UNPUBLISHED

UNITED STATES COURT OF APPEALS

FOR THE FOURTH CIRCUIT

ROANOKE PROPERTIES LIMITED
PARTNERSHIP, a North Carolina
Limited Partnership,
Plaintiff-Appellant,

v.

SIDNEY O. DEWBERRY; DWIGHT F.
STEPHENSON; RONALD B. SMITH,
Defendants-Appellees,

and

DEWBERRY & DAVIS,
Defendant & Third Party Plaintiff-
Appellee,

and
                                     No. 97-1905
JOHN STEVENSON,
Defendant,

v.

GLENN ELLIOTT FUTRELL,
INCORPORATED; LRM INCORPORATED;
ROGERS-BAKERS PROPERTIES,
INCORPORATED; A. GLENN BARWICK
PROPERTIES, INCORPORATED; EASTERN
CAROLINA LAND DEVELOPMENT,
INCORPORATED; BARRY MARTIN
PROPERTIES, INCORPORATED; LAND
CONSULTANTS OF THE SOUTH,
INCORPORATED; MANTEO INVESTMENT
ASSOCIATES, INCORPORATED,
Third Party Defendants.
ROANOKE PROPERTIES LIMITED
PARTNERSHIP, a North Carolina
Limited Partnership,
Plaintiff-Appellee,

v.

SIDNEY O. DEWBERRY; DWIGHT F.
STEPHENSON; RONALD B. SMITH,
Defendants-Appellants,

and

DEWBERRY & DAVIS,
Defendant & Third Party Plaintiff-
Appellant,

and
                                                                 No. 97-1991
JOHN STEVENSON,
Defendant,

v.

GLENN ELLIOTT FUTRELL,
INCORPORATED; LRM INCORPORATED;
ROGERS-BAKERS PROPERTIES,
INCORPORATED; A. GLENN BARWICK
PROPERTIES, INCORPORATED; EASTERN
CAROLINA LAND DEVELOPMENT,
INCORPORATED; BARRY MARTIN
PROPERTIES, INCORPORATED; LAND
CONSULTANTS OF THE SOUTH,
INCORPORATED; MANTEO INVESTMENT
ASSOCIATES, INCORPORATED,
Third Party Defendants.

Appeals from the United States District Court
for the Eastern District of North Carolina, at Elizabeth City.
Terrence W. Boyle, Chief District Judge.
(CA-93-59-2-BO)

                    2
Argued: May 6, 1998

Decided: November 15, 1999

Before ERVIN,* WILKINS, and WILLIAMS, Circuit Judges.

_________________________________________________________________

Affirmed by unpublished per curiam opinion.

_________________________________________________________________

COUNSEL

ARGUED: Robert L. O'Donnell, VANDEVENTER, BLACK, MER-
EDITH & MARTIN, L.L.P., Kitty Hawk, North Carolina, for Appel-
lant. William Joseph Carter, CARR, GOODSON, LEE & WARNER,
P.C., Washington, D.C., for Appellees. ON BRIEF: Norman W.
Shearin, Jr., VANDEVENTER, BLACK, MEREDITH & MARTIN,
L.L.P., Kitty Hawk, North Carolina; John N. Hutson, Jr., HOWARD,
STALLINGS, STORY, WYCHE, FROM & HUTSON, P.A.,
Raleigh, North Carolina, for Appellant. James F. Lee, Jr., CARR,
GOODSON, LEE & WARNER, P.C., Washington, D.C.; Evelyn M.
Coman, NEWSOM, GRAHAM, HEDRICK & KENNON, P.A., Dur-
ham, North Carolina, for Appellees.

_________________________________________________________________

Unpublished opinions are not binding precedent in this circuit. See
Local Rule 36(c).
_________________________________________________________________
*Judge Ervin heard oral argument in this case but died prior to the
time the decision was filed. The decision is filed by a quorum of the
panel. 28 U.S.C. § 46(d).

                   3
OPINION

PER CURIAM:

Roanoke Properties Limited Partnership (RPLP) appeals an order
of the district court granting judgment as a matter of law, see Fed. R.
Civ. P. 50(b), to Dewberry & Davis (Dewberry)1 in RPLP's contract
and tort action against Dewberry. Finding no error, we affirm.2

I.

