Amzura Enterprises v. Global Financial , 18 F. App'x 95 ( 2001 )

UNPUBLISHED
UNITED STATES COURT OF APPEALS
FOR THE FOURTH CIRCUIT
AMZURA ENTERPRISES, 
INCORPORATED, d/b/a Amzco/Surgical
Devices, U.S.A.,
Plaintiff-Appellee,
v.
JAVAID A. RATCHER, an individual;
AFFILIATED INDUSTRIES,
INCORPORATED; FRANK FRANCOIS, an
individual,
Defendants-Appellees,
 No. 97-2697
GLOBAL FINANCIAL CORPORATION,
Intervenor-Appellant,
and
STANLEY V. CAMPBELL; MARK
FOWLER; ROWE INCORPORATED;
ANDERSON FUNDING GROUP,
Defendants.

2 AMZURA ENTERPRISES, INC. v. RATCHER
AMZURA ENTERPRISES, 
INCORPORATED, d/b/a Amzco/Surgical
Devices, U.S.A.,
Plaintiff-Appellee,
v.
STANLEY V. CAMPBELL; ROWE
INCORPORATED,
Defendants-Appellants,
JAVAID A. RATCHER, an individual;
AFFILIATED INDUSTRIES,  No. 97-2698
INCORPORATED; FRANK FRANCOIS, an
individual,
Defendants-Appellees,
and
MARK FOWLER; ANDERSON FUNDING
GROUP,
Defendants,
GLOBAL FINANCIAL CORPORATION,
Intervenor-Defendant.

Appeals from the United States District Court
for the Eastern District of Virginia, at Alexandria.
Claude M. Hilton, Chief District Judge.
(CA-96-1601-A, CA-97-956-A)
Argued: October 27, 1999
Decided: September 7, 2001
Before LUTTIG, WILLIAMS, and KING, Circuit Judges.
Affirmed in part, reversed in part, and remanded by unpublished per
curiam opinion.
AMZURA ENTERPRISES, INC. v. RATCHER 3
COUNSEL
ARGUED: Timothy Brian Mills, PATTON BOGGS, L.L.P., Wash-
ington, D.C., for Appellant. Walter Elmer Diercks, RUBIN, WIN-
STON, DIERCKS, HARRIS & COOKE, L.L.P., Washington, D.C.,
for Appellees. ON BRIEF: William E. Slade, Carol L. Hoshall, PAT-
TON BOGGS, L.L.P., Washington, D.C., for Appellant. Frederick D.
Cooke, Jr., RUBIN, WINSTON, DIERCKS, HARRIS & COOKE,
L.L.P., Washington, D.C., for Appellees.
Unpublished opinions are not binding precedent in this circuit. See
Local Rule 36(c).
OPINION
PER CURIAM:
This appeal requires us to determine whether a notice of appeal
signed by a corporate officer on behalf of the corporation is defective;
whether the district court erred on the first day of trial by inviting and
granting the oral summary judgment motion of AMZURA Enter-
prises, Incorporated (AMZURA), doing business as AMZCO/Surgical
Devices, U.S.A. (AMZCO), on the state law claims of Rowe, Incor-
porated (Rowe), its president, Stanley V. Campbell (Campbell), and
Global Financial Corporation (Global); and whether, as a matter of
law and under the facts presented, consequential damages may not be
recovered. We conclude that although Campbell signed the notice of
appeal on behalf of Rowe, Rowe’s notice of appeal was not jurisdic-
tionally defective. We also conclude that the district court did not
commit reversible error in granting AMZCO’s oral motion for sum-
mary judgment as to Rowe, Campbell, and Global’s fraud claims with
less than ten-days notice. However, we remand Rowe, Campbell, and
Global’s other state law claims for further proceedings consistent with
this opinion because the record before us is unclear as to whether
there is a triable issue of fact as to those claims. Finally, we reverse
the district court’s conclusion that, as a matter of law, consequential
4 AMZURA ENTERPRISES, INC. v. RATCHER
damages may not be recovered for AMZCO’s breach of the financing
agreement.
I.
In February 1996, the United States Small Business Administration
(the Government) awarded a subcontract (the Army Contract) to
Rowe under which Rowe would lease twenty-nine medical vehicles
to the Army for a one-year term, with four one-year options to extend
the lease. The Army Contract called for Rowe to receive $310,808.08
for the first year of the lease and a total of $1,554,040.40 if the Army
exercised all four of its one-year options. In order to perform the
Army Contract — which required Rowe to purchase parts, vehicles,
and other equipment — Rowe sought financing from AMZCO. By a
letter agreement dated July 19, 1996 (the July 19 agreement) and an
amendment dated July 26, 1996 (the July 26 amendment), AMZCO
agreed to finance Rowe for "up to $1 million." (J.A. at 287, 290.) In
exchange, AMZCO received an assignment of revenues due Rowe
under the Army Contract, as well as a security interest in the vehicles,
to secure Rowe’s indebtedness to AMZCO. Under the agreement,
MashreqBank was designated to provide funds for AMZCO. The July
19 agreement was signed by Javaid Ratcher, AMZCO’s president, on
behalf of AMZCO and by Campbell on behalf of Rowe. Neither
Campbell nor Ratcher signed the agreement in his individual capacity.
Similarly, Campbell signed the July 26 amendment on behalf of
Rowe. As part of the financing arrangement, Rowe asked Frank Fran-
cois, president of Affiliated Industries, to coordinate AMZCO’s pur-
chase of ten of the medical vehicles on behalf of Rowe. AMZCO
titled these ten vehicles in its own name. After providing funding in
the amount of $470,696.56, AMZCO sought to impose additional
conditions on its financing agreement with Rowe before providing
further funding for the medical vehicles. Because of the lack of
financing, several creditors threatened to sue Rowe. At least one cred-
itor, Richmond Motor Company, did file suit against Rowe. Rowe
notified AMZCO of the pending suit, but AMZCO did not pay the
amounts due to Richmond Motor Company or other creditors.
