                             UNPUBLISHED

                  UNITED STATES COURT OF APPEALS
                      FOR THE FOURTH CIRCUIT


                             No. 15-1457


KEYSTONE NORTHEAST, INC., f/k/a Pavers Plus           GSP,   Inc.,
assignee of Madawaska Brick and Block Corp.,

                Plaintiff - Appellee,

           v.

KEYSTONE RETAINING WALL SYSTEMS, LLC, f/k/a Keystone
Retaining Wall Systems, Inc., a division and wholly owned
subsidiary of Contech Construction Products, LLC, f/k/a
Contech Construction Products, Inc.; CONTECH CONSTRUCTION
PRODUCTS, LLC, f/k/a Contech Construction Products, Inc.,

                Defendants - Appellants.


Appeal from the United States District Court for the District of
South Carolina, at Greenville.     Bruce H. Hendricks, District
Judge. (6:12-cv-00720-BHH)


Argued:   October 25, 2016                 Decided:   January 18, 2017

Before NIEMEYER   and   MOTZ,   Circuit   Judges,   and   DAVIS,   Senior
Circuit Judge.


Affirmed in part, vacated in part, and remanded by unpublished
opinion. Judge Niemeyer wrote the opinion, in which Judge Motz
and Senior Judge Davis joined.

ARGUED: Paul Gregory Joyce, COLUCCI & GALLAHER, P.C., Buffalo,
New York, for Appellants.   ON BRIEF: Thomas E. Vanderbloemen,
GALLIVAN, WHITE & BOYD, P.A., Greenville, South Carolina, for
Appellants.


Unpublished opinions are not binding precedent in this circuit.
NIEMEYER, Circuit Judge:

       Keystone    Retaining    Wall       Systems,         LLC   (“Keystone    Wall

Systems”), the designer of a segmental retaining wall system and

holder of intellectual property related to that design, entered

into a “License Agreement” with Keystone Northeast, Inc., to

manufacture and sell the system in Maine, New Hampshire, and the

eastern part of Massachusetts.                 The License Agreement imposed a

sales quota on Keystone Northeast, which, if not met, justified

immediate    termination       of    the        agreement.         Otherwise,     the

agreement’s term expired at the end of 2010, subject to year-to-

year    renewals   thereafter       upon       the   establishment      of   revised

performance goals.

       During the License Agreement’s term, Keystone Wall Systems

and Keystone Northeast entered into transfer agreements, which

provided for Keystone Northeast’s transfer of a portion of the

licensed    territories    back     to     Keystone     Wall      Systems,   thereby

enabling    Keystone   Wall    Systems          to   deal   directly    with    local

manufacturers of the blocks used in the system.                        The transfer

agreements provided for readjustments of performance goals and

compensation.

       When Keystone Northeast allegedly failed to meet its sales

quota for 2008, Keystone Wall Systems terminated the License

Agreement, prompting Keystone Northeast to commence this breach

of contract action for damages.

                                           2
       The       district     court       granted    Keystone      Northeast      summary

judgment for damages under the License Agreement for the period

from 2008 to 2010, when the agreement expired.                          It also awarded

damages to Keystone Northeast under three transfer agreements

for obligations that it found continued after the termination of

the License Agreement.              Finally, it ordered specific performance

of    the    three     transfer       agreements,        requiring       Keystone      Wall

Systems to pay royalties into the future.                          From the district

court’s judgment, Keystone Wall Systems filed this appeal.

        Keystone      Northeast       has     not     appeared     in     this    appeal.

Nonetheless, we affirm the district court’s judgment awarding

Keystone Northeast damages through 2010, but we vacate its award

of    damages      under    the    transfer       agreements    after     2010   and   its

order       of     specific       performance,        and     we   remand        for   the

recalculation of damages.

                                              I

       The       License    Agreement      between     Keystone    Wall    Systems     and

Keystone         Northeast,       dated    January     2,     1998,     gives    Keystone

Northeast an exclusive license to manufacture and sell Keystone

Wall System’s designed block system in Maine, New Hampshire, and

the eastern part of Massachusetts.                    The License Agreement fixed

an annual sales quota based on the square footage of block “face

area” and provided that Keystone Wall Systems could terminate

the     contract       immediately         and      without    notice     if     Keystone

                                              3
Northeast     failed   to   meet    the    quota.     If    not   terminated       for

failure to meet the sales quota or for any other enumerated

reason, the Agreement was set to expire at the end of 2010,

“with renewals for successive year terms” under newly negotiated

sales quotas.

