Filed:   September 6, 2001

                     UNITED STATES COURT OF APPEALS

                         FOR THE FOURTH CIRCUIT


                              Nos. 00-2087(L)
                               (CA-99-1424-A)



Carlos V. Perry, Sr., et al.,

                                                   Plaintiffs - Appellants,

           versus


Richard F. Scruggs, et al.,

                                                    Defendants - Appellees.



                                   O R D E R



     The   court    amends   its   opinion     filed   August   16,   2001,   as

follows:

     On page 2, section 4, line 1; and page 2, section 5, line 2 --

the references to Judge “Michaels” are corrected to read “Michael.”

                                               For the Court - By Direction




                                               /s/ Patricia S. Connor
                                                        Clerk
UNPUBLISHED

UNITED STATES COURT OF APPEALS

FOR THE FOURTH CIRCUIT

CARLOS V. PERRY, SR.; JEANETTIE
PERRY,
Plaintiffs-Appellants,

v.
                                  No. 00-2087
RICHARD F. SCRUGGS; LOWERY M.
LOMAX; GERALD MAPLES; FRANK
HANNING,
Defendants-Appellees.

CARLOS V. PERRY, SR.; JEANETTIE
PERRY,
Plaintiffs-Appellees,

v.

RICHARD F. SCRUGGS; LOWERY M.
                                  No. 00-2092
LOMAX; GERALD MAPLES,
Defendants-Appellants,

and

FRANK HANNING,
Defendant.
CARLOS V. PERRY, SR.; JEANETTIE
PERRY,
Plaintiffs-Appellees,

v.

FRANK HANNING,
                                                               No. 00-2143
Defendant-Appellant,

and

RICHARD F. SCRUGGS; LOWERY M.
LOMAX; GERALD MAPLES,
Defendants.

Appeals from the United States District Court
for the Eastern District of Virginia, at Alexandria.
T. S. Ellis, III, District Judge.
(CA-99-1424-A)

Argued: May 7, 2001

Decided: August 16, 2001

Before MICHAEL and GREGORY, Circuit Judges, and
Benson E. LEGG, United States District Judge for the
District of Maryland, sitting by designation.

_________________________________________________________________

Affirmed by unpublished opinion. Judge Gregory wrote the opinion,
in which Judge Michael and Judge Legg joined.

_________________________________________________________________

COUNSEL

ARGUED: Robert Eric Greenberg, FRIEDLANDER, MISLER,
SLOAN, KLETZKIN & OCHSMAN, P.L.L.C., Washington, D.C.,
for Appellants. William Thomas Freyvogel, ADAMS, PORTER &

                   2
RADIGAN, LTD., McLean, Virginia; Peter King Stackhouse,
WALSH, COLUCCI, STACKHOUSE, EMRICH & LUBELEY,
P.C., Arlington, Virginia, for Appellees. ON BRIEF: Carlos M.
Recio, Washington, D.C., for Appellants. Kenneth S. Mahieu,
ADAMS, PORTER & RADIGAN, LTD., McLean, Virginia; Michael
L. Murray, WALSH, COLUCCI, STACKHOUSE, EMRICH &
LUBELEY, P.C., Arlington, Virginia, for Appellees.

_________________________________________________________________

Unpublished opinions are not binding precedent in this circuit. See
Local Rule 36(c).

_________________________________________________________________

OPINION

GREGORY, Circuit Judge:

Carlos V. Perry, Sr., and Jeanettie Perry ("the Perrys") appeal the
district court's order (1) entering judgment as a matter of law in favor
of Richard F. Scruggs, Lowery M. Lomax, and Gerald Maples ("the
Scruggs Group"); and (2) granting Frank Hanning's motion for entry
of judgment in his favor on the question of damages that the Perrys
allegedly suffered as a result of Hanning's breach of a real estate con-
tract to purchase the Perry Farm. Finding no reversible error, we
affirm substantially on the reasoning of the district court.

I.

