Court Opinion

ID: 1026117
Source: CourtListenerOpinion
Date Created: 2013-07-05 07:00:58.749496+00
Date Added: 2024-06-11T12:40:19.948413
License: Public Domain

UNPUBLISHED

                  UNITED STATES COURT OF APPEALS
                      FOR THE FOURTH CIRCUIT

                            No. 07-1571

CHARLIE NORFOLK CENTER ASSOCIATES, L.P.,

                Plaintiff - Appellant,

           v.

NORFOLK REDEVELOPMENT AND HOUSING AUTHORITY,

                Defendant - Appellee.

Appeal from the United States District Court for the Eastern
District of Virginia, at Norfolk. Jerome B. Friedman, District
Judge. (2:06-cv-00616-JBF)

Argued:   May 13, 2008                        Decided:   July 1, 2008

Before KING, Circuit Judge, HAMILTON, Senior Circuit Judge, and
Henry F. FLOYD, United States District Judge for the District of
South Carolina, sitting by designation.

Affirmed by unpublished per curiam opinion.

ARGUED: Roger J. Magnuson, DORSEY & WHITNEY, LLP, Minneapolis,
Minnesota, for Appellant. Conrad Moss Shumadine, WILLCOX & SAVAGE,
PC, Norfolk, Virginia, for Appellee. ON BRIEF: David Y. Trevor,
DORSEY & WHITNEY, LLP, Minneapolis, Minnesota, for Appellant.
David H. Sump, Elaine K. Inman, CRENSHAW, WARE & MARTIN, PLC,
Norfolk, Virginia; Brett A. Spain, WILLCOX & SAVAGE, PC, Norfolk,
Virginia, for Appellee.

Unpublished opinions are not binding precedent in this circuit.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

        Plaintiff Charlie Norfolk Center Associates, L.P. (“CNC”),

appeals from the final judgment entered in the Eastern District of

Virginia on its breach of contract claims against defendant Norfolk

Redevelopment and Housing Authority (the “NRHA”).               See Charlie

Norfolk Ctr. Assocs., L.P. v. Norfolk Redev. & Hous. Auth., No.

2:06-cv-00616 (E.D. Va. Mar. 26, 2007) (granting summary judgment

to NRHA under Federal Rule of Civil Procedure 56(c)) (the “Summary

Judgment Order”); Charlie Norfolk Ctr. Assocs., L.P. v. Norfolk

Redev. & Hous. Auth., No. 2:06-cv-00616 (E.D. Va. May 18, 2007)

(denying CNC’s motion to amend judgment under Rule 59(e)) (the

“Rule 59(e) Order”).1         On appeal, CNC contends that the district

court erred in three respects in making its summary judgment award:

failing to recognize that (1) the NRHA breached its obligations

under       an   Option   Agreement   when   it   rejected   CNC’s   proposed

development plan without negotiating alterations to the plan; (2)

the NRHA breached its obligations by unreasonably rejecting CNC’s

preliminary plans for property development; and (3) the NRHA

prevented and delayed CNC’s submission of an acceptable development

plan. CNC contends that the court thereafter abused its discretion

in the Rule 59(e) Order by declining to vacate the summary judgment

        1
      The Summary Judgment Order is found at J.A. 144-64, and the
Rule 59(e) Order is found at J.A. 1195-1209. (Citations to “J.A.
__” refer to the contents of the Joint Appendix filed by the
parties in this appeal.)

                                        2
award and failing to authorize discovery.            As explained below, we

have carefully assessed these contentions and are satisfied that

the judgment in favor of the NRHA should be affirmed.

                                        I.

       The NRHA is a political subdivision of the Commonwealth of

Virginia, charged with overseeing the redevelopment of blighted

urban areas in Norfolk pursuant to a redevelopment plan adopted by

the NRHA and approved by the City (the “Redevelopment Plan”).               The

NRHA is authorized to promote redevelopment by making blighted real

estate available for purchase by private parties for purposes

designated in the Redevelopment Plan.           See Va. Code Ann. § 36-53.

