Court Opinion

ID: 2795083
Source: CourtListenerOpinion
Date Created: 2015-04-20 19:01:06.877136+00
Date Added: 2024-06-11T11:29:12.890282
License: Public Domain

PUBLISHED

                   UNITED STATES COURT OF APPEALS
                       FOR THE FOURTH CIRCUIT

                              No. 13-2234

DAN RYAN BUILDERS, INC., a Maryland Corporation,

                 Plaintiff - Appellant,

           v.

CRYSTAL   RIDGE   DEVELOPMENT,   INC.,   a       West     Virginia
Corporation;   LANG   BROTHERS,   INC.,   a      West     Virginia
Corporation; ROBERT S. LANG, an individual,

                 Defendants - Appellees,

           v.

HORNOR BROTHERS ENGINEERS,

                 Third Party Defendant - Appellee,

           and

BRYCO BORE & PIPE, INC.; LOUDOUN VALLEY CONCRETE,            INC.;
DINGESS TRANSPORT, INC.; NORTH STAR FOUNDATION,              INC.;
PENNSYLVANIA SOIL AND ROCK INCORPORATED,

                 Third Party Defendants.

Appeal from the United States District Court for the Northern
District of West Virginia, at Clarksburg.    Irene M. Keeley,
District Judge. (1:09-cv-00161-IMK-JSK)

Argued:   December 10, 2014                 Decided:    April 20, 2015

Before MOTZ, GREGORY, and WYNN, Circuit Judges.
Affirmed by published opinion.    Judge Motz wrote the majority
opinion, in which Judge Wynn joined.      Judge Gregory wrote a
separate opinion concurring in part and dissenting in part.

ARGUED: Avrum Levicoff, LEVICOFF, SILKO & DEEMER, P.C.,
Pittsburgh, Pennsylvania, for Appellant.    Tiffany R. Durst,
PULLIN, FOWLER, FLANAGAN, BROWN & POE, PLLC, Morgantown, West
Virginia, for Appellees. ON BRIEF: Julie A. Brennan, LEVICOFF,
SILKO & DEEMER, P.C., Pittsburgh, Pennsylvania, for Appellant.
Nathaniel D. Griffith, PULLIN, FOWLER, FLANAGAN, BROWN & POE,
PLLC, Morgantown, West Virginia, for Appellees Crystal Ridge
Development, Inc., Lang Brothers, Inc., and Robert S. Lang.
Frank E. Simmerman, Jr., Chad L. Taylor, SIMMERMAN LAW OFFICE,
PLLC, Clarksburg, West Virginia, for Appellee Hornor Brothers
Engineers.

                               2
DIANA GRIBBON MOTZ, Circuit Judge:

       After a bench trial in this diversity case, the district

court ordered Robert Lang and his construction business, Lang

Brothers, Inc. (collectively “Lang”) to pay Dan Ryan Builders,

Inc. (“Dan Ryan”) limited damages for breach of contract.                                   Dan

Ryan appeals, seeking additional damages.                        We affirm.

                                                 I.

       We        briefly      summarize      the        relevant       facts,     which     are

undisputed. 1

       Lang owned seventy acres of land in West Virginia, on which

he     sought       to     build     a    housing       development,          Crystal     Ridge

Development.             In   2005,      pursuant      to   a   Lot    Purchase    Agreement

(“LPA”), Lang subdivided the land and contracted to sell Dan

Ryan       all    143    lots   in    Crystal        Ridge.      The    LPA     detailed    the

responsibilities of both parties, including lot inspection, fill

compaction, and building schedules.

       The parties also entered into a number of other written

contracts         in     connection       with        the   development,        including     a

Contract         with    Independent       Contractor         (“fill    slope    contract”).

They agreed in that contract that Lang would construct a fill

       1
       Dan Ryan concedes that “[t]he district court’s findings of
fact are beyond reproach.” Appellant’s Br. 52. Similarly, Lang
does not challenge them in any way.

                                                 3
slope that would provide grading on certain lots to accommodate

the construction of houses.     Lang completed the grading work and

was paid in full by Dan Ryan.

     In 2006, Dan Ryan paid Lang for the first twelve lots in

accord with the LPA.       Dan Ryan also entered into additional

contracts with Lang including a second fill slope contract.              In

2007, Dan Ryan purchased another five lots, and Lang continued

to work on the infrastructure of the Crystal Ridge Development.

