-DEM Land and Marine Remediation, Inc. v. BASF Corporation, No. 2:2011cv00239 - Document 61 (E.D. Va. 2012)
Court Description: OPINION AND ORDER - BASF's summary judgment motion is GRANTED with respect to LMR's purported cause of action under the implied covenant of good faith and fair dealing and LMR's unjust enrichment claim. Furthermore, BASF's summary motion is GRANTED with respect to BASF's breach of contract claim to the extent that BASF contends that LMR is legally obligated under the written Portsmouth Ground Leases to pay carrying costs and maintain the storm water treatment system. The pending motion is DENIED with respect to LMR's breach of contract claim asserting that BASF failed to comply with the notice/termination provisions in the Ground Leases, and DENIED to the extent that BASF's breach of contract claim is impacted by BASF's alleged failure to comply with the written notice/termination provisions. Signed by District Judge Mark S. Davis and filed on 6/26/12. (jcow, )
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FILED UNITED JUN 2 6 2012 STATES DISTRICT COURT EASTERN DISTRICT OF VIRGINIA Norfolk Division CLERK, U.S. DISTRICT COUF T NORFOLK. VA LAND AND MARINE REMEDIATION, INC. , Plaintiff, v. BASF Civil Action No. 2:llcv239 CORPORATION, Defendant. OPINION AND This matter filed judgment is by "Defendant"). Marine are: (1) or at whether BASF disputes as contractual held a Corporation opposed Inc., as of the is ("LMR" to to material in whether discretion on briefing Court under the on herein, the GRANTS, summary judgment motion. modified in motion issue. part, and For Land LMR's are the and the DENIES, and there alleged written faith or primary that oral long- regarding leases; The summary ("BASF" disputes such leases. pending in (2) bad for plaintiff regarding case; such one by facts acted motion judgment terminated BASF a "Plaintiff"). that this prematurely to or summary dealing, issue hearing supplemental BASF motion course leases on opposition disputes contracts, term in Court defendant Such Remediation, contentions before ORDER and (3) in exercising Court previously later reasons in part, ordered stated BASF's I. It is entered which undisputed into an ("the would located in Agreement 34-4. on the 4. In to paying (hereinafter It Ground July of executed, also several however, system. 2009, the appears small ECF No. that, during to one the are not directly relevant 34-1 Leases, No. through LMR other period, on was work through eighty-four lease 33, 34- for a years.1 LMR was the Portsmouth paying utilities with to respect maintain a to storm 16. year into Portsmouth, ECF properties and 5 Portsmouth the required 34-2 estate and Additionally, was real of 34-1 premiums entered pursuant in the leases perform of the ground and maximum approximately "outparcels" and BASF period, 3-4, Ground 33-1, taxes, LMR parties and 1 and Agreement") "the 33-1, to costs"). Leases, Nos. leases insurance property "carrying treatment In 1 the a Leases, paying parcels Facts Nos. obtain and ("the diligence buildings ECF would Ground for Property, Agreement years, the responsible of LMR ECF LMR long-term for Undisp. several 2008, (collectively, Leases, Property. four to Leases") the due separate Brief, dismantle of Pursuant water to exchange, two 12, agreement a Virginia Ground Portsmouth minimum into S.J. and August written Ground Pursuant required was enter Def. on following Portsmouth Property"). one that, Portsmouth PROCEDURAL BACKGROUND that initial provided parties and FACTUAL AMD an after the Agreement amendment to the Agreement, LMR was Virginia. The outparcels, to the Court's ruling herein. deeded Agreement and dismantling deadline certain 12, Ground Leases buildings for until removing insurance 34-5. to until requirements pay in all extended December debris Nothing obligation that the 31, 2009, September more costs deadline extended 23, 2011, stringent. written carrying LMR's ECF amendment as set LMR's and Nos. in made 33 altered forth for <fl LMR's the Ground Leases. Sometime property taxes, originally Leases. is in No. undisputed that notwithstanding 39 f 14. with the LMR 33 fS[ LMR that the carrying system. spreadsheets agreement was to that No. 39 and pay n 39 the of the written of its the No. 39 13-14. further such create expenses It f the and/or written until Leases storm evidence it storm Leases ECF No. to comply However, binding to oral strictly with water contends LMR 22, 13. obligation of LMR the failed Ground Ground Ground it dealing was Property that course of of 33 ECF LMR Additionally, ECF No. fact of that Portsmouth maintenance emails 13. premiums, written maintenance function. the costs the fl the one relieved and to written. requirements costs ECF over dispute as No. at such through LMR with not Leases comply ECF insurance carrying pursuant took fact paying other system LMR does contends and 14-21, to perform Ground began pay BASF the agreements, to to treatment required BASF utilities, required ECF water 2010, respect treatment that several of BASF's subleased the Portsmouth BASF property property 39 Property <3I written costs in covered by LMR has not, agreement on the agreement to received located being 13. or to afford the arrearage under the It met is in person, writing, that Portsmouth LMR the as was LMR BASF had discussed never The of initiated Portsmouth, breached tenancy, unjust the and separately it November such New pay of a to York ECF to period" for this LMR, the No. final carrying definitive repay the in BASF not such by LMR's for is in the that BASF was days from the Although, notice undisputed carrying that costs Property. Circuit ground for the for relief only within City that terminating Complaint relief, Court alleges wrongfully a and termination it BASF on remedied. Complaint asserts Although twenty and Leases stated outstanding the LMR orally Ground premature, LMR's Leases grounds that 2010, both notice Portsmouth action 24, effective was alternatively labeled evidence "grace informed Virginia. enrichment. nor contends BASF Ground separate contract. obligations written incurred during 2010 on the LMR on Leases LMR because repaid written if the breaches were below, ineffective LMR's breached Ground date of the notice York, a advanced any evidence of a specific that Property. terminating separate Property a New from Portsmouth Ground Leases. undisputed and a modify LMR cash-inflow Rensselaer, however, Portsmouth a BASF LMR's based includes the breach on two of contract claim covenant of On good April Portsmouth and LMR faith 29, and by Following both Court to to LMR's briefs, such Court hearing, parties regarding Furthermore, issued by complete, submit the a briefs, upon the the movant to if such any material implied BASF filed had carrying storm a breached water motion from an summary counterclaims. Ground thereunder treatment for answer the costs the system. judgment on The summary summary judgment fully briefed by the parties. considering held oral Court the afforded brief. the "shall party fact of of the pending from granting of