On June 5, 1996, the NRHA entered into an agreement with CNC, a

Connecticut-based real estate developer, that granted CNC an option

to purchase, for the sum of $1.6 million, a 2.46 acre parcel of

real       estate   in   downtown   Norfolk   (the   “Option   Agreement”   or

“Agreement”).2       The real estate parcel (the “Property”), which was

then being used as a surface parking lot, is located adjacent to

the MacArthur Center, a large shopping mall that had been developed

primarily by CNC.        Under the terms of the Option Agreement, CNC had

the exclusive right to purchase the Property from the NRHA under

specified conditions, which included the following:

       2
        The Option Agreement is found at J.A. 85-98.

                                        3
      •    CNC was to notify the NRHA in writing, prior to
           termination of the Option Agreement, of its intent
           to exercise the purchase option, see Option
           Agreement 2;

      •    Within 60 days of notifying the NRHA of its intent
           to exercise the purchase option, CNC was to
           identify its objections to title, and conduct any
           necessary soil or engineering tests on the
           Property, see id. at 2-3; and,

      •    CNC was required to submit and obtain the NRHA’s
           approval of a plan for developing the Property,
           showing, inter alia, (1) the intended use of the
           Property, “which must be for retail, residential,
           hotel or office use, or any use permitted under
           [s]ection   [1.B.]1.a.(3)(c)    of   the   [NRHA]’s
           Redevelopment Plan,” and (2) “the specific use or
           uses proposed to be constructed on the [site] in
           sufficient detail to show . . . all improvements, a
           plan view and elevation of the improvements, the
           materials to be used in the external facades, the
           provision for on-site parking (if any) and the
           approximate gross floor plan.” Id. at 7.3

      Under the Option Agreement, the NRHA agreed that it would not

otherwise sell, offer, or agree to sell the Property during the

option period.    The NRHA also agreed to “consider in good faith any

[d]evelopment [p]lan for the Property submitted by [CNC] and to

suggest such reasonable changes to plans submitted by [CNC] as may

be   necessary   for   [the   NRHA]   to   give   its   approval.”   Option

      3
      Pursuant to section 1.B.1.a.(3)(c) of the Redevelopment Plan,
entitled “Other Permitted Uses,” “land within the Project Area
which is not devoted to public uses, semi-public uses, existing
private uses or the proposed regional shopping mall may be used for
commercial, office, retail or transient housing uses, either singly
or by a combination of such uses.” J.A. 124. This section further
provides that “[p]ublic uses, such as public parking garages and
accessways, can be constructed within areas which are designated
for redevelopment by private enterprise.” Id.

                                      4
Agreement 7-8.            Accordingly, the NRHA could not unreasonably

withhold its approval of a development proposal for the Property

submitted by CNC.          See id. at 8.

        In November 2000, CNC met with the NRHA and the Mayor of

Norfolk to discuss a preliminary mixed-use plan for the Property

(to be called “Norfolk Place”).            In an effort to make such a plan

acceptable, CNC, among other things, identified potential tenants

and prepared architectural designs for the Norfolk Place project.

It failed, however, to submit a formal development plan proposing

any such project.

        On May 25, 2001, CNC notified the NRHA of its intent to

exercise the purchase option.           On November 13, 2001, CNC submitted

a formal development plan to the NRHA reflecting that its intention

was to continue using the Property as a surface parking lot.               This

plan consisted only of a single aerial photograph of the Property,

marked to show the intended restriping of the lot’s parking spaces

and placement of a 300-foot long chain across the lot.                Two days

later, CNC submitted a revised development plan to the NRHA,

consisting     of     a    photograph   identical   to   the    one   initially

submitted, but failing to show the proposed restriping of the lot

(the “Development Plan” or “Plan”).             By letter of November 21,

2001,    the   NRHA       rejected   the   Development   Plan    as   “woefully

inadequate,” explaining that surface parking — in the absence of

major on-site improvements — was not a valid use of the Property

                                           5
under the Option Agreement, which expressly incorporated by its

terms section 1.B.1.a(3)(c) of the Redevelopment Plan.    The NRHA

thus advised CNC that its Development Plan failed to satisfy the

requirements of the Agreement. See J.A. 138. The Option Agreement

expired on November 21, 2001, and, until sometime in 2006, the

Property continued to be owned by the NRHA.

