Filed: Jun. 20, 2002
Latest Update: Feb. 12, 2020
Summary: UNPUBLISHED UNITED STATES COURT OF APPEALS FOR THE FOURTH CIRCUIT SUN-LITE GLAZING CONTRACTORS, INCORPORATED, A Maryland Corporation, Plaintiff-Appellant, v. No. 01-1914 J. E. BERKOWITZ, L.P., A Delaware Limited Partnership; A. BERKOWITZ & COMPANY, INCORPORATED, A Pennsylvania Corporation, Defendants-Appellees. Appeal from the United States District Court for the District of Maryland, at Greenbelt. Frederic N. Smalkin, Chief District Judge. (CA-00-3076-S) Argued: May 9, 2002 Decided: June
Summary: UNPUBLISHED UNITED STATES COURT OF APPEALS FOR THE FOURTH CIRCUIT SUN-LITE GLAZING CONTRACTORS, INCORPORATED, A Maryland Corporation, Plaintiff-Appellant, v. No. 01-1914 J. E. BERKOWITZ, L.P., A Delaware Limited Partnership; A. BERKOWITZ & COMPANY, INCORPORATED, A Pennsylvania Corporation, Defendants-Appellees. Appeal from the United States District Court for the District of Maryland, at Greenbelt. Frederic N. Smalkin, Chief District Judge. (CA-00-3076-S) Argued: May 9, 2002 Decided: June 2..
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UNPUBLISHED
UNITED STATES COURT OF APPEALS
FOR THE FOURTH CIRCUIT
SUN-LITE GLAZING CONTRACTORS,
INCORPORATED, A Maryland
Corporation,
Plaintiff-Appellant,
v.
No. 01-1914
J. E. BERKOWITZ, L.P., A Delaware
Limited Partnership; A. BERKOWITZ
& COMPANY, INCORPORATED, A
Pennsylvania Corporation,
Defendants-Appellees.
Appeal from the United States District Court
for the District of Maryland, at Greenbelt.
Frederic N. Smalkin, Chief District Judge.
(CA-00-3076-S)
Argued: May 9, 2002
Decided: June 20, 2002
Before WILKINSON, Chief Judge, and WILLIAMS and
KING, Circuit Judges.
Affirmed by unpublished per curiam opinion.
COUNSEL
ARGUED: Herman Martin Braude, BRAUDE & MARGULIES,
P.C., Washington, D.C., for Appellant. Rebecca Anne Donnellan,
2 SUN-LITE GLAZING CONTRACTORS v. BERKOWITZ
DILWORTH PAXSON, P.L.L.C., Washington, D.C., for Appellees.
ON BRIEF: Michael B. Beard, BRAUDE & MARGULIES, P.C.,
Washington, D.C., for Appellant. Joel F. Brenner, DILWORTH PAX-
SON, P.L.L.C., Washington, D.C., for Appellees.
Unpublished opinions are not binding precedent in this circuit. See
Local Rule 36(c).
OPINION
PER CURIAM:
Sun-Lite Glazing Contractors, Inc. appeals the district court’s entry
of judgment in favor of J.E. Berkowitz, L.P. and A. Berkowitz &
Company (collectively, Berkowitz) on Sun-Lite’s breach of contract
and negligence claims. Finding no reversible error, we affirm.
I.
Grunley Construction Company, a prime contractor, entered into a
contract with the United States General Services Administration
(GSA) for the renovation of the George H. Fallon federal office build-
ing in Baltimore, Maryland. Included in the prime contract was the
replacement of the exterior windows of the 20-story office building.
In 1995, Grunley subcontracted the window replacement portion of
the prime contract to Sun-Lite. Sun-Lite, in turn, contracted with Ber-
kowitz early in 1996 to manufacture and supply the windows.
Berkowitz manufactured and supplied four varieties of windows
for the office building: GL1, GL1A, GL2, and GL2A.1 The GL2 win-
dow, which is the only variety at issue in this appeal, consisted of two
panes of glass hermetically sealed with an air space between the
1
Berkowitz refers to these as "Windou" units. (J.A. at 191.) The four
varieties were of two basic types: clear glass over clear glass and bronze
glass over low-emission glass. The GL2 windows were of the latter type.
SUN-LITE GLAZING CONTRACTORS v. BERKOWITZ 3
panes. One pane was coated with a special low-emission coating,
which was designed to absorb ultraviolet radiation and enhance the
energy efficiency of the window. The specifications of the prime con-
tract required the pane with this special coating to be placed on the
inside of the building.
