Developer can’t blame easement holder for failed deal

Although a real estate developer’s agreement to purchase property for residential development fell through because of a pipeline easement held by a gas transmission company, the developer failed to allege claims for inverse condemnation, unlawful taking, breach of contract and intentional interference with contract rights against the gas company.

Background

Pole Green Development Company LLC commenced this action against Columbia Gas Transmission LLC, or CGT, after Pole Green’s prospective agreement to purchase property for residential development fell through because of a pipeline easement held by CGT. In its amended complaint, Pole Green asserted claims for inverse condemnation, unlawful taking, breach of contract and intentional interference with contract rights.

The district court granted CGT’s motion to dismiss, concluding that Pole Green failed to allege that CGT exercised the power of eminent domain, breached the terms of the easement or tortiously interfered with Pole Green’s purchase contract. Pole Green now appeals.

Inverse condemnation/unlawful taking claims

In its amended complaint, Pole Green alleged that, by virtue of Virginia Code § 56-49, CGT had the ability to take land through eminent domain. However, § 56-49, which describes the eminent domain power granted to public service corporations such as CGT, conditions the right to exercise eminent domain on a public service corporation’s satisfaction of one of three antecedent requirements.

Because the amended complaint was silent on these other requirements, we conclude that Pole Green failed to adequately allege that CGT had the power to take land through eminent domain. Consequently, Pole Green’s factual assertions failed to establish CGT’s status as a state actor, thus dooming its claims for unlawful taking and inverse condemnation.

Breach of contract claim

Next, Pole Green alleges that CGT violated the terms of the easement by conditioning its approval of the residential development plans on Pole Green’s performance  of, and payment for, certain pipeline maintenance. Rather than relying on a contractual obligation that CGT breached, however, Pole Green predicated its claim on CGT’s alleged attempt to exercise rights that the easement did not grant. Because Pole Green neglected to identify any legally enforceable obligation that CGT failed to satisfy, we conclude that Pole Green failed to state a claim for breach of contract.

Tortious interference claim

Finally, Pole Green contends that CGT tortiously interfered with the purchase contract by requiring Pole Green to pay construction costs that, in its view, were unnecessary for pipeline maintenance.

In the amended complaint, Pole Green alleged that CGT’s parent company, TransCanada, which lacked a Virginia contractor’s license, submitted an illegal bid for the proposed maintenance. However, Pole Green attached to its amended complaint the so-called bid, which, on its face, is merely a cost estimate for the pipeline work at issue. Because Pole Green’s only basis for calling the cost estimate a “bid” was the document itself, which contained no such designation, we reject Pole Green’s assertion that CGT or TransCanada acted illegally.

Pole Green also challenged the necessity of the work contemplated by the cost estimate, pointing to an opinion letter advising that the proposed construction was not warranted. However, assuming that the construction was unnecessary, Pole Green fails to explain how CGT’s flawed proposal rose to the level of illegal or independently tortious conduct. Indeed, Pole Green identifies no allegation in the amended complaint accusing CGT of fabricating the maintenance costs to exploit Pole Green’s desire to purchase the land. Thus, we agree with the district court’s determination that Pole Green failed to state a claim for tortious interference.

Affirmed.

Pole Green Development Company LLC v. Columbia Gas Transmission LLC, Appeal No. 19-1181, Nov. 18, 2019. 4th Cir. (per curiam), from EDVA at Richmond (Payne). C. Jay Robbins IV for Appellant, Kim M. Watterson for Appellee. VLW 019-2-279. 5 pp.