     Almost five years after the Option Agreement expired, on

October 31, 2006, CNC filed a complaint in the Eastern District of

Virginia, alleging that it had satisfied all conditions precedent

to the exercise of its purchase option on the Property.    It also

alleged that the NRHA had breached the Option Agreement in three

respects:   (1) by failing to act in good faith in considering the

Development Plan; (2) by offering the Property for sale to other

prospective purchasers; and (3) by hindering CNC’s completion of

the Development Plan (because, for instance, the NRHA desired a

more substantial development of the Property).     On December 11,

2006, the NRHA moved to dismiss CNC’s complaint for failure to

state a claim, pursuant to Rule 12(b)(6) of the Federal Rules of

Civil Procedure.   On January 5, 2007, CNC filed its opposition to

such a dismissal, requesting instead that the court authorize

discovery pursuant to Rule 56(f).4    The district court, by its

     4
      Rule 56(f) provides that “[i]f a party opposing [a summary
judgment] motion shows by affidavit that, for specified reasons, it
cannot present facts essential to justify its opposition, the court
may[, inter alia,] deny the motion.”       Fed. R. Civ. P. 56(f)
(emphasis added).

                                 6
Summary Judgment Order of March 26, 2007, construed the motion to

dismiss as a motion for summary judgment (under the operative

version of Rule 12), and granted summary judgment to the NRHA.5

       On April 9, 2007, CNC filed a motion to alter or amend

judgment, pursuant to Rule 59(e),6 asserting three grounds:                      (1)

that       new   evidence   (in   the    form   of,   for   example,    deposition

testimony that the “such as” language in section 1.B.1.a.(3)(c) was

illustrative,        rather   than      exclusive)    showed   that    the   summary

judgment award had been improperly granted; (2) that the Summary

Judgment Order erroneously concluded that the Development Plan

failed to satisfy the requirements of the Option Agreement; and (3)

that the “prevention doctrine” was inapplicable to the NRHA.7                    CNC

also contended in its Rule 59(e) motion that the court had erred in

       5
      Rule 12 was recently amended, effective December 1, 2007, as
part of the general restyling of the Civil Rules. The operative
version of Rule 12 provided in subsection (b) that “[i]f, on a
motion [under Rule 12(b)(6),] matters outside the pleadings are
presented to and not excluded by the court, the motion shall be
treated as one for summary judgment and disposed of as provided in
Rule 56.”
       6
      Pursuant to Rule 59(e), a court may amend an earlier judgment
on three grounds: (1) to accommodate an intervening change in
controlling law; (2) to account for new evidence not available at
trial; or (3) to correct a clear error of law or prevent manifest
injustice. See Hutchinson v. Staton, 994 F.2d 1076, 1081 (4th Cir.
1993).
       7
      Under the so-called “prevention doctrine,” a condition
precedent to a contract is excused when the promisor prevents or
hinders the occurrence of the condition, and the condition would
have occurred in the absence of such prevention or hindrance. See
In Re Peanut Crop Ins. Litigation, 524 F.3d 458, 474 (4th Cir.
2008).

                                           7
denying CNC discovery under Rule 56(f).           On May 18, 2007, the

district court, by its Rule 59(e) Order, denied the motion to alter

or amend judgment. The court concluded therein that CNC had failed

to present any evidence that was unavailable when the Summary

Judgment Order was entered, and that CNC had otherwise failed to

show that the court had made any clear legal error.           CNC has filed

a timely appeal, and we possess jurisdiction pursuant to 28 U.S.C.

§ 1291.

                                     II.

     We   review   de   novo   a   district   court’s    award   of   summary

judgment, viewing the facts in the light most favorable to the non-

moving party.   See Lee v. York County Sch. Div., 484 F.3d 687, 693

(4th Cir. 2007).    An award of summary judgment is appropriate only

“if 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 also Lee, 484 F.3d at 693.           We review for abuse

of discretion the denial of a Rule 59(e) motion to alter or amend

judgment.    See Temkin v. Frederick County Comm’rs, 945 F.2d 716,

724 (4th Cir. 1991).           Finally, we also review for abuse of

discretion a district court’s denial of a Rule 56(f) motion for

discovery.   See Ingle v. Yelton, 439 F.3d 191, 195 (4th Cir. 2006).