During the manufacturing process, Berkowitz affixed stickers to
the GL2 windows that advised Sun-Lite, as the installer, to "Glaze
this side in." (J.A. at 8.) In June 1999, GSA inspectors examined the
office building and determined that the GL2 windows had been
installed backwards, with the special low-emission coating on the out-
side of the building. To meet the specifications of the prime contract,
Sun-Lite was required to remove and reinstall the GL2 windows so
that the pane with the special coating was placed on the inside of the
building.
On October 13, 2000, Sun-Lite filed a complaint against Berkowitz
in the United States District Court for the District of Maryland, alleg-
ing negligence and breach of contract arising out of Berkowitz’s
placement of the stickers on the incorrect pane and seeking damages
for the cost of removal and re-installation of the windows.2 On Febru-
ary 2, 2001, after filing a responsive pleading, Berkowitz filed a
motion to dismiss, which the district court construed as a motion for
judgment on the pleadings pursuant to Federal Rule of Civil Proce-
dure 12(c).
The district court granted judgment on the pleadings in favor of
Berkowitz on the negligence claim and granted in part and denied in
part judgment on the pleadings in favor of Berkowitz on the breach
of contract claim. The partial dismissal of the breach of contract claim
was based upon the district court’s conclusion that the four-year stat-
ute of limitations period provided by Maryland law governing actions
for breach of contract and warranties had expired. Sun-Lite filed a
motion for reconsideration, claiming that the dates that the windows
were tendered were in dispute, and the district court granted reconsid-
2
Berkowitz ultimately disputes that the stickers were placed on the
wrong pane, but we assume for purposes of this appeal that Sun-Lite’s
allegation is true.
4 SUN-LITE GLAZING CONTRACTORS v. BERKOWITZ
eration on the partial dismissal of the breach of contract claim for fur-
ther discovery as to the dates of tender.
After discovery, Berkowitz filed a motion for summary judgment
with respect to the breach of contract claim, claiming that the statute
of limitations barred the action, or, in the alternative, that the action
was barred by the contract’s disclaimer of warranties. On June 18,
2002, the district court granted Berkowitz’s motion on the latter ratio-
nale. Sun-Lite filed a timely notice of appeal.
II.
Sun-Lite first contends that the district court erred by granting
judgment on the pleadings in favor of Berkowitz with respect to Sun-
Lite’s negligence claim. We review de novo the district court’s grant
of judgment on the pleadings pursuant to Fed. R. Civ. P. 12(c), apply-
ing the same standard as for motions made pursuant to Rule 12(b)(6).
Burbach Broadcasting Co. v. Elkin Radio Corp., 278 F.3d 401, 405-
06 (4th Cir. 2002). To uphold a dismissal for judgment on the plead-
ings, we must take the allegations in the complaint as true and con-
clude that Sun-Lite, as the non-moving party, can prove no set of facts
in support of its claim that would entitle it to relief. See id.; Bruce v.
Riddle,
631 F.2d 272, 273-74 (4th Cir. 1980).
In its initial memorandum opinion granting judgment on the plead-
ings, the district court correctly noted that Maryland courts consis-
tently have held that there is no recovery under a negligence theory
for purely economic losses, absent a risk of death, personal injury, or
destruction of tangible property. A.J. Decoster Co. v. Westinghouse
Elec. Corp.,
634 A.2d 1330, 1333 (Md. 1994); Copiers Typewriters
Calculators v. Toshiba Corp.,
576 F. Supp. 312, 326 (D. Md. 1983)
(applying Maryland law and concluding that negligence cause of
action was foreclosed by economic loss doctrine where the purchaser
of photocopying machines sought recovery for the failure of the
defective copiers to perform adequately). The Maryland Special Court
of Appeals has explained:
It is generally said that a contractor’s liability for economic
loss is fixed by the terms of his [or her] contract. Tort liabil-
ity is in general limited to situations where the conduct of
SUN-LITE GLAZING CONTRACTORS v. BERKOWITZ 5
the builder causes an accident out of which physical harm
occurs to some person or tangible thing other than the build-
ing itself that is under construction.
Council of Co-Owners of Atlantis Condominium, Inc. v. Whiting-
Turner Contracting Co., 517 A.2d 336, 344 (Md. 1986). Sun-Lite
concedes that the alleged defect in the labeling of the windows did not
create a risk of death, personal injury, or destruction of tangible prop-
erty, but it contends that the economic loss doctrine is inapplicable
because Sun-Lite’s negligence claim is one of negligent misrepresen-
tation, which is an exception to the general rule barring tort recovery
for pure economic loss. In the district court’s memorandum opinion
denying reconsideration on the dismissal of the negligence claim, it
acknowledged negligent misrepresentation as an exception to the eco-
nomic loss doctrine but concluded that Sun-Lite could not establish
the elements of the claim as a matter of law.