Having summary for the received At both judgment. relevant after parties motion. counsel a Virginia the opinion briefing was opportunity such to supplemental for decision. STANDARD Federal grant" "shows and on discovery Court ripe parties' extensively propriety subsequent Court the argument heard II. court case the BASF's this matter is district the and Supreme to this LMR pay filed supplemental Pursuant an Court. that BASF carefully the breached removed this timely claims judgment motion was After to BASF dealing. BASF maintain discovery, that fair alleging failing failing and 2011, Circuit counterclaim Leases asserts the OF REVIEW Rules summary that there movant is of Civil judgment is no Procedure, in favor genuine entitled to of dispute judgment as a a as a matter some of law." alleged defeat an judgment; is If and no unsupported claims (E.D. (4th of and as the Cir. "will no Lobby pleadings, existence motion be Inc., a trial defenses 477 issue U.S. fact, judge prevent "it proceeding Auto-Owners Ins. Co., 744 F. (quoting Drewitt v. Pratt, 242, is the trial.'" 2d F.2d that factually to Supp. 999 of deposition material from not demonstrate to of summary genuine materials to for affidavits, 2010) Va. 543, 774, 545 778-79 1993)). summary the movant judgment, facts of in illustrating a Catrett, U.S. 477 Novatel At that determine whether 477 the 317, point, evidence Anderson, the Sys., the U.S. and form of for 322-24 "the 33 F.3d judge's is In a the instead and rest upon must sworn Cray set 390, truth the of the not issue judge forth Corp. 393-94 is the affidavits Commons, function so, supporting Celotex genuine doing not trial. (1986); determine 249. but evidence may exhibits issue Inc., filed party pleadings, there at properly non-moving genuine Computer 1994). has the allegations specific weigh Liberty mere parties the v. Once mere there discovery obligation The supported v. dispute Affirmative Hostettler between that the other genuine 56(a). is Anderson (1986). P. properly requirement transcripts, there Civ. dispute otherwise fact." 247-48 R. factual the material Fed. v. Inc. (4th v. Cir. himself matter but to to for trial." must construe the facts in and may not Holland v. Although "[t]he the light make Wash. the Homes, on motion); of a the Cir. to F.2d v. Booz, 2006) defeat" Anderson, a evidence "is probative, citations first argues that respective are disputes as obligations course of to dealing for the 452 F.3d is that if is be not judgment or may [nonU.S. summary colorable, be 477 Inc., (indicating judgment must of the not granted") DISCUSSION of Contract Claims the summary breach material oral under there speculation supported 249-50 support Anderson, Hamilton, 2007). non-movant, in find 255; Oral Contracts/Course of Dealing parties' into & at Cir. the evidence (quoting merely Breach the entered of unsupported summary (4th party, omitted). A. 1. 778 Allen at III. LMR at favor of Id. insufficient; properly U.S. non-moving 213 reasonably ("Mere 477 significantly be could 999 Francis (4th will jury the 208, in scintilla position which non-movant's (internal F.3d construed Drewitt, sufficient 487 is see 308 Inc., to determinations. existence movant].'" 299, favorable credibility [non-movant's] 252); most evidence mere evidence at the of facts contracts Ground modified judgment contract inappropriate claims because regarding whether modifying LMR's Leases or is and/or replaced the whether terms BASF on there and LMR contractual the of parties' the Ground Leases. In contract that in it support writing does contract by Boyle, not 259 Va. that parties through the of No. Virginia of not 39, new oral further the 10-11 [written] evince (quoting varied Reid v. the "contracting mutual contract." and in Reid, that a " *a original substantially recognized may that contract'" that be at argues As noted by LMR, dealing, their a LMR difference (2000)).2 of by should ECF course terms any it 369 contention, modified "Amake 356, Court such be writing.'" Supreme modify may provided except of intent Reid, 259 here, a Va. to at 370. LMR appears contract parties implicitly agree where, that all generally may even requires expressly writing, written correct that later expressly through requirement. course Id. at that a of 369. as modifications agree dealing, The written Supreme to be orally, suspend Court in or such of Virginia explained: We have held modified by Accident & 409, 165 "A by new S.E. 518, the by a adopt Nor original 2 It be Co. (1932), writing, of new as of the it written of Zurich 159 make required may be which to be so or may of the contract that except or all by Portsmouth Ground Leases 8 404, may or difference provided varied law. General Va. dissolved some written any contract be stated: not terms original may In contract, its substantially the we but writing Baum, v. frauds, oral part does is undisputed that Virginia 519 in in contract. Ins. statute provisions not oral Liability contract varied not a contract . that it . . the should writing. are governed by This stipulation and any oral be agreed upon sufficient at 369-70 above such Frauds does If, in contrast, any subsequent writing. not as by to the party 213, 217-18 a parol for To such written of Statute meant of to 204482, v. contracts Frauds *9 land of are "the Wooten Va. v. Jan. be 27 260 to Va. mischiefs No. be in 53 be in and any signed v. Ellis, in this prior 167 State written of agreement be then 48, to statute (6 of Frauds], settled Va. 2008) likewise Moyer the the Id. writing, writing very Lightburn, 25, a a in writing. of in material required a Statute required verbal the very in varying within permitting that is been the the must agent."); defeat presents (W.D. is be Statute long by emphasized requires also Wooldridge, that prevent"); at of as Assocs., materially would Heth his has substitution (indicating written or ("'It sale contract statute.'"); (1828) charged must may necessary where contract parol extent." contract Virginia contract (1936) such a by contract Frauds by which supported that McEnearney [the that the is is to the of writing applies of here, to be v. agreement agreement allow that rescinded However, only Statute Lindsay to the which added). modification modification that the pursuant be of rescission require See writing and rule ("[W]hen, (2000) Va. a (emphasis excerpt, may consideration implication Id. itself variation frauds. for the purpose of the Rand.) 605, 610 oral in modifications writing which the l:07cv52, (unpublished) by the Statute 2008 WL ("Under Virginia law, enforced pursuant that be contract Statute they than principle writing Therefore, 2010 to thousands modification writing.3 for Va. in the See ECF No. and any in writing to be modification to signed by the party dispute the . Leases . Ann. not to lease § 11-2. apply to the pay to be Virginia in writing [of real Accordingly, the alleged "must Lindsay, Va. by BASF LMR, LMR what in of Ground 34-2 1 20.06 orally the to costs, Leases was be the oral be at agreed express appears carrying 260 as estate] modifications relieve such . that 