UNPUBLISHED

UNITED STATES COURT OF APPEALS

FOR THE FOURTH CIRCUIT

JAMES H. FERGUSON, M.D.;

HEATHER R. STARK, M.D.,

Plaintiffs-Appellants,

v. No. 95-2322

UPPER CHESAPEAKE MEDICAL

SERVICES, INCORPORATED,

Defendant-Appellee.

Appeal from the United States District Court

for the District of Maryland, at Baltimore.

John R. Hargrove, Senior District Judge.

(CA-94-2792-HAR)

Argued: April 1, 1996

Decided: July 11, 1996

Before ERVIN, NIEMEYER, and WILLIAMS, Circuit Judges.

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Affirmed by unpublished opinion. Judge Ervin wrote the opinion, in

which Judge Niemeyer and Judge Williams joined.

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COUNSEL

ARGUED: Stephen Donald Langhoff, LANGHOFF & WACKER,

Baltimore, Maryland, for Appellants. Richard Jeffrey Magid,

WHITEFORD, TAYLOR & PRESTON, L.L.P., Baltimore, Maryland, for Appellee. ON BRIEF: Carmina Perez, WHITEFORD,

TAYLOR & PRESTON, L.L.P., Baltimore, Maryland, for Appellee.

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Unpublished opinions are not binding precedent in this circuit. See

Local Rule 36(c).

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OPINION

ERVIN, Circuit Judge:

I

Dr. James Ferguson and Dr. Heather Stark ("the doctors"), both

Canadian citizens, entered employment agreements with Upper Chesapeake Medical Services, Inc. The parties agreed, and the district

court found, that the contracts included conditions precedent requiring

the doctors to obtain Maryland medical licenses, obtain authorizations

to work in the United States, and report for work. The contracts did

not specify a time limit for satisfaction of the conditions. Fifteen

months after the contracts were signed, only one of the conditions

precedent had been fulfilled--Dr. Stark had obtained a Maryland

license. Upper Chesapeake decided then that it no longer needed the

doctors' services, and it terminated the agreements.

The doctors sued in the District of Maryland for breach of contract,

and the district court granted summary judgment in favor of Upper

Chesapeake. It held that a party has no duty of performance under a

contract as long as there are conditions precedent that remain unfulfilled, so Upper Chesapeake was free to terminate the agreements.

The doctors' appeal consists of two primary arguments. They assert

first that Upper Chesapeake was barred from terminating the contracts

by estoppel or waiver. Second, although they acknowledge that Upper

Chesapeake had no duty to perform as long as conditions precedent

remained unsatisfied, the doctors contend that Upper Chesapeake was

not entitled to terminate the agreements until it had allowed the doctors a reasonable time to fulfill those conditions. Whether a reasonable time has passed, they conclude, is a question of fact for a jury.

We agree with the doctors' analysis of the law governing conditions precedent. Nevertheless, the undisputed evidence before us cannot support an inference that Upper Chesapeake failed to allow the

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doctors a reasonable time to satisfy the conditions precedent. Waiver

and estoppel were not argued in the district court, so we do not

address their merits. Accordingly, we hold that Upper Chesapeake did

not breach the agreements, and we affirm the district court's grant of

summary judgment.

II

Maryland law controls this case, over which the district court had

diversity jurisdiction. We review the district court's summary judgment de novo, and affirm only if the evidence, viewed in the light

most favorable to the doctors, fails to create a genuine issue of material fact. Sempione v. Provident Bank, 75 F.3d 951, 954 (4th Cir.

1996) (citing Fed. R. Civ. P. 56(c)).

III

The parties do not dispute the basic facts, so we excerpt from the

district court's opinion:

Upper Chesapeake, a managed care organization, provides a wide range of medical services to various groups and

individuals. To supply medical services to its HMO[health

maintenance organization] members, Upper Chesapeake

enters into various contractual arrangements with area doctors. In the spring of 1992, Upper Chesapeake determined

that it could offer more efficient and less costly surgical specialties to its HMO members by hiring an orthopedic surgeon. On July 30, 1992, Plaintiff Ferguson, a Canadian

orthopedic surgeon who practiced in Ontario, Canada, and

his wife, Plaintiff Stark, a primary care physician also practicing in Ontario, Canada, entered into separate employment

contracts with Upper Chesapeake. Both contracts provided

inter alia:

1. Term The term of this Agreement shall commence no later than January 1, 1993, or as

soon as Physician obtains Maryland license

and shall continue for a period of twelve (12)

months.

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See Defendant's Motion for Summary Judgment, Exh. 1 and

Exh. 2.

