Court Opinion

ID: 148710
Source: CourtListenerOpinion
Date Created: 2010-06-16 19:13:26+00
Date Added: 2024-06-11T17:24:07.639451
License: Public Domain

UNPUBLISHED

                  UNITED STATES COURT OF APPEALS
                      FOR THE FOURTH CIRCUIT

                            No. 09-1468

SETTLERS CROSSING, L.L.C., a Virginia limited liability
company; WASHINGTON PARK ESTATES, LLC, a Maryland limited
liability company,

                Plaintiffs - Appellants,

           v.

U.S. HOME CORPORATION, a Delaware corporation,

                Defendant - Appellee.

Appeal from the United States District Court for the District of
Maryland, at Greenbelt.    Deborah K. Chasanow, District Judge.
(8:08-cv-00267-DKC)

Argued:   March 23, 2010                   Decided:   June 16, 2010

Before NIEMEYER and SHEDD, Circuit Judges, and James A. BEATY,
Jr., Chief United States District Judge for the Middle District
of North Carolina, sitting by designation.

Affirmed by unpublished opinion.      Judge Niemeyer      wrote   the
opinion, in which Judge Shedd and Judge Beaty joined.

ARGUED:    John J. Sabourin, Jr., REED SMITH, LLP, Leesburg,
Virginia, for Appellants. Deborah Jean Israel, WOMBLE, CARLYLE,
SANDRIDGE & RICE, PLLC, Washington, D.C., for Appellee.      ON
BRIEF: Paul A. Kaplan, WOMBLE, CARLYLE, SANDRIDGE & RICE, PLLC,
Washington, D.C., for Appellee.
Unpublished opinions are not binding precedent in this circuit.

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NIEMEYER, Circuit Judge:

      Settlers Crossing, L.L.C. and Washington Park Estates, LLC

(collectively      hereafter,        “Settlers    Crossing”)       entered       into   a

contract to sell 1,250 acres of real property in Prince George’s

County, Maryland, to U.S. Home Corporation.                       Settlement of the

transaction was initially scheduled to take place on December 5,

2007,    provided     that    “all     conditions      precedent     to     Settlement

contained in Section 11 of this Agreement are satisfied.”                           The

contract of sale also provided that “in the event any condition

precedent to Settlement contained in Section 11 is not satisfied

or waived in writing by [U.S. Home] at least ten (10) days prior

to the Settlement Date . . ., then the Settlement Date shall

automatically be extended to that date which is thirty (30) days

after    all    conditions    precedent       .   .    .   have   been    satisfied.”

      Prior to the initially scheduled settlement date, U.S. Home

sent Settlers Crossing a letter stating that Settlers Crossing

had failed to satisfy certain conditions precedent, “including

but     not    limited   to   [the      acquisition        of]    certain    off-site

easements”      and   that    as   a    result    the      settlement     date    would

automatically be extended, as provided in the contract.                            U.S.

Home also noted that the list of unsatisfied conditions that it

was providing was not exhaustive.                     Settlers Crossing did not

reply to U.S. Home’s letter and did not inquire further about

what unstated conditions remained unsatisfied.                      Rather, on the

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day     after      the        initial       settlement         date,          Settlers         Crossing

commenced         this    action       in    the       Eastern         District         of     Virginia,

seeking       a    declaratory          judgment        to     identify            “the      conditions

precedent, if any, that [were] unsatisfied” on that date.                                                In

its     complaint,        Settlers          Crossing         did       not    suggest          that    the

contract of sale had been breached.                                Indeed, after commencing

the action, all parties continued performance of the contract,

preparing for the newly scheduled settlement date.                                       The district

court    in       Virginia      transferred            the    case       to       the     District      of

Maryland, finding that “the events and circumstances giving rise

to    this        claim       occurred        overwhelmingly                 in     Maryland,           not

Virginia.”

