Bollech v. Charles County ( 2003 )

UNPUBLISHED
UNITED STATES COURT OF APPEALS
FOR THE FOURTH CIRCUIT
JOHN B. BOLLECH, Trustee; KENNETH 
A. HAAPALA, Trustee; DANIEL C.
MEISINGER, Trustee; DENNIS WINSON,
Trustee,
Plaintiffs-Appellants,
v.
CHARLES COUNTY, Maryland;  No. 01-2385
BOARD OF COUNTY COMMISSIONERS OF
CHARLES COUNTY, MARYLAND;
CHARLES COUNTY PLANNING
COMMISSION; CHARLES COUNTY
DEPARTMENT OF PLANNING AND
GROWTH MANAGEMENT,
Defendants-Appellees.

Appeal from the United States District Court
for the District of Maryland, at Greenbelt.
Deborah K. Chasanow, District Judge.
(CA-01-38-DKC)
Argued: June 3, 2003
Decided: July 10, 2003
Before WILKINSON and MOTZ, Circuit Judges,
and Robert R. BEEZER, Senior Circuit Judge of the United States
Court of Appeals for the Ninth Circuit, sitting by designation.
Affirmed by unpublished per curiam opinion.
2 BOLLECH v. CHARLES COUNTY
COUNSEL
ARGUED: Robert Henry Freilich, FREILICH, LEITNER & CAR-
LISLE, Kansas City, Missouri, for Appellants. Kurt James Fischer,
PIPER RUDNICK, L.L.P., Baltimore, Maryland, for Appellees. ON
BRIEF: Marta D. Harting, PIPER RUDNICK, L.L.P., Baltimore,
Maryland; Roger Lee Fink, County Attorney, COUNTY COMMIS-
SIONERS OF CHARLES COUNTY, La Plata, Maryland, for Appel-
lees.
Unpublished opinions are not binding precedent in this circuit. See
Local Rule 36(c).
OPINION
PER CURIAM:
Appellants Bollech, Haapala, Mesisinger and Winson (the "Trust-
ees") own land on which they planned to develop residential units. In
1989, the Trustees entered into a Development Agreement with
Charles County and the Cliffton Potomac Associates Ltd. Partner-
ships I-X (the "Newburg Station Owners") for the residential develop-
ment of land.
The Development Agreement’s purpose was to assure the timely
and orderly provision of water and sanitary sewer facilities to support
(1) the proposed residential development on the Trustees’ land (the
"Potomac Cliffs") and land owned by the Newburg Station Owners
(the "Newburg Station"), and (2) a portion of existing developments
on adjacent land. The Trustees and the Newburg Station Owners (col-
lectively, the "Property Owners") were allowed under the Develop-
ment Agreement to develop residential units in prescribed stages. In
return, the Property Owners agreed to construct, within a certain
amount of time, adequate public facilities (including upgrading,
repairing and expanding the existing sewer plant) to serve the pro-
posed residential development and a portion of the existing develop-
ment on adjacent property.
BOLLECH v. CHARLES COUNTY 3
In 1999, the Trustees submitted an application for a preliminary
plan for development. The County refused to accept the application
because amendments to the local zoning regulations prevented the
County from approving the application. The Trustees claim the
Development Agreement provides that the Trustees may develop the
residential units on their land irrespective of changes in County land
use regulations. In response, the County claims that the County is no
longer obligated under the Development Agreement to approve the
Trustees’ development applications for building permits.
The Trustees brought suit against the County for (1) impairment of
the obligation of contract in violation of the Contracts Clause, U.S.
Const. Art. I, § 10, cl. 1; and (2) breach of contract. The district court
entered an order granting the County’s motion for summary judgment
and denying the Trustees’ cross-motion for summary judgment. In a
memorandum opinion, the district court stated that the Development
Agreement no longer imposed an enforceable obligation on the
County because the Trustees did not ensure the provision of adequate
sewer and water facilities within the time period required by the
Development Agreement.
We AFFIRM the district court’s decision.
I
A district court’s grant of summary judgment is reviewed de novo.
