Carolina Quarries, Inc. v. Martin Marietta Materials, Inc.
| Decision Date | 10 May 2023 |
| Docket Number | 1:20CV1043 |
| Parties | CAROLINA QUARRIES, INC., Plaintiff, v. MARTIN MARIETTA MATERIALS, INC., Defendant. |
| Court | U.S. District Court — Middle District of North Carolina |
Plaintiff Carolina Quarries, Inc. brings this action for declaratory judgment, breach of implied covenant of good faith and fair dealing, and summary ejectment against Defendant Martin Marietta Materials, Inc. (ECF No. 28 ¶¶ 69-89.) Before the Court are cross-motions for summary judgment, (ECF Nos. 74 & 80), as well as Defendant's motion to seal its brief in support of its motion for summary judgment, (ECF No. 82). For the reasons that follow, Plaintiff's motion for partial summary judgment, (ECF No. 74), will be denied Defendant's motion for summary judgment, (ECF No. 80) will be granted; and Defendant's motion to seal, (ECF No 82), will be denied as moot.
Plaintiff Carolina Quarries, Inc. operates a granite quarry in Salisbury, North Carolina. (ECF No. 28 ¶¶ 11-12.) Plaintiff contracted to lease mineral rights, for thirty years, in a portion of that quarry totaling 150-acres (the “Property”) to Defendant Martin Marietta Materials, Inc.-a crushed stone, sand, and gravel supply company. (Id. ¶¶ 18, 23.) Defendant signed the Option and Lease Agreement (“Lease”) in 1998 and formally exercised its option in 2001. (Id. ¶¶ 23-29.)
The Lease provided that its purpose was to “grant all rights to [Defendant] for mining, quarrying, and removal” from the Property minerals, “together with the full and exclusive right, privilege and option . . . to construct, operate, or maintain mining itself, or to permit others to construct, operate or maintain” mining facilities and activities, “which in the sole discretion of [Defendant] are required for the processing or selling of crushed aggregate.” (ECF No. 28-1 at 3.) In the Lease, the parties agreed that “if [Defendant] commences its mining operation, then, in addition to operating its own pit, [Defendant] will use and process as much of [Plaintiff's] ‘waste rock' as [Defendant], in its sole discretion, deems feasible and practicable.” (Id. at 4.) The Lease required Defendant to pay an annual rental over the thirtyyear term. (Id.) Defendant was additionally required to pay royalties to Plaintiff on each ton of crushed aggregate it mined and sold; however, the parties agreed that “[t]here is no requirement that [Defendant] continuously conduct quarrying activity on the premises or that [Defendant] actually remove or sell stone, sand or gravel from the premises, it being the clear understanding of the parties that the minimum rental fairly compensates [Plaintiff] for the use of the premises.” (Id.)
Under the Lease, a “default” would occur if Defendant should “neglect or fail to pay the rent or other charges payable hereunder” when due and for a period of fifteen days after written notice from Plaintiff; or “vacate or abandon the Property for a period of time exceeding six (6) months.” (Id. at 7-8.) If Defendant defaulted, the Lease allowed Plaintiff to “immediately or at any time thereafter, and without demand or notice, enter into and upon the Property or any part thereof . . . and repossess the same . . . and expel [Defendant] . . . and upon entry, as aforesaid, this lease shall terminate.” (Id. at 9.)
Defendant paid the annual rental each year from 2001, but never commenced mining operations. (ECF No. 28 ¶ 47.)
In November 2019, the parties' representatives met in Salisbury to inspect the Property and discuss Defendant's intentions. (ECF No. 28 ¶ 52.) Defendant did not, according to Plaintiffs, follow up concerning their plans or commence mining operations. (Id. ¶ 57.)
In April 2020, Plaintiff wrote Defendant to announce that the Lease was terminated, claiming that Defendant had “abandoned the premises as it has failed to operate from and occupy them . . . since the execution of the Agreement.” (Id. ¶¶ 55-56.)
Plaintiff commenced this action on November 18, 2020. (ECF No. 1.) On September 3, 2021, this Court denied Defendant's motion to dismiss, noting that the construction of the “abandon or vacate” term in the Lease “preclude[d] dismissal on a motion for failure to state a claim.” (ECF No. 19 at 11.) Plaintiff subsequently filed an amended complaint. (ECF No. 28.)
Plaintiff s amended complaint contains three counts. (Id. ¶¶ 69-89.) Under Count I, Plaintiff seeks a declaratory judgment pursuant to the Declaratory Judgment Act, 28 U.S.C. § 2201, that: (1) Defendant is in default under the Lease; (2) Plaintiff may properly take possession of the Property and bar Defendant from the same; (3) the Lease is terminated; and (4) Defendant is liable for the minimum annual rental due for the balance of the thirty-year lease term. (Id. ¶¶ 72-75.) Under Count II, Plaintiff alleges that Defendant breached the implied covenant of good faith and fair dealing under North Carolina law by failing to exercise its discretion in a reasonable manner and in good faith. (Id. ¶¶ 78-79.) Under Count III, Plaintiff requests a judgment for damages and authorizing its immediate repossession of the Property and ejectment of Martin Marietta under North Carolina law. (Id. ¶ 89.)