On or about September 9, 1996, Rowe sought alternative financing
and engaged in a purchase agreement with Anderson Funding Group
(Anderson), under which Rowe conveyed all of its rights in the medi-
AMZURA ENTERPRISES, INC. v. RATCHER 5
1
cal vehicles to Anderson. Anderson then assigned all of its rights to
Global. Global agreed to provide the necessary financing, and Rowe
assigned Global the right to receive all of Rowe’s revenues under the
Army Contract. After Global began to finance Rowe, Rowe filed a
notice of release with the Government and MashreqBank advising
them to assign the proceeds of the Army Contract to Global, rather
than to AMZCO. Campbell spoke with Francois and Ratcher and
informed them of Rowe’s new arrangement with Global. Believing
that AMZCO had agreed to transfer title of the ten vehicles to Rowe
in exchange for repayment of the funds that AMZCO had already
financed, Global paid $470,696.56 to AMZCO on behalf of Rowe.
AMZCO deposited the money but refused to transfer title of the ten
vehicles. AMZCO claimed that it owned the vehicles because it had
purchased them.
On November 6, 1996, AMZCO filed suit in the Eastern District
of Virginia, asserting diversity jurisdiction and alleging that Campbell
and Rowe had breached their financing agreement. AMZCO asserted
claims of fraud, breach of contract, and intentional interference with
its business relationship with the Government and MashreqBank.
AMZCO also sought punitive damages. On December 9, 1996, coun-
sel for Campbell and Rowe filed an answer and counterclaim seeking
damages for breach of contract. Rowe and Campbell also requested
a declaratory judgment that Rowe owned the ten medical vehicles.
On May 2, 1997, the district court granted a motion by Campbell
and Rowe’s counsel to withdraw from the case, leaving Campbell and
Rowe to proceed pro se.2 On June 18, 1997, Global filed suit to pro-
1
Anderson and its president, Mark Fowler, were originally parties to
this suit, but both were dismissed from this action and are not parties on
appeal.
2
Although the district court considered and granted the motion by
Rowe and Campbell’s counsel to withdraw, we find nothing in the record
to suggest that the district court considered the issue of whether Rowe,
as a corporation, was capable of proceeding pro se. Moreover, there is
no evidence in the record that Campbell is a licensed attorney admitted
to practice in the Eastern District of Virginia or the Fourth Circuit. Nev-
ertheless, no issue was raised as to the effect on the district court’s judg-
ment of Rowe’s participation in the district court without counsel. On
remand Rowe may only proceed with licensed counsel.
6 AMZURA ENTERPRISES, INC. v. RATCHER
tect its interest in the ten medical vehicles, asserting claims of detinue
and unjust enrichment (against AMZCO and Ratcher), trover, unlaw-
ful conversion, fraud in the inducement and breach of contract
(against AMZCO, Ratcher, Francois, and Affiliated) (collectively,
Global’s state law claims). Global requested declaratory relief, as well
as compensatory and punitive damages. The district court granted
Global’s motion to consolidate its case with the pending suit between
AMZCO and Rowe and Campbell.
Global filed a motion for partial summary judgment against
AMZCO and Ratcher on its detinue and unjust enrichment counts,
and against AMZCO, Ratcher, Francois, and Affiliated on its tro-
ver/unlawful conversion counts. Global argued that there was no gen-
uine issue of material fact regarding its claim that AMZCO had no
right to retain title to the ten medical vehicles and that Rowe’s repay-
ment of the money discharged Rowe’s obligations to AMZCO. Rowe
and Campbell, acting pro se, filed a motion for summary judgment
against AMZCO on all counts of AMZCO’s complaint and in favor
of their own breach-of-contract counterclaim, arguing that AMZCO
breached its contract by failing to provide the full amount of financ-
ing. AMZCO did not file its own motion for summary judgment but
did submit memoranda of law, along with various attachments, exhib-
its, and affidavits, in opposition to the motions filed by Rowe, Camp-
bell, and Global.
After Rowe, Campbell, and Global filed their motions for summary
judgment, AMZCO filed a first amended complaint, which added a
constructive fraud claim against Rowe and Campbell. Rowe and
Campbell then filed an amended answer and counterclaims that
asserted counts of trover and unlawful conversion; fraud in induce-
ment and breach of contract to convey title; unjust enrichment; and
tortious interference with contracts and business relationships (collec-
tively, Rowe and Campbell’s state tort law claims) against AMZCO.
Campbell signed the amended answer and counterclaims "Individu-
ally and As President Of Rowe Incorporated." (J.A. at 127R.)3 On the
3
Rowe and Campbell’s motion for summary judgment and their
amended answer and counterclaims were apparently prepared by former
counsel before he withdrew from the case. We do not know whether
Campbell modified these documents prior to filing them.
AMZURA ENTERPRISES, INC. v. RATCHER 7
same day, Global responded to AMZCO’s amended complaint with
its own answer and also filed a motion to dismiss AMZCO’s fraud
and constructive fraud counts for failure to plead with particularity.
AMZCO did not file any summary judgment motions against Rowe,
Campbell, or Global.
The parties convened for trial as scheduled on September 8, 1997.
On the first day, the district court heard arguments on the previously
filed summary judgment motions, as well as Global’s new motion to
dismiss. The district court dismissed AMZCO’s fraud and construc-
tive fraud counts, and also granted partial summary judgment in favor
of Rowe, Campbell, and Global on the breach-of-contract issue. The
district court found that AMZCO breached its contract to provide
financing and that AMZCO was not entitled to any of the medical
vehicles. The district court ordered AMZCO to transfer title of the
vehicles to Global. The district court also concluded that Campbell
and Rowe could not recover consequential damages resulting from
AMZCO’s breach of contract because, as a matter of law, those dam-
ages were not foreseeable. It also held that AMZCO had no valid
claims against Rowe, Campbell, or Global.
