other party was misled by the
earlier position. Id. at 513-14 & n. 18. It is clear that as an
ordinary matter, a plaintiff may seek specific performance at
the outset of his breach of contract action and later change his
mind and ask for damages instead.
B.
Nor does West Virginia’s substantive law of contracts pro-
vide a limitation that election of remedies doctrine does not.
The prevailing view is that contract law typically should not
prevent a plaintiff from substituting one contractual remedy
for another. "Only if the other party has materially changed
his position in reliance on the original choice is a shift to
another remedy precluded by the election of the first."
Restatement (Second) of Contracts § 378, cmt a. In light of
Stone v. Kaufman, it is clear that West Virginia contract law
generally adopts this view. Stone is explicit on the point: "The
remedy of specific performance and by an action for damages
for a breach of a contract are not inconsistent. Under the law,
a party to a contract breached by the other may pursue not
both but either remedy, as our cases on the subject so hold.
So we find no merit in the point that plaintiff was barred by
his suit for specific performance." Stone, 107 S.E. at 296.
Unlike this case, however, Stone involved an actual breach
of contract, rather than a threatened, prospective one. We
must therefore determine whether the doctrine of anticipatory
breach, as construed by the courts of West Virginia, would
prevent a plaintiff whose cause of action was based upon a
repudiation from abandoning an initial claim for specific per-
formance in favor of a claim for damages. We find that it does
not.
14 HOMELAND TRAINING CENTER v. SUMMIT POINT
The doctrine of anticipatory breach has a well-defined
function. It allows a plaintiff to bring a breach of contract
action immediately, rather than having to wait for the prom-
ised non-performance actually to occur, which could be some
time well into the future. See Restatement (Second) of Con-
tracts § 253(1). The doctrine gives the plaintiff the option to
have the law treat the promise to breach as a breach itself. In
this way, it operates as a doctrine of accelerated ripeness. See
Franconia Assocs. v. United States, 536 U.S. 129, 143 (2002)
(internal quotation marks omitted) ("[A] repudiation ripens
into a breach prior to the time for performance only if the
promisee elects to treat it as such.").
This is no small matter. Regardless of whether a plaintiff
is seeking an injunction or damages, the right to go to court
and bring an action on the basis of threatened non-
performance is a valuable means for the plaintiff to secure the
benefit of his bargain in the manner that is best for him and,
possibly, the repudiating party as well. It provides both sides
with certainty concerning their contractual rights and obliga-
tions.
But the doctrine of anticipatory breach, intended in signifi-
cant part to work to the advantage of the non-repudiating
party, cannot be turned on its head. A party who repudiates
a contract cannot be allowed to force a non-repudiating party
to forfeit a claim for damages simply because it initially held
out the hope that the repudiating party would honor its side
of the bargain after all. It is well settled in contract law that
a non-repudiating party can encourage the repudiating party
to withdraw the repudiation without forfeiting the right to
bring an action for anticipatory breach if the repudiating party
fails to do so. See Restatement (Second) of Contracts § 257
(1981) ("The injured party does not change the effect of a
repudiation by urging the repudiator to perform in spite of his
repudiation or to retract his repudiation."). It is the non-
repudiating party who should generally be able to decide how
to proceed after a repudiation. "[I]n a contract action where
HOMELAND TRAINING CENTER v. SUMMIT POINT 15
one has been wronged and has a number of remedies, he may
select the most efficient one." Cochran v. Ollis Creek Coal
Co., 206 S.E.2d 410, 415 (W. Va. 1974). The repudiating
party should not be given the power to force the other’s hand.
It appears that the district court’s ruling was based upon a
misreading of language in Annon v. Lucas, 185 S.E.2d 343
(W. Va. 1971). Annon stated that, when a repudiation occurs,
"[t]here is no breach so long as the injured party elects to treat
the contract as continuing." Id. at 350 (internal quotation
marks omitted). This statement does not mean that failure to
terminate a contract after it has been repudiated waives the
right to sue for anticipatory breach. A party can certainly keep
a contract alive and sue for anticipatory breach at the same
time since West Virginia law expressly allows specific perfor-
mance as a remedy for anticipatory breach. Miller v. Jones, 71
S.E. 248, 249 (W. Va. 1911). All that Annon meant is that the
statute of limitations will not begin to run from the time of
repudiation if the non-repudiating party decides to sue on the
basis of a later actual breach, rather than the repudiation.