On November 24, 1993, Carlos V. Perry, Sr., and Jeanettie Perry
("the Perrys") entered into a real estate agreement ("Original Con-
tract") with Clay Kahler and Franz Hanning to sell a portion of their
435 acre farm in Prince William County, Virginia. The parties entered
into the Original Contract shortly after the Walt Disney Company
announced that it was planning to develop an American history theme
park on adjacent land. Kahler and Hanning agreed to purchase 335
acres of the Perry farm and planned to develop the property by build-
ing a commercial/recreational golf course facility.

                   3
Under the Original Contract, Kahler and Hanning agreed to pay the
Perrys a $155,000 non-refundable deposit, one million dollars at clos-
ing, royalties from future golf course operations, and to pay off or
clear all encumbrances and obligations affecting the entire Perry farm
(including the 100 acres retained by the Perrys). Although the parties
planned to close no later than May 1, 1994, Kahler and Hanning
informed the Perrys in April 1994 that they did not have the financial
resources to complete the purchase of the property. Kahler and Han-
ning subsequently contacted the Scruggs Group, a group of Missis-
sippi attorneys, in an attempt to seek financing.

The Scruggs Group expressed interest in providing Kahler and
Hanning with financial backing, subject to the parties making certain
substantive changes to the Original Contract. The Scruggs Group
retained William H. Casterline to represent its potential interest in the
transaction. Casterline negotiated, drafted, and finalized an addendum
to the Original Contract ("Addendum"). The Perrys, Kahler, and Han-
ning executed the Addendum on May 16, 1994; the Scruggs Group
was not a party to the Addendum. Upon execution of the Addendum,
Kahler and Hanning agreed to make an additional advanced payment
of $200,000, which was credited against the one million dollars due
at closing.

The record reveals that the Scruggs Group assisted Kahler and
Hanning in performing their duties under these agreements, advanc-
ing more than $600,000 to be used to satisfy their obligations to the
Perrys. This amount included the $200,000 paid to the Perrys upon
execution of the Addendum as well as payments on some of the liens
against the Perry Farm. Additionally, the Scruggs Group, Kahler, and
Hanning entered into negotiations regarding the possible formation of
an entity that would assume the Original Contract and purchase the
property from the Perrys. On the same day that Kahler and Hanning
executed the Addendum, Casterline sent them a Letter of Intent and
a draft Limited Partnership Agreement. The Letter of Intent stated
that "this letter is to set forth your intent to form a legally recognized
business entity in Virginia to protect the interests of the new `finan-
cial partners' and to purchase and develop the Perry Farm." Kahler
and Hanning countersigned the Letter of Intent and returned it via fac-
simile to Casterline. The parties ultimately did not, however, form
any such partnership, limited liability company or other type of entity.

                  4
In late September 1994, Disney publicly announced that it would
not proceed with its development as planned. Negotiations nonethe-
less continued through January 1995, and the Perrys, Kahler, and
Hanning executed a Second and Third Addendum to the Original
Contract, extending the closing date to October 7, 1994, and January
5, 1995, respectively. The Scruggs Group was not a party to either
addendum.

Kahler and Hanning failed to close on January 5, and no further
extensions of the closing date were granted. Further, they failed to
reach any agreement with the Scruggs Group for third-party financ-
ing, and no limited partnership or limited liability company was ever
formed. The Perrys retained the $155,000 deposit and the $200,000
advanced payment received from Kahler and Hanning upon execution
of the Addendum. In August 1995, the Perrys entered into a joint ven-
ture agreement and formed a limited liability company with a devel-
oper named C. Lewis Waltrip, II, to develop the Perry Farm. The
Perrys contributed the entire 435 acres to the development project in
exchange for a percentage ownership in the joint venture and
Waltrip's promise to satisfy all of the encumbrances on the property.
The Perrys were to retain three or four building lots, which they val-
ued at $62,500 each (the price at which Waltrip had an option to pur-
chase the lots), and received $71,000 in payments made during the
course of the joint venture. In November 1996, the Perrys sold their
interest in the project to Waltrip for the total sum of $1,050,000.