This action arose from the collapse of a bulkhead at the Pirate's
Cove Marina in Dare County, North Carolina. Roanoke Properties
General Partnership (the General Partnership) began developing
Pirate's Cove in the late 1980s. The development contains single- and
multi-family residential properties and a marina. In 1988, the General
Partnership contracted with Dewberry, a Virginia architectural and
engineering firm, to design certain parts of the marina, including the
bulkhead. After contracting with Dewberry, the General Partnership,
for liability reasons, conveyed the marina to Roanoke Properties Lim-
ited (the Corporation), a North Carolina corporation wholly owned by
the General Partnership. Subsequent to this conveyance, RPLP suc-
ceeded to the interests of the General Partnership.

The Corporation, after becoming the fee-simple owner of the
marina, issued a Declaration of Condominium, naming itself as the
sole declarant. The Declaration created a "dockominium," to be
known as "Pirate's Cove Yacht Club," in which boaters could pur-
chase individual boat slips and own common areas, including the
bulkhead, as tenants in common.
_________________________________________________________________
1 Several other entities that were initially parties in this suit are no lon-
ger involved in the action.
2 RPLP also appealed, and Dewberry cross-appealed, rulings of the dis-
trict court pertaining to the application of a limitation-of-liability clause
contained in a contract between the parties. Finally, RPLP appealed an
alternative ruling by the district court that Dewberry was entitled to a
new trial on damages even if it was not entitled to judgment as a matter
of law. Because we affirm the grant of judgment as a matter of law to
Dewberry, we need not reach those issues.

                    4
The Declaration reserved for RPLP certain easements through the
marina property for the purpose of allowing RPLP to complete the
Pirate's Cove development. It also reserved to RPLP the rights to
develop and improve land and properties in Pirate's Cove, to create
additional condominium regimes and other planned communities, and
to add such regimes to the area governed by the already-existing
homeowners' association. The Declaration further provided that the
Pirate's Cove Slip Owners' Association (the Slip Owners' Associa-
tion), an unincorporated association, would be responsible for main-
taining the common areas of the dockominium. The Slip Owners'
Association also has the right to bring suit on behalf of its members.
See N.C. Gen. Stat. § 47C-3-102(a)(4) (Supp. 1998).

In the Pirate's Cove Public Offering Statement, the Corporation, as
condominium declarant, warranted that each slip would be substan-
tially completed within 24 months of the signing of a contract for
sale. The Statement further provided that RPLP made"no other war-
ranties except those required specifically by Sections 47C-4-114 and
47C-4-115 of the North Carolina Condominium Act," J.A. 1942, and
that "[n]o assurances are made as to quality of construction," J.A.
1946.

In 1992, a portion of the marina bulkhead collapsed. RPLP subse-
quently brought suit3 against Dewberry seeking damages for breach
of contract and negligence,4 alleging that as a result of Dewberry's
substandard design (1) RPLP would need to expend considerable
money to repair the bulkhead; (2) the area of the marina would be
reduced; and (3) RPLP had lost and would continue to lose income
it otherwise would have enjoyed from slip rentals and sales and
because of interruptions to its business.

At various times during the trial that followed, the parties and the
district court discussed whether RPLP could establish a prima facie
case of breach of contract or tort damages because it had transferred
_________________________________________________________________
3 The suit was initiated in Dare County Superior Court and subse-
quently was removed to federal district court.
4 Although RPLP also asserted a claim of gross negligence, the district
court granted judgment as a matter of law to Dewberry on that claim, and
that ruling has not been appealed.

                    5
ownership of the bulkhead to a separate legal entity prior to the col-
lapse of the bulkhead. At the close of RPLP's evidence, Dewberry
moved for judgment as a matter of law on, inter alia, the basis that
RPLP had failed to prove ownership of the bulkhead and therefore
had failed to prove injury as the result of its collapse. See Fed. R. Civ.
P. 50(a). RPLP contended that Dewberry's motion properly should be
characterized as a motion to dismiss for failure to prosecute in the
name of the real party in interest, see Fed. R. Civ. P. 17, and in
response thereto, moved to amend its complaint to join the Corpora-
tion and the Slip Owners' Association as plaintiffs. The court denied
RPLP's motion but also denied Dewberry's motion for judgment as
a matter of law regarding the claim concerning the diminution in
value of the marina.5 The court did, however, grant judgment as a
matter of law against RPLP on its other damages theories.