Annon, 185 S.E.2d at 351 (citing Restatement (First) of Con-
tracts § 322). Annon had nothing to do with a suit for specific
performance and in no way suggested that when a non-
repudiating party does bring an anticipatory suit, his initial
choice to request one remedy will bar him from changing his
mind during the litigation and recovering another.
In sum, we see no reason why, as a general matter, a party
who initially seeks specific performance cannot later switch
his preferred relief to an award of damages in the event that
specific performance is rendered impractical or impossible—
which, after all, is exactly what happened here. Moreover, the
notion that an election has to be made at the time suit is filed
is inconsistent with modern pleading practice. Consider that
while the plaintiff in this case did not request both specific
performance and damages as alternative remedies in its origi-
nal complaint, it might well have done so. What election
could it be said to have made then? In a system where plain-
16 HOMELAND TRAINING CENTER v. SUMMIT POINT
tiffs are allowed to plead alternative theories of liability, there
is no reason why they should be categorically forbidden to
plead alternative theories of remediation.
C.
Turning to the facts of this case, we find that HTC was not
precluded from obtaining a damages award after it abandoned
its claim for specific performance.
First, while anticipatory breach doctrine provides that a
non-repudiating party loses the right to treat a repudiation as
a breach if the repudiating party nullifies the repudiation, see
Restatement (Second) of Contracts § 256, no such nullifica-
tion took place. The principal way for a repudiating party to
nullify its repudiation is by making a statement retracting it.
Id. Not only did SPARC not retract its repudiation, it repeat-
edly reaffirmed it. After HTC responded to SPARC’s October
17, 2007, repudiation of the contract, urging SPARC to
retract, SPARC reiterated its desire to put an end to the con-
tract, stating once again that the lease had been "terminated,"
in its letter of October 31, 2007. The October 31 letter was as
unequivocal as the original repudiation, if not more so.
Several weeks later, HTC again wrote to SPARC, explain-
ing that the repudiation was making it impossible to get
financing and asking once more for a retraction. SPARC
responded that it would accept the lease if HTC could verify
that it had obtained financing within six weeks’ time, but until
and unless that happened, it would "neither admit nor deny
the continued existence of the lease." This certainly was no
retraction. As a matter of law, a statement must be uncondi-
tional to be effective as a retraction. See Anderson Excavating
& Wrecking Co. v. Sanitary Improvement Dist. No. 177, 654
N.W.2d 376, 383 (Neb. 2002) (citation omitted); Vahabzadeh
v. Mooney, 399 S.E.2d 803, 805 (Va. 1991). SPARC could
not nullify its repudiation by trying to add new conditions to
the lease. Not only that, the response was sent after HTC had
HOMELAND TRAINING CENTER v. SUMMIT POINT 17
filed suit, and "an attempted retraction of a repudiation of a
contract, after suit has been filed, is too late and is therefore
ineffectual." 17A Am. Jur. 2d Contracts § 718. SPARC could
have retracted its repudiation at any point between October
17, when it was sent, and December 4, when suit was filed.
It never did so, and no retraction was ever effected.
A repudiating party may also be able to nullify its repudia-
tion by performing under the contract if the non-repudiating
party has not yet elected to treat the repudiation as a breach.
See 17B C.J.S. Contracts § 540 (1999). The record, however,
contains no indication that SPARC performed under the lease
in the period between its repudiation on October 17, 2007,
and HTC’s filing suit, on December 4, 2007. Thus, while
SPARC claims that it continued to perform by filing a second
plat in March of 2008, that act came too late to nullify its ear-
lier repudiation. Nor, for that matter, did it in any way suggest
that SPARC had changed course and decided to perform
under the lease. Throughout the litigation, SPARC maintained
that the lease had terminated. It was not until after HTC
moved to seek damages in place of an injunction that SPARC
ever suggested the lease had any continuing vitality.