At the hearing, the district court invited AMZCO to move orally
for summary judgment against Global, Campbell, and Rowe on their
state tort law claims. After brief argument, the district court granted
AMZCO’s oral motion for summary judgment. Neither Campbell nor
Rowe, who each were proceeding pro se, objected to the district
court’s action. Global, which was represented by counsel, also did not
object. On October 24, 1997, the district court issued its final written
order disposing of the entire case.4
On November 21, 1997, AMZCO filed its notice of appeal as to the
district court’s ruling on Rowe and Campbell’s breach-of-contract coun-
terclaim.5 On November 24, 1997, Global filed its notice of appeal
and on December 3, 1997, Campbell and Rowe filed a joint notice of
appeal, which was signed only by Campbell "Pro se and for Rowe,
4
The district court specifically mentioned only Rowe, Campbell, and
Global’s "fraud" claims in its final order.
5
AMZCO later voluntarily withdrew its appeal.
8 AMZURA ENTERPRISES, INC. v. RATCHER
Inc." (J.A. at 284.) On June 2, 1998, Global’s trial counsel entered an
appearance on behalf of Campbell and Rowe. Since that time, Glob-
al’s trial counsel has filed joint briefs on behalf of Rowe, Campbell,
and Global, and has represented them jointly in this appeal.
Rowe, Campbell, and Global raise several issues on appeal. First,
they argue that the district court erred by inviting and granting
AMZCO’s oral summary judgment motion against their state tort law
claims because the district court did not give them adequate notice or
an opportunity to respond. Second, Rowe and Campbell contend that
the district court erred in concluding, as a matter of law, that Rowe
and Campbell could not recover consequential damages for
AMZCO’s breach of contract because, they argue, foreseeability is a
question of fact for the jury.
At oral argument, AMZCO questioned for the first time whether
we lack jurisdiction to hear Rowe’s appeal because licensed counsel
did not sign its notice of appeal. At our request, the parties filed sup-
plemental briefs on this issue. In conjunction with its supplemental
brief, Rowe also filed a motion for leave to file its notice of appeal
out of time. We must address questions of subject matter jurisdiction
first "‘because they concern the court’s very power to hear the case.’"
Owens-Illinois, Inc. v. Meade, 186 F.3d 435, 442 n.4 (4th Cir. 1999)
(quoting 2 James Wm. Moore et al., Moore’s Federal Practice
§ 12.30[1] (3d ed. 1998)). Moreover, "the absence of jurisdiction may
be raised at any time during the case, and may be based on the court’s
review of the evidence." Lovern v. Edwards, 190 F.3d 648, 654 (4th
Cir. 1999). Therefore, we begin by considering whether we have
jurisdiction to hear Rowe’s appeal.
II.
AMZCO argues that the notice of appeal, signed by a pro se liti-
gant on behalf of the corporation for which he is president rather than
by licensed counsel, is invalid to bring the corporation’s appeal within
our jurisdiction. Reviewing this question of subject matter jurisdiction
de novo, see Tillman v. Resolution Trust Corp., 37 F.3d 1032, 1034
(4th Cir. 1994) (reviewing de novo a dismissal based upon lack of
subject matter jurisdiction), we conclude that we have jurisdiction
over Rowe’s timely noted appeal because although Rowe’s original
AMZURA ENTERPRISES, INC. v. RATCHER 9
notice of appeal was technically defective for lack of a proper signa-
ture, Rowe remedied that defect by filing a corrected notice of appeal.
See Becker v. Montgomery, No. 00-6374, 2001 WL 567709 (U.S.
May 29, 2001) (stating that although Becker’s notice of appeal was
defective because it lacked a proper signature, the Court of Appeals
for the Sixth Circuit erred in refusing to accept Becker’s corrected
notice of appeal).
In Becker, the Supreme Court addressed the question of whether,
"[w]hen a party files a timely notice of appeal in district court, . . .
the failure to sign the notice of appeal require[s] the court of appeals
to dismiss the appeal." Id. at *3 (internal quotation marks omitted).
Becker, a pro se inmate, had timely filed a notice of appeal in which
he had typewritten, but did not hand sign, his own name. Id. The
Court of Appeals for the Sixth Circuit dismissed Becker’s appeal on
the ground that Becker’s failure to sign his notice of appeal was juris-
dictional "and therefore not curable outside the time allowed to file
the notice." Id. The Supreme Court agreed that Becker’s notice of
appeal was defective due to the lack of his signature, but it disagreed
with the Sixth Circuit’s conclusion that Becker could not cure the
defect by filing a corrected notice of appeal after expiration of the
appeal period. Id. at *5-6.
The Court reasoned that Federal Rule of Civil Procedure 11 gov-
erned the signature requirement for the notice of appeal.6 Federal Rule
of Civil Procedure 11 provides, in pertinent part,
(a) Signature. Every pleading, written motion, and other
paper shall be signed by at least one attorney of record in
the attorney’s individual name, or, if the party is not repre-
sented by an attorney, shall be signed by the party. Each
paper shall state the signer’s address and telephone number,
if any. Except when otherwise specifically provided by rule
6
In Covington v. Allsbrook, 636 F.2d 63 (4th Cir. 1980), we concluded
that Federal Rule of Civil Procedure 11 does not apply to notices of
appeal. See id. at 64 n.2. To the extent that our decision in Covington is
inconsistent with the Supreme Court’s decision in Becker v. Montgom-
ery, No. 00-6374, 2001 WL 567709 (May 29, 2001), Becker, of course,
controls.
10 AMZURA ENTERPRISES, INC. v. RATCHER
or statute, pleadings need not be verified or accompanied by
affidavit. An unsigned paper shall be stricken unless omis-
sion of the signature is corrected promptly after being called
to the attention of the attorney or party.
Fed. R. Civ. P. 11(a). The Court noted that although Becker typed his
name and although the Civil Rules now recognize certain technologi-
cal advances, such as electronic filing, "[a]s Rule 11(a) is now
framed, we read the requirement of a signature to indicate, as a signa-
ture requirement commonly does, and as it did in John Hancock’s
day, a name handwritten (or a mark handplaced)." Id. at *5.
The Court stated, however, that "[a]s plainly as Civil Rule 11(a)
requires a signature on filed papers, . . . so the rule goes on to provide
in its final sentence that ‘omission of the signature’ may be ‘corrected
promptly after being called to the attention of the attorney or party.’"