11-2." § written no does contended dollars be frauds, Ground because Code timely of be Code. Reid case of to enforced."). "contract temporarily of to be year." required in writing the as to be requires satisfy obligation statute to this if, is appears forth in to a a set agreements the agent Frauds represent for more contract also must there of a to charged or his Here, 3 when in 53. during contractual hundreds such required of material to be in ("Failure of either party to LMR's contention that an LMR principal and BASF representative had a close personal relationship and often handled matters informally is inapposite. Controlling law mandates that multi-year land leases be in writing, and further mandates that modification of any such lease likewise be in writing. Additionally, the Portsmouth Ground Leases expressly required all amendments to be in writing, and in mid-2009, BASF and LMR executed a written modification to the Agreement and one of the Ground Leases, indicating that the parties understood the necessity to execute written modifications. Therefore, regardless of the existence of any friendship, LMR had no legal basis to believe that it was excused from multiple express financial obligations under the written long-term leases based on any informal oral discussions. LMR should have insisted that any contract modifications, 10 particularly insist upon exercise to be or option of any No provision construed such Lessor or As fully Ground has that Leases have admitted], required by LMR has failed was fully, by the as the the or of (quoting . . . Hale differently, to to pay" be Pair the 90 v. alleged modifying LMR's form and signed by BASF. 11 additional agreement at 53. The any at to such the of 732 a performance case of 196, out nature [oral] 206 (1953) Stated performance duties, of an (1894)). part [LMR agreement unequivocal Va. contractual as Similarly, part existence has expressly oral take an 195 728, 53-54. of [the Portsmouth costs alleged "'Acts to because, carrying Id. acts the added). the Rook, Va. by apply the of signed not Va. of evidence Hale, until be Lessee does execution, must deemed LMR's performed that specific ."' v. purportedly written fully this be because 260 to the (emphasis rejects under or and or construed shall Lessor writing frauds performed. frauds], themselves agreement those [of to or party Lease the [BASF] demonstrate seeking by hereof deemed such Ground contracts. partially, party statute failed be by also of been written to Court Lindsay, "not [it] this with performed." not provision case may be.") statute agreement any default reduced the this "the or waived be as of shall of been shall Lindsay, oral] breach have waiver in alleged to hereunder the Lessee, contention been performance any Lease. unless strict waiver a Ground the be put "''of into themselves to show Id. at the 207 evidence that, imply terms of Property. to not in that cut-off. that there (quoting 216 was oral of Hanley Va. v. Sept. Va. 872 at Court that defense Rummer, 16, that alleged a words, of No. LMR's they contract added); 195 Va. see T performance the not" not between unequivocally Pair, show at 207 v. T , must existence suggestion, from 2011 (unpublished). 12 performance of be the added). doctrine l:llcv270, part were are not part "estopped the utilities do [oral] than Property, because do (emphasis rejects under 2011) any of with expenses collectively, contract." (emphasis is or they other BASF acts writing ("[T]he likewise such and theory no consistent cover is Portsmouth Portsmouth singularly 733) the the (1976) contract.") argument, Frauds 90 on purported agreement lapse, not [oral] LMR's plainly to evidence inadmissible.'" oral costs is parol on existence other alleged placed execute the in with alleged oral to an is Here, required "the taken a[n] 867, consistent The of, or, Hale, Va. did Accordingly, failure parties; not on 733). carrying felt were case, at of contract, relied action it coverage "demonstrative the Va. paid such liens present the 90 BASF that some contract Hale, 2010, insurance excuse of part-performance contention the the However, ensure that existence of (quoting during BASF's the asserting of 4352402, the equitable WL advanced To at Statute estoppel." at establish *3 (E.D. equitable estoppel, "the party modification to reliance, a change (quoting T assumes excuse as a v. written the expressly [Portsmouth] by November LMR to put that such work carrying 4 LMR's any on Portsmouth Property, to work perform similar demolition evidence supporting representation position. explaining Property. suggesting LMR's for any the LMR BASF moved LMR has that differently, of failure Property to BASF's to LMR failed was LMR has any not or cash the mounting 13 that present as to flow costs for with such in on New the York to BASF a a of evidence Portsmouth any an for any made change any had order contract the presented actions pay that, costs point caused 2009 to in hearing claim yet failed in 2010 written on admission Rensselaer, and In 18, promised to to 1 complete failed suffered statements generate cover by 39-1 carrying to asserted on evidence LMR's judgment has the demolition during separate LMR newly relied a to on apparently was resources to However, counsel's was its No. use. all Court promised any 2009, nefariously cover the *3 or detriment.4 had Property to pursuant work. LMR summary at obligations ECF Property promises "detriment" Stated that later, BASF if orally late beneficial that at oral Furthermore, any apparent Portsmouth that year Id. presented "[b]y Portsmouth argued BASF's not oral representation, even BASF contractual Portsmouth the 'a Here, complete," any inference counsel on a subsequent detriment.'" that that was to the costs reliance nearly on undermines a show 872) . has asserts Property of a change in position, Property 2010, at express Property, LMR Va. must and assertion demonstrating reliance, fact, agreement 216 its enforcement position, LMR's from Portsmouth of T , true LMR' seeking evidence impact respect to Property. on the to induce LMR to continue performing demolition and clean-up at the Portsmouth Property.5 Accordingly, LMR material fact implied contract Although regarding LMR judgment that the parties written before the documents which Absent the (1) F.2d 5 to the its pay the LMR contracts suggests 778 of real of any not of Anderson, enforceable facts estate as taxes as a final BASF costs. Such "^evidence U.S. at modifications by on [non-movant] .'" that LMR including required a about 477 establish obligations, bills the between documents evidence carrying for jury. represent the constituting find (quoting contractual costs on in even the but Portsmouth reliance viewing that Property, with short undisputed elsewhere contrary, Portsmouth far Leases, or summary exchanged negotiations non-payment a on situation a oral by hearing to the required 252). to failed failure Ground by the to to: Leases; the Ground failed to present any evidence that LMR was capable of carrying money at do as enforceable the Ground reflect reasonably