Metropolitan Group, Inc. v. Meridian Industries, Inc. , 505 F. App'x 243 ( 2013 )

UNPUBLISHED
UNITED STATES COURT OF APPEALS
FOR THE FOURTH CIRCUIT
No. 12-1932
METROPOLITAN GROUP, INC.,
Plaintiff - Appellant,
v.
MERIDIAN INDUSTRIES, INC.,
Defendant - Appellee.
Appeal from the United States District Court for the Western
District of North Carolina, at Charlotte. Max O. Cogburn, Jr.,
District Judge. (3:09-cv-00440-MOC-DSC)
Submitted: January 14, 2013 Decided: January 18, 2013
Before KEENAN, WYNN, and THACKER, Circuit Judges.
Affirmed by unpublished per curiam opinion.
Kenneth R. Raynor, TEMPLETON & RAYNOR, Charlotte, North
Carolina, for Appellant. Kenneth D. Bell, Matthew J. Hoefling,
Elizabeth Timmermans, McGUIRE WOODS, LLP, Charlotte, North
Carolina, for Appellee.
Unpublished opinions are not binding precedent in this circuit.
PER CURIAM:
After Meridian Industries, Inc. (“Meridian”) sold its
shuttered Belmont, North Carolina yarn-dyeing facility (the
“Property”) to Metropolitan Group, Inc. (“Metropolitan”),
problems arose. Eventually, Metropolitan sued Meridian for,
among other claims, breaching the relevant Purchase Agreement
because Meridian purportedly had “actual knowledge” that certain
hazardous materials remained on the Property when it was
conveyed. Meridian filed a counterclaim for breach of contract,
contending that Metropolitan destroyed certain groundwater
monitoring wells and thereby failed to keep its obligation under
the Purchase Agreement to reasonably facilitate Meridian’s
access to the groundwater on the Property. The district court
entered summary judgment in favor of Meridian on both claims, *
and Metropolitan appealed. We have reviewed the record, and we
affirm.
Metropolitan raises two main arguments on appeal.
First, it contends that the district court erred in entering
summary judgment against its contract claim because a jury could
conclude that Meridian had actual knowledge that hazardous
*
Summary judgment was entered in favor of Metropolitan on
its contract claim to the extent that it alleged an asbestos-
related breach and damages. That portion of the district
court’s judgment has not been appealed.
2
materials remained on the Property at the time of the Purchase
Agreement.
We review a grant of summary judgment de novo, drawing
reasonable inferences in the light most favorable to the
nonmoving party. Webster v. U.S. Dep’t of Agric., 685 F.3d 411,
421 (4th Cir. 2012); United States v. Bergbauer, 602 F.3d 569,
574 (4th Cir. 2010). To withstand a summary judgment motion,
the nonmoving party must produce competent evidence sufficient
to reveal the existence of a genuine issue of material fact for
trial. See Fed. R. Civ. P. 56(c)(1); Thompson v. Potomac Elec.
Power Co., 312 F.3d 645, 649 (4th Cir. 2002). Neither
conclusory allegations, unwarranted inferences, nor the
production of a “mere scintilla of evidence” in support of a
nonmovant’s case suffices to forestall summary judgment.
Thompson, 312 F.3d at 649 (internal quotation marks omitted);
see Beale v. Hardy, 769 F.2d 213, 214 (4th Cir. 1985). Instead,
this Court will uphold the district court’s grant of summary
judgment unless it finds that a reasonable jury could return a
verdict for the nonmoving party on the evidence presented. See
EEOC v. Cent. Wholesalers, Inc., 573 F.3d 167, 174-75 (4th Cir.
2009).
When resolving a dispute over the proper construction
of a contract governed by North Carolina law, a court’s “primary
purpose” is to “ascertain and give effect to the intention of
3
the parties.” Schenkel & Shultz, Inc. v. Hermon F. Fox &
Assocs., P.C., 658 S.E.2d 918, 921 (N.C. 2008); see Woods v.
Nationwide Mut. Ins. Co., 246 S.E.2d 773, 777 (N.C. 1978). When
the contractual terms are unambiguous, the parties’ intent as to
their meaning is self-evident. Harleysville Mut. Ins. Co. v.
Buzz Off Insect Shield, L.L.C., 692 S.E.2d 605, 612 (N.C. 2010).
And when the contract defines a term, the court must ascribe
that meaning to the term in order to effect the intent of the
parties. Id.; Woods, 246 S.E.2d at 777. By contrast, when the
contractual language is “fairly and reasonably susceptible to
either of the constructions for which the parties contend,”
Harleysville, 692 S.E.2d at 612 (internal quotation marks
omitted), it is ambiguous and the “interpretation of the
contract is for the jury.” Schenkel & Shultz, 658 S.E.2d at
921.
Here, Metropolitan argues that Meridian breached the
Purchase Agreement because its employees had “actual knowledge”
that hazardous materials remained on the Property at the time
the agreement was signed. But Metropolitan’s arguments are not
supported by the plain language of the Purchase Agreement, which
defines “actual knowledge” as “the current, actual conscious
knowledge” of employees of Meridian. None of the pertinent
deposition testimony indicates that any Meridian employee had
actual knowledge that any hazardous materials were on site at
4
the time the Purchase Agreement was signed. Even assuming
without deciding that the record demonstrates a degree of
negligence, Metropolitan’s claims must fail. The Purchase
Agreement did not warrant against Meridian’s negligence; the
Agreement warranted only against Meridian’s actual knowledge.
Because Metropolitan can point to nothing in the record
demonstrating anything more than — at worst — negligence or
ignorance on the part of Meridian’s employees rather than actual
knowledge, the district court properly entered summary judgment
on this claim.
Second, Metropolitan contends that the district court
erroneously entered summary judgment in favor of Meridian’s
contract counterclaim because, in Metropolitan’s view, a jury
could conclude that the Purchase Agreement did not obligate
Metropolitan to provide Meridian with access to anything other
than the Property at large, not to the specific groundwater
monitoring wells that were destroyed. Our review of the
Purchase Agreement convinces us that Metropolitan’s focus on the
pertinent phrase, removed from its surrounding context, flouts
the principle that contracts must be construed “as a whole,”
considering each provision “in relation to all other
provisions.” Schenkel & Shultz, 658 S.E.2d at 921 (internal
quotation marks omitted); see also State v. Philip Morris USA
Inc., 685 S.E.2d 85, 90 (N.C. 2009); Woods, 246 S.E.2d at 777;
5
Lane v. Scarborough, 200 S.E.2d 622, 625 (N.C. 1973). Moreover,
“contracts are to be construed consistently with reason and
common sense.” Variety Wholesalers, Inc. v. Salem Logistics
Traffic Servs., LLC, 723 S.E.2d 744, 748 (N.C. 2012) (internal
quotation marks omitted).
In our view, the district court properly concluded
that the Purchase Agreement committed Metropolitan to reasonably
facilitate Meridian’s access to the groundwater on the Property,
which Meridian was required by North Carolina authorities to
monitor periodically. Further, the district court did not err
in concluding that Metropolitan’s repeated destruction of the
groundwater monitoring wells was patently unreasonable, given
the absence of any record evidence explaining or justifying
Metropolitan’s conduct. See Burton v. Williams, 689 S.E.2d 174,
177 (N.C. Ct. App. 2010); Harris v. Stewart, 666 S.E.2d 804, 808
(N.C. Ct. App. 2008).
Accordingly, we affirm the judgment of the district
court. We dispense with oral argument because the facts and
legal contentions are adequately presented in the material
before this Court and argument will not aid the decisional
process.
AFFIRMED
6