UNPUBLISHED

UNITED STATES COURT OF APPEALS

FOR THE FOURTH CIRCUIT

No. 05-1448

COLLINS HOLDING CORPORATION; COLLINS

PROPERTIES, LP,

Plaintiffs - Appellants,

versus

WAUSAU UNDERWRITERS INSURANCE COMPANY; LMG

PROPERTY,

Defendants - Appellees.

Appeal from the United States District Court for the District of

South Carolina, at Greenville. Henry M. Herlong, Jr., District

Judge. (CA-03-3552-6-HMH)

Argued: September 20, 2006 Decided: November 3, 2006

Before MOTZ and GREGORY, Circuit Judges, and Richard L. VOORHEES,

United States District Judge for the Western District of North

Carolina, sitting by designation.

Affirmed by unpublished per curiam opinion.

ARGUED: Charles Elford Carpenter, Jr., RICHARDSON, PLOWDEN,

CARPENTER & ROBINSON, Columbia, South Carolina, for Appellants.

James William Logan, Jr., LOGAN, JOLLY & SMITH, L.L.P., Anderson,

South Carolina, for Appellees. ON BRIEF: Carmen V. Ganjehsani,

RICHARDSON, PLOWDEN, CARPENTER & ROBINSON, Columbia, South

Carolina, for Appellants. 
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Unpublished opinions are not binding precedent in this circuit.

See Local Rule 36(c).
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PER CURIAM:

In this diversity contract case, Collins Holding Corporation

(“Collins”), a commercial real estate company, sues Wausau

Underwriters Insurance Company (“Wausau”), which insured a property

owned by Collins that was destroyed by fire. Collins alleges that

Wausau anticipatorily breached the insurance policy by imposing a

deadline for Collins to rebuild, and then refusing to pay the

replacement value of the property when Collins failed to meet the

deadline. Further, Collins asserts that Wausau’s conduct in the

negotiations breached an implied covenant of good faith and fair

dealing. After Collins presented its case to a jury, the district

court granted Wausau’s motion for a judgment as a matter of law on

both claims. Collins appeals; we affirm.

I.

Wausau insured several properties owned by Collins against

fire damage, including the property at issue here, a building at

3505 Augusta Road in Greenville, South Carolina (the “3505

Property”). On or about August 13, 2000 a fire destroyed the 3505

Property, which the parties concede was covered by Wausau’s policy.

The policy gave Collins the option to claim the actual cash

value of the damage, or the cost of replacing the damaged property

with a building of like size and construction. The dispute here

concerns the parties’ negotiations over the replacement cost. The
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relevant portion of the policy states that Wausau “will not pay on

a replacement cost basis for any loss or damage: (1) Until the lost

or damaged property is actually repaired or replaced; and (2)

Unless the repairs or replacement are made as soon as reasonably

possible after the loss or damage” (emphasis added).

Collins wanted to rebuild the property. But Collins insisted

upon reaching an agreement with Wausau over coverage prior to the

rebuilding, instead of seeking the replacement cost after the

rebuilding, as provided by the terms of the policy. Collins owned

another building that had burned, the “7150 Property,” which Wausau

also insured under a policy with the same terms, and the parties

had agreed about replacement cost prior to rebuilding that

property. 

Beginning in September 2000, the parties negotiated over the

cost of rebuilding the 3505 Property. In a letter dated January

15, 2001, Wausau offered to pay Collins an actual cash value

settlement of $296,455.56 or a replacement cost settlement of

$409,778.09. Collins did not accept the offer. The parties

continued to disagree on the replacement cost. On April 22, 2002,

Wausau reiterated its January 15, 2001 offer and informed Collins

that it must complete the repairs and make a claim for the

replacement cost by February 6, 2003. Noting that “[t]wenty [20]

months have passed since the date of loss,” Wausau told Collins

that missing the February 6, 2003 deadline would lead to a
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“forfeiture of the replacement cost benefit.” On July 18, 2002,

Wausau paid Collins the actual cash value of the property --

$295,455.56 -- which Collins accepted. However, Collins continued

to negotiate with Wausau as to replacement cost through the

February 2003 deadline. On February 18, 2003, Wausau informed

Collins that because it had failed to rebuild prior to the February

6 deadline, Wausau would “suspend all further adjustment activity

and close our file.” 