utility pay LMR likewise such To with timely paying could existence timely (2) fall dispute documents signatures, LMR's an cash-flow the a resolution at draft to best Ground Leases, comply argued LMR's at jury of require other excuse to 999 and lack therefore Drewitt, would modification and demonstrated existence reference Court the the that emails binding continuing not alternatively that agreement, has LMR on on the had any Property statement evidence cash-flow several BASF. 14 other in a that action light most issues projects but or not only covered by it spent by BASF. favorable on the separate leases; on (3) the Portsmouth required for adequately by grass on make of the discussed turn Property cutting timely pay As one the two insurance disputed and for by storm conduct water water Leases; the premium BASF's facts the Ground performed below, demand maintain City for remedies the for associated with quality (4) of treatment testing timely pay Portsmouth; Portsmouth such system a as bill and (5) Property.6 failures to alleged BASF's appear failure to payment/repayment/performance under various contractual provisions. 2. Lack of Notice of Default a. BASF summary briefly judgment asserts that notice/termination precluded was the Horton from Horton, 6 LMR contends ground that lease Portsmouth However, portion to Ground of if the 254 Va. $225,000 coverage for the premium on reimburse BASF demand not appear to fact may alter Ground the 115-16 (1997) . repayment respect as referenced Portsmouth the modify because that the writing due from contractual Portsmouth insurance premium. 15 such appears to under to: to create at a obligation to repay that pertains (1) an later of a to such pay the or due; payment. LMR the premium. language when such in the Rensselaer writing the e.g., indicated contention obligation made BASF LMR insurance Property BASF become LMR's the LMR's Property, LMR's Portsmouth after in is obligation to true the LMR See, As of with Leases, contract. assumes to insurance the comply breach with appear that the to support provisions LMR's figure does payment failed in contractual Ill, Court insurance a in memorandum a written and signed amendment to amendment differently, BASF such Leases on if materially the not its provisions implicates even in even enforcing first v. First to Breach Doctrine (2) Stated offset date BASF for to does the this Court's judgment decided law briefing a case 724 carefully law, breach as an Court It 196 entitled to (1941). the held first (1997); 142, In to that arrears" the on involving foreclosure to not in (2001); in an rule plaintiff, Bayview (2008) challenge Neely opinion by a name, to provisions, the the of the could to added). v. Supreme the "a to first to non- party P.C. Va. not 254 Va. Peyton, 358, 366 expressly discuss Court of Virginia "substantially recover with LLC Simmons, v. who is v. comply Mathews, failure Court case of Horton, 177 was In After contract still defendant's 16 a Supreme who afforded relevant on that failed Servicing, (emphasis and White, mortgagor failure Court briefs. Orthopaedics, v. Mortg. PHH the Ground Leases. Horton that payments, Loan of Virginia common allegation Virginia breach of v. rely LMR's summary breach" this briefs may contract." subsequent 122 a BASF to supplemental supplemental Countryside mortgage provisions. 117, file [material] see breach defendant's 114, to the Court Mathews Accordingly, defense the after "first termination provisions 154 2008, the Virginia. that a enforce Va. in the first 261 implicating well-established the 115 Supreme (2012). as commits Ill, the concludes with the is 2012, opportunity doctrine compliance 20, applied considering the June complete, was S.E.2d parties dated directly doctrine Corp., the Order of to for in the foreclosure 275 Va. another case comply with Virginia ruled similarly to first breach to court's is a a in material so highlighted event Id. breach 200. of the of a analyzing, 724 that to of At breach after designed the note. material did Mathews, contract lender mortgage is a and rule. analysis nature" the Bayview S.E.2d a deed protect deed of trust is alive clear Mathews and well directive resolve the the Ground as each containing all ECF at No. 59 contract inquiry 724 Leases and is do how not 200. by payments, the As their discussed nature provisions by their 17 of a note the to and is not meaning breach does Court of not of BASF from deed of a a of below, the the enforce its Ground distinct critical breach." to trust, parties." and although LMR that agreement[] separate and a would with material the present Virginia "contractual of doctrine agrees notwithstanding precisely that. borrower non-payment obligations permit terms, its although dispositive, of "by underlying case Court lack definition the The the first single necessarily "the such and trust, within different a rights However, not at is the This the Id. Supreme markedly the 9. the dispute. are of termination timely to Lease remains S.E.2d Virginia, instant Ground that in as Leases confirms length, 199-200. on "non-payment Horton and Countryside Orthopaedics." Although both Accordingly, note, at of non-payment at Mathews, the Ground the notice failure Leases to make permit Virginia contracts as adheres and "no meaningless PMA (2006). that The to Ryan, has this policy in the would Ins. Va. of otherwise L.P. first to by constitute Virginia (E.D. Va. rule 1995) as significant contract interpretation, that abrogate such Starr Cir. must Elec. Ct. law enforce the Co. Federal 1989) v. ("Of grounded clear "the terms Ins. course, in of Co., freedom 18 Co., the 15 advanced, nor of or public expressly RW Power 899 F. Supp. law recognizing the law that Cir. regarding agreement, occurs, agreement"); Va. policy." common by when they See Virginia and, view non-performance but parties, 358 and Virginia's Neely, principles courts rule," in . responsibilities such Power . Sisson from and . what law breach. (discussing "equally common if material stated any it the as v. not parties even to of treated 352, public Virginia rights and Va. long has be to 271 against identified, Elec. given so BASF parties' will "committed of preclude a be Inc., or (1987). would can choose Co. interpretation contract is law non-performance v. breach Court they 503 such [a] Airways, independently that in Telephone 492, writing, event 1495 US as meaning" meaning Supreme Potomac 234 in 1490, v. forbidden Court Partners, Co. not reason defining, reasonable contract and Inc., "plain clause may is Chesapeake a a or Virginia parties agree word if Capital to 374, contract may the see also 377 (Va. principles, permit parties to alter common law risk allocations by agreement."). Returning to opinion supports define their performance Mathews, a finding rights that breach. concurrence recognizes been applied breaching second "failure was party] the [the breach the party's holding, that of votes, turning on the necessitate notice/termination unique provisions 19 of of a deed how single the second J.) first from to further not relieve