        Possessing this exclusive right to manufacture and sell the

block     system,      Keystone      Northeast      contracted        with      local

manufacturers to produce the blocks in various portions of its

licensed territory.          These manufacturers included Gagne & Son

Concrete Blocks, Inc., in Maine; HiWay Concrete Products Co.,

Inc.,    in   Massachusetts;       and    Adolf   Jandris    &    Sons,    Inc.,    in

Massachusetts.       But, as Keystone Northeast’s relationships with

those three manufacturers soured, Keystone Northeast sought to

transfer back to Keystone Wall Systems portions of its licensed

territory to enable Keystone Wall Systems to deal directly with

the local manufacturers.            As a result, Keystone Wall Systems,

Keystone      Northeast,    and    the    local   manufacturers     entered      into

transfer agreements, which not only transferred territory back

to Keystone Wall Systems but also adjusted royalties and quotas

and provided for other modifications to the License Agreement.

        Keystone    Northeast,      Keystone      Wall     Systems,       and   Gagne

entered into the first transfer agreement in December 1999 (the

“Gagne Transfer Agreement”).               This agreement (1) renewed the

License Agreement through December 31, 2003; (2) increased sales

                                           4
quotas that would reach a maximum of 500,000 square feet of

block face area in 2003; (3) provided that Gagne’s sales in

Maine would count toward Keystone Northeast’s annual sales quota

for     purposes    of     Keystone    Northeast’s     obligations   under    the

License Agreement; (4) provided that Keystone Northeast had the

right of first refusal to expand its licensed territory into

western Massachusetts before Keystone Wall Systems could accept

a third party offer to acquire that territory; and (5) provided

that the License Agreement otherwise continued in full force and

effect.     The agreement also provided that if Keystone Northeast

exercised its right of first refusal, 75,000 square feet would

be added to its sales quota.              To exercise its right, Keystone

Northeast was required to match the initial license fee offered

by the third party, up to a maximum of $25,000.

        Keystone Wall Systems and Keystone Northeast entered into

two other similar transfer agreements in 2000, transferring back

Keystone    Northeast’s       licensed     territory    that   was   served    by

Jandris    and     HiWay.      Those    transfer     agreements   (1)   set   out

schedules for license-fee sharing between Keystone Northeast and

Keystone Wall Systems; (2) provided that Jandris’ and HiWay’s

sales    would     count    toward     Keystone    Northeast’s    annual   sales

quota; (3) added western Massachusetts to Keystone Northeast’s

licensed territory; and (4) otherwise provided for the continued

enforcement of the License Agreement.

                                          5
        In    September    2005,       Keystone       Wall      Systems    and     Keystone

Northeast renewed the 1998 License Agreement “through December

31, 2010, with no change in the Performance Requirements” and

without any other amendment.

        From 2005 to 2007, Keystone Northeast was credited with

sales of more than 575,000 square feet, meaning that it exceeded

its   sales     quota     even    if   its    quota       had     increased   to    575,000

square feet upon exercise of its right of first refusal for

western Massachusetts.            In 2008, however, Keystone Northeast was

credited for only 538,037 square feet, which exceeded its quota

if it had not exercised the right of first refusal (500,000

square feet), but fell short of its quota if it had exercised

the right of first refusal (575,000 square feet).

        By   letter     dated    March      17,    2009,     Keystone      Wall    Systems,

taking the position that Keystone Northeast’s sales quota had

increased to 575,000 square feet, notified Keystone Northeast

that it was “terminating the License Agreement . . . effective

December 31, 2008,” because it failed to meet its quota.                                The

letter       stated    that,     under       the    Jandris        Transfer   Agreement,

Keystone      Northeast     had    obtained         the   rights     to    production    in

western Massachusetts and therefore had in effect exercised its

right    of    first     refusal       as   specified        in    the    Gagne    Transfer

Agreement.        After     termination,           Keystone       Wall   Systems    stopped

paying Keystone Northeast its share of royalties for sales made

                                              6
by Gagne, Jandris, and HiWay, as specified in the three transfer

agreements.