Shaw v. Stroud, 13 F.3d 791, 798 (4th Cir. 1994). Summary judgment
is proper where there is no genuine issue of material fact. Fed. R. Civ.
P. 56(c); Anderson v. Liberty Lobby, Inc., 477 U.S. 242, 248 (1986).
We look at the undisputed facts and draw all reasonable inferences in
favor of the non-moving party. See Miller v. Leathers, 913 F.2d 1085,
1087 (4th Cir. 1990). When both parties file summary judgment
motions, as was done in this case, the district court rules on each
motion on an individual and separate basis. See Mingus Const., Inc.
v. United States, 812 F.2d 1387, 1391 (Fed. Cir. 1987) (stating courts
evaluate each party’s motion on its own merits, taking care in each
instance to draw all reasonable inferences against the party whose
motion is under consideration).
4 BOLLECH v. CHARLES COUNTY
II
The Contracts Clause states that "No State shall . . . pass any . . .
Law impairing the Obligation of Contracts." U.S. Const. Art. I, § 10,
cl. 1. In order to prove a violation of the Contracts Clause, a plaintiff
must first prove that there is an enforceable contract that the govern-
ment has impaired in some manner. See United States Trust Co. of
New York v. New Jersey, 431 U.S. 1, 17 (1977); Allied Structural
Steel Co. v. Spannaus, 438 U.S. 234, 244 (1978). If there is no
enforceable contract, there is no violation of the Contracts Clause. See
City of Charleston v. Public Service Com’n of West Virginia, 57 F.3d
385, 391 (4th Cir. 1995).
If there is an enforceable contractual obligation that has been
impaired, the plaintiff must prove that the impairment was substantial.
Baltimore Teachers Union v. Mayor and City Council of Baltimore,
6 F.3d 1012, 1014-15 (4th Cir. 1993). If the impairment is substantial,
the court then determine if the government action giving rise to the
substantial impairment was reasonable and necessary to protect an
important public interest. Id.A
The County claims there was no enforceable contractual obligation
to the Trustees at the time of the alleged impairment, 1999. Whether
there is an enforceable contractual obligation is a question of contract
interpretation. Maryland applies the principle of objective interpreta-
tion of contracts, which means that "where language employed in a
contract is unambiguous, a court shall give effect to its plain meaning
and there is no need for further construction by the court." Wells v.
Chevy Chase Bank, 768 A.2d 620, 630 (Md. 2001). "If a court prop-
erly determines that the contract is unambiguous on the dispositive
issue, it may then properly interpret the contract as a matter of law
and grant summary judgment because no interpretive facts are in gen-
uine issue." World-Wide Rights Ltd. v. Combe Inc., 955 F.2d 242, 245
(4th Cir. 1992) (citations omitted).
The language of the Development Agreement indicates (1) that the
Trustees had an obligation to expand and repair the existing sewage
treatment plant as a predicate for development of the proposed resi-
BOLLECH v. CHARLES COUNTY 5
dential units and (2) that the development of Potomac Cliffs was to
take place by a specified date in 1994. In return, the County promised,
among other things, to issue building permits upon application and
upon compliance with applicable regulations, in accordance with the
schedule set out in the Development Agreement.
The Development Agreement unambiguously imposes obligations
on the Trustees. For instance, the Development Agreement states in
§ 4.1:
The development of the property shall be supported by ade-
quate levels of public facilities, including sanitary sewer
facilities, water facilities, roadway facilities, stormwater
management facilities . . . . All public facilities necessary to
meet adequacy requirements shall be provided and initially
financed by the property owners. Owners . . . of the Poto-
mac Cliffs Tract generally are responsible for providing
public facilities to be situated on that tract.
Under § 4.2.3 of the Development Agreement, the Newburg Sta-
tion Owners had primary responsibility for the construction of sewer
and water facilities, but § 4.2.2(c) states that the Trustees had respon-
sibility for the construction of the facilities if the Newburg Station
Owners failed to construct the facilities and the Trustees still planned
to develop Potomac Cliffs.