Plaintiff now moves for partial summary judgment on Counts I and III, (ECF No. 74 at 1), and Defendant moves for summary judgment on all three counts, (ECF No. 80 at 1).
Summary judgment is appropriate when “the movant shows that there is no genuine dispute as to any material fact and the movant is entitled to judgment as a matter of law.” Fed.R.Civ.P. 56(a). “A dispute is genuine if a reasonable jury could return a verdict for the nonmoving party,” and “[a] fact is material if it ‘might affect the outcome of the suit under the governing law.'” Jacobs v. N.C. Admin. Off. of the Cts., 780 F.3d 562, 568 (4th Cir. 2015) (internal citations and quotations omitted). “[I]n deciding a motion for summary judgment, a district court is required to view the evidence in the light most favorable to the nonmovant” and to “draw all reasonable inferences in his favor.” Harris v. Pittman, 927 F.3d 266, 272 (4th Cir. 2019) (citing Jacobs, 780 F.3d at 568). A court “cannot weigh the evidence or make credibility determinations,” Jacobs, 780 F.3d at 569 (citations omitted), and thus must “usually” adopt “the [nonmovant's] version of the facts,” even if it seems unlikely that the moving party would prevail at trial, Witt v. W.Va. State Police, Troop 2, 633 F.3d 272, 276 (4th Cir. 2011) (quoting Scott v. Harris, 550 U.S. 372, 378 (2007)).
Where the nonmovant will bear the burden of proof at trial, the party seeking summary judgment bears the initial burden of “pointing out to the district court . . . that there is an absence of evidence to support the nonmoving party's case.” Celotex Corp. v. Catrett, 477 U.S. 317, 325 (1986). If the moving party carries this burden, then the burden shifts to the nonmoving party to point out “specific facts showing that there is a genuine issue for trial.” Matsushita Elec. Indus. Co. v. Zenith Radio Corp., 475 U.S. 574, 587 (1986). In so doing, “the nonmoving party must rely on more than conclusory allegations, mere speculation, the building of one inference upon another, or the mere existence of a scintilla of evidence.” Dash v. Mayweather, 731 F.3d 303, 311 (4th Cir. 2013). Instead, the nonmoving party must support its assertions by “citing to particular parts of . . . the record” or “showing that the materials cited do not establish the absence . . . of a genuine dispute.” Fed.R.Civ.P. 56(c)(1); see also Celotex, 477 U.S. at 324.
Where, as in this case, the Court has before it cross-motions for summary judgment, the Court reviews each motion separately to determine if either party is entitled to judgment as a matter of law. Rossignol v. Voorhaar, 316 F.3d 516, 523 (4th Cir. 2003).
As an initial matter, the Court must address whether Plaintiff's claims are barred by the statute of limitations. Defendant maintains that all three claims by Plaintiff are time-barred under North Carolina's three-year statute of limitations, and thus Defendant is entitled to judgment as a matter of law. (ECF Nos. 84 at 25-26; 91 at 6.) In response, Plaintiff maintains that “[t]he running of the applicable limitations period was tolled by the continuing wrong doctrine.”[1] (ECF No. 94 at 10.)
Under N.C. Gen. Stat. § 1-52(1), an action brought “[u]pon a contract, obligation or liability arising out of a contract, express or implied” must be brought “[w]ithin three years.” “The general rule for claims other than malpractice is that a cause of action accrues as soon as the right to institute and maintain a suit arises.” Williams v. Blue Cross Blue Shield of N.C. , 581 S.E.2d 415, 423 (N.C. 2003).
North Carolina courts, however, recognize the “continuing wrong” or “continuing violation” doctrine as an exception to the general rule. Id. That doctrine holds that “a statute of limitations does not begin to run until the violative act ceases.” Id. “In other words, ‘the applicable limitations period starts anew in the event that an allegedly unlawful act is repeated.'” Epcon Homestead LLC v. Town of Chapel Hill, 62 F.4th 882, 889 (4th Cir. 2023) (quoting Quality Built Homes, Inc. v. Town of Carthage, 813 S.E.2d 218, 226 (N.C. 2018)). “A continuing violation is occasioned by continual unlawful acts, not by continual ill effects from an original violation.” Williams, 581 S.E.2d at 423 (quoting Ward v. Caulk, 650 F.2d 1144, 1147 (9th Cir. 1981)). In determining whether a party suffers from a continuing violation, North Carolina courts will consider “[t]he particular policies of the statute of limitations in...
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