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A contour label line will place a label on any contour line that it crosses, even though you are only using the single label method. Matt mentions the way to fix it after it's already been placed. If you can anticipate having this issue with closely spaced contours before you begin labeling, one good way to avoid it from happening in most cases is to lower your annotation scale temporarily. The length of the contour label line object being placed is controlled by the current annotation scale.
Thanks for this suggestion! I was having the same issue, and temporarily changing the annoscale did the trick.