WRIGHT, J.
This appeal arises from a jury verdict in favor of appellee, Interactive Digital Solutions, Inc. ("IDS"), on counts of breach of contract, tortious interference with contract, and tortious interference with business relations. The jury awarded undifferentiated damages totaling $769,422 and on June 8, 2011, the Circuit Court for Howard County entered judgment against appellant, B-Line Medical, LLC ("B-Line"). On June 20, 2011, B-Line timely filed a Motion to Revise Judgment, a Motion for Judgment Notwithstanding the Verdict ("JNOV"), and a Motion for a New Trial. On July 28, 2011, the circuit court denied the motions. On August 1, 2011, B-Line filed this appeal.
B-Line asks us to determine:
IDS presents one issue on cross-appeal, which IDS asks us to address only if we remand the case for a new trial:
Finding no error or abuse of discretion, we affirm the circuit court's judgment. As such, we need not address B-Line's third question or IDS's cross-appeal.
B-Line is a Maryland limited liability corporation that creates proprietary medical simulation software used to train medical and nursing students and other healthcare professionals. IDS is an Indiana corporation that creates and sells video networking products for use in interactive distance learning, web-based training, and other purposes as well as sells media distribution, consultation, installation, and maintenance services.
On or about March 20, 2006, B-Line and IDS entered into a Mutual Subcontract Agreement ("MSA"), a teaming arrangement where the parties could bundle their services to sell as a package to prospective customers. The MSA was a non-exclusive agreement whereby either party could, but was not required to, contract with the other to provide services or materials in connection with a project in which the other party was involved. Under the MSA, a project would be initiated when the "Prime," or party entering a contract with a third-party, requested that the non-contracting party become the "Supplier" of goods and services under the contract. If either B-Line or IDS had a relationship with a third-party client, the other party was barred by the MSA from providing services to that client unless the party with the existing relationship consented in writing. Section 3.1.5 of the MSA states that "Supplier shall not provide any service directly to a client for solutions provided as a subcontractor to the Prime without written authorization from the Prime."
When the MSA was formed, B-Line was involved in two projects
In the latter half of 2006, Clarian, an Indiana non-profit corporation that owns and operates several hospitals and medical centers in Indiana, engaged in a joint venture with the Indiana University School of Medicine & School of Nursing ("IU") to construct a new building for the medical and nursing schools containing a clinical skills simulation center ("Clarian Simulation Center").
On November 28, 2006, AT & T, IDS, and B-Line gave a presentation to Clarian and IU representatives.
On February 9, 2007, the Midwest regional sales representative for IDS, Zac Cook, was notified via phone call by Melody Korous, a Clarian project manager, that Clarian had selected the AT & T, IDS, and B-Line team. Cook then sent an e-mail to AT & T and B-Line stating that "[w]e were just awarded the project for the Clarian/IU Medical Clinical Skills & Simulation Center!!!" Dave Ramsay of B-Line responded, "Great news Zac! Best I've heard in a while [sic]. Let me get back to you about our availability for the next meeting and who will be attending." IDS subsequently engaged in planning and design work, including development of detailed floor plans for the Clarian Simulation Center. From March 2007 until
On May 15, 2007, Korous sent Cook an e-mail stating that Clarian wanted to pay a retainer fee for the project. On June 29, 2007, Clarian faxed an executed Master Purchase Agreement and issued a written purchase order ("P.O.") to AT & T, agreeing to pay $160,000 as a ten percent down payment on the then-estimated project cost of $1.6 million to compensate AT & T and IDS for the work performed between February and June 2007. AT & T then paid IDS $159,400 for its design services, which constituted Phase I in the Master Purchase Agreement. B-Line was to be paid under Phase II, when AT & T and IDS received a second purchase order from Clarian. Lucas Huang, then-Chief Executive Officer of B-Line, testified that, with rare exceptions, it was normal for B-Line to "consult" and provide "advice during [the] whole [design] process" without being paid.
B-Line created the "detailed, room-by room equipment requirements that formed the basis for this Scope of Work document" comprising Phase II. B-Line reviewed and approved the completed design work in September and the completed designs were then provided to Clarian. Cook testified that various departments within Clarian and IU were contributing funds to the project's budget, which caused delays in getting the P.O. for Phase II issued. Cook stayed in regular contact with Korous and Clarian, and on November 8, 2007, Korous sent Bob Brake, the AT & T account executive assigned to Clarian and IU, an e-mail stating that "although we have approved project, we can't dedicate dollars until we know for sure where they're coming from. Once we have this figured out, we'll get you to sign the contract. We plan to deliver the P[.]O[.] and contract at the same time."
On December 28, 2007, AT & T received a second P.O. from Clarian for $1,890,000, the balance of the contract after the down payment for the design work was paid. The second P.O. encompassed the B-Line software modules, hardware, and corresponding services for implementation and contained the same Scope of Work document that was approved by B-Line in September 2007. The P.O. referenced Master Agreement No. 705568, which was signed between Clarian and AT & T in 2004.