                                      8
                                          III.

        CNC contends on appeal that the Summary Judgment Order should

be   vacated     for    three      reasons:        (1)     the     NRHA      breached      its

obligations      under       the   Option        Agreement       by    rejecting         CNC’s

Development Plan and failing to negotiate with CNC concerning

alterations      to    the   Plan;    (2)   the     NRHA     breached        its   contract

obligations by unreasonably rejecting CNC’s preliminary plans for

developing the Property; and (3) the NRHA prevented and delayed

CNC’s submission of the Development Plan.                   CNC also maintains that

the court abused its discretion in the Rule 59(e) Order by refusing

to recognize new evidence and the Summary Judgment Order’s clear

legal error, and also in denying CNC’s request for discovery

pursuant to Rule 56(f).            We address these contentions in turn.

                                            A.

                                            1.

      CNC’s first contention on appeal is that the NRHA was not

entitled    to   summary      judgment      because      it      breached      the   Option

Agreement in rejecting CNC’s Development Plan, without suggesting

reasonable changes or revisions that could have made the Plan

acceptable.       As    noted,      the   Agreement      mandated         that     the    NRHA

consider in good faith any development plan submitted by CNC and

suggest reasonable changes to such a plan that might result in the

NRHA’s approval.        Further, the Agreement stipulated that the NRHA

could    not   unreasonably        withhold,       delay,     or      deny    approval      of

                                            9
proposed development plans. The district court determined that the

NRHA did not contravene its obligations under the Agreement in

rejecting the Development Plan, because CNC’s contract rights had

never vested due to its failure to submit a development plan that

conformed to the threshold requirements of the Agreement.                See

Summary Judgment Order 18.

     In reviewing the permitted uses spelled out in the Option

Agreement, and the incorporated section 1.B.1.a.(3)(c) of the

Redevelopment   Plan,   the   district   court   concluded       that   CNC’s

proposed Development Plan failed to pass muster because “surface

parking was not an appropriate or permitted use of the [P]roperty.”

Summary Judgment Order 9.     In so ruling, the court explained that

the only provision of the Redevelopment Plan that referenced and

authorized the use of redevelopment property for surface parking

was not incorporated into the Agreement, reinforcing its conclusion

that surface parking was not a permitted use under the Agreement.

See Summary Judgment Order 8-9.

     The   district   court   further    observed   that   the    Agreement

mandated that a permissible development plan must contain “a

showing of the approximate gross floor area, indicating that the

type of development contemplated was a building, [rather than

simply] a surface parking lot.”    Summary Judgment Order 10.           CNC’s

Development Plan (consisting of an aerial photograph showing a

single chain stretching across the Property), however, failed to

                                  10
contain any such descriptions of improvements, external facades,

and    gross   floor    area,   as   mandated     by    the   Option        Agreement.

According to the court, because CNC’s Development Plan did not

conform   to    the    Agreement,    the   NRHA   “acted      in     good    faith    in

rejecting the plan and did not unreasonably deny its approval.”

Summary Judgment Order 18. Having carefully considered this issue,

we are satisfied to adopt the district court’s reasoning as our

own.    See id. at 7-10.

                                       2.