On September 23, 1999, the Perrys filed this action in district court
against Hanning and the members of the Scruggs Group, alleging
breach of contract against Hanning (Count I); breach of contract
against the Scruggs Group (Count II); and breach of contract against
the Scruggs Group based on theories of agency (Count III), agency
by estoppel (Count IV), partnership by estoppel (Count V), and part-
nership by ratification (Count VI). On January 27, 2000, the Perrys
moved for summary judgment against Hanning on the issue of liabil-
ity. The Perrys and the Scruggs Group filed cross-motions for sum-
mary judgment on the remaining claims. Both the Scruggs Group and
Hanning filed motions to strike the Perrys' jury demand.

After a hearing, the district court entered an order on April 27,
2000, granting the motions to strike the Perrys' jury demand, granting

                  5
the Perrys' motion for summary judgment against Hanning on the
issue of liability, and denying the remaining motions for summary
judgment.

A four-day trial was held in July 2000. At the conclusion of the
Perrys' case-in-chief, Hanning and the Scruggs Group moved to strike
the testimony of Dr. Richard Edelman, the Perrys' expert on damages,
and moved for judgment in their favor as a matter of law pursuant to
Fed. R. Civ. P. 52(c). The court granted the motion to strike, finding
that Dr. Edelman's testimony impermissibly relied on hearsay under
Fed. R. Evid. 703 and that his analysis was too speculative under Vir-
ginia's new business rule. The court also granted the Scruggs Group's
Rule 52(c) motion and dismissed its members from the case. Finally,
the court entered a final judgment in favor of Hanning on the issue
of damages, concluding that the Perrys had not suffered damages and
that the royalty payment was not susceptible of reasonable valuation.
The Perrys filed a timely notice of appeal. Both the Scruggs Group
and Hanning filed cross-appeals.

II.

The Perrys first contend that the district court erred in finding that
they suffered no damages as a result of Hanning's breach. We review
the district court's calculation of damages for clear error, unless its
calculation was influenced by legal error, in which case review is de
novo. United States v. St. Paul Fire & Marine Ins. Co., 

,
344 (4th Cir. 1996). In calculating damages, Virginia law seeks to put
the damaged party "in the same position, as far as money can do it,
as he would have been if the contract had been performed." Bryant
v. Peckinpaugh, 

, 205 (Va. 1991) (citation omitted).
When a buyer breaches an agreement to purchase real property, "the
measure of damages ordinarily is the difference between the contract
price and the saleable or market value at the time of the breach." Barr
v. MacGlothlin, 

, 620 (Va. 1940).

We have thoroughly reviewed the district court's calculations and
agree that under either of its two approaches to measuring the fair
market value of the property, the Perrys have suffered no damages.
Even treating payment of the obligations to clear title as a wash
between the Original Contract and Waltrip transaction, using three

                  6
building lots instead of four, and omitting a disputed $90,000 that the
Perrys claim should have been set aside as attorneys' fees and pro-
ceeds from the sale of farm equipment, we find no damages. Accord-
ingly, finding no reversible error, we uphold the district court's
ultimate conclusion that the Perrys suffered no loss as a result of Han-
ning's breach.

Specifically, we find that the district court did not abuse its discre-
tion in finding the testimony of the Perrys' expert witness, Dr. Edel-
man, to be inadmissible. See General Elec. Co. v. Joiner, 

, 142-43 (1997) (stating standard of review). First, Dr. Edelman
relied on hearsay, basing his opinions on estimates provided by the
manager of the golf course. The Perrys did not call witnesses to fur-
nish the underlying facts for Dr. Edelman's calculations and made no
alternative showing that the underlying facts or data were of a type
reasonably relied on by other experts in the field as required by Fed.
R. Evid. 703. See Wilder Enters., Inc. v. Allied Artists Pictures Corp.,

, 1143 (4th Cir. 1980). We find that the district court
properly excluded Dr. Edelman's testimony on this ground.

Second, we agree with the district court that Dr. Edelman's esti-
mates are impermissibly speculative. In order to arrive at his conclu-
sions, Dr. Edelman had to make three key numerical findings: (a) the
royalty per round of golf; (b) the number of rounds to be played; and
(c) the Perrys' actuarial lifetime. Dr. Edelman made several assump-
tions in making these findings. He assumed that the golf course would
continue for the Perrys' lifetime; that the royalty would increase by
twelve percent in 2000, and parallel the projected increase in the con-
sumer price index ("CPI") thereafter; and that the number of rounds
would continue at the estimated 2000 level for the Perrys' lifetime.