Id. at *5. Consequently, because Becker offered a corrected notice of
appeal containing his signature, the Court ruled that his appeal should
not have been dismissed: "We rule simply and only that Becker’s
lapse was curable as Civil Rule 11(a) prescribes; his initial omission
was not a "jurisdictional" impediment to pursuit of his appeal." Id. at
*6. In sum, the Court held that
The governing Federal Rules direct that the notice of appeal,
like other papers filed in district court, shall be signed by
counsel or, if the party is unrepresented, by the party him-
self. But if the notice is timely filed and adequate in other
respects, jurisdiction will vest in the court of appeals, where
the case may proceed so long as the appellant promptly sup-
plies the signature once the omission is called to his atten-
tion.
Id. at *3.
In the present case, Rowe timely filed a notice of appeal that was
signed only by Campbell, a non-lawyer, on Rowe’s behalf and not by
licensed counsel. After AMZCO questioned the validity of Rowe’s
notice of appeal at oral argument on the basis that Rowe, as a corpora-
tion, could not sign its own notice of appeal and that Campbell, as a
non-lawyer, was not authorized to sign the notice on Rowe’s behalf,
AMZURA ENTERPRISES, INC. v. RATCHER 11
Rowe promptly submitted a corrected notice of appeal signed by coun-
sel.7 Assuming, without deciding, that Campbell’s signature on
Rowe’s initial notice of appeal was insufficient to satisfy Federal Rule
of Civil Procedure 11’s signature requirement, Becker mandates the
conclusion that we nevertheless have jurisdiction over Rowe’s appeal
because Rowe promptly filed a corrected notice of appeal. See
Becker, 2001 WL at *8 (concluding that the court of appeals erred in
refusing to accept Becker’s corrected notice of appeal).
III.
Having concluded that we have jurisdiction to consider Rowe’s
appeal, we next address Rowe, Campbell, and Global’s claims. Rowe,
Campbell, and Global first argue that the district court erred in invit-
ing and granting AMZCO’s oral motion for summary judgment on
their state law claims without giving them ten days’ notice and any
opportunity to respond. They also argue that the district court erred
in concluding that there is no triable issue of fact as to their state law
claims. With regard to Rowe, Campbell, and Global’s assertion of
procedural error, we conclude that the district court did not commit
reversible error in failing to give ten-days notice before granting
AMZCO’s oral motion for summary judgment. With regard to the
substance of Rowe, Campbell, and Global’s state law claims, we con-
clude that Rowe, Campbell and Global failed to raise a triable issue
of fact as to their fraud claims, and, therefore, we affirm the district
court’s grant of summary judgment as to those claims. Because the
record before us is unclear as to whether there is a triable issue of fact
as to Rowe, Campbell, and Global’s other state law claims, however,
we reverse and remand the district court’s judgment for further pro-
ceedings consistent with this opinion. Finally, we conclude that the
7
We heard oral argument on October 27, 1999, and requested supple-
mental briefing on the issue of the validity of Rowe’s notice of appeal.
On November 23, 1999, within the time allotted by us to file supplemen-
tal briefing, Rowe filed a motion for leave to file an amended notice of
appeal, with an attached amended notice of appeal signed by counsel.
We grant Rowe’s motion and accept Rowe’s amended notice of appeal.
We note that licensed counsel filed Rowe’s briefs and orally argued
before us. At all times, AMZCO and this Court were well aware that
both Campbell and Rowe were on appeal.
12 AMZURA ENTERPRISES, INC. v. RATCHER
district court erred in ruling as a matter of law that consequential
damages are not recoverable for AMZCO’s breach of the financing
agreement, and we reverse and remand the district court’s judgment
on that issue for further proceedings consistent with this opinion.
A.
We turn first to Rowe, Campbell, and Global’s claim of procedural
error — that the district court erred by not affording them ten-days
notice before granting AMZCO’s oral motion for summary judgment.
Federal Rule of Civil Procedure 56 requires a party to serve a sum-
mary judgment motion "at least 10 days before the time fixed for the
hearing." Fed. R. Civ. P. 56(c). Rule 56, however, "does not provide
for situations in which . . . the court desires to enter summary judg-
ment sua sponte, or in which the nonmoving party, rather than the
movant, is entitled to summary judgment, but no cross-motion has
been made." 10A Charles Alan Wright et al., Federal Practice & Pro-
cedure § 2720 (3d ed. 1998). Although Rule 56 governs summary
judgment motions made by the parties, it is clear that a district court
may enter summary judgment sua sponte and that the principles of
Rule 56 apply to the latter situation. See United States Dev. Corp. v.
Peoples Fed. Sav. & Loan Ass’n, 873 F.2d 731, 735 (4th Cir. 1989).
Thus, when the district court considers summary judgment sua
sponte, it generally must give the nonmoving party sufficient notice
and an opportunity to respond. See id. In United States Development,
we addressed whether the district court erred by granting summary
judgment sua sponte against the United States Development Corpora-
tion (USDC) on its newly added contract claim without giving USDC
any notice or an opportunity to be heard. See id. In concluding that
the district court erred, we noted that the district court’s power to
grant summary judgment sua sponte
is contingent on giving the losing party notice that it must
come forward and defend its claim. While this notice need
not necessarily be a formal document, it should provide the
full ten days called for by Fed. R. Civ. P. 56(c). The notice
must be sufficient to provide the losing party with an ade-
quate opportunity to demonstrate a genuine issue of material
fact. And it must, in view of the procedural, legal, and fac-
tual complexities of the case, allow the party a reasonable
AMZURA ENTERPRISES, INC. v. RATCHER 13
opportunity to present all material pertinent to the claims
under consideration.