Meanwhile, problems arose between B-Line and IDS on a separate IU Nursing School project, where IDS was acting as the Prime and B-Line was the Supplier. Succinctly, B-Line had continued to develop its software over the course of the year in other projects, necessitating the use of particular equipment that was outside of the Nursing School's budget by $50,000. According to Mills, B-Line refused to accommodate
On December 28, 2007, Huang sent an e-mail to other B-Line personnel, in which he proposed to send the following e-mail to IDS:
Mills and Huang both testified that no one from B-Line informed IDS of the decision to terminate their relationship. Mills testified that by January, he believed all the disputes between IDS and B-Line regarding the Clarian Simulation Center project and the smaller IU Nursing School project had been resolved, while Huang testified that he was "furious" about the Nursing School problems.
In January 2008, the problems escalated when, because of concerns with the AT & T proposed addenda to the contract, Clarian assigned Vern Berridge to the Clarian Simulation Center project. In January 2008, Berridge approached IDS with questions about the end-user licensing agreement for the B-Line software, and a meeting was held in which AT & T explained that the Master Contract between AT & T and Clarian covered any issues. When Berridge still had questions about the B-Line software and a conference call could not be scheduled, IDS gave Berridge B-Line's contact information so he could contact them directly for answers. Berridge and Huang thereafter had numerous conversations regarding the project that did not involve IDS. Berridge expressed confusion about the relationship between IDS and AT & T, and concerns about IDS acting as the Prime on the project, which IDS and AT & T attempted to allay, but B-Line did not.
An internal Clarian e-mail from Don Hellum, the construction manager on the Clarian Simulation Center project, to Berridge dated January 28, 2008, stated:
Berridge replied that he wanted to clarify each party's roles before proceeding, and Hellum responded by explaining that Clarian had "paid for time spent regarding concepts and programming as a retainer ($160,000). [IDS] has been running the show with B-Line as backup, up to this point." Berridge then replied in a January 30, 2008 e-mail to Hellum that "[a]fter direct conversation with B-Line ... I am very apprehensive about current player arrangements in this implementation."
Huang testified that in his first conversations with Berridge, he told Berridge that the arrangement most likely to yield a
In the e-mail sending the proposal, Huang reiterates that "although Clarian is fine with using B-Line Medical as the overall software solution, given the magnitude of the AV project, it needs to be bid out to multiple AV vendors to [e]nsure Clarian is getting the best value for its investment."
Additionally, on January 29, 2008, B-Line was having internal discussions about sending a non-disclosure agreement ("NDA") to Berridge. B-Line President, Chafic Kazoun expressed his concern in an e-mail to Huang, stating, "[y]ou do realize that if he sends this around his team, someone on his team probably has a relationship with IDS which means no matter what he does it will very likely get back to IDS. What guarantee do we have that it won't?" David Ramsay, in an e-mail to Huang, suggested "[i]f they [Clarian] are willing to sign an NDA on this delicate issue, take them up on it. A bit embarrassing up front, but could save us a lawsuit." B-Line included a NDA with its proposal to Clarian, but the NDA was never signed.
On January 30, 2008, a few hours after Berridge sent an e-mail to Hellum asking for "input before making this change" and expressing his "apprehension," Berridge sent an e-mail to Huang agreeing to replace AT & T and IDS with B-Line. Berridge's e-mail states, "I believe I have what I need to make this change official by mid-next week.... To be clear on Clarian's desires with B-Line Medical, we would like B-Line to be responsible for ensuring the overall successful implementation of the project and include that cost in your overall solution price."
On January 31, 2008, Korous e-mailed Berridge the following:
Korous testified in her deposition, which was presented to the jury, that she was concerned that Berridge's actions would result in the operations group having to start the design process over again and delay opening. Korous further testified that her concerns were unwarranted because, as discussed below, B-Line took the detailed Scope of Work document prepared by IDS, presented it to Clarian, and then provided that document to other vendors.
On February 6, 2008, Brake sent an e-mail to Korous explaining that while they were separate companies, IDS was AT &
On February 20, 2008, Mills stated in an e-mail to B-Line that "[Huang] has confirmed that he has not heard from [Berridge] working with Clarion [sic] directly and [Berridge] evidently told [Huang] that the customer was frustrated with us, we have followed up with them and they have told us that this is not the case that [] their real frustration is internally with [Berridge]." E-mails between Brake and Huang on February 20, 2008, show that Huang disagreed that AT & T was responsible for bringing B-Line into the project, but Huang states that "[B-Line] will continue to stay out of the matter out of respect for the partnership and I hope you are successful in convincing Clarian to move ahead." Mills also requested a conference call with Berridge and B-Line to clarify what IDS was working on. Within B-Line, Ramsay e-mailed Huang, stating, "I would go ahead and participate at this point. We have made our position very clear. No need to get into an all out war if this ends up going ahead as planned."