Collins filed suit against Wausau in South Carolina state

court; Wausau removed the case to federal court. After Collins

presented its evidence to the jury, Wausau moved for a judgment as

a matter of law, which the district court granted.

We review the judgment as a matter of law, or directed

verdict, de novo. Gairola v. Va. Dep’t of Gen. Servs., 753 F.2d

1281, 1285 (4th Cir. 1985). “The standard for granting a directed

verdict requires a court to view the evidence in the light most

favorable to the non-moving party and draw every legitimate

inference in favor of that party; having treated the adjudicatory

facts in this fashion, the court must determine whether a

reasonable trier of fact could draw only one conclusion from the

evidence.” Hofherr v. Dart Indus., Inc., 853 F.2d 259, 261-62 (4th

Cir. 1988) (internal quotation marks omitted).
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II.

Collins first claims that it presented sufficient evidence

from which a reasonable jury could have found that Wausau

anticipatorily breached the insurance contract, by refusing to pay

any replacement cost at any time, regardless of whether Collins

replaced the 3505 Property. 

A.

Where adopted, the anticipatory breach doctrine excuses the

nonbreaching party from contractual conditions precedent. See,

e.g., Studio Frames LTD v. Standard Fire Insurance Co., 369 F.3d

376, 381 (4th Cir. 2004) (citing Restatement (Second) of Contracts

(“Restatement”) § 253(2) & cmt. b; and 23 Samuel Williston &

Richard A. Lord, A Treatise on the Law of Contracts (“Williston”)

§ 39:38 (4th ed. 2002)). South Carolina law governs this diversity

case, and that state long ago adopted the doctrine of anticipatory

breach. See Payne v. Melton, 45 S.E. 154 (S.C. 1903); 30 S.C. Jur.

Contracts § 66; Keith A. Rowley, A Brief History of Anticipatory

Repudiation in American Contract Law, 69 U. Cin. L. Rev. 565, 599

(2001). Thus in this case, proof of Wassau’s anticipatory breach

would excuse Collins from the contractual condition precedent of

rebuilding before being paid the replacement cost.

Although South Carolina has adopted the anticipatory breach

doctrine, state law on the subject is sparse. South Carolina,
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however, has consistently looked to traditional sources in its

development of other areas of contracts law. See, e.g., Holler v.

Holler, 612 S.E.2d 469, 475-76 (S.C. 2005); White v. J.M. Brown

Amusement Co., Inc., 601 S.E.2d 342, 345 (S.C. 2004); Boddie-Noell

Props., Inc. v. 42 Magnolia P’ship, 574 S.E.2d 726,729-30 (S.C.

2002); Munoz v. Green Tree Fin. Corp., 542 S.E.2d 360, 365 n.7

(S.C. 2001). Accordingly, the common law -- including the case law

developed in this circuit, e.g., Studio Frames, 369 F.3d 376; City

of Fairfax v. Wash. Met. Area Transit Auth., 582 F.2d 1321 (4th

Cir. 1978) -- and standard treatises and authorities, e.g.,

Restatement § 253; 23 Williston § 63:42, at 609, § 63:45 at 618; 9

Arthur Linton Corbin, Corbin on Contracts (“Corbin”) § 973, at 801

(interim ed. 2002); 17B C.J.S. Contracts (“C.J.S.”) § 536, at 199,

assist us here in determining what proof a South Carolina court

would require of a party seeking to establish anticipatory breach.

No single authority presents, as a comprehensive enumerated

list, the standards for finding an anticipatory breach. But taken

together, the relevant sources offer the following guidelines for

defining an anticipatory breach: (1) the repudiation must be

unequivocal, Studio Frames, 369 F.3d at 383; Fairfax, 582 F.2d at

1326; 23 Williston § 63:45, at 620; 9 Corbin § 973, at 801-02; 17B

C.J.S. § 536, at 199; (2) the repudiation must be a “final and

absolute declaration that the contract must be regarded as

altogether off,” Fairfax, 582 F.2d at 1326-27 (internal quotation
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marks omitted); 17B C.J.S. § 536, at 199; (3) the repudiation must