Not only were Dr. Edelman's assumptions based on the entirely
separate and distinct Waltrip course, we find simply no basis in the
record establishing (a) when the Hanning golf course would have
been built; (b) whether it would have generated comparable business
to the Waltrip course; (c) whether the Waltrip course (upon which Dr.
Edelman's figures were based) would sustain its 1999 number of
rounds; or (d) whether the golf course patrons would tolerate the pro-
jected twelve percent increase in fees in 2000 and future CPI
increases. Because these assumptions are speculative and not sup-

                   7
ported by the record, we conclude that the district court properly
excluded Dr. Edelman's testimony on this ground. Tyger Constr. Co.
Inc. v. Pensacola Constr. Co., 

, 142 (4th Cir. 1994).

Third, we find that the district court did not abuse its discretion in
concluding that Virginia's new business rule barred Dr. Edelman's
testimony. The rule prohibits measuring anticipated profits from an
unestablished business:

        When an established business, with an established earning
        capacity, is interrupted and there is no other practical way
        to estimate the damages thereby caused, evidence of the
        prior and subsequent record of the business has been held
        admissible to permit an intelligent and probable estimate of
        damages. But where a new business or enterprise is
        involved, the rule is not applicable for the reason that such
        a business is a speculative venture, the successful operation
        of which depends upon future bargains, the status of the
        market, and too many other contingencies to furnish a safe-
        guard in fixing the measure of damages.

Mullen v. Brantley, 

, 699-700 (Va. 1973) (citations
omitted). Because we agree with the district court's conclusion that
evidence of projected rounds of golf from the Waltrip course is barred
by the new business rule, we also uphold its exclusion of Dr. Edel-
man's testimony on this ground.

We also find that the district court did not err in finding that the
Perrys were not entitled to the sum of $60,000 multiplied by their
joint life expectancy as an alternative calculation of the royalty por-
tion of the Original Contract. The Original Contract provided that the
Perrys were entitled to receive $60,000 annually after July 31, 1996,
for "any period of time that the property is not used as a commer-
cial/recreational golf course." We uphold the district court's conclu-
sion that this provision was simply not meant to provide a minimum
royalty or designate liquidated damages. Instead, the clause entitles
the Perrys to a fixed payment until the golf course contemplated by
the Original Contract was operational. Because there is no indication
in the record as to whether the golf course would have been com-
pleted by July 31, 1996, if the contract had been performed, we

                   8
uphold the district court's determination that awarding damages in
this manner would be impermissibly speculative.

Finally, the Perrys contend that the district court (1) incorrectly val-
ued the building lots retained by them, finding that there were four
lots instead of three; and (2) incorrectly included in the amounts
received from Waltrip $40,000 that the Perrys had to pay for attor-
neys' fees in related lien litigation, and $50,000 in farm equipment
purchased by Waltrip from the Perrys. We need not address these
challenges to the district court's valuation because even assuming
arguendo that the district court erroneously included these amounts,
any resulting error would be harmless given the net gain to the Perrys
as calculated by the court. We therefore uphold the district court's
calculation of damages in its entirety.

III.

The next issues raised by the Perrys on appeal involve the district
court's order granting the Defendants' Fed. R. Civ. P. 52(c) motion,
rejecting the Perrys' arguments that the Scruggs Group was not liable
as a joint venturer, partner, partner by estoppel, or by ratification of
the real estate sales contract. We review the district court's findings
of fact in support of its order granting a Rule 52(c) motion for clear
error. Fed. R. Civ. P. 52(a); Carter v. Ball, 

, 457 (4th Cir.
1994). We give the trial court's findings of fact great weight, and will
only disturb its findings if "`the reviewing court on the entire evi-
dence is left with the definite and firm conviction that a mistake has
been committed.'" Friend v. Leidinger, 

, 64 (4th Cir.
1978) (quoting United States v. United States Gypsum Co., 

, 395 (1947)).

A.