We see no reason then why HTC should be precluded from
changing its request from one for specific performance to one
for damages after filing its complaint. Since specific perfor-
mance has never been decreed, there is no possibility of de
jure double compensation if damages are now awarded.
SPARC claims, however, that allowing HTC to recover dam-
ages would amount to de facto double recovery because the
preliminary injunction provided HTC the injunctive relief it
sought. The preliminary injunction, however, was not effec-
tive in giving HTC the benefit of its bargain. It proved insuffi-
cient to disperse the cloud of legal uncertainty that SPARC’s
repudiation had cast over HTC’s business plans. This likely
was for the very same reason that it does not qualify as de
jure double recovery: it was "merely a temporary injunction
entered to preserve the status quo." Jim-Bob, Inc. v. Mehling,
18 HOMELAND TRAINING CENTER v. SUMMIT POINT
443 N.W.2d 451, 461 (Mich. App. 1989); see also Southern
Christian Leadership Conference v. Al Malaikah Auditorium
Co., 281 Cal. Rptr. 216, 226 (Ct. App. 1991); Pre-
iss/Breismeister Architects v. Westin Hotel Co.-Plaza Hotel
Div., 437 N.E.2d 1154, 1154 (N.Y. 1982). It provided no
assurance to HTC or its prospective creditors that the lease
would ultimately be enforced. To ignore the provisional char-
acter of a preliminary injunction in the context of election of
remedies would be to impose upon plaintiffs a Hobson’s
choice "of seeking the injunction to preserve the status quo
and thereby being relegated to seeking only specific perfor-
mance or foregoing the injunction and risking being forced to
seek damages in a situation in which the legal remedy may be
inadequate." Jim-Bob, 443 N.W.2d at 461.
Election of remedies doctrine is also grounded in estoppel,
and we consider the possibility that damages are now fore-
closed because SPARC changed position in reliance on
HTC’s earlier manifestations. See Restatement (Second) of
Contracts § 378. SPARC contends that it spent "hundreds of
thousands of dollars improving the Lease property’s infra-
structure before and after the alleged repudiation" and that it
performed under the lease by filing the second plat. Cross-
Appellant’s Reply Br. at 8. It is only conduct caused by
HTC’s decision to pursue specific performance that matters,
however. Thus, the only efforts by SPARC of any possible
relevance are those undertaken after HTC had received the
repudiation and expressed an intention not to terminate the
contract. In this regard, we call attention to SPARC’s own
claim at the outset of this litigation that it had "no plans to re-
lease or otherwise affect the disputed property. . . ." We also
note that, in issuing the preliminary injunction, the district
court specifically found that if SPARC were to prevail on the
merits, a provisional order to keep the lease alive while HTC
sought financing would not have caused any significant harm
to SPARC that could not be satisfied by HTC’s $60,000 bond.
Doubtless, there are some costs that SPARC incurred as a
result of SPARC’s decision initially to seek specific perfor-
HOMELAND TRAINING CENTER v. SUMMIT POINT 19
mance, particularly as relates to surveying the property and
obtaining permits. On the record of this case, however, we
cannot conclude that they precluded HTC from altering its
remedial request. SPARC’s own conduct ensured that specific
performance could not succeed. SPARC refused to provide
the assurances that HTC needed in order to salvage the
arrangement contemplated in the lease. In such circumstances,
it would be improper not to allow HTC to amend its request
after discovering the futility of its initial efforts to rescue the
deal. HTC was not unreasonable in supposing at the time it
filed suit that a simple order of specific performance would
place the project back on track. This, of course, proved too
sanguine, and it is now apparent that if HTC cannot have
damages, it can have no remedy at all. In our view, it would
be inappropriate to allow one who repudiates a contract and
thereby irreparably damages the contractual venture to invoke
the very conditions it helped to create in order to prevent the
other party to the contract from obtaining any relief. It is a
familiar maxim that "he who seeks equity must do equity."
Everly v. Peters, 397 S.E.2d 416, 418 (W. Va. 1989) (cita-
tions omitted).