IDS was continuing to try and work with Clarian to resolve any confusion regarding its ability to perform the contract. IDS was also still communicating with B-Line regarding design changes and sending documentation to B-Line. On February 23, 2008, Brake was reassuring Berridge that B-Line was responsible for the design and would have a prominent role in the implementation stage of the project. IDS was unaware that in February or early March 2008, B-Line entered formal negotiations with Clarian, resulting in a written Purchase Agreement between B-Line and Clarian that excluded AT & T and IDS.
On March 5, 2008, Brake met with Berridge and Clarian's Chief Information Officer, which resulted in AT & T agreeing that Clarian would enter into a separate contract with B-Line for its software and a separate contract with AT & T for the integration work, essentially "two separate primes and no subs." On March 6, 2008, Brake relayed this to Huang, who responded that "[t]his is very good news. We are very comfortable with this arrangement. I hope you feel the same. Please let me know if there is anything I need to do to help make this arrangement work." On March 10, 2008, IDS removed B-Line's products from the proposed scope of work and updated the pricing for AT & T's contract with Clarian.
On March 19, 2008, Clarian held a meeting with B-Line regarding the new arrangement. In an e-mail on the same day, Korous stated that "B-Line is going to
B-Line then responded:
Several days later, Berridge stated:
However, IDS was unaware of the bid process until May 15, 2008, at which point Brake requested a copy of the bid from Berridge and Huang. Later that day, Huang e-mailed Mills and Brake with "the bid package that I sent out to the AV Integrators 2 days ago." Berridge responded to Brake:
After AT & T submitted its bid, Berridge sent Korous an e-mail stating that "[t]he only bidder which provided both functional and upgrade pricing was Bidder # 1 (AT & T) given their long term engagement with the committee." Korous testified that Berridge was referencing how AT & T "knew our solution the most and had the ... best understanding of our scope of work compared to the other bidders."
On July 10, 2008, Brake asked Huang to endorse AT & T. Brake stated that "[f]urther investigation seems to point to [Berridge] trying to steer this to Electro Evolutions. To my knowledge they have never done a Sim Center and I think it will be a bad result for everyone involved." B-Line responded with the following e-mail for AT & T to include in their presentation:
After the presentation, Brake sent Huang an e-mail stating "thanks for the endorsement. Our presentation went very well. The dynamics in the room were very evident. [Berridge] is pushing for E Evolutions and the rest of the selection committee seems very frustrated that this process was even required." An internal Clarian e-mail dated July 22, 2008, to Berridge explaining a cost-saving measure questioned by Huang that IDS had incorporated into its bid, states that "[t]hese cuts were gained through the meetings with end users.... Bottom line, there is no technical issue with AVS'[s] design vs IDS'[s] design. It simply demonstrates that IDS has had an advantage in the multiple meetings they had with the implementation team."
On August 12, 2008, Korous told another Clarian employee via e-mail that Clarian was "heading in the direction of AVS dependent upon final contract agreement. We are not making a formal announcement until we have the contract signed with them. IDS will not be informed until this time." Brake was notified by Berridge on October 3, 2008, that AT & T and IDS were not awarded the project.
On January 22, 2010, IDS filed a complaint in the circuit court and filed an amended complaint on June 2, 2010.
Additional facts will be provided as necessary, in the relevant sections, below.
The case sub judice contains both contract and tort claims. B-Line contends that the evidence adduced at trial was legally insufficient to support the jury's verdict. We shall examine each claim in turn.
This Court recently expressed the applicable standard of review as follows:
Univ. of Md. Med. Sys. Corp. v. Gholston, 203 Md.App. 321, 329, 37 A.3d 1074 (2012) (affirming trial court's assessment that evidence was sufficient to present to the jury).
Abuse of discretion has been found:
Abrishamian v. Barbely, 188 Md.App. 334, 342, 981 A.2d 797 (2009), cert. denied, 412 Md. 255, 987 A.2d 16 (2010) (internal quotations and citation omitted). "We do not disturb a trial court's discretionary ruling simply because we would not have made the same ruling." Id. (citing King v. State, 407 Md. 682, 697, 967 A.2d 790 (2009)). Further,
Titan Custom Cabinet, Inc. v. Advance Contracting, Inc., 178 Md.App. 209, 231, 941 A.2d 547 (2008) (quoting Buck v. Cam's Broadloom Rugs, 328 Md. 51, 59, 612 A.2d 1294 (1992)).
