Enforcement of Certified-Mail Notice and Non-Waiver Clauses in Contract Terminations

Introduction

The dispute in Curtis Lawrence v. DAP Products, Inc. (4th Cir. Apr. 14, 2025) arose when DAP Products, Inc. abruptly terminated its carriage contract with Skyward Transportation, LLC and its owner Curtis Lawrence (“Skyward”). Skyward alleged that the termination was motivated by racial animus and constituted unlawful retaliation under 42 U.S.C. § 1981, and that DAP had breached the contract by (1) failing to give a 30-day opportunity to cure safety breaches and (2) failing to send termination notice by certified mail as required. The magistrate judge granted summary judgment to DAP on all claims and denied Skyward’s motion to withdraw or amend deemed admissions under Federal Rule of Civil Procedure 36. Skyward appealed. The Fourth Circuit affirmed in part, vacated in part, and remanded.

Summary of the Judgment

The Fourth Circuit held:

Rule 36 Admissions: The district court did not abuse its discretion in refusing to allow withdrawal of Skyward’s deemed admissions. Skyward failed to answer or object within 30 days and showed no diligence in seeking relief.
§ 1981 Discrimination and Retaliation Claims: Skyward failed to establish a prima facie case. It did not show that it met DAP’s legitimate performance expectations and offered no evidence that a non-decisionmaker’s alleged bias influenced the termination. Skyward also failed to show a causal connection for retaliation given the long gaps between protected activity and termination.
Breach of Contract – Cure Period: The court agreed that DAP validly exercised its right to immediate termination for safety failures without breaching the cure-period clause.
Breach of Contract – Certified-Mail Notice: The Fourth Circuit found a genuine issue whether Skyward impliedly waived the certified-mail requirement and the non-waiver clause. That claim was vacated and remanded for trial.

Analysis

Precedents Cited

The Fourth Circuit’s decision rests on several precedents:

Fed. R. Civ. P. 36(b) & Banos v. Chicago, 398 F.3d 889 (7th Cir. 2005): District courts have broad discretion to refuse withdrawal of admissions absent good cause and diligence by the admitting party.
Summary Judgment Standards – Dean v. Jones, 984 F.3d 295 (4th Cir. 2021) & Perkins v. Int’l Paper Co., 936 F.3d 196 (4th Cir. 2019): The non-movant must produce evidence on each prima facie element to survive summary judgment.
§ 1981 Prima Facie & Retaliation – Bryant v. Aiken Reg’l Med. Ctrs., Inc., 333 F.3d 536, 543 (4th Cir. 2003); Comcast Corp. v. Nat’l Ass’n of Afr. Am.-Owned Media, 589 U.S. 327 (2020); Guessous v. Fairview Prop. Invs., LLC, 828 F.3d 208 (4th Cir. 2016).
Bias of Non-Decisionmaker – Hill v. Lockheed Martin Logistics Mgmt., Inc., 354 F.3d 277 (4th Cir. 2004).
Temporal Proximity for Retaliation – Holland v. Washington Homes, Inc., 487 F.3d 208 (4th Cir. 2007); Causey v. Balog, 162 F.3d 795 (4th Cir. 1998).
Contract Interpretation & Waiver – Credible Behavioral Health, Inc. v. Johnson, 220 A.3d 303 (Md. 2019); Myers v. Kayhoe, 892 A.2d 520 (Md. 2006); Little Beaver Enters. v. Humphreys Rys., Inc., 719 F.2d 75 (4th Cir. 1983); Hovnanian Land Grp., LLC v. Annapolis Town Centre, LLC, 25 A.3d 967 (Md. 2011); Woznicki v. GEICO Gen. Ins. Co., 90 A.3d 498 (Md. Ct. Spec. App. 2014).

Legal Reasoning

The court first affirmed the refusal to withdraw admissions under Rule 36(b). It found Skyward’s failure to respond or seek extensions, coupled with its delay until after summary judgment, fell short of diligence and prejudice DAP.

In the § 1981 context, Skyward failed to satisfy the prima facie elements—particularly legitimate performance and causation. Safety incidents undermined performance, and the only biased employee was not a decisionmaker. Retaliation claims collapsed on temporal gaps (11 months, eight months) and absence of but-for causation.

On contract interpretation, Maryland’s objective theory governs. The panel held that the immediate termination clause authorized DAP to end the contract for safety breaches without a cure period. As to certified-mail notice and the non-waiver clause, the court recognized that implied waiver is possible where conduct (vacating premises) signals acceptance of notice by other means—but that determining waiver of a non-waiver clause generally requires a factfinder.

Impact

This opinion clarifies three areas:

Rule 36 Admissions: Reinforces courts’ discretion to enforce deemed admissions where a party sleeps on discovery.
§ 1981 Litigation: Underscores the necessity of demonstrating legitimate performance and strong causation evidence, particularly where bias stems from non-decisionmakers and protected activities are remote in time.
Contract Drafting & Enforcement: Emphasizes the importance of certified-mail notice and non-waiver clauses. Parties will need to consider express waivers or risk fact-intensive disputes over implied waiver.

Complex Concepts Simplified

Deemed Admission (Fed. R. Civ. P. 36): If you don’t answer a request for admissions in 30 days, the matters are “admitted” and conclusively established.
Summary Judgment: A court grants judgment when no material fact is disputed and the moving party is entitled to win as a matter of law.
§ 1981 “But-For” Causation: The plaintiff must show race (or protected activity) was a necessary cause of the adverse action, not merely one of several factors.
Implied Waiver: A party can lose the right to enforce a contract term if its conduct clearly indicates it will not insist on strict compliance.

Conclusion

Curtis Lawrence v. DAP Products confirms that diligence in discovery, robust evidence of performance and causation in discrimination claims, and precise compliance with contractual notice provisions are critical to litigation strategy. The Fourth Circuit’s vacatur and remand on the certified-mail notice issue signals that sophisticated waiver and notice clauses will invite detailed factual inquiry rather than summary resolution. This decision will guide future parties in drafting termination provisions, handling admissions, and marshaling evidence in § 1981 and breach-of-contract actions.