Id. (internal citations omitted).8
Assuming that the ten-days-notice rule of United States Develop-
ment applies to this case, we conclude that the district court’s failure
to give Rowe, Campbell, and Global ten-days notice was at most
harmless error.9 See Fender v. General Elec. Co., 380 F.2d 150, 152
8
We recognize that the ten-days-notice rule might not apply where the
district court is already considering a properly noticed motion for sum-
mary judgment from the moving party and decides to enter summary
judgment sua sponte in favor of the nonmovant on an issue identical to
that which it is already considering, even absent a cross-motion, because
"[t]he threat of procedural prejudice is greatly diminished if the court’s
sua sponte determination is based on issues identical to those raised by
the moving party." Bridgeway Corp. v. Citibank, 201 F.3d 134, 140 (2d
Cir. 2000) (internal quotation marks and alteration omitted); see Exxon
Corp. v. St. Paul Fire & Marine Ins. Co., 129 F.3d 781, 786 (5th Cir.
1997) (noting that the district court, in essence, treated Exxon’s opposi-
tion to St. Paul’s motion for summary judgment as a cross-motion for
summary judgment: "That Exxon did not file a proper motion for sum-
mary judgment does not preclude the district court in the instant action
from granting summary judgment in its favor."). But see Massey v. Con-
gress Life Ins. Co., 116 F.3d 1414, 1417 (11th Cir. 1997) (stating that
"[t]he notice provisions retain their mandatory character even when the
district court contemplates awarding summary judgment sua sponte
against a party that itself had moved for summary judgment").
In the present case, Rowe, Campbell, and Global moved for summary
judgment as to several of their own claims, as well as AMZCO’s claims,
but they did not move for summary judgment as to their own fraud
claims. As a result, the same claims were not at issue in AMZCO’s oral
motion for summary judgment and Rowe, Campbell, and Global’s
motions for summary judgment. For that reason, we need not address
whether a district court may, in some circumstances, grant summary
judgment sua sponte without notice in favor of a nonmovant where the
moving party has filed a motion for summary judgment on an identical
issue.
9
This reasoning also applies to Rowe, Campbell, and Global’s argu-
ment that the district court’s grant of AMZCO’s oral motion for sum-
mary judgment contravened Eastern District of Virginia Local R. 56(A)
and the scheduling order entered in this case on July 18, 1997.
14 AMZURA ENTERPRISES, INC. v. RATCHER
(4th Cir. 1967) (concluding that district court’s consideration of sum-
mary judgment before counter-affidavits were due was harmless error
because, among other reasons, there was "no material surprise," and
Fender refused to present evidence or affidavit to contradict General
Electric’s proof); see also Powell v. United States, 849 F.2d 1576,
1580 (5th Cir. 1988) (applying a harmless-error analysis to a district
court’s grant of summary judgment sua sponte without ten-days
notice); Harrington v. Vandalia-Butler Bd. of Educ., 649 F.2d 434,
436-37 (6th Cir. 1981) (same). In Oppenheimer v. Morton Hotel
Corp., 324 F.2d 766, 767-68 (6th Cir. 1963) (per curiam), cited favor-
ably by Fender, the Sixth Circuit concluded that the district court’s
grant of summary judgment without giving ten days’ notice was not
reversible error on the grounds that "the trial judge asked counsel if
he had any further evidence to submit and he replied in the negative,"
id. at 767-68, that "[t]here is no claim now on this appeal that counsel
had further evidence to submit," id. at 768, and that "it would be a
useless procedure to reverse the District Court because it did not
allow ten days to elapse from the time the motion was filed until it
was heard," id. In the present case, just as in Oppenheimer, the district
court asked Rowe, Campbell, and Global if they had any additional
arguments or issues to raise in the case, and they did not object or
request additional time to offer further evidence or argument. On
appeal, Rowe, Campbell, and Global have not pointed to any addi-
tional evidence, beyond conclusory allegations, that they might have
offered as to their fraud claims had the district court given them more
time to respond.
The proceedings leading up to the district court’s grant of
AMZCO’s motion for summary judgment further support our conclu-
sion that the district court’s failure to give Rowe, Campbell, and
Global ten-days notice was at most harmless error. First, discovery
was complete, Rowe, Campbell, and Global had filed several plead-
ings, and the parties had filed timely motions to dismiss and for sum-
mary judgment. Second, the parties were convened for trial when the
district court invited AMZCO to move for summary judgment on
Rowe, Campbell, and Global’s fraud claims, and Rowe, Campbell,
and Global should have been well-prepared to put forth a triable issue
of fact in response to an oral motion for summary judgment. Third,
the district court reminded the parties that it had previously expressed
concern about the merits of Rowe, Campbell, and Global’s fraud
AMZURA ENTERPRISES, INC. v. RATCHER 15
claims. (See J.A. at 242-43 ("Now, we have got some other fraud alle-
gations in this case that I have got some question about, as I indicated
to you all when we talked informally. I don’t have any motion from
you-all in regard to some of these fraud claims, but I think we need
to deal with them as well.").) Rowe, Campbell, and Global, therefore,
should not have been surprised by the district court’s action. Under
these circumstances, the district court’s failure to give Rowe, Camp-
bell, and Global ten days’ notice does not warrant reversing the dis-
trict court’s grant of AMZCO’s oral motion for summary judgment.10
Cf. Portsmouth Square, Inc. v. Shareholders Protective Committee,
770 F.2d 866, 869-70 (9th Cir. 1985) (concluding that the district
court did not err in granting summary judgment sua sponte to defen-
dant without giving ten-days notice to plaintiff where plaintiff was on
notice that it might have to defend the adequacy of its claim and had
a full opportunity to develop the facts in support of its case and to
present its legal theory and facts supporting that theory to the district
court).11
10
We also note that Rowe, Campbell, and Global each failed to object
to the district court’s expedited grant of summary judgment. As a result,
they waived their procedural challenges to the district court’s expedited
grant of summary judgment absent a showing of plain error, which is
"error committed [that] is so obvious and substantial that failure to notice
and correct it would affect the fairness, integrity or public reputation of
judicial proceedings." United States v. Fant, 974 F.2d 559, 565 (4th Cir.
1992) (internal quotation marks omitted); see Oberg v. Allied Van Lines,
Inc., 11 F.3d 679, 684 (7th Cir. 1993) (stating that Allied waived its right
to appeal the district court’s noncompliance with the ten-days-notice rule
because it failed to object before the trial court); Trustees of Sabine Area
Carpenters’ Health & Welfare Fund v. Don Lightfoot Home Builder,
Inc., 704 F.2d 822 (5th Cir. 1983) (same). We have no difficulty con-
cluding that even if the district court’s invitation and grant of AMZCO’s
oral motion for summary judgment without 10-days notice was not harm-
less error, it was certainly not plain error.