The elements of a contract are offer, acceptance, and consideration. See Peer v. First Fed. Sav. & Loan Ass'n, 273 Md. 610, 614, 331 A.2d 299 (1975). B-Line argues as to its first question that no contract was formed between itself and IDS pursuant to the MSA, and therefore no breach could have occurred. According to B-Line, in order for a contract to exist between itself and IDS, a purchase order had to be issued by IDS to B-Line, along with an Exhibit A, in connection with the Clarian project. B-Line asserts that because neither a P.O. nor an Exhibit A were issued, no subcontract existed. Further, B-Line argues that IDS had no contractual relationship with Clarian, either directly or as a third-party beneficiary to a contract between AT & T and Clarian, an argument we address in Section III, below.
IDS responds that it was the Prime on the Clarian project because it identified and developed the opportunity before bringing B-Line into it, and that B-Line ignored key provisions in the MSA that create a contract between the parties once they begin to engage in the creation of a Scope of Work document. IDS argues that the MSA only requires a P.O. for payment purposes, not for contract formation purposes, and that an Exhibit A is only required if the parties want to alter the MSA's default payment terms. Moreover, IDS argues that B-Line fails to address the reason why no P.O. was ordered for the Clarian project — because B-Line successfully induced Clarian to remove IDS from the project.
The MSA states, in its first section:
The MSA does not call for payment or P.O.s during the preparation of the proposal or Scope of Work document, and in fact requires the Supplier and Prime to each fulfill their respective duties in preparing each at their own expense. Under a separate "Payment" section of the MSA, the Supplier is required to invoice the Prime after services have been provided or products have been shipped. Section 4.3 in the "Payment" section sets a default payment schedule and states "please also refer to Exhibit A for specific pay term." No part of the MSA requires a P.O. or an Exhibit A to be issued in order to create a contract under the MSA. B-Line signed the MSA in March 2006.
B-Line cites Peoples Drug Stores, Inc. v. Fenton Realty Corp., 191 Md. 489, 62 A.2d 273 (1948), in support of its argument that no contract was formed between itself and IDS because of the lack of P.O. and Exhibit A in connection with the Clarian project. B-Line ignores the following language from Fenton, however:
Id. at 494, 62 A.2d 273 (citations omitted) (emphasis added). Under Fenton, once B-Line and IDS began to act under the terms of the MSA, which as discussed, is not limited to issuing a P.O. or Exhibit A, a contract exists.
The record is replete with evidence, including extensive testimony by Korous and Cook, that IDS offered to bring B-Line into the Clarian project, B-Line agreed to work with IDS on presenting its products as part of a comprehensive solution marketed by AT & T,
B-Line argues that the lack of a P.O. indicates that IDS had only "a general willingness to engage B-Line if IDS received some future purchase order from AT & T" and therefore no contract was formed. In support of this contention, B-Line cites Md. Supreme Corp. v. Blake Co., 279 Md. 531, 369 A.2d 1017 (1977). Blake is distinguishable from the case at hand because Blake involved the sale of goods and was therefore governed by the Uniform Commercial Code ("UCC"), whereas the contract between IDS and B-Line was mixed, involving services and goods, and the part of the contract performed was for services.
Blake is instructive, however, in that the Court of Appeals stated that even under the UCC, a basic principle is that a "contract may be made in any manner sufficient to show agreement, including conduct by both parties which recognizes the existence of such a contract ... even though the moment of its making is undetermined." Id. at 541, 369 A.2d 1017. The Blake Court further reasoned that "the conduct of the parties, particularly that of Supreme in delivering concrete and that of Blake in accepting and paying for it, recognized the existence of a contract. There being legally sufficient evidence for the court as the trier of fact to find that Blake accepted Supreme's offer, that judgment on the evidence was not clearly erroneous." Id. at 542, 369 A.2d 1017. Similarly, in the instant case, the jury heard testimony that B-Line provided design services before Clarian issued any P.O. to AT & T, in accordance with B-Line's regular practice, and B-Line did not request a P.O. from IDS until after Clarian had paid $160,000 to AT & T and signed the Master Purchase Agreement for the design and implementation stages of the project, when AT & T had a contract for the entire project.
The evidence presented by IDS was sufficient to make the issue of existence of a contract between IDS and B-Line a jury question. The record contains sufficient evidence for a reasonable jury to find as it did. Accordingly, the trial court did not err or abuse its discretion in denying B-Line's Motion for Judgment at the close of the evidence, Motion for JNOV, or Motion for a New Trial on the ground of legally insufficient evidence.
Maryland follows the principle of lex loci delicti, meaning that Maryland courts apply the substantive tort law of the state where the "injury — the last event required to constitute the tort occurred." Erie Ins. Exch. v. Heffernan, 399 Md. 598, 620, 925 A.2d 636 (2007). Here, all the conduct related to the tort occurred, with regard to any interaction with Clarian, in Indiana. Therefore, the trial court correctly concluded that Indiana tort law governs the tortious interference claims.