The principal elements of the tort of negligent misrepresentation
are as follows:
(1) the defendant, owing a duty of care to the plaintiff, neg-
ligently asserted a false statement; (2) the defendant
intended that the statement will be acted upon by the plain-
tiff; (3) the defendant has knowledge that the plaintiff will
probably rely on the statement which, if erroneous, will
cause loss or injury; (4) the plaintiff, justifiably, took action
in reliance on the statement; and (5) the plaintiff suffered
damage proximately caused by the defendant’s negligence.
Prudential Securities, Inc. v. E-Net, Inc., 780 A.2d 359, 380 (Md. Ct.
Spec. App. 2001) (internal quotation marks omitted). To establish the
first element of a negligent misrepresentation claim, Maryland juris-
prudence requires that the alleged duty be independent of any contrac-
tual obligation. Thus, "the mere negligent breach of a contract, absent
a duty or obligation imposed by law independent of that arising out
of the contract itself, is not enough to sustain an action in tort." Heck-
rotte v. Riddle,
168 A.2d 879, 882 (Md. 1961); see also Mesmer v.
Maryland Auto. Ins. Fund,
725 A.2d 1053, 1058 (Md. 1999) ("A con-
tractual obligation, by itself, does not create a tort duty. Instead the
duty giving rise to a tort action must have some independent basis.").
6 SUN-LITE GLAZING CONTRACTORS v. BERKOWITZ
Applying this caselaw, this circuit has made clear that we will not
countenance a negligent misrepresentation claim premised only upon
a breach of a contractual obligation when the contract does not pro-
vide for the bringing of such a claim and the parties are "equally
sophisticated." Martin Marietta Corp. v. Int’l Telecomm. Satellite
Org., 991 F.2d 94, 98 (4th Cir. 1993) ("Equally sophisticated parties
who have the opportunity to allocate risks to third party insurance or
among one another should be held to only those duties specified by
the agreed upon contractual terms and not to general tort duties
imposed by state law." (internal quotation marks omitted)).
Despite Sun-Lite’s protestations to the contrary, its negligent mis-
representation claim is virtually indistinguishable from the claim
under consideration in Martin Marietta. Because Sun-Lite does not
contend that it was in an inferior bargaining position vis-a-vis Ber-
kowitz and is unable to establish that Berkowitz had a duty, indepen-
dent from its contractual obligations, regarding the placement of the
stickers on the windows, Sun-Lite’s negligent misrepresentation claim
fails as a matter of law.3 Were we to recognize the viability of a negli-
gent misrepresentation claim on the facts alleged by Sun-Lite, we
would not only ignore settled precedent interpreting Maryland law,
we would allow a garden variety breach of contract claim to be con-
verted into a negligence claim, thereby nullifying the parties’ agreed
upon allocations of risk. Thus, we have no difficulty concluding that
the district court correctly granted judgment on the pleadings in favor
of Berkowitz with respect to Sun-Lite’s negligence claim.
III.
Sun-Lite next contends that the district court’s grant of summary
3
The cases cited by Sun-Lite in support of its contrary proposition are
inapposite, in that each involved a fiduciary duty, or some other duty,
independent of the contract. Noble v. Bruce, 709 A.2d 1264, 1268-69
(Md. 1998) (recognizing a tort duty of care towards clients for profes-
sionals, such as attorneys); Shofer v. Stuart Hack Co.,
723 A.2d 481, 487
(Md. Ct. Spec. App. 1999) (involving fiduciary duty of a pension plan
administrator). No such duty has been established here; instead, Sun-
Lite’s negligent misrepresentation claim is premised solely on the
alleged contractual duties undertaken by Berkowitz.
SUN-LITE GLAZING CONTRACTORS v. BERKOWITZ 7
judgment in favor of Berkowitz on Sun-Lite’s breach of contract
claim was improper because it was based upon the erroneous legal
conclusion that the parties’ contract contained a warranty provision
disclaiming implied warranties.4 We review de novo the district
court’s entry of summary judgment, viewing the facts in the light
most favorable to Sun-Lite, as the non-moving party.