be unconditional, Fairfax, 582 F.2d at 1326 (citing Frank F. Pels

Co. v. Saxony Spinning Co.,287 F. 282, 288 (4th Cir. 1923)); 17B

C.J.S. § 536, at 200; (4) the repudiation cannot rest on a “partial

breach” but must “go to the whole consideration of the contract,”

relate to the “very essence of the contract,” and “defeat the

object of the parties in making the contract,” Fairfax, 582 F.2d at

1328 (internal quotation marks omitted); Studio Frames, 369 F.3d at

383; 9 Corbin § 973, at 805; 17B C.J.S. § 536, at 199; (5) while

the repudiation need not be express, if it rests on the defendant’s

conduct it must evince “a clear intention to refuse performance in

the future,” Studio Frames, 369 F.3d at 383 (internal quotation

marks omitted); Fairfax, 582 F.2d at 1327; 23 Williston 63:46, at

623. These factors do not set forth a balancing test. Rather, if

a plaintiff fails to establish any one of them, it cannot prevail

on its anticipatory breach claim. With these standards in mind, we

turn to the facts of the case at hand.

B.

As evidence of anticipatory breach, Collins relies on Wausau’s

February 18, 2003 letter. In that letter Wausau informed Collins:

“By not making your replacement cost claim by the previouslyestablished February 6, 2003, deadline, and not meeting other terms

and conditions of the policy, we will suspend all further
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adjustment activity and close our file.” This letter fails,

however, to establish that Wausau anticipatorily breached the

policy.

The policy requires that repairs be made “as soon as

reasonably possible after the loss.” Although Collins argues that

the reasonableness of Wausau’s February 6, 2003 deadline is a

question of fact best left to a jury, all of Collins’s own evidence

supports the conclusion that the deadline was reasonable.

The representative of Cely Construction, Collins’s witness,

testified that the construction would take approximately four to

four and a half months. And Collins stipulated at trial that it

could afford to rebuild before being reimbursed. Thus, even if the

insurance policy did not require Collins to rebuild within a

reasonable time of its “loss” in August 2000 -- a question we need

not reach -- Wausau’s April 2002 notification that Collins must

rebuild within the next nine months, by February 6, 2003, provided

Collins with more than sufficient time, even according to Collins’s

own witness. Because the deadline was reasonable, Wausau’s

February 18, 2003 letter was in keeping with the terms of the

contract, not a repudiation of it.

Collins’s anticipatory breach claim fails. 
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III.

Collins also argues that a reasonable jury could have found

that Wausau breached an implied covenant of good faith and fair

dealing. Collins asserts that Wausau breached this covenant

because it negotiated a replacement value with Collins in advance

of the rebuild on another property (the 7150 Property), began a

similar course of negotiations here, and so knew that Collins

expected to reach a similar agreement here, and yet imposed an

arbitrary deadline that Collins could not meet.

Collins correctly points out that under South Carolina law, an

implied covenant of fair dealing requires a court to look to the

course of dealing between the parties. See Commercial Credit Corp.

v. Nelson Motors, Inc., 147 S.E.2d 481, 485 (S.C. 1966). But even

in light of the course of dealing between the parties over the 7150

Property, the undisputed evidence shows that Wausau has

“perform[ed] those things that according to reason and justice [it]

should,” Boddie-Noell Props., Inc. v. 42 Magnolia P’ship, 544

S.E.2d 279, 284 (S.C. Ct. App. 2000) (internal quotation marks

omitted), aff’d, 574 S.E.2d 726 (S.C. 2002), and so has not

breached the implied covenant.

Collins’s own evidence demonstrates that Wausau notified

Collins of the February 6, 2003 deadline on April 22, 2002 -- over

nine months in advance of the deadline, and twenty months after the

fire. According to Collins’s own witness this deadline provided it
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with more than the four or five months needed to rebuild, an

expense Collins conceded it could afford to undertake without the

insurance payment. Collins’s evidence also demonstrates that

Wausau repeatedly and consistently reminded Collins of the February

6 deadline in numerous letters prior to that deadline. A

reasonable trier of fact could draw only one conclusion from this

evidence: that Wausau did not breach the implied covenant of good

faith and fair dealing.

IV.

For all of these reasons, the judgment of the district court

is

AFFIRMED.