Under Indiana law, the elements of tortious interference with contract or business relations are basically the same. Both require 1) the existence of a valid and enforceable contract or business relationship; 2) the defendant's knowledge of the contract or relationship; 3) the defendant's intentional inducement of the breach of contract or interference with the relationship; 4) the absence of justification; and 5) damages resulting from the wrongful interference. Bragg v. City of Muncie, 930 N.E.2d 1144, 1147-48 (Ind.Ct.App.2010) (citations omitted); Geiger & Peters, Inc. v. Berghoff, 854 N.E.2d 842, 852-53 (Ind. Ct.App.2006) (citations omitted). In order to establish an absence of justification for the interference, a plaintiff must demonstrate that "the interferer acted intentionally, without a legitimate business purpose, and the breach is malicious and exclusively directed to the injury and damage of another." Id. (citation omitted). Additionally, the tort of interference with business relations requires "some independent illegal action." Geiger & Peters, 854 N.E.2d at 853 (citing Brazauskas v. Ft. Wayne-South Bend Diocese, Inc., 796 N.E.2d 286, 291 (Ind.2003)).
B-Line argues in its second question that the elements of the torts were not met because no "valid and enforceable contract" existed between AT & T or IDS and Clarian, IDS had no protected business relationship with Clarian, B-Line's actions were justifiable as pursuing its own legitimate business interests, and B-Line engaged in no illegal conduct.
IDS counters that a valid and enforceable master agreement was in effect between AT & T and Clarian starting in 2004. IDS argues that Clarian awarded the Clarian Simulation Center project to AT & T pursuant to the Master Agreement and memorialized the project in the Master Purchase Acceptance Document and P.O.s issued by Clarian to AT & T. IDS further asserts that it was an intended beneficiary of the contract between AT & T and Clarian. IDS also avers that it had an independent relationship with Clarian in addition to its third-party beneficiary status under the AT & T-Clarian relationship and that "illegal" conduct does not mean "criminal" conduct under Indiana law.
First, B-Line maintains that AT & T and Clarian could not reach an agreement on the terms of a contract between them, as evidenced by the unsigned addenda to the Master Agreement, and therefore no contract existed as to the implementation phase of the project. B-Line points to the Master Purchase Acceptance Document dated June 29, 2007, from Clarian to AT & T, which included the P.O. for the $160,000 retainer fee and hinges its argument on the language stating "[t]his Master Purchase Acceptance Document, including all attachments incorporated herein, constitutes the entire Agreement between the Parties and supersedes all prior negotiations,
Indiana law recognizes that "the nonexistence of a writing is not decisive of whether there was actually a contract; the parties may agree to memorialize their contract in writing at some point in the future." Eden United, Inc. v. Short, 573 N.E.2d 920, 926 (Ind.Ct.App.1991) (citing Int'l Shoe Co. v. Lacy, 114 Ind.App. 641, 53 N.E.2d 636, 638 (1943)). Therefore, the jury could find, as IDS argued, that the lack of signed addenda to the Master Agreement was of no consequence.
The record shows that IDS presented evidence that this Master Purchase Acceptance Document acknowledged the entire contract between AT & T and Clarian, which was for the entire project, not just the planning phase. Thus, the existence of the contract and the interpretation of this document were factual disputes, properly before the jury, who rejected B-Line's interpretation.
Under Indiana law, a third-party beneficiary is one who, "though not a party to a contract, stands to benefit from the contract's performance." DLZ Ind., LLC v. Greene Cnty., 902 N.E.2d 323, 330 n. 4 (Ind.Ct.App.2009) (citation omitted). A party claiming third-party beneficiary status must show 1) a clear intent by the parties to the contract to benefit the third party; 2) a duty imposed on one of the contracting parties in favor of the third party; and 3) performance of the contract terms is necessary for the third-party to receive the direct benefit intended by the parties to the contract. Haire v. Parker, 957 N.E.2d 190, 195 (Ind.Ct.App.2011); Luhnow v. Horn, 760 N.E.2d 621, 628 (Ind.Ct.App.2001).
The record demonstrates that AT & T had an ongoing contractual relationship under its Master Agreement with Clarian. AT & T partnered with IDS, essentially treating IDS as a subsidiary, when selling AV integration solutions. AT & T bid on the Clarian Simulation Center with IDS as its only subcontractor. Under the contract, Clarian was required to use IDS's services and pay AT & T for those services. Clarian had to pay AT & T in order for IDS to be paid under the contract. Extensive testimony was presented explaining the relationship between AT & T and IDS and how Clarian interacted primarily with IDS on the project until Huang and Berridge began communicating. We agree that the jury could reasonably find that AT & T and Clarian intended for the award of the project to benefit IDS pursuant to the AT & T-Clarian Master Agreement.
