UNPUBLISHED

UNITED STATES COURT OF APPEALS

FOR THE FOURTH CIRCUIT

No. 07-1993

PACIFIC AG GROUP; ALLIANCE FARM GROUP, INCORPORATED,

Plaintiffs - Appellees,

v.

H. GHESQUIERE FARMS, INCORPORATED; GHESQUIERE PLANT FARMS

LIMITED; STRAWBERRY HILL, INCORPORATED,

Defendants - Appellants.

Appeal from the United States District Court for the Eastern 

District of North Carolina, at New Bern. Louise W. Flanagan, 

Chief District Judge. (5:05-cv-00809-FL)

Submitted: January 13, 2011 Decided: March 29, 2011

Before WILKINSON, DUNCAN, and AGEE, Circuit Judges.

Reversed by unpublished per curiam opinion.

John R. Wallace, Joseph A. Newsome, WALLACE, NORDAN & SARDA, 

L.L.P., Raleigh, North Carolina, for Appellants. Paige C. 

Kurtz, SPROUSE & KURTZ, PLLC, Raleigh, North Carolina, for 

Appellees.

Unpublished opinions are not binding precedent in this circuit.
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PER CURIAM:

H. Ghesquiere Farms, Inc. (“Ghesquiere Farms”) appeals 

the district court’s judgment finding it liable to Pacific Ag 

Group (“Pacific Ag”) for $190,600 in damages (plus interest) 

stemming from a contract dispute between the parties. For the 

reasons that follow, we reverse.*

In 2003, Pacific Ag purchased a quantity of strawberry 

runner tips (infant strawberry plants) from Ghesquiere Farms. 

Pacific Ag contended that the runner tips were sub-standard and 

infected with a disease that made them unusable and did not 

tender payment. Ultimately, Ghesquiere Farms sued Pacific Ag in 

North Carolina state court, and the action was removed to the 

district court. See Strawberry Hill, Inc. v. Alliance Farm 

Group, Inc., No. 5:03-cv-795-FL (E.D.N.C.). 

As the federal litigation was pending, Frank Sances, 

Pacific Ag’s principal, met with Carl Ghesquiere, Ghesquiere 

Farm’s principal, to discuss settling the litigation. 

Ghesquiere became aware that Pacific Ag had been late planting 

their fields that season, and saw an opportunity to immediately 

 * On December 20, 2010, Ghesquiere Plant Farms Limited filed 

a “Suggestion of Bankruptcy” notifying the court and the 

opposing parties that it had filed for bankruptcy in a Canadian 

court. No party has suggested or argued that the bankruptcy 

filing prevents this court from issuing its decision in this 

case. 
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supply young strawberry plants to Pacific Ag. At the end of 

their meeting, Sances and Ghesquiere (without the assistance of 

counsel) drafted and executed a settlement agreement that 

ultimately became the subject of the instant appeal. 

The agreement provided that Ghesquiere Farms would 

provide 500,000 strawberry runner tips to Pacific Ag free of

charge before July 26, 2004. The agreement also required 

Ghesquiere Farms to sell additional, high quality strawberry 

runner tips at a discounted rate to Pacific Ag in 2004, 2005, 

and 2006. The agreement provided for dismissal of the 

litigation “following successful performance by Ghesquiere 

Farms[.]” Paragraph 8 of the settlement agreement contained a 

provision that “[i]f Ghesquiere Plant Farms ceases growing 

strawberry runner tips for [Pacific Ag], the full amount of 

promised discounts will be paid by Ghesquiere to [Pacific Ag].” 

The parties (now assisted by counsel) later entered an addendum 

to the settlement agreement providing for more gifting of plants 

in 2005 and facilitating the dismissal of the previous 

litigation. 

In late 2004, Sances and Ghesquiere began negotiations 

for the purchase of strawberry runner tips for 2005. Sances 

claims that he repeatedly informed Ghesquiere that he might not 

have any orders for 2005 based on the market and the quality of 

Ghesquiere’s plants in 2003 and 2004. Sances ultimately did 
4

make two identical written offers to purchase runner tips 

consistent with the agreement. Ghesquiere never accepted the 

offers, however, as he and Sances continued to disagree on the 

amount of the discount to be provided, whether payment was due 

in advance, and whether inspection would occur before shipping 

or after delivery. 

When Sances and Ghesquiere were unable to reach an 

agreement for the purchase of runner tips in 2005, Sances 

informed Ghesquiere that he had no purchases from his customers 

and would be doing no business with Ghesquiere Farms for the 

2005 season. Sances later confirmed in writing that Pacific Ag

would not purchase any plants from Ghesquiere Farms. In a June 

2005 memorandum, Sances informed Ghesquiere that “the full 

amount of the discount is due” as a repayment for the damages 

suffered from the sale of defective Ghesquiere Farms plants in 

2003. 