On November 17, 1993, over a year after the parties

entered into their respective contracts but before either Ferguson or Stark had reported for work, Upper Chesapeake

terminated their contracts. As of this date, it is undisputed

that only Stark had obtained her Maryland medical license

and neither party had received immigration approval to

work in the United States.

The doctors acknowledge that, during the fifteen-month period

between the execution and termination of the contracts, Upper Chesapeake cooperated with their efforts to obtain licenses and immigration

approval.

IV

A

The district court defined condition precedent:

A condition precedent is a fact or event that the parties

intend must exist before there is a right to performance on

a contract. Pradhan v. Maisel, 338 A.2d 905, 26 Md. App.

671 (1975) (holding no contractual duty arises where there

is an unfulfilled condition precedent to a contract). If the

condition does not occur, and is not excused, the promised

performance need not be rendered. Laurel Race Course Inc.

v. Regal Constr. Co., 274 Md. 142, 154, 333 A.2d 319, 327

(1975) ("It is fundamental that where a contractual duty is

subject to a condition precedent, whether express or implied,

there is no duty of performance and there can be no breach

by nonperformance until the condition precedent is either

performed or excused.").

That definition is correct as far as it goes, but the conclusion the district court drew from it--that Upper Chesapeake was entitled to terminate the contracts because the conditions precedent had not been

fulfilled--is a non sequitur.

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The absence of a duty to perform under a contract is not equivalent

to a freedom to terminate it. Performance is not due until conditions

precedent have been satisfied, but a future obligation to perform once

they are fulfilled exists upon the agreement's inception. Accordingly,

the obligor must allow its counterpart an opportunity to satisfy the

conditions. If the agreement does not specify the duration of that

opportunity, the law implies a reasonable time. E.g., E. Allan Farnsworth, Contracts § 8.3, at 569-70 (2d. ed. 1990).1 Upper Chesapeake

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1 We have located no Maryland case addressing this issue directly, but

other jurisdictions provide ample support. See City of Stockton v. Stockton Plaza Corp., 68 Cal. Rptr. 266, 270 (1968); Lieberman Properties,

Inc. v. Braunstein, 522 N.Y.S.2d 874, 877 (N.Y. App. Div. 1987) ("In

light of . . . the lack of a specific time period for performance of the condition precedent, it follows that in the event the plaintiff is not able to

secure approval for the proposed subdivision within a reasonable time,

the defendants retain the absolute right to cancel the contract."); Carroll

v. Wied, 572 S.W.2d 93, 97 (Tex. Civ. App. 1978) ("We disagree with

the argument that there can be no breach of contract before the condition

precedent is fulfilled. The provision . . . implied . . . that the appellees

would pursue their application for a loan diligently and would be allowed

a reasonable time within which to secure it."); see also Christopherson

v. Blount, 582 A.2d 460, 462 (Conn. 1990) ("In the absence of a specified time limit to comply with a condition precedent, the law implies a

reasonable time."); HECI Exploration Co. v. Clajon Gas Co., 843

S.W.2d 622, 634 (Tex. Ct. App. 1992) ("If a contract does not specify

a time within which a party must fulfill a condition precedent, as was the

case here, the law will imply that performance must occur within a reasonable time."); Pearcy v. Environmental Conservancy, 814 S.W.2d 243,

246 (Tex. Ct. App. 1991) ("[W]here a contract does not specify a time

during which a condition precedent must occur, the condition precedent

must occur within a reasonable time.").

The district court confused the instant agreements--bilateral contracts

with conditions precedent to performance--with offers for unilateral

contracts. Calamari and Perillo addressed the distinction:

In [the case of] an offer to a unilateral contract B's performance

is a condition precedent to A's duty of payment. It is also, under

the classical view, a condition precedent to the formation of the

contract--that is to say, performance of the act is the acceptance

of the offer. It should be stressed again, however, that the term

"condition" is ordinarily reserved to describe acts or events

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was not free, therefore, to terminate the agreements at any time before

the doctors fulfilled the conditions precedent. It was entitled to do so

only if it had allowed them a reasonable opportunity.

Ordinarily the factfinder should determine whether the period

allowed for fulfillment of conditions precedent was a "reasonable

time." E.g., Christopherson v. Blount, 582 A.2d 460, 463 (Conn. 1990).2

However, when the facts are undisputed and they support only one

inference regarding the reasonableness of the time, the court may

decide the question as a matter of law. See, e.g., Lynx, Inc. v. Ordnance Prods., Inc., 327 A.2d 502, 512 (Md. 1974).3 In this case, the

undisputed evidence shows that the parties entered into the contracts

on July 30, 1992. The term of employment under each contract was

to begin on January 1, 1993, or as soon as the doctor obtained a Maryland license, and was to last for one year. Upper Chesapeake cooper-

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which must occur before a duty of performance under an existing

contract becomes absolute.