As discussed above, the record contains sufficient evidence to support a jury's finding that a contract existed between AT & T and Clarian. It is undisputed that AT & T and Clarian had an ongoing and longstanding business relationship where AT & T provided network and other information technology services to Clarian. AT & T's Master Agreement with Clarian states that its affiliates and
As discussed, sufficient facts exist for the jury to find that both AT & T and IDS had existing relationships with Clarian generally, and specific to the Clarian Simulation Center.
B-Line argues that its conduct was nothing more than a pursuit of its own legitimate business interests. B-Line claims that when Clarian contacted it, Clarian was asking questions about a $2,000,000 proposal that B-Line had never seen, and that at all times, B-Line was solely motivated by "a desire to complete a sale of its software to Clarian." IDS argues that B-Line made an internal decision in or about December 2007 to cease working with IDS and then began a secret campaign to remove IDS from the project, while continuing to represent to IDS and AT & T that it was willing to continue working with IDS.
Under Indiana law, a plaintiff "must show that the defendant acted exclusively to harm the plaintiff['s] business interest." Smith v. Biomet, Inc., 384 F.Supp.2d 1241, 1249 (N.D.Ind.2005) (citation omitted). The record contains ample evidence supporting IDS's argument. IDS presented testimony that it worked with B-Line prior to and immediately after the November 2006 meeting to create three scenarios, offering "good, better, and best solutions" ranging in price from $1.5 million to $3.5 million. On January 19, 2007, AT & T presented its bid for the Clarian Simulation Center, explaining that it was teaming with IDS and offering B-Line's products as part of its comprehensive package. The testimony demonstrated that IDS and B-Line continued to work closely to refine the pricing and design throughout 2007. In February 2007, Cook notified B-Line that AT & T/IDS had been awarded the project. Huang admitted to signing off on the Scope of Work submitted to Clarian in September 2007. Therefore, the record contains evidence refuting B-Line's claim that it was unaware of a contract or of any contract pricing.
After circulating the internal e-mail expressing the desire to remove itself as subcontractor to IDS on the Clarian Simulation Center project in December 2007, B-Line then submitted proposals to Clarian to situate itself as the Prime on the project, adding the benefit of a five percent fee on top of the price for its software, and initiated a bid process to select a new AV integrator for the project. B-Line argues that this conduct was not "exclusively directed" to the injury of IDS. However, IDS also presented evidence that B-Line, in the course of soliciting bids for an AV integrator, provided confidential and proprietary information belonging to IDS to other AV companies. The conduct does not have to be "exclusively directed" in order to fail the test for justifiable conduct.
In determining whether conduct was justifiable, Indiana courts have stated that "the overriding question is whether the defendant's conduct has been fair and reasonable
Comments b and e to § 768 state:
See Rice v. Hulsey, 829 N.E.2d 87, 91 (Ind.Ct.App.2005); Computers Unlimited, Inc. v. Midwest Data Syss., Inc., 657 N.E.2d 165, 169 (Ind.Ct.App.1995).
The case sub judice is distinguishable from those involving competitors. B-Line, as a Supplier to IDS, already had a contracted sale of its product to Clarian. B-Line was not competing with another software manufacturer; in fact, as part of its November 2006 and January 2007 presentations with IDS, it successfully eliminated a potential software competitor from Clarian's consideration. B-Line presented itself as part of the AT & T/IDS team package. Nevertheless, B-Line convinced Berridge that contracting separately with B-Line and an AV integrator was a necessary change. The record contains sufficient evidence to generate a factual dispute regarding B-Line's motive and intent in engaging directly with Clarian and a determination of the reasonableness of B-Line's actions under all the circumstances lies squarely with the fact-finder.
Under Indiana law, to satisfy the fourth prong of the test for intentional interference with business relations, B-Line must have engaged in illegal conduct. However, illegal does not equate to criminal conduct but instead has been "interpreted loosely ... encompassing a broad swath of claims." Nikish Software Corp. v. Manatron, Inc., 801 F.Supp.2d 791, 797 (S.D.Ind.2011) (citing Syndicate Sales, Inc. v. Hampshire Paper Corp., 192 F.3d 633, 641 (7th Cir.1999)). The courts, applying the RESTATEMENT (SECOND) OF TORTS § 768 (1977) standard, supra, have held that if "wrongful means" are employed in the interference, there can be no justification.
At trial, IDS presented testimony and documentary evidence that B-Line made an internal decision to cease working with IDS, failed to notify IDS of that decision, and continued to work with IDS on designs for Clarian, while simultaneously engaging in discussions with Berridge about B-Line taking control of the project and selecting a new AV integrator. B-Line intentionally misrepresented to IDS that it was not communicating with Berridge and was "staying out of the matter out of respect for the partnership." Meanwhile, B-Line represented to Berridge that it had not been part of the design process, tried to ensure that Berridge would not disclose B-Line's negotiations to assume the role of Prime to IDS, used IDS work product and proprietary pricing and equipment lists in its preparation of the bid package submitted to other AV integrators, and did not solicit bids from IDS, despite B-Line's argument that it was willing to work with "any qualified AV integrator, including IDS, to sell its software to Clarian." We agree that the record contains sufficient evidence to submit the issue of wrongful or illegal conduct to the jury and for the jury to find in favor of IDS.