      During the early months of 2008, further disputes arose

concerning        both    parties’          performance,           prompting            U.S.    Home     to

file a separate action in the District of Maryland for breach of

contract.          In    this    second       action,         U.S.      Home       named       not     only

Settlers Crossing, but also its lender, iStar Financial, and

others.

        Pursuant         to    various       motions         filed,          the    district          court

dismissed this action, focusing on the lack of any significance

that a declaratory judgment would have for resolving the overall

disputes.           The        court     noted         that        a    declaratory            judgment

identifying the unsatisfied conditions as of December 5, 2007,

was not of sufficient immediacy to constitute an Article III

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case or controversy, as it would not conclusively resolve any

dispute between the parties because the nature of the dispute

was ongoing and changing.                 Alternatively, the court concluded

that    even   if       jurisdiction     existed,       it   would    decline,     in   its

discretion,        to    provide    relief      under    the   Declaratory       Judgment

Act.     See 28 U.S.C. § 2201 (affording the court discretion to

decline to declare the rights and relations of the parties).

The court reasoned that a declaratory judgment would not resolve

the disputes between the parties and that, in any event, any

dispute over which conditions precedent were not satisfied could

be resolved in the second filed action, where the issues were

more     comprehensively           presented.            Accordingly,        the    court

dismissed this action.

       We   affirm       the   judgment    of    dismissal      on    both   grounds    on

which the district court relied.                  First, the complaint in this

action did not present an Article III case or controversy.                              It

is unclear how a declaratory judgment identifying satisfied and

unsatisfied conditions precedent as of December 5, 2007, would

resolve      any        dispute    and    present       a    decree    of    conclusive

character.     The complaint did not allege a breach of contract or

any other violation of duty that could lead to relief.                                  It

merely sought a declaratory judgment of historical fact about

what conditions were or were not satisfied as of December 5,

2007.       Since the performance between the parties was ongoing

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thereafter,        such       a     declaratory        judgment      would     be       virtually

meaningless.          It      could       only    be   a    historical      observation        and

would,   in   any       event,       be    an     advisory    and     irrelevant         opinion.

Accordingly,       we      agree      with       the   district      court     that      Settlers

Crossing’s     complaint            did    not     present     a     case    or     controversy

supporting      federal           jurisdiction.              See     MedImmune,         Inc.   v.

Genentech, Inc., 549 U.S. 118, 127 (2007) (holding that Article

III requires that a “dispute be definite and concrete, touching

the legal relations of parties having adverse legal interest;

and   that    it    be       real    and    substantial        and    admi[t]       a    specific

relief through a decree of a conclusive character” (internal

quotation marks and citation omitted)).

      Second,        the          district         court’s         alternative           holding,

exercising      its        discretion            not   to    grant     relief       under      the

Declaratory Judgment Act, was sound and prudent.                                  As noted, a

declaratory judgment in this case would not clarify the legal

relations between the parties or resolve any live controversy.

Moreover,     all       of    the     legal       issues     between     the      parties      are

subsumed within the second action, which was filed by U.S. Home

and remains pending in the district court.                             Avoiding piecemeal

litigation provides a strong reason for declining to declare

rights and relationships.                    See Mitcheson v. Harris, 955 F.2d

235, 239 (4th Cir. 1992) (“[I]t makes no sense as a matter of

judicial economy for a federal court to entertain a declaratory

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action   when     the   result    would       be   to    try   a   controversy    by

piecemeal,   or    to   try    particular       issues    without    settling    the

entire   controversy”         (internal       quotation    marks    and    citation

omitted)).

     Accordingly, the judgment of the district court is

                                                                          AFFIRMED. *

     *
       After the appeal was filed in this action, U.S. Home
submitted two motions to dismiss, arguing that this appeal had
become moot because Settlers Crossing’s lender, iStar Financial,
had foreclosed on the property at issue. Because of our ruling
in this case, we conclude that we need not reach this issue.
For the same reason, we also need not address Settlers
Crossing’s argument that the Eastern District of Virginia abused
its discretion in transferring this action to the District of
Maryland.

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