     In March 2007, cracks appeared in the basement slab and

foundation walls of a partially constructed house on one of the

first lots that Dan Ryan had purchased.             An engineering firm

engaged by Dan Ryan concluded that stabilization of that house,

as well as of another house displaying similar cracks, required

remediation.      These   problems       and   their     associated   costs

exacerbated    existing   tensions       between   Dan   Ryan   and   Lang,

ultimately leading to a “divorce” (the parties’ term) between

the two.      The parties memorialized the divorce in the “First

Amendment to Lot Purchase Agreement” (the Amendment).            Under the

Amendment, Dan Ryan agreed to purchase from Lang the remaining

thirty-three lots in Crystal Ridge, and the parties’ development

responsibilities were apportioned differently.

     In December 2007, the slope behind the lot that had first

exhibited cracks began sliding downhill toward a nearby highway.

A geotechnical study concluded that the slope had failed due to

                                     4
its natural composition, soil type, and poor construction.                        Dan

Ryan also encountered difficulties related to Crystal Ridge’s

stormwater management system, development permits, and entrance

drive.

     In December 2009, Dan Ryan filed this lawsuit against Lang

seeking monetary damages.           In its complaint, Dan Ryan asserts

three causes of action.            Initially and principally, Dan Ryan

alleges negligence by Lang in connection with construction of

the fill slope.          Second, Dan Ryan alleges that Lang breached

several of its contractual duties under both the LPA and the

Amendment.         The   third    cause       of     action     alleges    fraudulent

misrepresentation by Lang; Dan Ryan abandoned this last claim at

trial.

     Following several pre-trial conferences and numerous pre-

trial    submissions,     the    district      court     held    a   five-day   bench

trial.       The    court   admitted          many    exhibits       and   considered

testimony from more than a dozen witnesses.                          After extensive

post-trial submissions, 2 the court issued a detailed, ninety-page

order setting forth findings of fact and conclusions of law.

     2
       The court permitted the parties to submit up to eighty
pages of proposed findings of fact and conclusions of law.
After the deadline for these submissions had passed, Dan Ryan
moved for leave to file a supplemental post-trial memorandum.
The district court denied that motion.

                                          5
    On the contract claim, the district court awarded Dan Ryan

$175,646.25 in damages and $77,575.50 in pre-judgment interest

for breach of the LPA and the Amendment with respect to claims

for repairs on the road leading to Crystal Ridge.                        The court

found that Dan Ryan had failed to carry its burden of proof with

respect to other asserted breaches of the LPA and the Amendment,

i.e.,   those   relating      to   an   entrance     easement,      a   stormwater

management and erosion control system, and other “miscellaneous

bad work.”      J.A. 2353. 3       Accordingly, the court denied further

contract damages.       The district court then rejected Dan Ryan’s

negligence claim.        The court reasoned that this claim failed

under West Virginia’s “gist of the action” doctrine, which bars

recovery in tort when the duty that forms the basis of the

asserted     tort     claim    arises       solely     from     a       contractual

relationship.       Dan Ryan timely noted this appeal.

    We “review a judgment following a bench trial under a mixed

standard of review -- factual findings may be reversed only if

clearly erroneous, while conclusions of law, including contract

construction, are examined de novo.”            Roanoke Cement Co. v. Falk

Corp., 413 F.3d 431, 433 (4th Cir. 2005).                On appeal, Dan Ryan

does not challenge the district court’s resolution of its claim

for breach of the LPA and the Amendment.                      Rather, Dan Ryan

    3
       Citations to the “J.A.” refer to the Joint Appendix filed
by the parties to this appeal.

                                        6
appeals only the court’s determination that the “gist of the

action” doctrine bars its tort claim, and the court’s failure to

recognize that its tort claim was really a claim for breach of

the fill slope contracts. 4

                                       II.

     Dan Ryan offers two reasons why the district court erred in

its “gist of the action” holding.               We consider each in turn.

                                           A.

     First, citing Greenlaw v. United States, 554 U.S. 237, 243

(2008),    Dan    Ryan    contends     that        the     “principle         of    party

presentation” ought to have prevented the district court from

relying   on     the   “gist    of   the       action”    doctrine.           The   party

presentation     principle      generally       cautions       a    federal    court   to

consider only the claims and contentions raised by the litigants

before    it.      Dan   Ryan    asserts        that     the       party   presentation

principle applies here because neither it nor Lang raised the

“gist of the action” doctrine in submissions to the district

court.

     Greenlaw is the Supreme Court’s most robust articulation of

the party presentation principle.                 There, in language on which

     4
       The district court also dismissed as moot the derivative
claims Lang had brought against third-party defendant Hornor
Brothers Engineering for contribution. Dan Ryan does not appeal
that ruling.