Underlying each of these arguments, B-Line argues that the trial court erred in giving the jury instructions regarding third-party beneficiary status because, under Indiana law, a third-party beneficiary to a contract, like IDS was to any AT & T and Clarian contract (assuming one existed), cannot recover under either tort claim asserted. IDS avers that B-Line did not preserve this issue of erroneous jury instructions for appellate review. Alternatively, IDS contends that, even if preserved for review, the trial court did not err.
First, we must address IDS's claim that B-Line failed to preserve the issue for appeal. Maryland Rule 2-520(e) states in pertinent part that "[n]o party may assign as error the giving or the failure to give an instruction unless the party objects on the record promptly after the court instructs the jury, stating distinctly the matter which the party objects and the grounds of the objection." See Mayor & City Council v. Hart, 167 Md.App. 106, 124, 891 A.2d 1134 (2006); Hoffman, 385 Md. at 39-40, 867 A.2d 276. Maryland Rule 2-520(e) has been interpreted "as requiring parties to be precise in stating objections to jury instructions at trial, for the plain reason that the trial court has no opportunity to correct or amplify the instructions for the benefit of the jury if the judge is not informed of the exact nature and grounds of the objection." Fearnow v. Chesapeake & Potomac Tel. Co., 342 Md. 363, 377-78, 676 A.2d 65 (1996) (citations omitted). Generally, a mere reference "to the written prayer by number ... [will be] held... to be insufficient compliance with the requirement [of Rule 2-520(e) ] that the trial judge's alleged failure to give any instruction be stated `distinctly' together with the `ground' of any objection thereto." Sergeant Co. v. Pickett, 283 Md. 284, 288, 388 A.2d 543 (1978) (referencing Belt's Wharf Warehouses, Inc. v. Int'l Prods. Corp., 213 Md. 585, 591-92, 132 A.2d 588 (1957)).
None of the objections in the transcript gives any specific reason for the objection or directs the trial judge to Indiana law prohibiting considering third-party beneficiary status in the torts. As discussed, generic objections are insufficient to preserve the issue for appeal. B-Line argues in its rebuttal brief that it provided the argument for omitting all third-party beneficiary language, both during trial and in written form, as footnotes to its proposed jury instructions. Our review of the record shows that B-Line raised the issue of whether Indiana law allows third-party beneficiaries to a contract to recover under the torts alleged during its argument in support of its motion for judgment at the close of IDS's case at trial. The trial judge noted the citation to Eden, 573 N.E.2d 920, and IDS argued for a different reading of Eden than that espoused by B-Line.
While it is true that "under certain well-defined circumstances, when the objection is clearly made before instructions are given, and restating the objection after the instructions would obviously be a futile or useless act, we will excuse the absence of literal compliance with the requirements of the Rule[,] ... these occasions represent the rare exceptions, and ... the requirements of the Rule should be followed closely." Haney v. Gregory, 177 Md.App. 504, 518, 936 A.2d 388 (quoting Sims v. State, 319 Md. 540, 549, 573 A.2d 1317 (1990)). We agree with B-Line that the trial court understood the reason for their objection and further explanation was unnecessary to preserve the issue for appellate review.
Having determined that the issue of erroneous jury instructions was preserved for our review, we now consider whether the instructions given by the trial judge were erroneous or if denial of certain instructions was an abuse of discretion. The Court of Appeals has held that:
Smith v. State, 403 Md. 659, 663-64, 944 A.2d 505 (2008) (internal citations and quotations omitted). When we review a trial court's grant or denial of a requested jury instruction, we review under the abuse of discretion standard, keeping in mind:
Bazzle v. State, 426 Md. 541, 549, 45 A.3d 166 (2012) (citation omitted). In evaluating the trial court's decision, "we consider whether the requested instruction was a correct exposition of the law, whether that law was applicable in light of the evidence before the jury, and finally whether the substance of the requested instruction was fairly covered by the instruction actually given." Malik v. Tommy's Auto Serv., Inc., 199 Md.App. 610, 616, 24 A.3d 114 (2011) (citations omitted); see also Landon v. Zorn, 389 Md. 206, 224-25, 884 A.2d 142 (2005).
The trial court gave the jury the following instructions regarding contracts and third party beneficiaries:
B-Line's proposed jury instructions were the same as above regarding the tort claims, except all mention of third-party beneficiary status was omitted from the instructions for tortious interference with contract and business relations.