contractual of the other did not garner majority's a the parties' the with event the nature in the does concurrence because consideration [the party but the McClanahan's of (McClanahan, compliance in on has contractual differently, obligations, the when based of 208 non-breaching apply defense remedy at material doctrine [its] breach Stated from perhaps the any of to non- analysis, damages one S.E.2d independent Justice seeks free of a breach affirmative to added). party to party's] 724 expressly breach. majority not its an perform first event majority's party) to relieves non-breaching provisions a (emphasis of as the are considered first unrelated Mathews, doctrine performance the first that (concurring) that concurring parties in be the Virginia obligations contract." from (the party's for obligations in party McClanahan's contracting otherwise Independent only that and would Justice of to unified narrower trust, did interpret contract. Regardless of opinion Mathews in the precise does Justice McClanahan's Prior supports to include and that breach, of its the such licensing notice, and the a if to 362 cure under the even if was express the that allow decision not notice the was 20 event breach, of a regardless Chlorophyll, expressly period breach. Id. to pay and a at 367. the his court at waiver was held failure was continue 370. of the royalties, provision to if The plaintiff relationship Id. such contract earning termination required Chlorophyll However, received, the following the American continue not contract, v. non-payment. election free Chlorophyll Id. contractual defendant's such and are by failing to a the terminating by being a arguably contemplated cure its contract. the of expressly defendant contract plaintiff's clarified that the the of not in in parties notice Court parties American 30-day breach to majority American In the a of issue. did that face at Supreme apply is written party "election," rejection tacit provisions face (1940). default, due the the a be only the between second payment ruling, contracting breach provisions royalties invoke such demonstrated first that in of defaulting evidence finding contract notice to Virginia enforceable Va. written the which contractual its notice/termination materiality, 176 appear provisions, remain Schertz, the from Court's express not for viewpoint. precedent this reason the The to an in court right to recover the preclude past the due royalty plaintiff payments, from obligations (which Id. 371. abandoning included processes). at but that his here, election other non-disclosure Important the of did contractual the however, licensed is not the court's election of remedies analysis,7 but the court's rejection of the plaintiff's termination defendant The assertion provisions breached the only to urged may compliance with default. not terms of or was in to the defendant's It nullity, contract, it must Id. Such Court of default is, but and when The is very one of that himself was only a its by when condition is however, operative terms with and objecting section terms, argument was for provisions], the clear non- complainant's preclude the complainant's is come [such should its he default of once reference sequitur/ could non-compliance, by with complainant's non and explained: provisions] operation notice inoperable provision] obvious default. complainant's nullity. an were complainant [such defendant a by non-compliance precedent to The provisions] is written contract complain [such This compliance if the notice/termination defendant the the contract. argument [the in in that of a not the reference to fall. analysis justification for provides rejecting a persuasive, BASF's if assertion not that controlling, LMR's breaches 7 Another judge from this district recently opined that the election of remedies analysis Countryside Inc., No. 2009). more and l:09cv863, This recent Chlorophyll analysis in Court but WL not Court 4067717, instead, Court does of the notice/termination provision. 21 v. at cases *3-4 harmonized (E.D. whether tacitly apply the be Advanced consider not cites "cannot Inc. directly Supreme the Chlorophyll Tandberg, 2009 does Virginia because therein, American Horton." the case Media Va. it for Nov. 23, agrees that overrule election its with Design, of American remedies interpretation excused BASF provisions from of from analyzes not the 75, Inc. 79 funds to months Wells W. bank apart. notice written such the defendant and operated as at 77. doctrine, funds was compliance Court to from any The contractual termination a that material rejected the of and the breach 962 any (3) to to defendant's thereby such contractual such argument the several the parties oral loss; (2) proof 76-77. The expressly relieved an alleged loss lost funds. Id. with such comply first failure absolving granted plaintiff's written at with requirements. and 22 later to invoke defendant alleged claim Supp. immediate Id. failed F. the the Cabro occurring provisions right having sought Corp., {1) liability associated of Court. between records. such doctrine this provide: by breach occasions discovery point squarely deliver contract on Virginia Foods, to follow plaintiff, with to thereafter; waiver asserting Service The upon factually and failed 76. provisions a and to Cabro separate substantiated failure first In plaintiff shortly loss plaintiff's at defendant notice Armored a West Chlorophyll allegedly two of the 1997). on Id. the of Fargo Va. required to notice law, District American company a expressly of with v. car the Virginia application {S.D. armored applying Southern the consistently Foods, with the Ground Leases. Although case compliance to to breach deliver Plaintiff Id. summary at the from 78. judgment The in favor of observe at the defendant contractual 79. based conditions Explaining defendant's [I]n analysis, the case attempting such bar avoid of portions argument, protect further . . to ." Id. adopted court the is duties of use the "first to assert that were it its suspended, unrelated precedent of contractual but to to avoid performance, to the suit. This "first far by to a intended beyond wronged is to [Cabro] its to effect who that trying contract the exposure . to related to stretching one "fail[ure] suit the provisions not conditions misconstrues to is not the the precedent the performance [of] namely, plaintiffs result, are [Cabro] argument duties the stating: at to performance. breach" on rule breach" nonperformance to from injury. Id. Synthesizing the breach" rule express contractual their terms dispute where, was in longer to procedures. illegal or such American resolve to a to public 176 from case law its terms Va. of at Court 23 and at it that on by The by non-breaching to the breach. relied BASF party duties default/termination issue would contract" 371. The Virginia here be the of with contractual governing provisions "first Leases LMR's the perform the compliance of breach, policy, that Ground event duties Supreme finds the the material "operative the in the contractual Chlorophyll, whether BASF unlike express