Following the trial, the jury returned a verdict for RPLP on both
the breach of contract and the negligence claims, and awarded dam-
ages in the amount of $840,585.63. Subsequently, Dewberry renewed
its motion for judgment as a matter of law. See Fed. R. Civ. P. 50(b).
The district court granted Dewberry's motion on the ground that
RPLP had failed to prove that it owned the bulkhead and therefore
could not prove that it was injured by its collapse. The court noted
that although RPLP had offered during the trial to amend the com-
plaint to join the Corporation and the Slip Owners' Association as
plaintiffs, such an amendment was not warranted because "Rule 17 `is
intended to prevent forfeiture when ... an understandable mistake has
been made,'" and RPLP's decision to name itself as the only plaintiff
"was conscious and intentional." J.A. 1803 (quoting Fed. R. Civ. P.
17 advisory committee's note) (alteration in original).
_________________________________________________________________

5 This diminution claim evolved during the course of the trial from
RPLP's allegation that it would have to incur expense in repairing the
bulkhead and testimony that the diminution in value of the marina as a
result of the collapse of the bulkhead was equal to the cost of repairing
the bulkhead. At the close of all of the evidence, Dewberry again moved
for judgment as a matter of law on this claim, and the court again denied
the motion. See Fed. R. Civ. P. 50(a).

                     6
II.

On appeal, RPLP contends that the district court erred in conclud-
ing that it failed to prove that it was injured as a result of the collapse
of the bulkhead.6 Alternatively, RPLP maintains that Dewberry's
challenge should be construed as an assertion that RPLP "was not the
real party in interest." Opening Brief of Appellant/Cross-Appellee at
19. In this regard, RPLP claims that the district court erred in denying
its motion to amend the complaint to add the Corporation and the Slip
Owners' Association as plaintiffs, and that in any event, Dewberry
waived any objection it otherwise could have made under Rule 17.
We address these contentions seriatim.

We review the decision of the district court to grant judgment as
a matter of law de novo, viewing the facts in the light most favorable
to the nonmoving party. See Konkel v. Bob Evans Farms Inc., 165
F.3d 275, 279 (4th Cir. 1999), cert. denied, 68 U.S.L.W. 3106 (U.S.
Oct. 4, 1999) (No. 99-180). We review the grant or denial of a motion
to amend the pleadings for abuse of discretion. See Lone Star Steak-
house & Saloon, Inc. v. Alpha of Va., Inc., 43 F.3d 922, 940 (4th Cir.
1995).

A.

To establish a prima facie case of negligence under North Carolina
law, the plaintiff must demonstrate that the defendant breached a duty
of care owed to the plaintiff and that the breach proximately caused
the plaintiff's injury. See Matthieu v. Piedmont Natural Gas Co., 152
S.E.2d 336, 341 (N.C. 1967). To establish a prima facie case of enti-
_________________________________________________________________
6 RPLP also contends that Dewberry, in moving for judgment as a mat-
ter of law on the basis that RPLP had failed to produce any evidence that
it owned the bulkhead and therefore failed to produce evidence that the
collapse of the bulkhead proximately caused it to suffer damages, failed
to explain the specific reason why the ownership of the bulkhead was
material or controlling on the proximate cause issue. See Fed. R. Civ. P.
50(a)(2) (stating that a motion for judgment as a matter of law "shall
specify the judgment sought and the law and the facts on which the mov-
ing party is entitled to the judgment"). We disagree, and believe that
Dewberry's explanation was more than adequate.

                     7
tlement to damages in a breach of contract action under North Caro-
lina law, a plaintiff must prove that it suffered special damages as a
result of a breach of contract. See Reis v. Hoots, 509 S.E.2d 198, 205
(N.C. Ct. App. 1998), review denied, ___ S.E.2d ___ (N.C. June 28,
1999). Thus, under either theory RPLP must prove that it was injured
as a result of the collapse of the bulkhead.

