UNPUBLISHED

UNITED STATES COURT OF APPEALS

FOR THE FOURTH CIRCUIT

STRAIGHT CREEK PROCESSING

COMPANY; PETER W. STROH; ELDERS

FINANCE, INCORPORATED; ESTATE OF

WALTER B. FORD, II,

Plaintiffs-Appellants,

No. 95-1825

v.

LAWYERS TITLE INSURANCE

CORPORATION,

Defendant-Appellee.

Appeal from the United States District Court

for the Western District of Virginia, at Big Stone Gap.

Samuel G. Wilson, District Judge.

(CA-94-9-2-B)

Argued: December 7, 1995

Decided: January 31, 1996

Before HALL and HAMILTON, Circuit Judges, and

THORNBURG, United States District Judge for the Western

District of North Carolina, sitting by designation.

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Affirmed by unpublished per curiam opinion.

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COUNSEL

ARGUED: Daniel Robert Bieger, COPELAND, MOLINARY &

BIEGER, P.C., Abingdon, Virginia, for Appellants. James Laurent
Windsor, KAUFMAN & CANOLES, P.C., Newport News, Virginia,

for Appellee. ON BRIEF: John E. Kieffer, Beth O. Skinner, WOODWARD, MILES & FLANNAGAN, P.C., Bristol, Virginia, for Appellee.

_________________________________________________________________

Unpublished opinions are not binding precedent in this circuit. See

Local Rule 36(c).

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OPINION

PER CURIAM:

Straight Creek Processing Company (Straight Creek) 1 brought this

breach of contract action against Lawyers Title Insurance Corporation

(Lawyers Title), alleging that Lawyers Title breached its obligations

under a title insurance policy.2 The district court granted summary

judgment in favor of Lawyers Title. For the reasons stated below, we

affirm.

I.

In 1981, Millers Cove Energy Company (Millers Cove) purported

to convey to Straight Creek a parcel of land (the Property) located in

Lee County, Virginia. Lawyers Title issued a title insurance policy

(the Policy) that insured Straight Creek's title to the Property. In

1986, Straight Creek learned that Millers Cove may not have had title

to the Property at the time it purported to convey the Property to

Straight Creek.

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1 Straight Creek has assigned portions of the proceeds it may receive

in this action to the other appellants, Peter W. Stroh, the Estate of Walter

B. Ford, II, and Elders Finance.

2 Jurisdiction was based on diversity of citizenship. See 28 U.S.C.

§ 1332(a)(1).

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In a letter dated April 11, 1991, Straight Creek gave Lawyers Title

notice of a claim under the Policy. The letter informed Lawyers Title

that a title "discrepancy" existed (J.A. 482), that Straight Creek was

attempting to sell the Property, and that the sale was contingent on

Straight Creek's delivering clear title. Thereafter, Straight Creek notified Lawyers Title of a proposed settlement agreement with a group

of persons asserting an ownership interest in the Property. Straight

Creek and Lawyers Title then exchanged letters regarding whether

Straight Creek's claim was covered under the Policy. Sometime

between May 29, 1991, and June 6, 1991, Straight Creek entered into

a settlement agreement in which it agreed to pay $300,000 to the

group of alleged adverse owners. On June 12, 1991, Lawyers Title

notified Straight Creek that the claim was not covered under the Policy.

Straight Creek subsequently brought this action against Lawyers

Title in the United States District Court for the Western District of

Virginia, seeking to recover the $300,000 under the Policy. The district court granted summary judgment in favor of Lawyers Title, concluding that Straight Creek's violation of three provisions of the

Policy precluded Straight Creek's recovery under the Policy. This

appeal followed.

II.

We review the grant of summary judgment de novo . Cooke v. Manufactured Homes, Inc., 998 F.2d 1256, 1260 (4th Cir. 1993). Summary judgment is appropriate when, viewed in the light most

favorable to the nonmoving party, "the pleadings, depositions,

answers to interrogatories, and admissions on file, together with the

affidavits, if any, show that there is no genuine issue as to any material fact and that the moving party is entitled to a judgment as a matter

of law." Fed. R. Civ. P. 56(c); see Cooke, 998 F.2d at 1260. A nonmoving party will survive a motion for summary judgment only if

"the evidence is such that a reasonable jury could return a verdict for

the nonmoving party." Anderson v. Liberty Lobby, Inc., 477 U.S. 242,

248 (1986).

III.

Because this is a diversity case, we apply the substantive law of

Virginia, the state where the action was brought, see Erie R.R. v.

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Tompkins, 304 U.S. 64, 78-80 (1938), including Virginia's choice-oflaw rules. See Klaxon Co. v. Stentor Elec. Mfg. Co., 313 U.S. 487,

496 (1941). In Virginia, the interpretation of a contract is governed

by the law of the place where the contract was made. Woodson v.

Celina Mut. Ins. Co., 177 S.E.2d 610, 613 (Va. 1970). The Policy,

which is the contract at issue here, was made in Virginia. Therefore,

Virginia law governs its interpretation.

Under Virginia law, an unambiguous contract controls the rights of

the parties to the contract. See D.C. McClain, Inc. v. Arlington

County, 452 S.E.2d 659, 662 (Va. 1995) ("[T]he contract becomes the

law of the case unless the contract is repugnant to some rule of law

or public policy."). Therefore, we enforce unambiguous provisions of

contracts, including insurance policies, as they are written. State Farm

Fire & Casualty Co. v. Walton, 423 S.E.2d 188, 191 (Va. 1992).