During the negotiation of the final purchase order, Berkowitz pro-
vided Sun-Lite with a one-page document entitled "Warranty." (J.A.
at 191.) The document referenced Sun-Lite’s order for "dual seal,
IGCC Level A windows" for the "GSA Fallon Office Building," and
it warranted that the windows "were free from material obstruction of
vision as a result of dust or film formation on the internal glass sur-
faces caused by failure of the hermetic seal due to faulty manufactur-
ing of the unit by J.E. Berkowitz, L.P." (J.A. at 191.) The warranty
extended for a period of ten years. The document also included the
following disclaimer:
[BERKOWITZ] MAKES NO OTHER EXPRESS OR
IMPLIED REPRESENTATION OR WARRANTY OF
4
As Sun-Lite acknowledges in its opening brief, Sun-Lite’s assignment
of error does not turn on any disputed facts but rather on the proper inter-
pretation and construction of the parties’ agreement. (Appellant’s Br. at
7 ("Each of these determinations [that no cause of action existed in tort
and that the warranty was part of the contract] are findings of law
. . . .")); (Appellant’s Br. at 15 ("Construction of a written contract is a
question of law . . . .")). Thus, Sun-Lite has not demonstrated the exis-
tence of any genuine issues of material fact that render summary judg-
ment inappropriate with respect to its breach of contract claim. World-
Wide Rights Ltd. Partnership v. Combe, Inc., 955 F.2d 242, 245 (4th Cir.
1992) (providing a framework for determining whether summary judg-
ment is appropriate in a breach of contract action and concluding that
when the action involves undisputed evidence that is, as a matter of law,
"dispositive of the interpretive issue," summary judgment is appropriate);
Burgin v. OPM,
120 F.3d 494, 497-98 (4th Cir. 1997) ("[T]he essential
question is one of the interpretation of the contract’s language, a question
of law clearly within the competence of courts."); cf. Mitchell v. AARP
Life Ins. Program, 779 A.2d 1061, 1069 (Md. Ct. Spec. App. 2001)
("The interpretation of a written contract is generally a question of law
for the court . . . .").
8 SUN-LITE GLAZING CONTRACTORS v. BERKOWITZ
ANY KIND REGARDING WINDUO, WHETHER AS TO
MERCHANTABILITY, FITNESS FOR A PARTICULAR
PURPOSE OR USE, OR ANY OTHER MATTER.[5]
(J.A. at 191.)
Significantly, Sun-Lite concedes that it received the document con-
taining the limited warranty and disclaimer and that it submitted a
Purchase Order after receiving the document without indicating any
disagreement with the terms of the warranty.6 In response to the Pur-
chase Order, Berkowitz sent Sun-Lite an acknowledgment, which
stated, "[t]his acknowledgment is subject to the Limited Warranty at
the end of this order." (J.A. at 194.) Again, Sun-Lite expressed no dis-
agreement with the terms of the warranty or its inclusion in the con-
tract. Thus, because Sun-Lite was made aware of the limited warranty
and the disclaimer prior to submitting its offer, was reminded of the
warranty in Berkowitz’s acceptance, and never objected to its inclu-
sion in the contract, the limited warranty clearly formed "part of the
basis of the bargain" and was included in the contract. See Md. Code
Ann., Com. Law I § 2-313 (1997) (providing that express warranties
are created by "[a]ny affirmation of fact or promise made by the seller
to the buyer which relates to the goods and becomes part of the basis
of the bargain"); § 2-313 cmt. 7 (noting that the timing of the making
of the express warranty "is not material" to the question of whether
the warranty became part of the "basis of the bargain"); cmt. 3 (illus-
trating that warranties made during contract negotiations generally
form part of the "basis of the bargain").
Moreover, Sun-Lite concedes that the parties’ contract includes the
5
As the district court noted, "it is hornbook U.C.C. law that," as
between merchants, "a seller may exclude the implied warranty of mer-
chantability by a written exclusion that mentions merchantability and is
conspicuous." (J.A. at 153 (citing Md. Code Ann., Com. Law I, § 2-
316(2) (1997).)
6
In its memorandum opinion, the district court stated that the Purchase
Order submitted by Sun-Lite and the Warranty submitted by Berkowitz
were both dated April 23, 1996. We note, however, that the parties agree
that this statement was erroneous with respect to the date of the Purchase
Order, which they agree was dated May 3, 1996.