Initially, we note that the district court correctly ruled that although
Dewberry's substandard design resulted in a significant decrease in
the value of the marina, this injury was not suffered by RPLP because
RPLP had conveyed the marina to the Corporation prior to the col-
lapse. See Chauncy v. Atlantic Coast Line R.R. , 142 S.E. 327, 328
(N.C. 1928) (recognizing that a plaintiff suing for injury to property
may recover only to the extent that his property rights have been
impaired); see also 59 Am. Jur. 2d Parties § 32 (stating that "[i]f an
injury is done to either real or personal property, the right of action
is in the then owner alone"). RPLP maintains that even though it con-
veyed the property before the bulkhead collapsed, it suffered injury
from the collapse because it retained certain easements and other
property rights in the Yacht Club. However, evidence of these rights
does nothing to aid RPLP's cause in the absence of evidence of how
these rights were impaired by the collapse and what damages RPLP
suffered as a result of the impairment of those rights.7

Apart from its contention that it suffered an injury by virtue of the
rights it retains in the marina, RPLP maintains that it produced suffi-
cient evidence that it was injured by the collapse of the bulkhead to
avoid judgment as a matter of law because RPLP was"responsible for
repairs to be made to the common elements and slips." Opening Brief
of Appellant/Cross-Appellee at 16. In support of its position that it
was responsible for the repairs, RPLP contends that it warranted in
the Pirate's Cove Public Offering Statement that the premises were
_________________________________________________________________
7 RPLP also argues that it "has and will suffer an interruption of its
income stream derived from Pirate's Cove resulting in a loss of rents and
delay in sales in the Yacht Club as repairs have been and will be made."
Opening Brief of Appellant/Cross-Appellee at 16. Of course, this dam-
ages claim depends implicitly on the false premise that RPLP owned the
slips to rent and sell when the bulkhead collapsed.

                    8
constructed according to sound engineering and construction stan-
dards. We do not agree that RPLP made such a warranty.

The North Carolina Condominium Act provides that"[t]he law
relating to implied warranties, including but not limited to, implied
warranties that the premises are ... constructed according to sound
engineering and construction standards ..., is applicable to the sale of
a condominium unit." N.C. Gen. Stat § 47C-4-114 (1987). The Act
further provides that a general disclaimer of such warranties is effec-
tive, except with respect to purchasers of units"that may be occupied
for residential use." N.C. Gen. Stat. § 47C-4-115(b) (1987); see N.C.
Gen. Stat. § 47C-4-115(a) (1987). Here, the statement in the Pirate's
Cove Public Offering Statement that "[n]o assurances are made as to
quality of construction," J.A. 1946, clearly constituted a general dis-
claimer of the type identified in the Act. It is also apparent that the
boat slips at issue may not "be occupied for residential use." Indeed,
the Pirate's Cove Yacht Club Rules and Regulations expressly pro-
hibit "[l]iving aboard boats at the marina." J.A. 1908. Accordingly,
the disclaimer was effective, and RPLP in fact was not responsible for
repairing the bulkhead.

B.

RPLP next contends that the judgment entered against it on the
basis that it did not own the damaged property amounted to a dis-
missal based on a failure to sue in the name of the real party in inter-
est. RPLP further contends that Dewberry waived the issue by failing
to timely object under Rule 17.8

Rule 17(a) of the Federal Rules of Civil Procedure states in perti-
nent part that "[e]very action shall be prosecuted in the name of the
real party in interest," that a real party in interest may sue in his "own
name without joining the party for whose benefit the action is
brought," and that "[n]o action shall be dismissed on the ground that
it is not prosecuted in the name of the real party in interest until a rea-
_________________________________________________________________
8 Presumably in conjunction with this argument, RPLP argues that it is
the only party in privity with Dewberry and therefore that neither the
Corporation or the Slip Owners' Association could maintain an action
against Dewberry for negligent performance of the contract.