                                           7
Dan Ryan rests its claim, the Court stated that “in the first

instance and on appeal, . . . we rely on the parties to frame

the issues for decision.”                  Greenlaw, 554 U.S. at 243.                    But

although Greenlaw paints the concept of party presentation in

broad    brushstrokes,        its    holding      is    much       narrower,    i.e.,     “an

appellate       court      may     not    alter     a       judgment     to    benefit       a

nonappealing party.”             Greenlaw, 554 U.S. at 244.               In fact, other

than in Greenlaw, the Court has invoked the party presentation

principle only twice, both times in stressing the limits of the

principle.       See Wood v. Milyard, 132 S.Ct. 1826, 1833-34 (2012)

(courts may sua sponte consider statute-of-limitations defenses

overlooked by the State in habeas cases); Arizona v. California,

530    U.S.   392,    412-13      (2000)    (courts         may    sua   sponte      raise   a

preclusion      defense      the     parties      failed       to    raise     in    special

circumstances).

       Moreover, neither in Greenlaw nor in any other case has the

Court    ever      suggested       that    the    party      presentation           principle

constrains       a    court’s       fundamental         obligation        to        ascertain

controlling law.           A party’s failure to identify the applicable

legal rule certainly does not diminish a court’s responsibility

to apply that rule.               The judiciary would struggle to maintain

the    rule   of     law   were     it    limited      to    the    parties’        competing

assertions about what the law requires.                       For this reason, it is

well    established        that   “[w]hen    an     issue      or    claim    is    properly

                                             8
before the court, the court is not limited to the particular

legal theories advanced by the parties, but rather retains the

independent power to identify and apply the proper construction

of governing law.”           Kamen v. Kemper Fin. Servs., Inc., 500 U.S.

90, 99 (1991).        Thus, the Supreme Court has long recognized that

a    “court    may    consider   an    issue        ‘antecedent       to   .     .    .   and

ultimately dispositive of’ the dispute before it, even an issue

the parties fail to identify and brief.”                     U.S. Nat’l Bank of Or.

v. Indep. Ins. Agents of Am., Inc., 508 U.S. 439, 447 (1993)

(quoting      Arcadia   v.    Ohio    Power     Co.,    498    U.S.    73,     77     (1990)

(alterations in original)).

       Here, West Virginia’s “gist of the action” doctrine is just

such an “antecedent” and “dispositive” issue, since it goes to

the duty element of any West Virginia tort claim.                          The “gist of

the action” doctrine requires plaintiffs seeking relief in tort

to   identify     a    non-contractual          duty    breached      by   the       alleged

tortfeasor.      See Gaddy Eng’g Co. v. Bowles Rice McDavid Graff &

Love,    LLP,    746    S.E.2d       568,     577      (W.    Va.   2013).            “[T]he

determination of whether a plaintiff is owed a duty of care by a

defendant must be rendered by the court as a matter of law.”

Lockhart v. Airco Heating & Cooling, Inc., 567 S.E.2d 619, 622

(W. Va. 2002) (internal quotation marks and citation omitted).

To determine whether Dan Ryan established all of the required

elements of a tort claim under West Virginia law, the district

                                            9
court    necessarily    had   to   consider          the    “gist    of    the   action”

doctrine and identify the source of any asserted duty.

     We must therefore reject Dan Ryan’s contention that the

party    presentation   principle     barred         the    district       court,   when

adjudicating    a   West      Virginia        tort    claim,        from    considering

whether the elements of such a claim had been met. 5

                                         B.

     Dan Ryan also contends that the district court erred in

holding that the “gist of the action” doctrine dooms its tort

claim.     This contention is meritless.                   Given that Dan Ryan’s

tort claim rests on Lang’s asserted negligence in performing two

contracts –- the LPA and the Amendment –- and not on any duty

independent    of   those     contracts,        the        “gist    of     the   action”

doctrine does indeed bar that claim.

     “To prevail in a negligence suit, the plaintiff must prove

by a preponderance of the evidence that the defendant owed a

     5
        We note that third-party defendant Hornor Brothers
Engineering did develop the “gist of the action” doctrine in its
post-trial submissions to the district court. See J.A. 2186-88
(“[T]ort liability cannot arise from a breach of contractual
duty. . . . [T]he principle is that if a defendant would have
no duty of care to plaintiff but for the fact that the parties
have a contract, no independent professional negligence claim
may be maintained.” (citing Lockhart, 567 S.E.2d 619, and other
relevant West Virginia cases)). In so doing, Hornor alerted the
court (and other parties) to the principle and its application
to this case.   Accordingly, this is hardly a case in which a
court has “sall[ied] forth . . . looking for wrongs to right.”
Greenlaw, 554 U.S. at 244 (internal quotation marks and citation
omitted).