We conclude, therefore, that there is no reason why HTC
may not now obtain an award of damages occasioned by
SPARC’s repudiation of the contract. What the measure of
damages may be is a matter for remand. We hold only that
West Virginia law provides no per se bar or indeed a bar in
this case to plaintiff’s amending its request for specific perfor-
mance to seek damages instead.
V.
For the foregoing reasons, we affirm the district court’s
conclusion that SPARC has no valid breach of contract claims
to bring against HTC and that SPARC repudiated the contract.
We reverse the district court’s conclusion that an award of
monetary damages against SPARC was precluded by HTC’s
earlier request for specific performance, and we remand for
20 HOMELAND TRAINING CENTER v. SUMMIT POINT
trial on the issue of damages caused by SPARC’s breach.2 To
hold otherwise would allow a party repudiating a contract to
deny the party who stuck by the bargain any remedy. The
judgment is hereby
AFFIRMED IN PART,
REVERSED IN PART,
AND REMANDED.
DAVIS, Circuit Judge, dissenting in part and concurring in
part:
I agree with the disposition of SPARC’s cross-appeal in
Part III of the Majority Opinion. I am unable to join my fine
colleagues in the majority, however, in the disposition of the
appeal by HTC. The majority asserts that HTC’s suit "sought
a preliminary injunction, which was granted shortly thereaf-
ter, and requested an order of specific performance." Maj. Op.
at 6. Unlike the majority, but like the district court, I am per-
suaded that the preliminary injunction sought and obtained by
HTC was the very "order of specific performance" it sought
by filing this suit in December 2007.
As the district court recognized, at the time of SPARC’s
alleged breach, the preliminary injunction (despite the nomen-
clature) afforded HTC complete relief for the very breach of
contract in consequence of which it sought a remedy from the
district court. J.A. 983-85. West Virginia contract law is clear:
a party may obtain either specific performance of a contract,
or damages flowing from a breach of a contract, but not both.
Stone v. Kaufman, 107 S.E. 295, 296 (W. Va. 1921) ("The
remedy of specific performance and by an action for damages
for a breach of contract, are not inconsistent. Under the law,
a party to a contract breached by the other may pursue not
both but either remedy, as our cases on the subject all hold.").
Thus, the effect of the majority’s remand for a trial on dam-
2
We also vacate the district court’s denial of attorneys’ fees to HTC.
HOMELAND TRAINING CENTER v. SUMMIT POINT 21
ages gives HTC two bites of an apple under circumstances in
which West Virginia law permits it only one bite. Id.
To be sure, whether SPARC’s posturing in connection
with, and after delivery of, the October 17, 2007 letter consti-
tutes an actionable repudiation of the agreement presents a
close question in my view, one not comfortably resolved as
a matter of law.1 Certainly, there is no evidence in the record
that SPARC had a third party waiting in the wings with which
it could quickly do business. Thus, the majority’s assertion
that SPARC "was seeking to get out of the contract as fast as
it could," Maj. Op. at 10, is curious.2 But accepting the district
court’s conclusion that HTC was entitled to treat the letter as
an anticipatory repudiation, and thus as an actionable breach
of contract, it is clear that what HTC was entitled to under
West Virginia law was to make a choice:
[1] treat the contract as rescinded, and recover on
quantum meruit so far as [it] ha[d] performed; . . .
[2] keep the contract alive for the benefit of both par-
ties, being at all times ready and able to perform, and
at the end of the time specified in the contract for
performance, sue and recover under the contract; or
[3] treat the repudiation as putting an end to the con-
tract, and sue for the profits [it] would have realized
if [it] had not been prevented from performing.
Point 1, syllabus, Annon v. Lucas, 185 S.E.2d 343 (W. Va.