Here, the Policy unambiguously provides, "No claim shall arise or

be maintainable under this policy . . . for liability voluntarily assumed

by an insured in settling any claim or suit without prior written consent of [Lawyers Title]." (J.A. 389). Straight Creek admits that it settled the claim without Lawyers Title's prior written consent. Thus,

under the terms of the Policy, Straight Creek cannot recover the settlement amount. Straight Creek contends, however, that it was

relieved of its duty to obtain Lawyers Title's prior written consent to

the settlement agreement for two reasons: (1) Lawyers Title denied

coverage on the claim; and (2) Lawyers Title acted unreasonably in

its handling of the claim. We shall address each of these contentions

in turn.

A.

Straight Creek argues that it was relieved of its duty to obtain Lawyers Title's prior written consent to the settlement agreement because

Lawyers Title denied coverage on the claim. As support for this argument, Straight Creek relies on Bluff Ventures Ltd. Partnership v. Chicago Title Ins. Co., 950 F.2d 139 (4th Cir. 1991). We find this

reliance to be misplaced.

In Bluff Ventures, an insured made a claim under a title insurance

policy. The insurer responded by informing the insured that the policy

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had terminated and that the claim was denied. The insured subsequently entered into settlement agreements without obtaining the

insurer's consent, although the policy required the insurer's consent

to any settlement agreement. When the insured later attempted to

recover under the policy, the insurer raised the settlement agreements

as a defense. Under these circumstances, we held that the insurer's

denial of coverage on the claim relieved the insured of its duty to

obtain the insurer's consent before entering into any settlement agreement. Id. at 143-44.

In Bluff Ventures, the insurer denied coverage before the insured

settled the claim. It would have been pointless to require the insured

to get consent from the insurer when the insurer had already stated

that no coverage existed under the policy. Here, in contrast, Lawyers

Title did not deny coverage until after Straight Creek settled the

claim. Straight Creek settled the claim sometime between May 29,

1991, and June 6, 1991, and Lawyers Title denied coverage on June

12, 1991. Because Lawyers Title did not deny coverage until after

Straight Creek settled the claim, Straight Creek was not relieved of

its duty to obtain Lawyers Title's prior written consent to the settlement agreement.

B.

Straight Creek also contends that it was relieved of its duty to

obtain Lawyers Title's prior written consent to the settlement agreement because Lawyers Title acted unreasonably in its handling of the

claim. Straight Creek argues that although it notified Lawyers Title

of the settlement negotiations three times, Lawyers Title refused to

participate in settlement negotiations and used stalling tactics to delay

or avoid settling the claim. Assuming that such conduct on behalf of

Lawyers Title would justify Straight Creek in settling the claim without Lawyers Title's prior written consent, Straight Creek's argument

still fails because there is no evidence on which a reasonable jury

could find that Lawyers Title stalled or refused to participate in settlement negotiations.

Straight Creek first notified Lawyers Title of the claim and of the

proposed sale of the Property by a letter dated April 11, 1991. Lawyers Title responded on April 22, 1991, with a letter informing

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Straight Creek that the claim had been assigned to a claims attorney

for investigation.

On May 9, 1991, Straight Creek sent Lawyers Title a proposed settlement agreement. In a letter dated May 14, 1991, Lawyers Title

requested further details regarding the settlement agreement and the

proposed sale. This letter acknowledged that time was of the essence

and asked that the requested information be forwarded to Lawyers

Title as soon as possible, so that Lawyers Title could determine

whether coverage existed.

On May 29, 1991, Straight Creek sent Lawyers Title a letter stating

that the proposed sale of the Property must occur no later than June

9, 1991, and that Straight Creek had to complete the settlement before

consummating the sale. Lawyers Title wrote back the next day and

informed Straight Creek that its claim would be discussed at a meeting to be held on May 31, 1991.

On June 2, 1991, Lawyers Title requested additional information

from Straight Creek. Having failed to receive this requested information, Lawyers Title requested it again in a letter dated June 6, 1991.

The June 6, 1991 letter explained that Lawyers Title had to review the

requested information before it could determine whether coverage

existed. Sometime between May 29 and June 6, Straight Creek settled

the claim.

The correspondence between Lawyers Title and Straight Creek

shows that Lawyers Title reasonably handled the claim. Lawyers Title

promptly responded to Straight Creek's letters, assigned a claims

attorney to the claim, and began investigating the claim. Lawyers

Title did not stall or refuse to participate in settlement negotiations;

it simply attempted to obtain information from Straight Creek so that

it could determine whether coverage existed and whether the settlement agreement was acceptable.

IV.

In summary, Straight Creek, in violation of the Policy, settled the

claim without prior written consent of Lawyers Title. Under the terms

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of the Policy, the violation of this Policy provision precludes Straight

Creek from recovering the settlement amount. Therefore, the district

court properly granted summary judgment in favor of Lawyers Title.

Having determined that summary judgment was properly granted

because Straight Creek violated the Policy provision requiring Lawyers Title's prior written consent before settling a claim, we need not

consider the other violations of Policy provisions found by the district

court.

AFFIRMED

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