                                         10
legal duty to the plaintiff.”              Strahin v. Cleavenger, 603 S.E.2d

197, 205 (W. Va. 2004) (emphasis added).                     Under the “gist of the

action”    doctrine,      a     party    to    a    contract      can    prevail      on    a

negligence claim only if he can demonstrate “the breach of some

positive legal duty imposed by law because of the relationship

of the parties, rather than from a mere omission to perform a

contract obligation.”             Lockhart, 567 S.E.2d at 624 (internal

quotation marks and citation omitted). 6                         In other words, the

negligence    “action      in    tort    [must]          arise   independent         of   the

existence of the contract.”              Id.       (internal quotation marks and

citation omitted).            “If the action is not maintainable without

pleading and proving the contract, where the gist of the action

is the breach of the contract, either by malfeasance or non-

feasance,    it    is,    in    substance,         an    action    on    the    contract,

whatever     may    be    the    form    of        the    pleading.”          Cochran      v.

Appalachian       Power   Co.,     246    S.E.2d         624,    628    (W.    Va.    1978)

(internal quotation marks and citation omitted).

     6
       This requirement -- that a tort claim must rest on a non-
contractual duty -- is hornbook law in most jurisdictions, even
if they do not employ the “gist of the action” nomenclature.
See Black’s Law Dictionary (10th ed. 2014)(defining “tort” as
“[a] civil wrong, other than breach of contract, for which a
remedy may be obtained, . . . a breach of a duty that the law
imposes”); Restatement (Third) of Torts:    Liab. for Econ. Harm
§ 3 (Tentative Draft No. 1, 2012) (explaining the general rule
that “there is no liability in tort for economic loss caused by
negligence in the performance or negotiation of a contract
between the parties”).

                                          11
       Only two years ago, in Gaddy, the West Virginia Supreme

Court of Appeals reiterated this requirement.                    There, the court

unequivocally held that a plaintiff cannot recover in tort if

the complaint does no more than include “the bare bones averment

that   ‘Defendants     negligently    .    .    .     breached    their    agreement

with’ [the plaintiff].”         746 S.E.2d at 577.                 Here, a “bare

bones” recitation is all that the Amended Complaint offered with

respect to the fill slope claims:                Dan Ryan alleged only that

Lang    “negligently     performed    or        failed     to    perform    various

development   obligations     under       the    LPA     and    Amendment   causing

substantial damage to [Dan Ryan]’s property.”                   J.A. 47 ¶ 39.

       Gaddy further explains, in words that resonate here, that

recovery in tort will be barred if any of the following factors

is demonstrated:       “(1) where liability arises solely from the

contractual   relationship     between          the    parties;     (2)    when   the

alleged duties breached were grounded in the contract itself;

(3) where any liability stems from the contract; and (4) when

the tort claim essentially duplicates the breach of contract

claim or where the success of the tort claim is dependent on the

success of the breach of contract claim.”                  Gaddy, 746 S.E.2d at

577.    Here, of course, Dan Ryan specifically alleges that Lang’s

liability for “negligent[] perform[ance]” of two contracts --

the LPA and the Amendment -- caused its damages, and thus that

                                      12
its tort claim asserting negligence in constructing the fill

slope arises from these contracts.

     In    its     briefing       on     appeal,    Dan     Ryan      points      to     one

additional source of Lang’s supposed duty:                          “[t]he common law

duty of care owed by a contractor.”                     Appellant’s Br. 30.              But

if, as Dan Ryan contends, “the gravamen of the breach was the

failure to construct the fill slope in a good and workmanlike

manner,” id. at 31, Lang breached not an independent legal duty

but an implied warranty arising out of –- in fact, created by --

the LPA and the Amendment.                See Thacker v. Tyree, 297 S.E.2d

885, 887 (W. Va. 1982) (“In the area of construction contracts,

. . . there is general recognition that an implied warranty of

fitness and workmanlike quality attaches to such contracts.”).

     In    sum,    this     is    precisely       the   kind    of    case     in      which

plaintiff’s       claims    are        “simply     breach      of    contract       claims

masquerading as” tort claims.               Gaddy, 746 S.E.2d at 577.                    See

also Covol Fuels No. 4, LLC v. Pinnacle Mining Co., LLC, No. 14-

1395,   Slip     Op.   at   25    (4th     Cir.    2015)    (gist      of   the     action

doctrine   applicable       where       party’s    tort     claims     “simply      recast

[its] claim for breach of contract”).                      The district court did

not err in invoking the “gist of the action” doctrine, and in

concluding that Dan Ryan’s “negligence” claim was actually a

claim for breach of contract.              Thus, Dan Ryan’s negligence claim

fails as a matter of law.

                                           13
                                       III.

       Alternatively, Dan Ryan now seeks damages under contract

claims never alleged or even asserted before the district court.

Specifically, Dan Ryan contends that the district court should

have    awarded      it   damages    for        a   breach   of    the   fill        slope

contracts.