against clear is in required The Court absolve apply the this provisions case subsequent no not only this unrelated read does above, are improper as a Court would not to nullity. need not conclude that: (1) should, a by virtue "material"; deemed breach or (2) enforceable, is default it and such thus, contain carrying by favor. A lack of LMR any two first states LMR is second with that even in clause in the default that the with provisions the first to 11 "fl default of 14.01 and for Ground respect based 24 such are breach to governing two to differing timely contracts construed Leases, the defining in however, interplay default, that qualify Such on: in as "Any failure a "material" the Ground provisions breach. were LMR's reveals of such "events of provision by [LMR] to failure to Leases, are pay expressly contractual termination "material" forth failure be references obligations a set should 14.01. provisions because occurrences default of event they provision, 34-02 non-payment the because of different No. Leases' ambiguity ambiguity ECF apply of Ground with review default." suggests not contractual invocation asserts any The that the associated careful forth The does notice/termination written ambiguities BASF, provisions. comply rule of LMR's Lack of Notice Claim that costs. drafted 8 the BASF's Merits contends periods sets of with breach McClanahan, not provisions to Justice deemed to first by be operate the suggested language, provisions rejected. LMR the contract contractual if that b. time as such Regardless of which theory might be adopted, apparent rule the non-compliance the contract.8 is of by even material, absolve governed which intended to pay any due, rent but notice in or no to lists any than [BASF] to occurs if default second the after Ground (60) days Id. LMR is Leases possessed 14.02 in default, BASF retake upon twenty (20) paragraph 14.01 defines certain defines However, below, exist 9 The such or judgment disputes Court immediate recognizes payment provisions do not provisions as the (it terms was), before the but by by appear question being rather, right to to meet such its failure thereof right to the default, under Portsmouth and As paragraph Court of an this 5 terminate the on of Id. ambiguity, granted event notice. default, of the Thus, of existence be "in the of termination, finds no ambiguity.9 as discussed issue as there facts. that LMR a lack cannot to material added). notice added). written the the BASF has events for summary contract days remedy notwithstanding "if governing possession inconsistency internal a fails written by (emphasis Property 14.02 written (emphasis leases, provision, f and after when added). contractual remedies Id. after hereunder days materially sixty contractual 14.02, LMR [LMR] (30) [LMR]." ground (emphasis by thirty the Id. default." paid under for Lessee." The be from continue the to sooner obligations shall amount event thereof Additionally, other other other of contractual carrying internally is not whether BASF as in LMR improperly on require demand. with was arrears the in contract, Such default violation its terminated defined by the 25 provisions without inconsistent whether substantially terminate, costs of obligations the contracts ripened. Here, Ground as there Leases, substantially Ground had such in a dispute complied as that not contract Corp. , Feb. Co., F. parties to treated it, and as to is a the to have and, termination the of if the absence whether BASF governing notice and provisions as the its 2d. under implicating under parties, plain 284, --, 396, 2012 the word if Co. clause that 26 Wood at 1998)) rule, terms in the the v. Family Symantec (E.D. Nat7! Va. Fire ("'Virginia the contract can parties a be entitling of meaning in must v. a terms terms *5 American Cir. reasonable presumption v. meaning' the Parikh see law, adding contract 368279, express or a WL (4th 'plain the the (2007); Ins. 405 when meaning." 288 Pacific Virginia without and unambiguous, Va. on "No by to meaningless there facts was default demonstrate the LMR appears its to Leases. and 273 rely agreement.'"). to written, F.3d adheres fails construed (quoting strictly of pursuing that, Supp. 148 BASF LMR established" clear 2012) Ins. Ground be Inc., BASF express according Center, cured, that obligations arrearage, notifying modification establish payment material included are construed such for the "well must were to the "contract 2, on oral facts its timely the of is not on However, with termination Care arrears was enforceable undisputed Based Leases. It no justification default Ground of the Leases. ample was be have the written will be given to not used words needlessly." D.C. McClain, PMA Inc. Capital v. Ins., Arlington 271 County, Va. at 249 358 Va. (quoting 131, 135-36 (1995)). Here, indicate that default [] notice as . a no the be delivered, hand via th[e] SI reasonable rent "written 11 LMR7 s to "event after 14.01 written (emphasis to pay on to advance an 14.01 and registered such Lessor to that or to have a failure to Lessee. summary shall mail, default" BASF . Federal interpretation: of . as language "event . absent As the satisfied judgment such must be indicates that such paragraph provides a "default" notice undisputed writing" or such requirements,11 of in courier establish 14.01 be of under expressly facts invokes indicating occurred in this the that Ground <fl a 14.01 Leases, and default BASF other case. BASF states in its memo in support of summary judgment light behalf, shall one from termination presented "[i]n pursuant f expressly an days Lessee" air only to definition that defined in 5 failure the (30) certified constitute fail notice For example, that by thereof" facts purported Lease supports not notice exclusive than to terms constitutes thirty Construing 10 Although nothing in f not contract rent recognized 20.01. does contractual BASF's Lessor mailed meaning undisputed has pay than Ground nationally Express. the the The contracts further provide that "all notices under pay to sooner from required sent above, failure . . thereof added).10 discussed of LMR's demand BASF made paragraph continued breaches as additional the 14.02." decision ECF evidence demonstrating No. that 27 rent to 33 of the the terminate at 14. "demand" Ground costs was Leases, and BASF incurred on the Ground However, BASF ever made. Leases fails denied of as to LMR's contract BASF's for maintain failure carrying the 14.01. storm See, the first second that the contract was The as paragraphs cure its cites failed a and case to law comply contract, such cure alleged the in in a of LMR LMR's 176 no at as to with Va. two had grace' failure breach unless by seeking compliance language that breach impacted to of breach f 370 follows: should notices occurred, be were the expired had and and the there is no an end"). is LMR is because to "give has, to of its support with suggestion fact 14.02 failure cure BASF's are notice system, contract BASF's and they contract ^period material 14.01 and Chlorophyll, that at rejects defaults," no the stating