In addition, § 3.2 of the Development Agreement requires the prop-
erty owners to develop their property in phases. Section 3.2(a) details
the schedule of construction phases in which Potomac Cliffs was to
be developed. Full development of Potomac Cliffs by the Trustees
was scheduled to be completed in 1994.
There is no factual dispute as to whether the Trustees developed
Potomac Cliffs by 1994; not only had the Trustees failed to develop
Potomac Cliffs by the specified date, but the Trustees failed to ensure
the development of adequate sewer and water facilities as required by
the Development Agreement in Section 4.2.6(a), which states, in part:
"Construction of the additional capacity [to the existing sewer facil-
ity] shall be pursued in a timely and reasonable manner, subject to
6 BOLLECH v. CHARLES COUNTY
timely approval by the appropriate authorities, so as to meet the
schedule for development set forth in Section 3.2 of this Agreement."
The Trustees’ failure to meet their obligation under the Develop-
ment Agreement released the County from the County’s obligations
under the Agreement. See Wilcom v. Wilcom, 502 A.2d 1076, 1081
(Md. 1986) (citing Restatement (Second) of Contracts § 237). A
material failure to perform by one party "prevents performance of [the
other party’s remaining duties] from becoming due, at least temporar-
ily, and it discharges those duties if it has not been cured during the
time in which performance can occur." Restatement (Second) of Con-
tracts § 237 cmt. a. The County was discharged from any enforceable
contractual obligation after the Trustees failed to perform within the
time period specified in the Development Agreement.
B
The Trustees make the following arguments: (1) the district court
erred in finding that the Development Agreement imposes a six-year
termination date; (2) the district court erred in not finding the Trustees
entitled to summary judgment because the County allegedly impaired
the obligations of the Development Agreement by enacting interven-
ing regulatory changes; (3) the district court erred because there are
material factual disputes and the district court erroneously considered
extrinsic evidence; (4) the district court improperly relied on affida-
vits which do not comply with Rule 56; and (5) res judicata bars the
County from arguing a defense of termination of contract based on
the Trustees’ breach of contract. None of the Trustees’ arguments
alter the conclusion that the County was released from its obligations
to the Trustees upon the Trustees’ failure to perform within the speci-
fied time.
1
The Trustees argue that the district court erred in finding that the
Development Agreement imposes a six-year termination date. The
Trustees point out that the Development Agreement expressly
required construction to extend over a period of ten years. In addition,
the Trustees argue that because the Development Agreement had no
express termination date, the Development Agreement is valid for a
BOLLECH v. CHARLES COUNTY 7
reasonable amount of time. See Goldman, Skeen & Wadler, P.A. v.
Cooper, Beckman & Tuerk, L.L.P., 712 A.2d 1, 9 (Md. App. 1998)
(stating that in the in the absence of a specific termination date, a con-
tact is valid for a reasonable period of time).
The district court did not find that the Development Agreement ter-
minated after six years. The district court recognized that the Trustees
were obligated to develop the residential units on their property
within the time specified in the Development Agreement under § 3.2.
Section 3.2(a) requires that the Potomac Cliffs area be developed by
August 12, 1994. In addition, § 4.2.6(a) requires the construction of
additional capacity at the existing sewer facility in time to meet the
schedule in Section 3.2. Section 4.2.6(a) also requires that the design
documents for the construction of additional capacity be submitted for
approval to the appropriate authorities no later than six months after
the effective date of the Agreement. The Trustees did not meet their
obligations within the specified time periods. The Trustees’ failure to
perform released the County from the County’s obligations after the
specified time periods elapsed. See Wilcom, 502 A.2d at 1081;
Restatement (Second) of Contracts § 237 cmt. a.
The reference to the ten year construction period does not extend
the period in which the Trustees can perform. Section 3.2 states that
"[t]he construction schedule shall extend over a period of a minimum
of ten (10) years, commencing, for the purpose of this Agreement,
August 12, 1988." This language applies to the development of both
Potomac Cliffs and Newbury Station as a unit. Section 3.2 lays out
the phases, within the ten year period, in which each property must
be developed. Section 3.2(a) lays out the plan for Potomac Cliffs,
which involves five phases, the last ending in August 1994. Section
3.2(b) lays out the plan for Newbury Station, which involves nine
phases, the last ending in August 1998.