       Nowhere in its pleadings did Dan Ryan assert such a claim.

The district court pointed out that Dan Ryan did not reference

the fill slope contracts in its original complaint.                             Indeed,

neither Dan Ryan’s Amended Complaint, nor its pre-trial listing

of contested issues of fact and law, nor its seventy-eight-page

post-trial proposed findings of fact and conclusions of law even

mentions the fill slope contracts -- let alone alleges that Lang

breached them.        Dan Ryan concedes, as it must, that this is so.

Nevertheless, Dan Ryan maintains that “the absence of explicit

reference to the [fill slope contracts] in the pleadings is of

no consequence,” because a claim as to breach of those contracts

was tried by consent, as permitted by Federal Rule of Civil

Procedure 15(b)(2).        Appellant’s Br. 48.

       That   Rule    provides      that    “an      issue   not    raised      by    the

pleadings” will be treated as if it were raised, provided it is

“tried by the parties’ express or implied consent.”                          Fed. R.

Civ. P. 15(b)(2).          Of course, Rule 15(b)(2) does not offer a

failsafe for any and every faulty pleading.                        Rather, the Rule

                                           14
sets forth “an exception to the general rules of pleading . . .

when the facts proven at trial differ from those alleged in the

complaint, and thus support a cause of action that the claimant

did not plead.”          Gilbane Bldg. Co. v. Fed. Reserve Bank of

Richmond, 80 F.3d 895, 901 (4th Cir. 1996).                          But “[b]ecause

notice   to   the    defendant    of      the   allegations     to    be    proven   is

essential to sustaining a cause of action, Rule 15(b) applies

only when the defendant has consented to trial of the non-pled

factual issues and will not be prejudiced by amendment of the

pleadings to include them.”               Id. (emphasis added).            Thus, Rule

15(b)(2) requires that a party expressly or impliedly consent to

trial on an unpled claim and not be prejudiced by doing so.                          Dan

Ryan cannot satisfy the Rule’s requirements.

     First,     the    record     offers        no   support    for        Dan   Ryan’s

assertion on appeal that Lang expressly consented to trial of

any claim of breach of the fill slope contracts.                             Dan Ryan

maintains     Lang     did   so      by   including,     among       its     pre-trial

contested     issues   of    fact,    the   question    of     whether      “the   Lang

Defendants [are] liable to [Dan Ryan] for breach of contract in

relation to” the fill slope contracts.                  J.A. 305.          But Lang’s

single reference to a breach of the fill slope contract in its

                                           15
pre-trial memorandum does not constitute consent. 7                        This pre-

trial submission demonstrates only that Lang regarded breach of

the fill slope contracts as a potential issue, which might be

raised by Dan Ryan at trial.                 Dan Ryan mistakes Lang’s caution

in this regard for consent.

       In fact, as early as the final pretrial conference, Lang

pointed      out    the   absence    of   any   reference     to   the    fill    slope

contracts in the Amended Complaint.                 Lang’s counsel specifically

noted that “there were additional agreements” that “were not

attached as exhibits to the complaint” and distinguished the

obligations in those unpled contracts from the obligations in

the    LPA    and   the    Amendment,     on    which   Dan   Ryan   did    rest    its

contract claims.           J.A. 380-81.         Similarly, in its post-trial

submission, Lang noted that although the fill slope contracts

were       introduced     as   evidence    at    trial,   they     were    not    “even

mentioned anywhere within the Complaint or Amended Complaint”

and so could not provide Dan Ryan with a basis for recovery.

Far    from    consenting       to   trial     of   unpled    issues,     then,    Lang

consistently and expressly disclaimed any consent to trial on

the unpled claim of breach of the fill slope contracts.

       7
       We have said as much before.   See Interstate Petroleum
Corp. v. Morgan, 249 F.3d 215, 221 (4th Cir. 2001) (en banc)
(noting that even where an issue was “discussed on occasion
during the course of [the] case,” that alone did not establish
trial by consent).

                                           16
        Moreover, in Dan Ryan’s own submissions to the district

court    it    confirmed        that    it   did    not   advance      such      a    claim.

Rather,       when    Dan     Ryan    raised    contract      claims       at   trial,    it

expressly      identified       the    pertinent      contracts      that       formed   the

source of the asserted breach -- the LPA and the Amendment --

not the fill slope contracts.                  Furthermore, after trial, in its

proposed findings of fact and conclusions of law, Dan Ryan set

forth in numbered paragraphs each of the damage awards sought

for breach of the LPA and the Amendment.                            Dan Ryan did not

devote a numbered paragraph to any damage claim under the fill

slope contracts.              Dan Ryan did not propose that the district

court find that Lang breached the fill slope contracts.                              And Dan

Ryan did not ask the district court to hold that Lang had any

specific obligations arising out of the fill slope contracts.