11
Rowe and Campbell also argue that because they were pro se liti-
gants, the district court erred in failing to give them notice pursuant to
Roseboro v. Garrison, 528 F.2d 309 (4th Cir. 1975) (per curiam), prior
to granting AMZCO’s motion for summary judgment. We note, how-
ever, that we are unaware of any published decisions in our Circuit
applying Roseboro outside of the prisoner context. See, e.g., Altizer v.
Deeds, 191 F.3d 540 (4th Cir. 1999) (applying Roseboro in the prison
16 AMZURA ENTERPRISES, INC. v. RATCHER
B.
Having concluded that the district court did not commit reversible
procedural error in considering AMZCO’s oral motion for summary
judgment, we now turn to the substance of Rowe, Campbell, and
Global’s state law claims upon which the district court granted sum-
mary judgment to AMZCO. Summary judgment is appropriate if the
pleadings, depositions, answers to interrogatories, and admissions on
file, together with the affidavits, if any, demonstrate that there is no
genuine issue of material fact. See Anderson v. Liberty Lobby, Inc.,
477 U.S. 242, 247 (1986). A dispute of material fact "is ‘genuine’ . . .
if the evidence is such that a reasonable jury could return a verdict for
the nonmoving party." Id. at 248. "We review a grant of summary
judgment de novo, applying the same standard as the district court."
Baber v. Hospital Corp. of America, 977 F.2d 872, 874 (4th Cir.
1992). In doing so, we view all facts and reasonable inferences there-
from in the light most favorable to the nonmoving party. See Mat-
sushita Elec. Indus. Co. v. Zenith Radio Corp., 475 U.S. 574, 587-88
(1986).
1.
Rowe, Campbell, and Global argue that the district court erred in
concluding that there is no triable issue of fact as to their fraud claims.
Rowe, Campbell, and Global’s fraud claims were predicated upon
AMZCO’s failure to return title to the medical vehicles after Rowe
(through Global) sent AMZCO a check to repay AMZCO for its prior
funding.12 (See J.A. at 127N (alleging that "there was a separate oral
contract between Rowe and Campbell and [AMZCO] that upon
repayment by Rowe and Campbell to [AMZCO] of the money loaned,
inmate context), cert. denied, 119 S. Ct. 1121 (1999); Taylor v. McDuf-
fie, 155 F.3d 479 (4th Cir. 1998) (same); Norman v. Taylor, 25 F.3d
1259 (4th Cir. 1994) (en banc) (same). In any case, for the same reasons
as discussed above, even if we assume that the district court erred in fail-
ing to give Rowe and Campbell Roseboro warnings, such error was, at
most, harmless.
12
At the hearing, Global characterized its fraud claim as "derivative"
of Rowe and Campbell’s fraud claims. (J.A. at 250.)
AMZURA ENTERPRISES, INC. v. RATCHER 17
[AMZCO] would return the title documents to Rowe and Campbell
free and clear of any encumbrances").) The district court, in granting
summary judgment as to those claims, reasoned that "any allegations
about the failure to return title, that is simply a breach of contract mat-
ter. I have already found as a matter of summary judgment that they
did in fact breach the contract, but I don’t find anywhere in the evi-
dence any evidence of fraud in that connection." (J.A. at 248.)
To recover for fraud against AMZCO, Rowe, Campbell, and
Global must prove by clear and convincing evidence the following
elements: (1) a false representation; (2) of a material fact; (3) made
intentionally and knowingly; (4) with intent to mislead; (5) reliance
by the party misled; and (6) resulting damage. Hitachi Credit America
Corp. v. Signet Bank, 166 F.3d 614, 628 (4th Cir. 1999) (applying
Virginia law). "In determining whether a cause of action sounds in
contract or tort, the source of the duty violated must be ascertained."
Richmond Metro. Auth. v. McDevitt Street Bovis, Inc., 507 S.E.2d
344, 347 (Va. 1998). Although a party can, under some circum-
stances, establish both a tortious breach of duty and a breach of a con-
tract duty, "‘the duty tortiously or negligently breached must be a
common law duty, not one existing between the parties solely by vir-
tue of the contract.’" Id. (quoting Foreign Mission Bd. v. Wade, 409
S.E.2d 144, 148 (Va. 1991)).
After carefully reviewing the record, we agree with the district
court that Rowe, Campbell, and Global have failed to raise a triable
issue of fact that their claims are anything more than an "‘attempt to
dress up a contract claim in a fraud suit of clothes.’" City of Richmond
v. Madison Management Group, Inc., 918 F.2d 438, 447 (4th Cir.
1990) (quoting Triangle Underwriters, Inc. v. Honeywell, Inc., 604
F.2d 737, 747 (2d Cir. 1979)). Their fraud claims arise from a pur-
ported conversation between AMZCO and Rowe, during which
AMZCO allegedly induced Rowe to repay AMZCO with Global’s
money under the false promise that AMZCO would return title to the
medical vehicles for the benefit of Global. Their most direct evidence
on these claims is Campbell’s affidavit, which states simply that
AMZCO "told me that [it] would return the original title documents
. . . as soon as I paid [it] back the money it had provided." (J.A. at
298.) Campbell’s affidavit, at best, shows that AMZCO made an oral
contract that AMZCO subsequently breached. This act, by itself, is
18 AMZURA ENTERPRISES, INC. v. RATCHER
nothing more than a breach of contract. Rowe, Campbell, and Global
have not pointed to any evidence in the record, nor can we find any,
to suggest that AMZCO’s duty to return title to Rowe arose from any-
thing other than a contractual duty, and the district court has ruled in
favor of Rowe and Campbell on their breach of contract counterclaim
and required AMZCO to return title to the medical vehicles. Accord-
ingly, we affirm the district court’s grant of summary judgment as to
Rowe, Campbell, and Global’s fraud claims.