The Perrys first contend that the district court erred in ruling that
there was no principal/agent relationship between the Scruggs Group
and Kahler and Hanning. Under Virginia law, "[a]gency has been
defined as the relationship which results from the manifestation of
consent by one person to another that the other shall act on his behalf
and subject to his control, and the agreement by the other so to act."
Raney v. Barnes Lumber Corp., 

, 584 (Va. 1954). "Ac-

                  9
tual control, however, is not the test; it is the right to control which
is determinative." Whitfield v. Whittaker Mem'l Hosp., 

, 581 (Va. 1969).

The district court concluded, based on its factual findings, that the
Scruggs Group did not exercise sufficient control over Kahler and
Hanning such that an agency relationship was established. Finding no
clear error, we uphold this conclusion. The Scruggs Group, Kahler,
and Hanning all deny the existence of any agency relationship and
members of the Perry family testified that neither group made any
representations to them that Kahler and Hanning were acting as mere
agents. Although the Perrys contend that the Scruggs Group exercised
almost complete financial control over the transaction after the
Addendum was signed on May 16, 1994, it is clear that any amounts
paid or advanced by the Scruggs Group were necessary to keep the
potential deal afloat during negotiations. The Scruggs Group never
indicated that it intended to undertake liability on the contract and
there is no evidence that Kahler and Hanning were not free to reject
such financial support. Moreover, Kahler continued to seek investors
independent of the Scruggs Group, belying any claim that the Scruggs
Group possessed financial control of the transaction.

Based on our review of the record, we find that the district court
correctly applied the law of agency and find no clear error in its fac-
tual findings. Accordingly, we uphold the court's finding that no
agency relationship was established.

B.

The Perrys also contend that the district court erred in finding that
there was no partnership agreement between the Scruggs Group and
Kahler and Hanning. Although the district court found that the Letter
of Intent and a draft partnership agreement constituted an agreement
to agree, the Perrys claim that the documents formed an interim part-
nership agreement that would be amended as necessary.

In determining whether the two groups intended to become part-
ners, the court may look to the terms of any agreements, the conduct
of the parties, or the general circumstances surrounding the transac-
tion. Woodson v. Gilmer, 

, 894 (Va. 1964). No one

                  10
factor is determinative; rather, each case must be assessed upon its
own facts and circumstances. Cooper v. Knox, 

, 847
(Va. 1956).

We again find no clear error in the district court's factual findings.
As noted by the district court, the parties consistently denied that they
ever formed a partnership despite the fact that Hanning stood to bene-
fit from claiming the Scruggs Group as a partner instead of bearing
all liability on his own. Although a letter of intent was signed by Han-
ning and Kahler, the district court found that it merely indicated their
intent to form some sort of entity with the Scruggs Group. It was not
signed by the Scruggs Group and was essentially an "agreement to
agree."

Turning to the actual conduct of the parties, the district court found
that the parties acted inconsistently with the existence of a partnership
agreement. For example, Kahler testified that the Scruggs Group was
trying to identify additional investors and potential partners for the
deal. Carlos Perry, Jr. testified that Kahler expressed concern that his
interest would become diluted if more partners were to join the deal.
Likewise, the record indicates that Kahler and Hanning continued to
investigate other means of financing, presumably in case they failed
to reach an agreement with the Scruggs Group. If a partnership agree-
ment had indeed been reached, we see no reason why either group
would independently continue to seek out additional investors.

Although the Perrys place great weight on the document that they
refer to as an "interim partnership agreement", we uphold the district
court's determination that the document was merely a preliminary
draft of a potential agreement. From the clear language of the letter
of intent, it is clear that the parties needed to engage in further negoti-
ation. For example, the letter of intent does not specify what type of
entity is being formed; it merely refers to the formation of "a legally
recognized business entity" and discusses the advantages and disad-
vantages of entering into a limited liability company or limited part-
nership. The letter also refers to the attached agreement as a "draft"
and states "an understanding that additional provisions and revisions
will be required to produce a final agreement." Finally, we note that
the Scruggs Groups never signed either the letter of intent or the draft
agreement.

