Contract – Tri-Party Agreement – Breach of Contract

Plaintiffs cannot show that Defendant corporation breached a Tri-Party Agreement (TPA).

We affirmed the grant of summary judgment to Defendant on Plaintiffs’ contract claim.

This was the second appeal in a suit brought by residents and businesses of Lumberton, alleging that Defendant corporation caused their property to be flooded during Hurricanes Matthew and Florence. In the first appeal, we affirmed the dismissal of most of Plaintiffs’ claims but concluded that one breach-of-contract claim should proceed. On remand, the district court granted summary judgment to Defendant on the contract claim.

The TPA grants the City of Lumberton and the Drainage District the “right or license to construct and maintain portions of a 6-foot, more or less, high (10-foot wide top with 3:1 side slopes) earthen dike on the easterly and westerly portions of [Defendant’s] right of way” through the gap in the City’s levee system. The TPA provides detailed specifications for the dike’s design. It also establishes several covenants relating to “said dike.” Paragraph 8 of the TPA sets out the limited circumstances under which the City may actually close the dike it has constructed across Defendant’s line and bring rail transit to a temporary halt. The City has the right to close “said dike” “ONLY in the event the City [] is in eminent [sic] danger of flood,” and only so long as the City has given “at least 12 hours[‘] notice prior to such closing.”

It is clear – and plaintiffs did not dispute – that Paragraph 8’s reference to “said dike” can mean only the “earthen dike” the City has been authorized by the TPA to construct. By way of the TPA, in other words, Defendant has agreed to the construction of an “earthen dike” across its property, and the City has agreed to keep “said dike” open unless there is a flooding emergency. Plaintiffs argued that Defendant breached its end of the agreement by refusing to allow for an emergency sandbag dam across its tracks when Hurricane Matthew approached. But Defendant did not agree to a sandbag barrier, and the TPA does not license the City to fill the gap on Defendant’s property in any manner it chooses. Instead, the TPA gives the City the (limited) right to close “said dike” – and “said dike,” as Plaintiffs admit, has never been built. The district court viewed construction of the dike as a “condition precedent,” without which Defendant was not bound by the TPA. But we need not adopt that reasoning here. Even assuming the TPA remained enforceable, the only duty Paragraph 8 imposed on Defendant was to allow the City to close “said dike.” And we do not see how Defendant can be held to have breached a duty to close “said dike” when “said dike” did not exist.

A “plain reading” of the terms of the TPA forecloses Plaintiffs’ breach of contract claim. And we are bound to “enforce the contract as written,” without imposing “liabilities on the parties not bargained for and found therein.”

Affirmed.

Edwards v. Moore (Lawyers’ Weekly No. 001-151-25, 10 pp.) (Pamela Harris, J.) Appealed from the U.S. District Court for the Eastern District of North Carolina, at Wilmington (Terrence W. Boyle, J.) ARGUED: William Franklin Cash, III, LEVIN PAPANTONIO RAFFERTY, Pensacola, Florida, for Appellants. Scott L. Winkelman, CROWELL & MORING LLP, Washington, D.C., for Appellee. ON BRIEF: Theodore J. Leopold, Diana L. Martin, COHEN MILSTEIN SELLERS & TOLL PLLC, Palm Beach Gardens, Florida; Mark R. Sigmon, MILBERG COLEMAN BRYSON PHILLIPS GROSSMAN, PLLC, Raleigh, North Carolina, for Appellants. Henry L. Kitchin, Jr., MCGUIREWOODS LLP, Wilmington, North Carolina; April N. Ross, CROWELL & MORING LLP, Washington, D.C., for Appellee. U.S. Court of Appeals for the Fourth Circuit