1971) (brackets and alteration added).3
1
See Mollohan v. Black Rock Contracting, Inc., 235 S.E.2d 813, 816
(W. Va. 1977) (quoting Dingley v. Oler, 117 U.S. 490, 502 (1886)) ("An
anticipatory repudiation must be ‘a positive, unconditional, and unequivo-
cal declaration of fixed purpose not to perform the contract in any event
or at any time.’"); Wood County Airport Auth. v. Crown Airways, Inc., 919
F. Supp. 960, 967-69 (S.D.W. Va. 1996).
2
Indeed, in its preliminary injunction opinion, the district court specifi-
cally found that "[SPARC] . . . has no present plans to re-lease or other-
wise affect the disputed property." J.A. 346.
3
"[T]he syllabus . . . is the law in West Virginia." Union Trust Co. of
Maryland v. Townshend, 101 F.2d 903, 910 (4th Cir. 1939).
22 HOMELAND TRAINING CENTER v. SUMMIT POINT
It is clear to me that HTC chose option number three: it
treated the repudiation as an actionable breach of contract and
persuaded the district court to accept that characterization.
Rather than sue then and there for lost profits and the benefit
of its bargain, however, it sought and obtained the alternative
remedy of specific performance.4 The effect of the prelimi-
nary injunction (that is, the order of specific performance)
was threefold: (1) it precluded SPARC from entering into any
alternative arrangement with respect to the land with a willing
third party; (2) it affirmatively required SPARC to perform
fully its contractual undertakings going forward, i.e., to record
a proper "final plat" and to forebear from any further acts or
omissions inconsistent with the parties’ agreement; and (3) it
permitted HTC to continue, as contemplated by the parties’
agreement, its quest for financing that would have been criti-
cal to its consummation of the deal.5 Having foregone a claim
for damages, HTC received all to which it was entitled.
4
Of course, it is not at all surprising that HTC did not seek money dam-
ages (in the form of lost profits) in December 2007 because it almost cer-
tainly would have encountered a wholesale failure of proof at that time.
This is true notwithstanding that HTC repeatedly assured the district court
at the time of the preliminary injunction hearing that financing for the deal
was well in hand. J.A. 346 ("HTC has secured acceptable financing for the
project."). In any event, as the majority acknowledges, Maj. Op. at 19, the
measure of damages in the unusual circumstances of this case will be for
the district court to fathom in the first instance.
5
The district court’s injunction ordered:
. . . that SPARC and the Trust are hereby enjoined from selling
or re-leasing the property in question for a period of 120 days
from the December 18, 2007, hearing, or April 16, 2008. SPARC
and the Trust are further enjoined from taking any actions with
respect to the Lease which are inconsistent with the terms of the
Lease as if the same remain in full force and effect. During this
period, HTC may exercise its rights under the Lease to continue
the project going forward with respect to financing, inspection,
and other issues preliminary to construction.
J.A. 346-47.
HOMELAND TRAINING CENTER v. SUMMIT POINT 23
The majority concludes, to the contrary, that HTC chose
option two, that is, "it kept the contract alive." But how did
HTC keep the contract alive? It obtained an order of specific
performance requiring SPARC to perform. Most assuredly, as
the district court recognized, this is not what West Virginia
law anticipates.
If A contracts to sell land to B for $100, but A gets a better
offer in the meantime and threatens to sell to C for $200, then
B has a choice to make. B can sue A (because B claims an
entitlement to the apparent $100 increase in the value of the
land, and thus the benefit of his bargain) and B can seek, at
the commencement of the suit, in the alternative, specific per-
formance and damages. In particular, B can choose to allow
A to sell to C and limit his damages claim against A to the
disputed $100 profit. On the other hand, however, at B’s
insistence, the court will compel A to go through with his deal
with B and sell to B at $100. If, thereafter, C changes his
mind and decides not to buy from B for the $200 he had
offered A, surely B could not then seek damages of $100 from
A on a theory of breach of contract. But that seems to me to
be the import of the majority’s approach in this case.