B-Line argues that the trial court erred because it failed to give the jury B-Line's requested instruction "regarding the narrow interpretation of provisions restricting trade and competition under Maryland law." Citing Diamond Point Plaza Ltd. P'ship v. Wells Fargo Bank, N.A., 400 Md. 718, 752-53, 929 A.2d 932 (2007), the denied instruction read as follows:
Section 3.1.5 is a subsection of the "General Terms and Conditions" section of the MSA which lists what the parties agree to "in consideration of the mutual agreements set forth." Section 3.1.5 states that "Supplier shall not provide any service directly
IDS responds that no evidence was presented that § 3.1.5 significantly restrained competition, and therefore the denial of the instruction was within the court's discretion and, if in error, was harmless. B-Line does not direct us to any evidence in the record regarding restraint on competition, and we are unclear as to why B-Line requested this instruction, unless to support its argument that no breach of contract occurred on the grounds that § 3.1.5 is unenforceable under Diamond Point.
The record indicates that the trial court instructed the parties thoroughly on contract formation and breach. Further, we agree with IDS that the instruction regarding restriction of trade is not supported by the evidence. The court's failure to provide the requested instruction did not affect the jury's ability to find whether a contract existed between the parties. The party complaining about the trial court's denial of a requested instruction "must not only establish error, but also show prejudice resulting from that error." Malik, 199 Md.App. at 617-18, 24 A.3d 114 (citing Landon, 389 Md. at 225, 884 A.2d 142). Finding neither error nor prejudice, we hold that the trial court did not abuse its discretion in denying the requested instruction.
The Indiana Statute of Frauds states that a person cannot bring "an action involving any agreement that is not to be performed within one (1) year from the making of the agreement" unless the contract on which the action is based is in writing. Coca-Cola Co. v. Babyback's Int'l, Inc., 841 N.E.2d 557, 561 (Ind.2006) (citing Ind.Code § 32-21-1-1(b)). As discussed, the Master Agreement was in effect between AT & T and Clarian, and testimony established that while the addenda were desired, they were not required to create contractual obligations between AT & T and Clarian for the Clarian Simulation Center. Therefore, the requested instruction on the Indiana Statute of Frauds was not supported by the evidence and the trial court did not abuse its discretion by denying the instruction.
B-Line argues that the trial court incorrectly instructed the jury on Indiana law, which, it argues, does not recognize claims by a third-party for tortious interference with contract or business relations. IDS, while acknowledging that Indiana courts have not directly addressed the issue, counters that Indiana courts have indicated that if confronted with the issue, they would adopt the position of the RESTATEMENT (SECOND) OF TORTS, § 766, cmt. p (1979). In support of their respective arguments, both parties cite to Eden, 573 N.E.2d 920.
When it came time to close on the property, Eden United provided Short with documents that reflected its proposed agreement rather than the terms actually agreed upon by the parties. Nevertheless, Short attempted to resolve the issues during closing but Eden United refused to cooperate and aborted the closing. Eden United then defaulted on its escrow arrangements with Chatlee, allowing Chatlee to proceed to closing directly with Short, pursuant to the first agreement between the three parties. Eden United thereafter acted to block that closing and induce Chatlee to sell the property to any purchaser other than Short. No sale was ever consummated between Short and Chatlee. Short then prevailed on an action for breach of contract and tortious interference with contractual relations. On appeal, Eden United argued that Short did not have standing to assert the tort cause of action as a third-party beneficiary to a contract. Id. at 922-24.
The Eden Court did not find that Short was a third-party beneficiary to the Eden-Chatlee contract, but rather, that Short had "a direct contractual right to close with Chatlee under the terms of the Short-Eden Contract." Id. at 924. In a footnote explaining why the case cited by Eden United did not apply, the Court stated:
Id. at 925 n. 2 (emphasis omitted).
The Restatement (Second) of Torts, § 766, cmt. p (1979) states:
The Eden Court then adopted the view of the Restatement (Second) in its affirmation of the trial court's ruling on the breach of contract claim. The Court stated:
573 N.E.2d at 925. Additionally, other jurisdictions in the same Federal Circuit have cited to the Restatement (Second) in holding that "the tort of intentional interference with contract is meant to protect the parties (including third-party beneficiaries, assignees, and others having the rights of parties) to contracts." CSY Liquidating Corp. v. Harris Trust & Sav. Bank, 162 F.3d 929, 932-33 (7th Cir.1998) (citations omitted).
We agree with IDS, and case law demonstrates, that Indiana courts follow the Restatement (Second) of Torts. Therefore, the jury instructions given for the intentional torts were accurate statements of the law and, as discussed above, were applicable in light of the evidence before the jury. Contrary to B-Line's
Mills also testified that he ran the video-conferencing group of AT & T for ten years and left to form IDS in 2000 "as an organization to be symbiotic to AT & T and to be able to enhance and do things that AT & T wasn't able to do ... like simulation centers." Mills testified that IDS had numerous employees who worked twenty or more years at AT & T, creating a very trusting relationship between them.