                  11
Considering the statement of the parties, their written correspon-
dence, and their conduct as a whole, we cannot conclude that the dis-
trict court erred in finding that there was no partnership agreement
between the Scruggs Group and Kahler and Hanning. Accordingly,
we uphold the district court's finding on this issue.

C.

The Perrys also contend that the district court erred in determining
that the Scruggs Group was not liable based on agency by estoppel
or partnership by estoppel. Under Virginia law, a principal is estopped
from denying an agency relationship if he represents that a party has
authority to act on his behalf and a third party reasonably relies on
this representation to its detriment, even if such authority is lacking.
Title Ins. Co. v. Howell, 

, 391 (Va. 1932). Likewise, par-
ties are estopped from denying a partnership where they hold them-
selves out as partners and a third party reasonably relies on their
representation as partners to its detriment. Bonavire v. Wampler, 

, 1016 (4th Cir. 1985).

The Perrys' own testimony fails to establish that a representation
of agency or partnership was ever made. The attorney representing
the Perrys in their lien litigation, Robert Cunningham, testified that he
was told that the members of the Scruggs Group were giving "serious
consideration" to becoming participants, that they were "likely partici-
pants", and that they were in the "decision-making process." Francine
Perry testified that Kahler and Hanning informed her that the Scruggs
Group was "interested in negotiating a deal." Both Carlos Perry, Sr.,
and his son testified that they were never told that Hanning and
Kahler were acting as agents of the Scruggs Group.

Although Carlos Perry, Jr., testified that Kahler made representa-
tions that he and the Scruggs Group were partners, there is no evi-
dence that the Scruggs Group was aware of any such representations.
Without knowledge of Kahler's alleged statement, we find that there
is no basis for a finding of partnership by estoppel and therefore the
Scruggs Group had no duty to make a statement disavowing any part-
nership arrangement. See generally Hobbs v. Virginia Nat. Bank, 

(Va. 1926). Accordingly, we uphold the district court's
determination that the Perrys never received any representation of an

                  12
agency relationship or partnership from the Scruggs Group or Kahler
and Hanning, and therefore we find no basis to apply the doctrine of
estoppel to this case.1
                      1

IV.

Finally, the Perrys contend that the district court erred in striking
their demand for a jury trial. Prior to trial, both Hanning and the
Scruggs Group filed separate motions to strike the Perrys' jury
demand pursuant to the terms of the Original Contract. Paragraph
21(d) of the Original Contract between the Perrys, Kahler, and Han-
ning expressly provided that "Each party hereby waives trial by jury
respecting any claim arising from or related to this Agreement." We
find that the Perrys are clearly bound by this waiver as to their claims
against Hanning because Hanning was a signatory to the Original
Contract. The Perrys are also bound by their waiver as to their claims
against the Scruggs Group; we agree with the district court's finding
that a person may not simultaneously bring a claim under a contract
and repudiate a jury waiver clause in the same contract. We therefore
find that the district court did not err in striking the Perrys' demand
for a jury trial.

V.

Upon review of the parties' briefs and applicable law, and having
had the benefit of oral argument, we uphold the district court's judg-
ment and rulings in their entirety. Accordingly, we affirm substan-
_________________________________________________________________

1 We also reject the Perrys' argument that the Scruggs Group was liable
under the doctrine of agency by ratification. This doctrine states that "a
principal may ratify the voidable acts of his agent, and such ratification
may be express or implied. And where, after a discovery of such acts, the
principal, with full knowledge of the facts, acts in such a manner as to
unmistakably indicate that he intends to avail himself of the benefits of
the contract made by the agent, he will be deemed to have ratified such
acts in their entirety." Bank of Occoquan v. Davis, 

(Va.
1931). Because we agree with the district court's finding that there was
no evidence that Kahler and Hanning acted on behalf of the Scruggs
Group, we find that the doctrine of ratification does not apply.

                  13
tially on the reasoning of the district court, as stated in its opinions
and bench rulings.2
                  2

AFFIRMED
_________________________________________________________________

2 Based on our disposition, we find it unnecessary to consider the argu-
ment raised on cross-appeal by the Appellees, i.e., whether the district
court erred in denying their motions for summary judgment based on the
liquidated damages clauses in the Original Contract and Addendum.

                   14