I take a different view of the record. Just as B obtained
complete relief (specific performance) in the above scenario,
HTC obtained complete relief before the district court,
namely, SPARC’s full performance of any and all of its con-
tractual undertakings that were due on and after the issuance
of the preliminary injunction.6 Contrary to the majority’s
6
The district court described the effect of HTC’s decision to seek and
obtain specific performance by SPARC as a "forfeiture" of its damages
claim. J.A. 985. Whether or not that characterization is the most apt, the
district court was surely correct in reasoning that HTC had achieved all the
relief to which it was entitled by virtue of the preliminary injunction:
[N]o genuine issue of material fact exists with regard to whether
or not the parties continued to perform under the Lease following
the repudiation. . . . [I]t is uncontested that [SPARC] continued
24 HOMELAND TRAINING CENTER v. SUMMIT POINT
view, HTC did not "change its mind" see Maj. Op. at 12-13,
or "abandon[ ] its claim for specific performance." Id. at 16.
HTC could not "change its mind" because it had already
received what it wanted and what it proved it was entitled to:
specific performance.
There is not a scintilla of evidence in the record to suggest
that SPARC committed any further breach of contract after
the district court issued its preliminary injunction and after the
parties had "continued to perform." See supra note 6.7 Eventu-
ally, as it was entitled to do, HTC elected to abandon the
agreement when it failed to obtain the financing necessary to
continue with the deal, notwithstanding the "make whole"
relief it had obtained from the district court.8
performance under the Lease by securing approval of the final
plat from the Jefferson County Planning Commission and by
recording the same in the office of the Clerk of the County Com-
mission of Jefferson County.
J.A. 985.
7
It appears that the unspoken theory of HTC, implicitly embraced by the
majority, is that simply by requiring HTC to file a lawsuit, SPARC
thereby cast something of a pall over the deal, possibly scaring off poten-
tial lenders and investors. As a matter of West Virginia law, it is doubtful
that SPARC owed HTC some extra-contractual duty to display public
enthusiasm for the deal. At all events, HTC surely foresaw that some if not
many potential investors would not look benignly at the December litiga-
tion, and this would be particularly true during the nationwide economic
collapse of late 2007. See J.A. 346 ("This Court recognizes the difficulties
in the mortgage market over the last year."). This is yet a further indication
that HTC made a binding election of remedies in December 2007.
8
As the majority notes and as the district court recognized, the parties’
agreement was structured such that there were two separate and distinct
parts to the agreement. The first part essentially required affirmative per-
formance by both parties, i.e., to obtain the necessary permits and financ-
ing for the project, and to fashion and record the "final plat." The second
part laid out terms for the actual construction of the buildings and leasing
of the land. J.A. 30-47. Bifurcating the two parts of the contract was an
election clause, which effectively allowed HTC to terminate the agreement
going forward if it was unable to secure financing:
HOMELAND TRAINING CENTER v. SUMMIT POINT 25
Thus, with one exception, I would affirm the district court’s
order dismissing this case as fully heard and resolved. I would
vacate the district court’s order insofar as it denied attorney’s
fees to HTC and remand the case for consideration by the dis-
trict court whether fees should be awarded. Consistent with
the views expressed above, I would permit HTC to argue that
it was a "prevailing party" because it persuaded the district
court to issue an order of specific performance, i.e., the pre-
liminary injunction.9
With respect, I dissent.
Until all of the conditions set forth in Paragraph 3 herein are sat-
isfied, Tenant may terminate this Lease by giving written notice
to Landlord as provided herein, and this Lease shall be of no fur-
ther force or effect, except for such matters which are designated
to survive the termination of this Lease and except for any pay-
ment obligations pursuant to Paragraph 6(B) herein.
J.A. 32.
At that point, if HTC elected not to go forward with the Lease, the
agreement would naturally terminate, releasing both parties from further
performance.
9
A party may prevail, for the purposes of an award of contractual attor-
ney’s fees, in any one (or more) of three ways: (1) by winning the lawsuit;
(2) by prevailing on the principal issues; and (3) when there is a causal
connection between the lawsuit and a change in the defendant’s conduct.
See Daily Gazette Co., Inc. v. West Virginia Dev. Office, 521 S.E.2d 543,
553-54 (W. Va. 1999) (construing statutory fee-shifting provision allow-
ing an award of fees to a "successful party"). Arguably, HTC was a pre-
vailing party in that it obtained an order for specific performance;
presumably, any award of attorney’s fees would cover only the fees
incurred in obtaining the preliminary injunction.