John D. Calamari & Joseph M. Perillo, The Law of Contracts § 11-3 (2d

ed. 1977) (emphasis added).

2 See also, e.g., Hamlin v. Steward, 622 N.E.2d 535, 540 (Ind. Ct. App.

1993); Johnson v. Zingarelli, 448 N.E.2d 1282, 1282 (Mass. App. Ct.

1983); Kesinger v. Burtrum, 295 S.W.2d 605, 609 (Mo. App. 1956);

HECI Exploration Co., 843 S.W.2d at 634; cf. Lynx, Inc. v. Ordnance

Prods., Inc., 327 A.2d 502, 512 (Md. 1974) ("Where notice of rejection

or of breach has been given by the buyer, the sufficiency of the notice

and whether it was given within a reasonable time are ordinarily questions of fact based upon all the surrounding circumstances."); Town of

Glenarden v. Lewis, 273 A.2d 140, 144 (Md. 1971) ("What is a reasonable time is a question of fact, and depends upon all the circumstances

of the case."); Smith v. Butler, 311 A.2d 813, 815 (Md. Ct. Spec. App.

1973) ("Ordinarily the question of what is a`reasonable time' in which

a buyer is to give notice to the seller of breach of warranty is a question

of fact for the determination of the jury based upon the surrounding circumstances.").

3 See also, e.g., Smith, 311 A.2d at 816; cf. Pearcy, 814 S.W.2d at 246

("Where the material facts are undisputed, the question of what is a reasonable time is a matter of law."); Carroll , 572 S.W.2d at 97 ("[W]here

the facts are undisputed, as here, the issue of what is a reasonable time

for performance is a question of law for the court.").

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ated with the doctors' efforts to obtain licenses and immigration

approval during the five months between the formation of the agreements and the intended beginning date of January 1, 1993, and it continued to cooperate for more than ten more months. Not until

November 17, 1993, more than fifteen months after it entered the contracts and barely more than six weeks before the doctors' periods of

employment were expected to end under the agreements' terms, did

Upper Chesapeake decide that it had waited long enough. We agree.

These circumstances support only one reasonable inference--that

Upper Chesapeake allowed the doctors a reasonable time to satisfy

the conditions precedent.

B

The doctors note correctly that the general rule of conditions precedent is subject to exceptions for fraud, bad faith, waiver, and estoppel.

Laurel Race Course Inc. v. Regal Constr. Co., 333 A.2d 319, 325

(1975). They argue that Upper Chesapeake waived the contracts'

"time conditions" by exhibiting willingness

to extend the time of performance beyond January 1, 1993

and "Early Spring" 1993. And since the Defendant never

advised the Plaintiffs of a date by which the conditions had

to be fulfilled, it waived its right to insist on performance

without first advising the Plaintiffs of a completion date.

Brief of Appellants at 18. The doctors also contend that equitable

estoppel should bar Upper Chesapeake from terminating the contracts, because "Upper Chesapeake's actions and silence induced the

Plaintiffs to continue their quest to obtain the immigration clearances

and for Dr. Ferguson to obtain his Maryland medical license."

Upper Chesapeake counters that the doctors are precluded from

arguing waiver or estoppel on appeal, because they failed to raise

those issues before the district court. The doctors respond only that

their arguments are based on Laurel Race Course , which the parties

and the district court agreed "contain[ed] the applicable law." But the

portions of the Joint Appendix to which the doctors refer reveal that

the parties and the court cited Laurel Race Course only for the general rule of conditions precedent, without mentioning the exceptions

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to the rule. Thus the issues of waiver and estoppel are not preserved

for review, and we do not address their merits. Cf. Beaudett v. City

of Hampton, 775 F.2d 1274, 1278 (4th Cir. 1985) (holding that,

"[e]ven in the case of pro se litigants," "fleeting references" are insufficient to preserve issues for appeal), cert. denied, 475 U.S. 1088

(1986); Tyler v. Runyon, 70 F.3d 458, 465 (7th Cir. 1995) ("[M]ere

citation of the rule [of civil procedure] fails to preserve the merits of

this issue for appeal.").

V

The doctors failed to satisfy the conditions precedent within a reasonable time, so Upper Chesapeake was free to terminate the contracts. Accordingly, we affirm the district court's summary judgment.

AFFIRMED

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