       CNC’s   second    contention    is    that      the    NRHA    breached       its

contractual obligations under the Option Agreement by unreasonably

rejecting the preliminary plans that CNC had raised (prior to

submission of its Development Plan) to construct a mixed-use

development on the Property.         In this regard, CNC asserts that the

City of Norfolk’s Mayor had communicated to CNC that he would not

approve the particular commercial tenants proposed by CNC for

Norfolk Place.        CNC acknowledges in its appellate brief, however,

that the NRHA’s approval of development plans was not contingent on

any tenant placement or approval.           See Br. of Appellant 10-11.               On

appeal, CNC maintains that the NRHA was obligated, pursuant to the

Option Agreement, to provide feedback on preliminary plans, and

that the NRHA breached the Agreement by failing to provide any such

feedback.      As the district court recognized, however, CNC stopped

short of actually submitting a plan that satisfied the conditions

                                       11
precedent provided for in the Agreement.     Because of CNC’s failure

to submit any formal development proposals to the NRHA prior to

submitting its surface parking plan, the NRHA “was not required to

begin an interactive negotiation process with [CNC] with regard to

any previously submitted ‘plans,’ whether or not they constituted

‘[d]evelopment [p]lans.’”       Rule 59(e) Order 13-14.       Under the

circumstances, we agree with the district court and reject this

contention as well.

                                   3.

      CNC’s third contention on appeal is that the NRHA prevented

CNC from submitting a conforming development plan by, inter alia,

denying CNC’s engineers access to the Property to conduct tests;

failing to resolve deficiencies uncovered by such tests; and

repeatedly rejecting CNC’s preliminary proposals for development

and failing to raise objections when CNC first notified the NRHA

that it would be submitting a development plan for surface parking.

According to CNC, the NRHA, by its preventive actions, waived CNC’s

contractual obligation to obtain approval of a development plan

before exercising its purchase option under the Agreement.           The

district court rejected this contention, however, reasoning that

the   NRHA   acts   in   a   governmental   capacity   when   it   makes

redevelopment property available for private purchase under section

36-53 of the Code of Virginia, and is therefore not subject to the

prevention doctrine or other similar concepts such as waiver and

                                   12
estoppel.     See Summary Judgment Order 13.8             Finally, the court

concluded that, “even were [CNC] able to assert the prevention

doctrine    against    the    [NRHA   (by   the    NRHA   acting    in   a   non-

governmental capacity)], [CNC] would be unable to succeed on that

basis, as it was in fact not prevented from submitting a valid

development plan.”      Id.    We also agree with the district court on

this point, and we are content to reject it on the reasoning of the

Summary Judgment Order.

                                      B.

     After the Summary Judgment Order was entered, CNC moved to

alter or amend the judgment pursuant to Rule 59(e), contending that

new evidence showed that summary judgment had been improperly

awarded.     CNC also asserted that the district court had erred in

concluding    that    the    Development    Plan   failed   to     satisfy   the

requirements of the Option Agreement, and in ruling that the

prevention doctrine did not apply to the NRHA.                     Finally, CNC

maintained that the court erred in denying discovery pursuant to

Rule 56(f).     In its Rule 59(e) Order of May 18, 2007, the court

ruled that the “new evidence” CNC sought to present was in fact

available when CNC initially responded in the district court, and

     8
      In its Summary Judgment Order, the district court ruled that
the NRHA is bound, under section 36-53 of the Virginia Code, to
“condition the sale or lease of land on the obligation of
purchasers or lessees to use it for a designated purpose, begin
work on improvements within a fixed period of time, and comply with
other conditions.” Summary Judgment Order 13.

                                      13
also   was   “insufficient      to    cause    the    court   to   reevaluate     its

decision.”       Rule    59(e)       Order    4.      After   considering       CNC’s

contentions,     the    court    reaffirmed        the   ruling    in   its   Summary

Judgment Order and concluded (1) that CNC had failed to satisfy the

necessary conditions precedent for a transfer of the Property, and

(2) that the NRHA was not subject to the prevention doctrine under

Virginia law.      Accordingly, the court ruled that discovery was

neither warranted nor necessary, and denied CNC’s Rule 59(e)

motion.      See id. at 14.      Having thoroughly assessed each of the

contentions presented with respect to the Rule 59(e) Order, it is

clear that the court did not abuse its discretion in declining to

alter or rescind its Summary Judgment Order.

                                         IV.

       Pursuant to the foregoing, we are satisfied to adopt as our

own the reasoning of the Summary Judgment Order, as well as that of

the Rule 59(e) Order, and thus affirm the judgment of the district

court.

                                                                              AFFIRMED

                                         14