        In sum, Dan Ryan’s own statements about the theory of its

case,    as    well      as   its    repeated      omission    of    the    now-asserted

breach of the fill slope contracts from any argument at trial or

post-trial confirm what Lang’s submissions make clear:                            Lang did

not consent to trial of claims for breach of the fill slope

contracts.           See Pinkley, Inc. v. City of Frederick, 191 F.3d

394, 401 (4th Cir. 1999) (when a party “sets out in [a list of]

numbered paragraphs . . . its legal theories for recovery,” its

omission       of    a   particular      legal      theory    from     those      numbered

paragraphs militates against a finding of trial by consent); see

                                             17
also Elmore v. Corcoran, 913 F.2d 170, 173 (4th Cir. 1990).

Accordingly,   Dan   Ryan   did   not   put    Lang    on   notice   of   any

potential liability under those contracts.

     Moreover, Dan Ryan cannot establish Lang’s implied consent

by demonstrating that evidence at trial clearly supported only

this unpled claim.    We have previously explained that admission

without objection of evidence related to the unpled claim may be

“an indicium of implied consent” to trial of that claim.             McLeod

v. Stevens, 617 F.2d 1038, 1040 (4th Cir. 1980).               But if that

evidence is also “germane” to claims expressly in the pleadings,

its admission “cannot be treated as implied consent” to trial of

the unpled claim.     Id. at 1040-41.         Accord, Trinity Carton Co.

v. Falstaff Brewing Corp., 767 F.2d 184, 193 (5th Cir. 1985);

see also 6A Charles Alan Wright & Arthur R. Miller, Federal

Practice & Procedure § 1493 (3d ed. 2014).

     Dan Ryan contends that consent to trial of a breach claim

under the fill slope contracts may be implied from its evidence

related generally to the slope failure and from the admission of

the two fill slope contracts themselves.              But evidence of the

slope failure was admitted in support of the claim that Lang

negligently constructed the slopes, not that it breached the

                                   18
fill slope contracts. 8           Accordingly, the evidence was “germane”

to   an   asserted    tort     claim    actually     present    in    Dan   Ryan’s

pleadings and cannot establish trial by consent of a phantom

contract claim.       Admission of the fill slope contracts, without

more, cannot establish consent to trial of a claim that those

contracts were breached.

      Moreover, Lang would undoubtedly be prejudiced if we were

to accept Dan Ryan’s contention on appeal that the opposite is

true.      See    Withrow    v.    Williams,   507    U.S.     680,   696   (1993)

(holding that where the record “reveals neither thought, word,

nor deed . . . that could be taken as any sort of consent” to

trial     of     an   unpled       claim,    the     party     “was    manifestly

prejudiced”).

      Dan Ryan had opportunities before, during, and after trial

to clarify its contract claims against Lang. 9                  Yet at none of

      8
        Nor does the district court’s observation that Lang
“failed to live up to its contractual obligations” under the
fill slope contracts establish that breach of those contracts
was tried by consent.    J.A. 2375.   For the court had earlier
identified the LPA and the Amendment as the sole bases for all
breach of contract claims alleged by Dan Ryan.    See J.A. 2324-
56.   Further, the court explained that any “[m]ention of the
Fill Slope Contract[s] was conspicuously absent from” Dan Ryan’s
complaint. J.A. 2373. Thus the court was clear that the claims
Dan Ryan might have alleged are distinct from the claims it
actually did allege.
      9
       Dan Ryan repeatedly failed to clarify the precise claims
under which it sought relief and the specific evidence
supporting each claim.    Examination of the trial transcript
(Continued)
                                        19
these junctures did Dan Ryan contend that Lang breached the fill

slope contracts.           The omission of the claim at one of these

stages in the litigation –- in the amended complaint, or in the

pre-trial submissions, or in the presentation of the theory of

the   case,     or    in   the   post-trial     submissions    –-   might    evince

inadvertence and so allow the district court to consider the

claim.      But the repeated omission of the claim permits only one

conclusion:          Dan Ryan’s now-asserted claim that Lang breached

the fill slope contracts was not tried by consent, it was simply

omitted. 10

                                          IV.