henceforth to seeking contracted thirty-day Court dispute or written similar terminating given, send claim, extent treatment specifically for the American somewhat parties grounds to water contract to costs, e.g., (interpreting "the of counterclaim, alleged payment breach the "the LMR date, after purpose" the failed argument termination somehow default that excused the of opportunity to that, cure. even provisions by LMR's contract both was to BASF if BASF of the failure to purportedly terminated by BASF. In must and be sum, the denied BASF's Court with breach of finds respect that to contract BASF's LMR's summary breach counterclaim, 28 of judgment motion contract claim, because such claims are necessarily purportedly remaining arrears impacted terminated factual on that BASF due, its prior or the provided November has United recognized contain an 24, Vermiculite, Cir. Ltd. 1998); Residential Court covenant W.R. see Co. no in demonstrated amount Court of good Grace of Appeals governed SunTrust Ins. The is not there due or therefore past cannot and Fair Dealing of contracts v. has an BASF substantially was BASF 2010.12 which Although LMR of in breach of contract claim at this stage.13 States implied that notice" Good Faith that Leases. dispute "written 3. timing/manner obligations, resolve either parties' The the Ground legal payment to by & for by North Circuit law and dealing. 156 Mortg., Fourth Virginia faith Co., the fair F.3d Inc. Carolina, 535, v. 806 generally Va. 541-42 United F. Supp. (4th Guar. 2d 872, 12 Although BASF has provided some evidence suggesting that LMR had in its is possession past unclear whether required by 5 assume that requiring 13 As of the which of failure trial, the of indicated acts demand, the in to two Second, bills to in was to set Portsmouth September made even LMR forth of were with a this Leases Court to notice facts was it LMR as written undisputed Ground 2010, by BASF to that breached by to pay. Court evidence contract such fails the thereof" contracts. BASF writing the 14.01 payment, admissibility distinct and utility bills notice forwarded alleged At tax BASF demonstrate each due "written will governing a prior Portsmouth the LMR the of portion relevancy/admissibility with disputes the BASF property footnote, relieve resolve associated of of Court its the such in that insurance document to and New York. nothing obligation the separate Rensselaer, finds legal regarding parties' in pay, such upon bill. Accordingly, remains questionable. However, parties' this Court will address such matter at trial because the voluntary decision to intertwine obligations created under separate contracts some evidence may open associated with the the door to the Rensselaer 29 limited ground admissibility lease. of 893-95 (E.D. federal courts good faith finding under 28, no rise a Commercial covenant of independent a action tort). parties to implied to 379, rights." 385 (1997) Circuit, does the above decision to in bad that Here, party." the legal to terminate the contractual right, of party even payment Portsmouth do faith is and of law, fair common dealing contract and well-established valid and and dealing Holland N. As good explained faith from by its not exercise when such discretion not past Ground F.3d dispute they due the at Fourth explicit 542 is vested (emphasis whether the of BASF's and attempt exercise of or the exercise of contractual discretion. 30 law] contractual obligations was Va. applicability dispute Leases an 254 the may 156 "when Virginia exercising an inapplicable Am., [under not rights, is New is gives that binding fair v. rather, of the the Vermiculite, parties and falling breach of added). standard; demand ("U.C.C.") and Va. Equip, faith, contracts of 251 it party a relationships, between breach faith duty a rights, discretion added). the duty under Virginia for (emphasis prevent contractual in good implied and N.A., create Ward's "although not solely of state NationsBank of Va., good However, contract covenant those of how an contractual Code v. length acknowledged in (indicating that cause at differentiate Brauer Co. implied to have dealing to Uniform (1996) U.C.C. fair E. (examining Virginia reason Charles 33 2011) in and the law); Va. a LMR's good assertions faith and obligations demanding law. the undisputed its arrears, BASF breached dealing such and LMR to has law] noted does not "the prevent contractual rights," clearly the cure had its to right at breach a of However, repayment discretionary 724702, in at purchasing option implied does to that *4 re covenant Such a N.D. a right of invoke point Coal W. coal written Va. is Co., coal 31 under in bad to faith. [under Virginia its explicit 542, and require a to There, exercised that LMR valid rights the to into detailed 06-366, contract for dealing. rights power its such claim fair by a LMR exercise express No. BASF Leases. and illustrated supply express "discretion" contractual Case to into Ground such 2010). supplier the of fell faith its failed LMR "chose" good later a matter LMR at asserted transform Buffalo from terminate to F.3d BASF has as exercising 156 but had faith Portsmouth LMR somehow (Bankr. coal from because time, rights. In the any good contractual decision not of of that BASF exercised party under suspicious BASF's analysis express suggests an that non-payment after to of Leases, BASF point covenant fails repayment Vermiculite, arrearage nevertheless Ground demonstrates duty a implied tolerating obligations, demand failed above, the obligations. Portsmouth Ground Leases As first evidence contractual right by Portsmouth compliance with contractual the fair under The satisfy that 2010 WL company contractual based on the coal supplier's termination terminate was the "Bankruptcy include insolvency. based on [the was *1. at In the became to a to supplier's faith bankruptcy to contract the good [it] subject by rejecting of company's allowing defined covenant applicable, power provision was *2. implied The supplier] which Id. the at express if Proceeding,'" that dealing "an agreement insolvency. assertion Id. and court's fair opinion explained: Of course, has a party's is [under right to under obligations breaching are are to of to 249 property, but chose the had the bank but instead. Co., duty In decision neither court to of act good to in with an good faith would cases like Mahoney party cannot express Id. the at As of act wholly in contractual a that Charles bad faith by E. non- and could [v. have on the parcels of Brauer Co., E. a foreclosure to to be finding judgment E. Brauer party's subject that right must a Mahoney Charles eviscerate and entails non-breaching chosen and of based claim contractual discretion in lien nor the party waiver, bank approve Indeed, a to the its manner faith. favor Charles to Mahoney find exercise act In other Rights individual to. party necessarily its for reduce the did decision a release to in example, discretion opted that a the the on act. subject (1995)], prices not mean right For 216 partially sale a because based that Rights waive