                            UNPUBLISHED

                  UNITED STATES COURT OF APPEALS
                      FOR THE FOURTH CIRCUIT


                            No. 08-1488


RUSSELL TODD HUTTENSTINE, On Behalf of Himself and All
Others Similarly Situated; RONALD A. SCHINDELER; ROBERT G.
COLE; JAMIE SLAUGHTERBECK; WILLIAM SCHUTTER,

                Plaintiffs - Appellees,

           v.

DENNIS MAST; GEORGE A. MOORE; SHANE TRAVELER; ROSS W. SMITH;
HYDROFLO,   INCORPORATED;   METALS   AND   ARSENIC   REMOVAL
TECHNOLOGY, INCORPORATED,

                Defendants - Appellants.



Appeal from the United States District Court for the Eastern
District of North Carolina, at Wilmington. James C. Fox, Senior
District Judge. (4:05-cv-00152-F)


Argued:   May 14, 2009                     Decided:   June 22, 2009


Before NIEMEYER, MOTZ, and TRAXLER, Circuit Judges.


Affirmed by unpublished opinion.      Judge Niemeyer wrote      the
opinion, in which Judge Motz and Judge Traxler joined.


ARGUED: Terence James Rasmussen, HUNTON & WILLIAMS, LLP,
Richmond, Virginia, for Appellants.   Laurence Mathew Rosen, THE
ROSEN LAW FIRM, PA, New York, New York, for Appellees.        ON
BRIEF: L. Neal Ellis, Jr., Edward Avery Wyatt, HUNTON &
WILLIAMS, LLP, Raleigh, North Carolina, for Appellant Shane
Traveler. Donald J. Harris, HARRIS, WINFIELD, SARRATT & HODGES,
LLP, Raleigh, North Carolina, for Appellants Dennis Mast, George
A. Moore, Ross W. Smith, HydroFlo, Incorporated, and Metals and
Arsenic Removal Technology, Incorporated.   Kevin B. Cartledge,
WILSON & COFFEY, LLP, Winston-Salem, North Carolina, for
Appellees.


Unpublished opinions are not binding precedent in this circuit.




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NIEMEYER, Circuit Judge:

       After      stockholders         of     HydroFlo,        Inc.,      commenced         this

securities class action against HydroFlo and its officers and

directors,        the       parties       entered     into     a     written       settlement

agreement       under        which     the     defendants          agreed     to    pay      the

plaintiffs $425,000, in exchange for which the plaintiffs agreed

to release the defendants and dismiss the action.                                  After the

district court preliminarily approved the settlement agreement,

the defendants refused to pay the $425,000 within ten days, as

required,       and     the     district       court     enforced         the      settlement

agreement, entering judgment against the defendants for $425,000

plus   interest.             From    the     judgment    enforcing          the    settlement

agreement, the defendants appeal.

       The     defendants       concede        that     they       failed     to    pay     the

$425,000, as agreed.                 But, in some incomprehensible way, they

maintain that their payment was a condition precedent to the

settlement        agreement’s        effectiveness       and       that   therefore        their

failure      to     fulfill         the      condition       precedent        resulted       in

cancellation          and     termination       of     the     settlement          agreement,

leaving them with no further obligation.

       The     settlement       agreement       is    staged        so    that     after    the

defendants make the $425,000 payment into an escrow fund, the

plaintiffs, on the effective date of settlement, release the

defendants and dismiss the action.                       Obviously, the settlement

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agreement provides that the effective date of settlement, when

plaintiffs’ release is deemed effective, is conditioned on the

defendants’ making the agreed-upon payment.                          As the settlement

agreement provides:

        K.    CONDITIONS OF SETTLEMENT

              1.     The Effective Date of the Settlement shall be
                     conditioned upon the occurrence of all of the
                     following events:

                                     *        *          *

                     e.    Defendants shall have paid the Settlement
                           Amount, as set forth in paragraph C.,
                           above [detailing the escrow fund].

Relying on this language, the defendants argue that since they

did   not      pay   the       $425,000   settlement          amount,   the   settlement

agreement is no longer operative and binding.                           They claim that

their        argument     is    bolstered     by     a       later   provision    of   the

settlement agreement, which states:

        If all of the conditions specified in paragraph K.1
        are not met, then the Stipulation shall be canceled
        and terminated . . . .

Thus,    the       defendants      contend    that       when    they   failed    to   pay

$425,000 into escrow, the condition precedent for the settlement

agreement’s effective date failed, and therefore the settlement

itself was “canceled and terminated.”

        This argument fails for lack of a fundamental understanding

of    the     settlement        agreement’s       operation.         The   duty   to   pay

$425,000 into escrow was a promise by the defendants, not a


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condition precedent to their performance under the settlement

agreement.      See   Harllee v. Harllee, 565 S.E.2d 678, 682 (N.C.

App. 2002) (discussing distinction between promise and condition

precedent).     Indeed, the defendants’ promise to pay $425,000 was

the only consideration given by them for the plaintiffs promise

to drop the class action and release the defendants.                         When the

defendants failed to pay, they breached their promise, giving

rise to a claim for damages, which the district court correctly

ascertained to be $425,000 plus interest.

       The settlement agreement labeled the payment a “condition”

for the effective date because payment was a condition precedent

for plaintiffs’ dropping the class action on the effective date.

In other words, the $425,000 payment was a condition precedent

for the plaintiffs’ performance of their obligations, not for

the    defendants’     performance.            See       Restatement   (Second)    of

Contracts § 225 cmt. d (1981) (“The same term may . . . be

interpreted     not   only    to   make       an    event    a   condition    of   the

obligor’s duty, but also to impose a duty on the obligee that it

occur”).

       Moreover, even if the defendants sought to take advantage

of a condition precedent in the settlement agreement, they could

not unilaterally “cancel and terminate” the settlement agreement

by    their   own   failure   to   satisfy         the    condition.    “[O]ne     who

prevents the performance of a condition, or makes it impossible

                                          5
by his own act, will not be permitted to take advantage of the

nonperformance.”    In re Bigelow, 649 S.E.2d 10, 13-14 (N.C. App.

2007)   (quoting   Mullen   v.   Sawyer,   178   S.E.2d   425,   431   (N.C.

1971)); accord Torrey v. Cannon, 88 S.E. 768, 770 (N.C. 1916).

     The judgment of the district court is

                                                                 AFFIRMED.




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