       On March 12, 2012, Keystone Northeast commenced this action

against Keystone Wall Systems for breach of contract, based on

Keystone Wall Systems’ termination of the License Agreement and

for related torts.       After the completion of discovery, Keystone

Wall   Systems   filed   a    motion   for    summary    judgment    on    all    of

Keystone   Northeast’s       claims,   and    Keystone    Northeast       filed   a

cross-motion     for   summary   judgment     on   its   breach     of    contract

claim.

       By order dated March 16, 2015, the district court entered

partial summary judgment in favor of Keystone Northeast, ruling

that it was entitled to judgment on its breach of contract claim

because Keystone Northeast had not exercised its right of first

refusal under the License Agreement and therefore its quota had

remained at 500,000 square feet, a number that it satisfied.

The court also ruled that Keystone Northeast was entitled to

royalties under the three transfer agreements so long as the

License Agreement was in force.              Because Keystone Wall Systems

“would not have automatically been entitled to terminate the

License Agreement at the end of the term in 2010,” the court

concluded that Keystone Northeast could seek “damages accruing

beyond that time.”       Finally, the court concluded that the three

transfer agreements “depend[ed] on the License Agreement,” and

                                       7
thus    Keystone      Northeast       “did    not    have       a   perpetual        right   to

receive royalties regardless of its compliance with the License

Agreement.”       The court deferred ruling on the amount of damages.

        Both    parties      filed    motions       for       reconsideration,         and    by

order    dated    March      25,     2015,    the    district        court     revised       its

rulings.        First, it reversed its earlier ruling that Keystone

Wall Systems would not have unilaterally terminated the License

Agreement at the end of its 2010 term, concluding that in fact

it would have.          Accordingly, the court concluded that Keystone

Northeast was entitled to damages for the termination of the

License Agreement only from the end of 2008 (the time of the

breach) to the end of 2010, and not for any “damages for the

future value of the license.”                     Second, the court reversed its

earlier ruling that Keystone Northeast was entitled to royalties

under    the    transfer      agreements          only    so     long    as    the     License

Agreement      was    in   force.       It    concluded         instead       that,    because

Keystone Wall Systems’ obligation to pay royalties under the

transfer agreements was not dependent on the License Agreement,

Keystone Wall Systems had a continuing obligation beyond 2010 to

pay Keystone Northeast its share of the royalties.

       The     next   day,    the     court    held       a    hearing    on    the    damage

calculations,         and,    following       the        hearing,       awarded       Keystone

Northeast $725,775 in damages, calculated to the date of the

court’s order, plus $203,140 in prejudgment interest.                                 Because

                                              8
it concluded that the amount of future royalties would be the

product      of     speculation,      it    ordered        specific     performance,

obligating Keystone Wall Systems to continue paying royalties

under    the      transfer   agreements,        based      on   sales   in    Keystone

Northeast’s territory.

       From the district court’s judgment, entered April 1, 2015,

Keystone Wall Systems filed this appeal.


                                           II

       Keystone      Wall     Systems      contends        first    that      Keystone

Northeast in fact exercised its right of first refusal to obtain

the western Massachusetts territory and that therefore its quota

under the License Agreement increased from 500,000 square feet

to 575,000 square feet, a figure that Keystone Northeast did not

meet    in   2008.     It    argues     that    the   district     court     erred   in

concluding that it breached the License Agreement and therefore

that we should reverse the summary judgment entered in favor of

Keystone Northeast and grant summary judgment in favor of it.

       The     question      thus     presented       is    whether     the     record

demonstrates that Keystone Northeast indeed exercised the right

of first refusal, thereby increasing its quota obligation, as

provided in the Gagne Transfer Agreement.

       The district court was unable to find sufficient evidence

to justify a reasonable jury’s finding that Keystone Northeast


                                           9
exercised its right of first refusal.                        Accordingly, it denied

Keystone Wall Systems’ motion for summary judgment and granted

Keystone Northeast’s motion.

        Based    on     our   review   of    the        record,   we    agree     with   the

district court and conclude that, as a matter of law, Keystone

Northeast did not exercise its right of first refusal and that

therefore Keystone Wall Systems was not justified in terminating

the license agreement based on Keystone Northeast’s failure to

meet its 2008 quota.