      This is a messy case, spanning four years and thousands of

pages      of   trial      submissions.         During   the   course   of    such

reveals the district court’s frustration with Dan Ryan’s
haphazard submissions throughout the trial. For example, in an
order issued after trial, the court instructed that “Dan Ryan
shall clarify, within its proposed findings of fact and
conclusions of law/post-trial legal memorandum, or in an
attachment thereto, which of its claimed damages flow from its
breach of contract theory and which flow from its negligence
theory.”   Summ. Order 4, Aug. 30, 2012, ECF No. 249.  But Dan
Ryan utterly failed to do this.
      10
       In the alternative, we hold that Dan Ryan has waived any
breach of contract claim based on the fill slope contracts. See
Helton v. AT&T Inc., 709 F.3d 343, 360 (4th Cir. 2013) (holding
that appellant’s argument not raised during a bench trial or in
proposed findings of fact and conclusions of law is waived on
appeal).

                                          20
protracted      litigation,     parties      must      be       vigilant    not    to    lose

sight   of    the   necessity    of     pleading          and    proving    all     of    the

elements of each cause of action.

     The     district    court    properly           dismissed       Dan    Ryan’s       tort

claim, alleging negligence in construction of the fill slope,

because Dan Ryan rested that claim solely on asserted breach of

two contracts -- the LPA and the Amendment.                          We now hold that

Dan Ryan never alleged, and the parties never consented to trial

on, a claim of breach of the fill slope contracts.                              Contrary to

Dan Ryan’s contention, this result does not unfairly penalize it

for a purely formal error.             Rather, it simply holds Dan Ryan to

the requirements of the law.                 A claim grounded on breach of

contract (here, the LAP and the Amendment) does not give rise to

tort liability, and a claim never pled (here, breach of the fill

slope contracts) will not be regarded as pled unless actually

tried   by    consent.      These      are     the    only       fair    standards,       for

without them litigants and courts alike would be unable to ever

adequately prepare for trial.             Parties would be forced to defend

against    shadow     claims,    and    trial        courts      would     be    forced    to

search, as for a needle in a haystack, for unpled causes of

action purportedly hiding in the parties’ submissions.

     It    is   not   the   responsibility           of     a    trial   court     to    wade

through      ambiguously    or    incorrectly             labeled        allegations       in

pursuit of any potential basis for awarding relief.                             In the case

                                          21
at hand, the district court did a commendable job of sorting

through a museum of non-sequiturs to identify the plaintiff’s

meritorious claims.   Notwithstanding Dan Ryan’s dissatisfaction

with the resulting judgment, it is clear that the district court

committed no error.

     The judgment of the district court is

                                                       AFFIRMED.

                               22
GREGORY, Circuit Judge, concurring in part and dissenting in
part:

       Dan Ryan Builders, Inc. (“Dan Ryan”) contracted with Robert

Lang       and    his        construction     business,       Lang     Brothers,       Inc.

(collectively “Lang”) to fix the steep gradation of a portion of

land that would not have otherwise supported the construction of

homes.           Lang      botched   the     job,    and     Dan   Ryan    had    to    pay

$1,722,104.91 to fix it. *                   The district court found all the

elements         of    a   breach    of    contract:        that     the   contract      was

enforceable, J.A. 2369 n.43, that Dan Ryan paid Lang in full for

the    work,      J.A.       2307,   and    that    Lang    “[u]nquestionably          . . .

failed to live up to its contractual obligations, and [Dan Ryan]

suffered damages as a result,” J.A. 2375.                      Yet, because Dan Ryan

did not formally amend its complaint to name one of the several

contracts at issue, the district court allowed Lang to escape

liability.            I cannot agree with this inequitable result, which

is    exactly         what    Rule   15(b)    of    the    Federal    Rules      of    Civil

Procedure was designed to prevent.                         I therefore must dissent

from Part III of my good colleagues’ opinion.

       Rule 15(b) allows liberal amendment of the pleadings to

conform to the evidence presented at trial.                           See Equal Emp’t

       *
       This figure is based on Dan Ryan’s post-trial submission
asserting that expenses related to the slope remediation totaled
$1,772,104.91 before prejudgment interest.        Pl.’s Proposed
Findings of Fact and Conclusions of Law at 70, ECF No. 256.

                                              23
Opportunity Comm’n v. Gen. Elec. Co., 532 F.2d 359, 367 n.17

(4th    Cir.    1976).        Formal   amendment,       however,   is    not    always

required.       See Fed. R. Civ. P. 15(b)(2).                 “When an issue not

raised by the pleadings is tried by the parties’ express or

implied consent, it must be treated in all respects as if raised

in the pleadings,” and “failure to amend does not affect the

result of the trial of that issue.”                     Id.   This liberalism was

meant to obviate the necessity of a new trial every time an

opposing party points to a technical deficiency in pleading.

See 6A Fed. Prac. & Proc. Civ. § 1491 (3d ed. 2014) [hereinafter

Fed. Prac. & Proc.]; see also Deere & Co. v. Johnson, 271 F.3d

613, 621 (5th Cir. 2001) (“As has been often said, the principal

purpose of Rule 15(b) is judicial economy.”).                   In fact, the rule

has always been construed to promote resolution of cases on the

merits, rather than on the pleading skills of counsel.                        See Fed.