SUN-LITE GLAZING CONTRACTORS v. BERKOWITZ 9
plans and specifications of the prime contract between GSA and
Grunley. (Appellant’s Br. at 17.) Section 1.8 of those specifications
contains a warranty provision that requires the manufacturer of the
glass products to "submit a written warranty . . . agreeing to furnish
replacements for those coated glass units that deteriorate . . . War-
ranty covers only deterioration due to normal conditions of use and
not to handling, installing, and cleaning practices contrary to glass
manufacturer’s published instructions." (J.A. at 173 (emphasis
added).) Similarly, subsection (g) of Federal Acquisition Regulation
(FAR) 52.246-21 provides that the prime contractor should "obtain
[from its subcontractors and suppliers] all warranties that would be
given in normal commercial practice." FAR 52.246-21, codified at 48
C.F.R. 52.246-21 (2001). No other warranty was submitted by Ber-
kowitz, and Berkowitz provided undisputed evidence that the limited
warranty is one that complies with "normal commercial practice."
(J.A. at 561-62.) Accordingly, the applicable regulations, as well as
the specifications of the prime contract, require the submission of a
warranty like that submitted by Berkowitz.7
Finally, Sun-Lite argues that the limited warranty was excluded
7
Sun-Lite argues that Berkowitz was not required to submit a warranty
pursuant to the specifications because the warranty of construction found
in FAR 52.246-21 was incorporated into the agreement. This argument
misapprehends the plain text of FAR 52.246-21, which authorizes the
following warranty to be included in the contract solicited by the con-
tracting officer:
In addition to any other warranties in this contract, the Contrac-
tor warrants, . . . that work performed under this contract con-
forms to the contract requirements and is free from any defect in
equipment, material, or design furnished, or workmanship, per-
formed by the Contractor or any subcontractor or supplier at
any tier.
FAR 52.246-21 (emphasis added). By distinguishing the "Contractor"
from the "subcontractor" and the "supplier," the plain language of this
FAR provision makes clear that the provision imposes warranty require-
ments on the prime contractor. Thus, the FAR warranty of construction
renders Grunley, as the prime contractor, responsible for any faulty work
done by its subcontractors or suppliers, but it does not impose any war-
ranty requirements on Berkowitz.
10 SUN-LITE GLAZING CONTRACTORS v. BERKOWITZ
from the parties’ contract by an integration clause in a Joint Pay
Agreement between Sun-Lite, Berkowitz, and Grunley. The Joint Pay
Agreement was entered into after the exchange of the Purchase Order
and the acknowledgment. It established Grunley’s obligations with
respect to payment of the subcontractors and suppliers and stated,
"Berkowitz and Sun-Lite Glazing acknowledge that the attached Pur-
chase Order is the complete contract between the parties." (J.A. at
196.) As noted above, however, Sun-Lite concedes that the specifica-
tions of the prime contract were included in the parties’ agreement by
way of reference in the Purchase Order. Supra at 8. Those specifica-
tions, in turn, require the submission of a warranty meeting some
minimum standards, but they expressly leave to the manufacturer’s
discretion many of the terms of the warranty to be submitted. (J.A. at
173.) Insofar as the contract, which Sun-Lite agrees includes the
incorporated portion of the specifications, facially is incomplete
because it requires the submission of an additional document, namely,
a limited warranty like that submitted by Berkowitz, any argument
that the integration clause prohibits consideration of the limited war-
ranty lacks merit.
In sum, the undisputed evidence shows that the limited warranty
was conspicuous and unambiguous, Sun-Lite received the warranty
prior to submitting its Purchase Order, was again made aware of the
warranty in Berkowitz’s acknowledgment, never evinced any dis-
agreement as to the terms of the warranty or the warranty’s inclusion
in the contract, and agrees that the contract included the specifications
requiring such a warranty. Thus, the district court correctly deter-
mined, as a matter of law, that the limited warranty was part of the
basis of the bargain and was included in the contract. Because Sun-
Lite’s breach of contract claim is premised exclusively upon breach
of warranty, and Berkowitz effectively disclaimed all implied and
express warranties other than the warranty for obstruction of vision,
see supra at 7, the district court correctly granted summary judgment
in favor of Berkowitz on the breach of contract claim.8 Indeed, Sun-
8
As the district court noted, even if the disclaimer of the implied war-
ranty of merchantability were ineffective, the warranty provides that the
limited, exclusive remedy for any breach is replacement of the non-
conforming goods or refund of the purchase price. This limited, exclu-
sive remedy is valid under Md. Code Ann., Com. Law I § 2-719 (1997),
and it forecloses the underlying legal action for consequential damages.
SUN-LITE GLAZING CONTRACTORS v. BERKOWITZ 11
Lite does not argue that its breach of contract claim is viable if the
district court properly found the limited warranty to have been
included in the contract.
IV.
For the foregoing reasons, we affirm the district court’s entry of
judgment in favor of Berkowitz with respect to Sun-Lite’s claims of
negligence and breach of contract.
AFFIRMED