     The right of first refusal provision in the Gagne Transfer

Agreement provides that Keystone Northeast “shall have a first

right     of     refusal      to    obtain        the     license      to   the      Western

Massachusetts          Territory     before       [Keystone       Wall      Systems]     may

accept    a     third    party     offer    to     acquire    that      license.”        The

provision continues by requiring Northeast, in order to exercise

the right, “to match the initial license fee up to a maximum of

$25,000.00 and an addition of 75,000 square feet to [Keystone

Northeast’s]          existing     quota.”         Under     Minnesota        law,     which

governed the contract, for a right of first refusal to “ripen[]

into an option,” a third party would have to make a bona fide

offer and that offer would have to be communicated to the party

holding the right.            Dyrdal v. Golden Nuggets, Inc., 689 N.W.2d

779, 784 (Minn. 2004).



                                             10
       Based on our review of the record, we can find no evidence

either that a third party made a bona fide offer to Keystone

Wall Systems or that Keystone Wall Systems communicated a third-

party    offer    to    Keystone       Northeast.         Keystone    Wall    Systems

argues, nonetheless, that circumstantial evidence supports its

position.      It maintains that the record shows that Jandris was

interested       in     acquiring       Keystone      Wall      Systems’      western

Massachusetts         territory    and    that,      when    the     territory    was

ultimately granted to Keystone Northeast in the Jandris Transfer

Agreement, Keystone Northeast and Jandris evenly split payment

of the $25,000 license fee.              Keystone Wall Systems reasons that

there “would have [been] no reason to offer [Keystone Northeast]

such an arrangement if the parties had not been exercising the

right of first refusal.”

       This evidence, however, is not evidence that Jandris or any

other third party actually made an offer or that a third-party

offer    was   communicated       to    Keystone     Northeast.        Indeed,    the

direct    evidence      points    in    the    opposite     direction.        Keystone

Northeast’s      President        Dan    Albert      testified       that    Keystone

Northeast had not exercised its right of first refusal and that

it had never received notice of a third-party offer.                        Consistent

with    that   testimony,    Keystone         Wall   Systems’    former      President

Bill Dawson, who actually signed the Gagne and Jandris Transfer

Agreements, testified that he did not recall Keystone Northeast

                                          11
exercising its right of first refusal.                            To the contrary, he

recalled that Keystone Northeast continued to have a 500,000

square feet quota during the period from 2005 to 2008, which was

indicative     of   the    fact       that        Keystone      Northeast      had     never

exercised its right of first refusal.

       Keystone Wall Systems does point to an affidavit filed in

district court in which Keystone Wall Systems’ Sales Manager

John    Schramm     stated      conclusorily,           “As        a    result    of     the

Plaintiff’s     right     of    first      refusal,        the     Plaintiff     obtained

Superior’s     territory       in    Massachusetts           as    well   as     Berkshire

County,   making    it    the       sole   licensee        in     the   Commonwealth      of

Massachusetts.”      This litigation affidavit, however, points to

no evidence to support its bare conclusion.                             Indeed, Schramm

himself explicitly denied such a conclusion in an e-mail that he

sent during the relevant period.                    In response to Keystone Wall

Systems’ President’s inquiry whether Keystone Northeast’s quota

had indeed increased by 75,000 square feet, as provided in the

right of first refusal, Schramm responded, “We gave him the west

half of Mass[achusetts] in a later agreement.                           We had no third

party offer that I am aware of.”

       In light of this record, we agree with the district court

that   there   is   no    record       evidence       to     support      Keystone      Wall

Systems’ contention that Keystone Northeast exercised its right

of first refusal over the western Massachusetts territory and

                                             12
thereby      increased         its     quota          to     575,000           square     feet.

Accordingly, Keystone Wall Systems’ termination of the license

agreement in 2008 constituted a breach of the agreement, for

which Keystone Northeast was entitled to damages.


                                             III

     It    is    uncontroverted          that       the    License       Agreement’s          term

expired     at    the    end     of   2010      and       that    it     was    not     renewed

thereafter.           Nonetheless,       the    district         court    ruled        that    the

three transfer agreements, each of which modified the License

Agreement, constituted separate and independent contracts that

imposed independent and continuing obligations on Keystone Wall

Systems     to    pay     Keystone       Northeast          royalties          beyond     2010.

Accordingly, the court awarded damages for royalties up to the

date of its order and specific performance for a payment of

royalties in the future.