Va. offered sale not generally discretion. NationsBank, agreed does different. party just contract undertake whether deciding act to law,] a non-performance obligated an Virginia act is to every imbued be exercised in the holdings of Brauer acting Co. , pursuant that to a an right. *4. suggested contractual right in to Buffalo demand Coal, if payment or 32 exercising an express an express contractual right to as "discretionary" a party issue could contractual a notice opt right an Va. fair Inc. 2009) and dealing any portion written Coal, 2010 cannot notice WL be the to to altered though defendant for *4 duty the "may (emphasis (indicating its enervating faith right exercise this language Purchase penalty added)/ Buffalo a contracting termination of to without that contractual the good of (E.D. contractual reason e.g., 610 express terminate any Subcontractor") at the 2d not express See, Supp. defendant's do of act. as that right right with good faith"). This Court the recognizes contract expressly grants ultimately termination, duties even exercise by the thereof, 724702, "choice a duty of between orders that upon to every recast simply F. that recast right, invocation 666 assertion applied law be non-breaching being Virginia Sys., the to the to express discretionary Data the stated or party's a because subject recast as permitted such applying Elec. purchase issue Order, v. merely be to (rejecting terminate at Cases were exercise would rights Skillstorm to attempt contractual default decision not "discretionary." support of to termination pay on no language BASF the if the other at fails costs, party's 33 significant issue right LMR carrying legally to to in this seek satisfy and difference case, repayment, which and its contractual language permitting insolvency or language permitting termination "at will." See Buffalo 724702, *4 that although the power manner [it] have at to (finding act conscious in the choice Mahoney, and to do Charles contractual right, Omega Travel, 16 World (4th Cir. themselves law did Court give not impose override BASF the "an finds contractual duties, the doctrine judgment implied that faith thus Airlines, because and LMR granted fails a fair as F.3d faith cause Virginia and fair The Leases repayment, and perform its action dealing. to "bound Ground to of a 14, terms"). seek in discretion); 111 Portsmouth to the remained parties contract right assert good not made relationship," of the if the "did WL parties choice contractual duty contractual good is such will' because cannot [but] non-breaching explicit LMR . World 'at termination, of motion an . 2010 company of that [such] express seek to . Co., Trans (indicating not the exercise v. contractually therefore like Brauer an Inc. 1997) ultimately in E. [to] dealing so," did Coal, grounded summary assertion LMR's BASF's of a violation of the implied duty of good faith and fair dealing.14 14 To the extent it requires separate analysis, assertion that sublessee under before the sublessee close matter to the Court, acted and cancelling completion LMR cannot bad BASF's and another in Rensselaer LMR's for court. BASF day, ground alleged the of faith bad under before another the the Court rejects LMR's rejecting lease. Such faith Rensselaer work bootstrap by acts ground such alleged bad proposed is not rejecting of the lease separate judge, LMR's contract suspiciously contract sitting faith in are a another exercise of discretion under a separate contract, creating separate obligations, into a violation of alleged contractual discretion purportedly created under the Portsmouth Ground Leases. 34 4. LMR denied of alternatively because paying treatment in the set to forth LMR's system. agent under as apparently is control no or Inc. v. 650, Cir. Ct. 652 (Va. Memorial Hospital, law, factors be two established. principal's manner of business with regard it. Second, the Rather, that the was negotiating See Village Ass'n, 231 negotiating table at the in 408, arms or finding that BASF was inference, that BASF was benefit Inc. v. (1986) with 35 LLC, work 80 the facts on length the Cir. Whittaker Virginia to the be to to and the on the to done be done benefit clearly other Federal [appellant], Va. subject business ("Clearly, v. See relationship be has LMR. ("Under agency work American of Whitfield for entity arm's length to must the this 412 fails (1969)) the mentioned LMR an undisputed business Motors, Va. to water face. the agent principal principal."). BASF for storm not the purposes in its 181 the be time (citing 176, should first the present be theory, Hospitality, 2010) Va, for the for or for the performing of evidence, First, control on support Doswell 210 must raised acting Narayanswarup, "agent" legal fails could judgment maintaining alternative that there summary LMR's and judgment, facts as LMR's acting costs and summary any that Such Complaint defense argues BASF was carrying Agency the demonstrate side of the relationship. Sav. [appellee] is of not and Loan who deemed was to have been the the bank check."). asserted, agent fails on of [appellant] LMR's its unjust the Complaint enrichment. undisputed valid written LMR its brief in granted Court in Royer 268, v. express rights Inc. 10 and of v. of the that of dealing summary the motion action and timely on LMR's BASF's F.2d Sup'rs 881 in does 926 (4th will not be not imply a The 1988); 176 there which in Acorn Cir. County, a LMR argue should ("[W]here existence law it See Albemarle the of both request. (Va.1940) contract that claim. 923, of on into enrichment unopposed 846 entered judgment unjust notes rights nor based Va. is governs an the contract in CONCLUSION thereof."). For judgment if motion legal fact IV. contravention procuring relief parties summary 876, parties, the such County enforceable the of even for judgment that governs Swantz, S.E.2d ground dispute BASF grants Board 280, not of argument, summary that opposition therefore a establish does favor Structures, BASF's contract BASF. purpose Unjust Enrichment includes facts and agency the face. B. LMR's for is under GRANTED the LMR's motion reasons is set with implied unjust forth respect covenant enrichment GRANTED with 36 above, BASF's to LMR's of good claim. respect summary purported faith and Furthermore, to BASF's cause fair BASF's breach of contract legally pay claim obligated carrying system. breach with the the extent under costs The of DENIED to and pending contract the maintain impacted the by extent BASF's is that alleged BASF the failure Ground with in water LMR is Leases to respect BASF the breach to that storm that provisions BASF's contends Portsmouth DENIED asserting notice/termination to written motion claim that failed treatment to to LMR's comply Ground Leases, of contract comply claim with the this Opinion and is written notice/termination provisions. The Order Clerk to IT all IS is DIRECTED counsel of to send a copy of and record. SO ORDERED. /s/l Mark UNITED Norfolk, June Q-C> Virginia , 2012 37 STATES S. Davis DISTRICT JUDGE
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