2.
We next address whether the district court erred in granting sum-
mary judgment as to Rowe, Campbell, and Global’s other state law
claims. Because the record before us is unclear, we cannot determine
whether the district court erred in determining that summary judg-
ment is appropriate as to those state law claims. We, therefore,
reverse and remand those claims for further proceedings consistent
with this opinion.
The district court, both in its statements at the summary judgment
hearing and in its written order, specifically mentioned only Rowe,
Campbell, and Global’s "fraud" claims when it disposed of the entire
case, even though Rowe, Campbell, and Global, between the three of
them, had asserted claims for unjust enrichment, detinue, trover,
unlawful conversion, and tortious interference with contract, as well
as fraud. Although the district court issued a written order memorial-
izing its oral conclusions from the hearing, it did not issue a written
memorandum opinion. It is unclear to us whether, and upon what
rationale, the district court summarily rejected all of Rowe, Campbell,
and Global’s other state law claims. The district court’s written order
does not in any way clarify the district court’s rationale, nor does it
explain whether the disposition of the "fraud" claims encompassed all
of Rowe, Campbell, and Global’s other state law claims. No party
points to any reference in the record where either the district court or
the parties discussed the other claims at the hearing. Given the lack
of clarity in the record, and because the district court is in the best
position to amplify its conclusions, we believe that the best course is
to remand Rowe, Campbell, and Global’s remaining state law claims
for further proceedings consistent with this opinion.
AMZURA ENTERPRISES, INC. v. RATCHER 19
3.
Finally, because this issue will likely surface on remand, we
address Rowe’s argument that we should reverse the district court’s
grant of summary judgment in favor of AMZCO as to Rowe’s request
for consequential damages because, Rowe contends, under Virginia
law, foreseeability is a question of fact for the jury. On the record
before us, we cannot agree with the district court that, as a matter of
law, Rowe is not entitled to recover consequential damages resulting
from AMZCO’s breach of the financing agreement. We, therefore,
reverse the district court’s grant of summary judgment on Rowe’s
request for consequential damages and remand for further proceed-
ings, contingent on Rowe acquiring counsel to proceed.13
13
Campbell, like Rowe, also argues that he should receive consequen-
tial damages resulting from AMZCO’s breach of contract. The district
court did not address whether Campbell had standing to pursue his
claims, nor was this issue raised by any of the parties. However, standing
is a jurisdictional issue that we may raise at any time. See Juidice v. Vail,
430 U.S. 327, 331 (1977). On remand, the district court should consider
whether Campbell has standing to recover under the financing contract
or to pursue his state law counterclaims.
We note that under Virginia law, neither a shareholder nor an officer
has standing to recover for injuries to the corporation. See Landmark
Communications, Inc. v. Macione, 334 S.E.2d 587, 589 (Va. 1985) ("[A]
corporation, as owner and operator of a business, is itself the only person
entitled to recover for injuries to its business, profits, or property.");
Keepe v. Shell Oil Co., 260 S.E.2d 722, 724 (Va. 1979) ("The Keepes
argue that they have legal standing because, as stockholders of the corpo-
ration, they are actual owners of the business and all its assets . . . . We
reject this argument. The corporation is a legal person, separate and dis-
tinct from the persons who own it . . . ."); see also Semida v. Rice, 863
F.2d 1156, 1161 (4th Cir. 1988) (applying Virginia law to hold that an
individual lacked standing to assert a tortious interference with contract
claim that asserted interference with his corporation’s contract); Mullins
v. First Nat’l Exchange Bank, 275 F. Supp. 712, 721 (W.D. Va. 1967)
(noting, in a tort action under Virginia law, that "[t]he rule is that an offi-
cer or a shareholder of a corporation, even if he is the sole shareholder,
has no personal or individual right of action against third parties for a
wrong or injury inflicted by those third parties upon the corporation").
20 AMZURA ENTERPRISES, INC. v. RATCHER
We recognize that under Virginia law, the foreseeability of conse-
quential damages is generally a question for the jury. See Richmond
Medical Supply Co. v. Clifton, 369 S.E.2d 407, 409 (Va. 1988)
("Whether claimed damages are direct or consequential is a question
of law for the trial court. Whether special circumstances were within
the contemplation of the parties so as to justify the recovery of conse-
quential damages is a question of fact for the jury."). "Consequential
damages are those which arise from the intervention of ‘special cir-
cumstances’ not ordinarily predictable . . . . If damages are deter-
mined to be consequential, they are compensable only if it is
determined that the special circumstances were within the ‘contem-
plation’ of both contracting parties." Roanoke Hosp. Ass’n v. Doyle
& Russell, Inc., 214 S.E.2d 155, 160 (Va. 1975). "‘[C]ontemplation’
includes what was actually foreseen and what was reasonably foresee-
able. ‘If there are special circumstances, it is not even necessary that
the defendant should have known them; it is enough that a reasonable
man in his position would have known them.’" Id. at 160 n.4 (quoting
5 A. Corbin, Contracts § 1010(79) (1964)) (emphasis in original). In
general, "contemplation must exist at the time the contract was exe-
cuted." Id. at 160.
In the present case, the district court summarily rejected Rowe’s
request for consequential damages resulting from AMZCO’s breach
In the present case, we cannot determine from the undeveloped facts
in the record whether Campbell has standing to pursue his claims. On the
one hand, the contract between Rowe and AMZCO, in a single sentence,
lists Campbell as a "borrower" under the contract. Likewise, the July 26
amendment purports to obligate Campbell to assign his proceeds under
the Army Contract to AMZCO. Yet, Campbell signed the contract only
in his capacity as Rowe’s president and not in his individual capacity.
Moreover, Rowe and Campbell’s amended answer and counterclaims
deny "that Campbell acted, at any time, in his individual capacity." (J.A.
at 127C.) Finally, Campbell and Rowe’s counsel, when specifically
asked at oral argument about the basis of Campbell’s individual claims,
stated that Campbell’s claims are only representational in nature in his
capacity as an officer of the company on behalf of Rowe, and that Camp-
bell does not have any individual claims against AMZCO that are sepa-
rate and distinct from Rowe’s claims.