     Keystone Wall Systems contends that the district court also

erred in these rulings, as the three transfer agreements were

amendments       to    the     License    Agreement,             and   when      the    License

Agreement    ended,       so    did   the      three       transfer      agreements.            We

agree.

     In substance, the transfer agreements effected transfers of

portions    of    territory       licensed          under    the       License    Agreement.

Therefore, they would be meaningless without the existence of


                                               13
the underlying License Agreement.                         This is made explicit in the

terms of the various transfer agreements.                                  Each begins with the

recital      that       the     parties       “entered         a    License         Agreement       dated

January 2, 1998” and that Keystone Northeast and Keystone Wall

Systems “desire to accomplish a transfer” of some of Keystone

Northeast’s rights under that License Agreement.                                         The parties

thus clearly treated the License Agreement as the premise of the

transfer agreements.

       Again, after the recitals, each agreement makes clear that

the    transfer          agreement           transferred            a     portion        of    Keystone

Northeast’s “right, title and interest in and to the License

Agreement pertaining to the Transferred Territory to [Keystone

Wall    Systems]             subject    to    the     terms         and       conditions       of     this

Agreement.             . . . The License Agreement, except to the extent

amended      by    this        Agreement,      shall          continue        in    full      force   and

effect.”      (Emphasis added).

       And yet again, the transfer agreements provide that, if the

third party license in the transferred territory “is terminated

for    any    reason,”          Keystone       Northeast’s              “then       current     License

Agreement”         would         be     amended          to        include         the     transferred

territory.

       Finally,          apart         from     the       language             in     the      transfer

agreements,            the    parties’       extension         of       the    underlying       License

Agreement         in    2005,     extending         it    to       2010,      indicates        that   the

                                                 14
parties viewed the transfer agreements simply as amendments to

the License Agreement.            The renewal agreement refers to “the

License   Agreement,     as     amended       by    the   transfer      agreements.”

(Emphasis added).

     Because     we    conclude    that       the    district    court       erred   in

holding   that   the    transfer    agreements         imposed    independent        and

continuing   obligations      beyond      the      termination    of    the    License

Agreement, we reverse its ruling in that regard.                   We thus vacate

the award of damages and the order of specific performance and

remand for the recalculation of damages only through the end of

2010.


                                         IV

     Finally,    Keystone       Wall     Systems      challenges       the    district

court’s calculation of damages during the 2008 to 2010 period.

Specifically,    it    claims     that    the       district    court    incorrectly

assumed that -- after Keystone Wall Systems breached the License

Agreement in 2008 -- Keystone Northeast would meet its quota of

500,000 in both 2009 and 2010, as third-party sales data for

those years suggests that Keystone Northeast would not have met

its quota unless it began manufacturing blocks itself.                        Keystone

Wall Systems concludes, therefore, that the court should not

have awarded damages based on royalties and interest for 2009

and 2010.    We disagree.


                                         15
       In estimating lost profit, a court should not assume that a

party    is    unable      to     fulfill     its    end       of     the    bargain.        See

Williston on Contracts § 64:10 (4th ed. 2002) (“[T]he fact that

the plaintiff’s damage is uncertain in amount or even that it is

uncertain that substantial damage has been caused should not

deprive the plaintiff of a right to compensation for the loss of

the defendant’s performance that would have given the plaintiff

a   chance     to   make    a     profit     or    avoid       damage”).        The    License

Agreement contemplated continued performance until 2010.                                     And

because Keystone Northeast had met its 500,000 square feet quota

each year preceding Keystone Wall System’s purported breach, the

district court did not err in assuming that Keystone Northeast

would continue to meet that quota for the following two years.

                                         *    *      *

       In sum, we agree with the district court that Keystone Wall

Systems       breached      the     License        Agreement          and    that     Keystone

Northeast was entitled to damages through 2010.                              But because we

find    that    the   transfer       agreements          depended       on    the    continued

existence of the License Agreement, Keystone Wall Systems was

not    obligated      to   make     royalty       payments       beyond      2010     when   the

License       Agreement’s       term     ended.           We    therefore       vacate       the

district      court’s      award    of     damages       and    its    order    of    specific




                                              16
performance, and we remand for the recalculation of damages,

limiting damages to the period ending December 31, 2010.



                                                IT IS SO ORDERED.




                               17