Prac.    &     Proc.    § 1493.        In    other   words,     Rule    15(b)    helps

litigants      and     the   courts    “avoid     the    tyranny   of    formalism.”

Kirkland v. District of Columbia, 70 F.3d 629, 634 (D.C. Cir.

1995); Dunn v. Ewell (In re Santa Fe Downs, Inc.), 611 F.2d 815,

817 (10th Cir. 1980).

       The     majority      insists    on    formalism,      finding    no    implied

consent to try the issue of whether Lang breached the Fill Slope

Contract.       However, this was the entire gravamen of the five-day

trial.       We may find implied consent where the defendant:                       1)

                                             24
fails to object to evidence relating to the unpleaded issue; 2)

actually produces evidence bearing on the issue; or 3) offers

direct arguments contesting the issue.                       See Fed. Prac. & Proc.

§ 1493; see also McLeod v. Stevens, 617 F.2d 1038, 1040 (4th

Cir. 1980) (finding admission of evidence without objection an

indicium of implied consent).                     All three criteria are present

here.        Even    though     Dan    Ryan’s         post-trial   submission    omitted

mention      of    the   Fill   Slope       Contract,      Lang    did   not   object   to

introduction of the contract into evidence, and the issue also

had     been      teed   up     since       at    least     the    parties’    pre-trial

statement.          Dan Ryan specified in its brief statement of its

claims that “the Lang Defendants owed legal duties to [Dan Ryan]

from four separate and distinct contractual undertakings.”                            J.A.

293-94.        Dan Ryan’s theory was unambiguously that Lang breached

these duties by “[i]mproper placement and compaction of fill

material.”          J.A. 294.        Lang confronted these arguments head on

in    its    own    section     of    the    pre-trial       statement:        “The   Lang

Defendants did not breach any contract with [Dan Ryan].”                              J.A.

296.        Lang’s theory was that even if it had followed proper

construction practices, “the slope would have still failed due

to a layer of colluvium in the soil.”                      J.A. 301.     It thus sought

to place the blame on Horner Brothers Engineering, which Lang

alleged drew up lot grading plans that did not take into account

certain soil properties.

                                                 25
       In    this    way,     Lang    was    fully       prepared       to       litigate,     and

indeed litigated in substance, whether it was “liable to [Dan

Ryan] for breach of contract in relation to [the Fill Slope

Contract].”         J.A. 305 (contested issue from pre-trial statement

proposed      by     Lang).         During    the     trial,       “[t]he          experts     all

agree[d] that [Lang Brothers Inc.] did not employ the standard

construction practices that, if applied in the first instance,

would have ensured the slope’s stability.”                         J.A. 2374 n.44.              It

turns out that Lang built the fill slope based on rudimentary

drawings      that    were     never    meant       to    serve     as       a    full   set   of

engineering plans and specifications.                          Lang did not ensure the

slope foundation was built according to the proper ratio, and

did not install the appropriate draining system, among other

failings.      Basically, Lang picked up dirt from one part of the

development and set it on top of another.                              The district court

had no trouble ascertaining that, according to the “credible

evidence,”     Lang’s       “poor     construction         practices             were   the   sole

proximate cause of the slope failure.”                     J.A. 2374 n.44.

       This is not a case where the evidence “incidentally tends”

to     establish       that    Lang’s        shoddy       construction             breached      a

contractual duty to build a viable fill slope.                            Pinkley, Inc. v.

City    of   Frederick,       191    F.3d    394,        401    (4th     Cir.      1999).       In

determining         whether    an    issue    has     been      tried        by    consent,     we

rightly should be concerned with the defendant’s potential lack

                                             26
of opportunity to defend against a new allegation.                          But here, in

addition to Lang having had adequate notice of just what was at

issue,    treating       the     Fill   Slope     Contract      as    if    it   had   been

included in the pleadings in no way prejudices Lang.                             Prejudice

occurs, like in the Withrow case cited by the majority, where

there    is    “failure     to    afford     [a     litigant]    an    opportunity       to

present       evidence    bearing       on   that    [new]   claim’s        resolution.”

Withrow v. Williams, 507 U.S. 680, 696 (1993).                             Lang does not

even    claim    any     potential      prejudice,      perhaps       because     it   must

admit that inclusion of the Fill Slope Contract in Dan Ryan’s

complaint would not have compelled presentation of any different

evidence, or reliance on any alternative theory of defense.

       Given the ample notice, implied consent, and utter lack of

prejudice to Lang, I would reverse the district court and find a

breach of the Fill Slope Contract.

                                             27