Ghesquiere Farms failed to tender payment in response 

to Sances’s communication, and Pacific Ag brought a complaint 

against Ghesquiere Farms in district court. The complaint 

sought damages resulting from Ghesquiere Farms’s alleged failure 

to perform on the settlement agreement by providing discounted 

runner tips to Pacific Ag. After a bench trial, the district 

court ruled in favor of Pacific Ag and awarded $190,600 in 

damages (plus interest). The court based its ruling primarily 
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on the conclusions that the term “ceases” in the settlement 

agreement was ambiguous and that when the parties were unable to 

reach an agreement for the purchase of runner tips in 2005, 

Ghesquiere Farms “ceased” growing strawberry plants for Pacific 

Ag. When Ghesquiere Farms did not pay the amount of the 

discount, the district court ruled that it breached the 

agreement. Ghesquiere Farms noted a timely appeal.

This court reviews a district court’s conclusions of 

law at the bench trial de novo and its factual findings for 

clear error. Roanoke Cement Co. v. Falk Corp., 413 F.3d 431, 

433 (4th Cir. 2005). Ghesquiere Farms argues that the term 

“ceases” is unambiguous and should not be read to impose 

liability on them when Pacific Ag failed to place an order for 

runner tips. Pacific Ag, on the other hand, claims that the 

language is subject to more than one reasonable interpretation 

when viewed in the context of the agreement as a whole. Pacific 

Ag further contends that analysis of extrinsic evidence reveals 

that the parties intended for Pacific Ag to be able to elect 

either to purchase runner tips at a discount or take the value 

of the discount in cash. 

The parties agree that North Carolina’s law of 

contracts applies to their claims. “When the language of a 

written contract is plain and unambiguous, the contract must be 

interpreted as written and the parties are bound by its terms.” 
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Atlantic & E. Carolina Ry. Co. v. Wheatley Oil Co., 594 S.E.2d 

425, 429 (N.C. Ct. App. 2004). An ambiguity exists in a 

contract when either the meaning of words or the effect of 

provisions is uncertain or capable of several reasonable 

interpretations. Schnkel & Schultz, Inc. v. Hermon F. Fox & 

Assocs., 658 S.E.2d 918, 922 (N.C. 2008) (citations omitted). 

In determining whether a phrase is ambiguous, “words are to be 

given their usual and ordinary meaning and all the terms of the 

agreement are to be reconciled if possible[.]” Piedmont Bank and 

Trust Co. v. Stevenson, 339 S.E.2d 49, 52 (N.C. Ct. App. 1986). 

A court may not, “in the guise of construing an ambiguous term, 

rewrite the contract or impose liabilities on the parties not 

bargained for and found therein.” Dawes v. Nash Cnty., 584 

S.E.2d 760, 764 (N.C. 2003) (internal citation omitted). 

The district court stated that “[a] reading of the 

2004 [s]ettlement [a]greement which binds plaintiffs to trade in 

strawberry runner tips in order to be compensated for losses 

sustained as a result of purchase of tips from defendants in 

2003, in the face of the facts of this case, is nonsensical.” 

We do not agree. As the court itself noted, the predominant 

purpose of the agreement was to facilitate the continuing 

business relationship between the parties, not merely to settle 

past debts. 
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Our review of the agreement leads us to conclude that 

the reading proposed by Pacific Ag is not a reasonable one and 

accordingly, the term “ceases” is not ambiguous. “Ceases” in 

the context of the settlement agreement, means just that. There 

is no indication in the agreement that the parties intended to 

give Pacific Ag an election to seek either to trade with 

Ghesquiere Farms or to demand a monetary award. If that were 

the case, Pacific Ag would have had no incentive to purchase 

runner tips from Ghesquiere Farms and every incentive to simply 

elect the cash option. Rather, the agreement clearly 

contemplated a continuing business relationship between 

Ghesquiere Farms and Pacific Ag unless Ghesquiere Farms stopped 

(i.e., ceased) growing runner tips. 

Because we conclude that the agreement was not 

ambiguous, we need not review the extrinsic evidence contained 

in the record. Furthermore, we need not address the district 

court’s conclusion that parol evidence shows that the parties 

intended a different outcome. Finally, though Ghesquiere Farms 

did file a counterclaim against Pacific Ag that was dismissed by 

the district court, it has not sought to appeal that issue, and 

it is abandoned. 

We therefore reverse the judgment of the district 

court. We dispense with oral argument because the facts and 

legal contentions are adequately presented in the materials 
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before the court and argument would not aid the decisional 

process.

REVERSED