                     9
sonable time has been allowed after objection for ratification of com-
mencement of the action by, or joinder or substitution of, the real
party in interest." Fed. R. Civ. P. 17(a). The origin of this rule was
permissive in purpose in that it allowed subrogees or assignees to sue
in their own names. See Virginia Elec. & Power Co. v. Westinghouse
Elec. Corp., 485 F.2d 78, 84 (4th Cir. 1973). That purpose having
been served, the primary function of Rule 17 is now negative: "to
enable a defendant to present defenses he has against the real party
in interest, to protect the defendant against a subsequent action by the
party actually entitled to relief, and to ensure that the judgment will
have proper res judicata effect." Id.

We disagree with RPLP's characterization of the deficiency in its
case as being an issue of the real party in interest. RPLP's protesta-
tions notwithstanding, Dewberry did not contend that an entity other
than RPLP was the real party in interest, but rather maintained simply
that RPLP had failed to establish its prima facie case. We believe that
the district court properly assessed the situation when it stated to
RPLP's counsel, "It's not that you want to come back twice, it's that
you want to stay in once." J.A. 954. Accordingly, whether Dewberry
timely raised a real party in interest objection is immaterial.

RPLP also argues that its alleged status as a real party in interest
in this litigation relieved it of the requirement of demonstrating that
it was injured by the collapse of the bulkhead. We disagree. Even
assuming arguendo that RPLP was a real party in interest by virtue
of its relationships to the Corporation and the Slip Owners' Associa-
tion, and therefore that RPLP was entitled to sue on behalf of these
entities, RPLP did not do so. Indeed, RPLP's complaint is clear that
the claimed injuries on which this action is based are injuries that
RPLP itself allegedly has suffered.

Although it is not altogether clear from reading RPLP's brief,
RPLP may also contend that, to the extent that the Corporation and
the Slip Owners' Association are real parties in interest in this litiga-
tion, the district court abused its discretion in refusing to "allow[ ] ...
joinder" of those parties prior to granting judgment as a matter of law
to Dewberry. Fed. R. Civ. P. 17(a). To the extent that RPLP advances
that position, it is incorrect.

                     10
First, RPLP asserts in its brief that neither the Corporation nor the
Slip Owners' Association could have maintained a negligence or con-
tract action against Dewberry because Dewberry breached no duty
owed to either of those entities. Accordingly, to the extent that RPLP
claims that the court erred in failing to allow joinder of the two other
entities, it is not clear what difference RPLP asserts that joinder could
have made.

That point aside, the language in Rule 17 allowing a party to cure
a real party in interest defect before the case is dismissed for failure
to sue in the name of the real party in interest"is intended to prevent
forfeiture when determination of the proper party to sue is difficult or
when an understandable mistake has been made." Fed. R. Civ. P. 17
advisory committee's note. Here, the district court was well within its
discretion in concluding that the decision to have RPLP sue Dewberry
was not an "understandable mistake," but rather a purely strategic
decision. RPLP was not surprised by the fact that it did not own the
bulkhead. Indeed, it would appear that it brought suit itself because
it believed that neither the Corporation nor the Slip Owners' Associa-
tion could maintain a tort or contract action against Dewberry and that
bringing suit itself was its best chance for recovery.

Even had RPLP's failure to add the Corporation and the Slip Own-
ers' Association as plaintiffs earlier in the suit been an "understand-
able mistake," we note that allowing RPLP to amend on the third day
of trial would have been extremely prejudicial to Dewberry. Up to
that point, Dewberry had had no reason to conduct discovery regard-
ing, or otherwise to investigate, whether it in fact owed these other
entities any duties, and if so, whether it breached such duties. See
Lone Star, 43 F.3d at 941 (explaining that "a motion to amend may
be denied when it has been unduly delayed and when allowing the
motion would prejudice the nonmovant"). For all of these reasons, we
conclude that the district court did not abuse its discretion in denying
RPLP's motion to join the Corporation and the Slip Owners' Associa-
tion as plaintiffs.

III.

In sum, the deficiencies in RPLP's action transcend mere real party
in interest problems. Because we conclude that RPLP failed to pro-

                     11
duce evidence that it was injured as a result of Dewberry's substan-
dard design, we affirm the judgment as a matter of law in Dewberry's
favor.

AFFIRMED

                   12