The County’s obligation to the Trustees were discharged after
August 1994. The district court correctly held that there was no
enforceable contract obligation between the County and the Trustees
at the time the alleged violation occurred.
2
The Trustees argue that the district erred in not finding the Trustees
entitled to summary judgment because the County allegedly impaired
8 BOLLECH v. CHARLES COUNTY
the obligations of the Development Agreement by enacting regulatory
changes which precluded the Trustees from obtaining approval for its
preliminary plan in 1999. The lack of a contractual obligation in 1999
precludes this argument. See City of Charleston, 57 F.3d at 391("Only if there is a contract, which has been substantially impaired,
and there is no legitimate public purpose justifying the impairment,
is there a violation of the Contract Clause.") (emphasis added).
3
The Trustees claim that there are material facts in dispute and that
the district court erroneously considered extrinsic evidence. The
Trustees demonstrate that the district court’s memorandum opinion
relies primarily on the County’s facts in presenting the history and
context out of which the Development Agreement arose. The Trustees
do not demonstrate that the district court relied on a factual finding
where the fact was actually the subject of genuine dispute. In addi-
tion, the Trustees did not identify any extrinsic evidence actually used
by the district court in interpreting the contract. The district court’s
decision relied on the unambiguous terms of the contract to resolve
the legal question whether the County was bound by an enforceable
contractual obligation. The district court’s grant of summary judg-
ment was proper because no interpretive facts are in genuine issue.
World-Wide Rights Ltd., 955 F.2d at 245.
4
The Trustees argue that the County’s motion for summary judg-
ment lacked support because the County’s affidavits do not comply
with Fed. R. Civ. P. 56(e). Rule 56(e) states:
Supporting and opposing affidavits shall be made on per-
sonal knowledge, shall set forth such facts as would be
admissible in evidence, and shall show affirmatively that the
affiant is competent to testify to the matters stated therein.
. . . When a motion for summary judgment is made and sup-
ported as provided in this rule, an adverse party may not rest
upon the mere allegations or denials of the adverse party’s
pleading, but the adverse party’s response, by affidavits or
as otherwise provided in this rule, must set forth specific
BOLLECH v. CHARLES COUNTY 9
facts showing that there is a genuine issue for trial. If the
adverse party does not so respond, summary judgment, if
appropriate, shall be entered against the adverse party.
The affidavits cited by the district court were used to provide his-
tory and background; the affidavits were not used to interpret the
Development Agreement. The district court relied exclusively on the
terms of the Development Agreement in reaching its decision. We
need not decide whether the affidavits supplied by the County were
defective because the district court did not rely on facts contained in
the affidavits in reaching its legal conclusion. Rather, the court prop-
erly determined that the Development Agreement was unambiguous
on the dispositive issue. See World-Wide Rights Ltd., 955 F.2d at 245.
5
The Trustees claim that res judicata bars the County from arguing
a defense of termination of contract based on the Trustees’ breach of
contract. This argument was not raised before the district court and
is waived. Washington Metro. Area Transit Auth. v. Precision Small
Engines, 227 F.3d 224, 227-28 (4th Cir. 2000).
III
The district court held that there was no breach of contract for the
same reason there was no Contracts Clause violation: at the time of
the alleged violation, there was no enforceable contractual obligation
against the County. The above analysis validates the district court’s
decision.
IV
Summary judgment for the County was proper. Viewing the evi-
dence in the light most favorable to the Trustees, there was no viola-
tion of the Contracts Clause and there was no breach of contract
because the County was no longer under an enforceable contractual
obligation after 1994. None of the arguments raised by the Trustees
on appeal alter the above analysis.
10 BOLLECH v. CHARLES COUNTY
As summary judgment for the County was proper, the district court
properly denied the Trustees’ cross-motion for summary judgment.
We affirm (1) the district court’s grant of the County’s motion for
summary judgment and (2) the district court’s denial of the Trustees
cross-motion for summary judgment.
AFFIRMED