AMZURA ENTERPRISES, INC. v. RATCHER 21
of the financing agreement, concluding as a matter of law that the cir-
cumstances — the Army’s termination of the contract and Rowe’s
subsequent financial collapse — were not foreseeable.14 AMZCO
does not dispute that foreseeability is generally a question of fact for
the jury, but it argues that the district court did not err because Rowe
"failed to meet the legal standard required to present a question of fact
to the jury as to whether the ‘special circumstances’ that produced the
damages were within the contemplation of the parties and therefore,
compensable." (Appellee’s Br. at 20.) In support of this argument,
AMZCO relies upon NAJLA Assocs., Inc. v. William L. Griffith &
Co., 480 S.E.2d 492 (Va. 1997). In that case, Griffith was a general
contractor for NAJLA for a project to construct a shopping center. See
id. at 493. After Griffith and its bonding company became concerned
that NAJLA intended to finance the project without a loan from any
financial institution, Griffith and NAJLA executed an escrow agree-
ment that created an identifiable source of money to secure NAJLA’s
payment obligations from which Griffith could obtain payment if
NAJLA failed to pay in a timely manner. See id. After construction
was nearly completed and NAJLA refused to pay Griffith, Griffith
received payment from the escrow account. See id. The escrow agree-
ment required NAJLA promptly to reimburse the escrow account for
any payments made to Griffith from that account, but NAJLA refused
to do so. See id. Griffith subsequently filed suit against NAJLA seek-
ing consequential damages arising from NAJLA’s breach of the
escrow agreement. See id. Griffith alleged, among other things, that
as a result of its dispute with NAJLA, its bonding company reduced
its "work program" (the total volume of bonded business that a bond-
ing company permits a contractor to perform), that certain subcontrac-
tors were no longer willing to work with Griffith because Griffith had
been delinquent in its payments on the project, and that Griffith expe-
rienced cash flow problems. See id. at 494. The gist of Griffith’s
claim was that "NAJLA understood the importance of Griffith’s rela-
tionship with its bonding company and that the manipulation of the
14
The district court stated that "I simply find that it is just not foresee-
able that somebody is going to go out of business as a result of this
breach of contract, and it is not a natural consequence of that breach.
And I just so find. That is just not an element of damage in this case."
(J.A. at 263.) The district court’s written order states only that the dam-
ages "were not foreseeable as a matter of law." (J.A. at 278.)
22 AMZURA ENTERPRISES, INC. v. RATCHER
escrow account would significantly impair that relationship to Grif-
fith’s detriment." Id. (internal quotation marks omitted). The jury
found in Griffith’s favor and the trial court upheld the verdict. See id.
The Supreme Court of Virginia, however, reversed the trial court’s
judgment, concluding that "Griffith presented no evidence which
would permit the jury to find that when the contracting parties signed
the escrow agreement, they contemplated that had NAJLA breached
that agreement, such breach would have restricted Griffith’s ‘work
program,’ thereby preventing Griffith from bidding on projects." Id.
The court further noted that "Griffith did not present any evidence
that NAJLA was even aware of Griffith’s ‘work program’ when the
escrow agreement was executed," id., and that Griffith failed to pres-
ent evidence "that either party to the contract contemplated that Grif-
fith’s future costs for subcontractors would increase as a result of
NAJLA’s breach of the escrow agreement," id. at 494-95, or that
either party contemplated that Griffith would later experience cash
flow problems, see id. at 495.
The facts in the record before us are distinguishable from NAJLA.
First, Griffith’s allegations were predicated upon future injuries that
were removed from the underlying escrow agreement that NAJLA
had breached — i.e., that Griffith could not bid on certain projects
because of the "work program" and that it faced higher costs in retain-
ing subcontractors for future projects. Rowe’s injuries, by contrast,
are arguably much closer to the underlying breach. It follows natu-
rally from AMZCO’s breach of the financing agreement that Rowe
could not pay its suppliers for the Army Contract itself (the intent for
which the financing agreement was signed), and that Rowe would be
subject to lawsuits and other related problems. Second, because the
financing contract in this case was intended, from the beginning, to
fund the Army Contract and its related costs, a plausible argument can
be made, on the facts presently before us, that the parties contem-
plated that AMZCO’s breach of the financing contract would impede
Rowe’s ability to pay its bills and fulfill its obligations under the
Army Contract. We simply cannot agree, at this stage of the proceed-
ings, that Rowe’s claim for consequential damages must fail as a mat-
ter of law.15 See R.K. Chevrolet, Inc. v. Hayden, 480 S.E.2d 477, 481
15
We recognize the possibility that, on remand, further facts may sur-
face that might establish that Rowe cannot recover consequential dam-
ages for AMZCO’s breach of contract.
AMZURA ENTERPRISES, INC. v. RATCHER 23
(Va. 1997) (reversing trial court’s conclusion that R.K. Chevrolet, as
a matter of law, could not recover consequential damages because
"[a] jury reasonably could conclude that the sole purpose of the con-
tract was to prevent a loss of business and the resulting damages to
R.K. Chevrolet and that both parties contemplated the potential for
such damages at the time they entered into the contract"); Richmond
Medical Supply, 369 S.E.2d at 409 ("Thus, having properly deter-
mined that RMS’s claimed damages were consequential in nature, the
trial court erred in failing to submit the ‘contemplation’ issue to the
jury . . . ."). Accordingly, we reverse and remand this issue to the dis-
trict court for further proceedings consistent with this opinion.
IV.
In conclusion, Rowe’s notice of appeal is not jurisdictionally defec-
tive because Rowe promptly filed a corrected notice of appeal. We
affirm the district court’s grant of summary judgment as to Rowe,
Campbell, and Global’s fraud claims, but we remand Rowe, Camp-
bell, and Global’s other state law claims. We reverse and remand the
district court’s conclusion that, as a matter of law, consequential dam-
ages for AMZCO’s breach of the financing agreement are not avail-
able.
AFFIRMED IN PART, REVERSED IN PART,
AND REMANDED