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Abt Associates Inc v. JHPIEGO Corporation, 00-2026 (2001)

Court: Court of Appeals for the Fourth Circuit Number: 00-2026 Visitors: 48
Filed: May 17, 2001
Latest Update: Feb. 12, 2020
Summary: UNPUBLISHED UNITED STATES COURT OF APPEALS FOR THE FOURTH CIRCUIT ABT ASSOCIATES, INCORPORATED, Plaintiff-Appellant, v. No. 00-2026 JHPIEGO CORPORATION, Defendant-Appellee. Appeal from the United States District Court for the District of Maryland, at Baltimore. Alexander Harvey II, Senior District Judge. (CA-99-3238-H) Argued: April 5, 2001 Decided: May 17, 2001 Before WIDENER and LUTTIG, Circuit Judges, and Rebecca Beach SMITH, United States District Judge for the Eastern District of Virg
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                         UNPUBLISHED

UNITED STATES COURT OF APPEALS
                 FOR THE FOURTH CIRCUIT


ABT ASSOCIATES, INCORPORATED,           
                 Plaintiff-Appellant,
                 v.                             No. 00-2026
JHPIEGO CORPORATION,
             Defendant-Appellee.
                                        
           Appeal from the United States District Court
            for the District of Maryland, at Baltimore.
           Alexander Harvey II, Senior District Judge.
                          (CA-99-3238-H)

                       Argued: April 5, 2001

                      Decided: May 17, 2001

       Before WIDENER and LUTTIG, Circuit Judges, and
    Rebecca Beach SMITH, United States District Judge for the
        Eastern District of Virginia, sitting by designation.



Affirmed by unpublished per curiam opinion.


                            COUNSEL

ARGUED: Robert Kelso Taylor, PATTON BOGGS, L.L.P., Wash-
ington, D.C., for Appellant. Susan Martielli, Wesley Daniel Blakes-
lee, Office of the Vice President and General Counsel, THE JOHNS
HOPKINS UNIVERSITY, Baltimore, Maryland, for Appellee. ON
BRIEF: Michael T. Wood, PATTON BOGGS, L.L.P., Washington,
D.C., for Appellant. Frederick G. Savage, Office of the Vice President
2                ABT ASSOCIATES v. JHPIEGO CORP.
and General Counsel, THE JOHNS HOPKINS UNIVERSITY, Balti-
more, Maryland, for Appellee.



Unpublished opinions are not binding precedent in this circuit.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


                             OPINION

PER CURIAM:

   Appellant Abt Associates, Inc. ("Abt") appeals the district court’s
grant of summary judgment to appellee JHPIEGO Corporation
("JHPIEGO") in this action alleging a breach of contract and various
torts. For the reasons set forth below, we affirm.

                                  I.

   In June 1998, the United States Agency for International Develop-
ment ("USAID") issued a formal request for the submission of appli-
cations to enter into a five-year cooperative agreement (the "Award")
to provide services for USAID’s maternal and neonatal health care
efforts in developing countries (the "MNH Program"). Over the
course of several weeks following USAID’s request for applications,
JHPIEGO met with Abt and three other members of a joint bidding
group (the "Bidding Group") to discuss the structure of a prospective
project team and to prepare an application. The members of the Bid-
ding Group agreed that JHPIEGO would be the prime contractor in
applying for the Award. They subsequently worked together to pre-
pare the application, which contained two parts — a questionnaire
concerning the strategies that the Award recipient would use to fur-
ther the goals of the MNH Program, and a cost application setting
forth a model budget.1 JHPIEGO submitted the application to USAID
on July 13, 1998.
    1
   Because the extent of the services offered by the MNH Program
would not be known until after the Award was made, none of the appli-
cants for the Award knew for certain the particular countries in which
their services would be needed or the amount of funding they would
receive.
                 ABT ASSOCIATES v. JHPIEGO CORP.                    3
   Shortly before submitting the application, JHPIEGO sent a "Team-
ing Agreement" to Abt and the other members of the Bidding Group.
The agreement provided that JHPIEGO would have "the full responsi-
bility to prepare and submit the application" to USAID, with each
member of the Bidding Group assisting in preparing that portion of
the application pertaining to its area of expertise. The Teaming
Agreement also stated that if JHPIEGO received the Award, it would
use "its best efforts to negotiate a subagreement with the Subrecipi-
ents for work" on the MNH Program. J.A. 177-82. All of the mem-
bers of the Bidding Group except Abt signed the Teaming
Agreement. Thus, seeking confirmation of Abt’s commitment to the
Bidding Group, JHPIEGO sent Abt a letter on July 1, 1998, which
stated that "[w]e are very pleased that Abt has agreed to partner with
JHPIEGO on the technical bid in response to the USAID-funded
Maternal and Neonatal health Project." J.A. 184. The letter asked Abt
to confirm "our partnership agreement as soon as possible." Abt
returned a letter stating that "Abt Associates Inc. is pleased to be a
partner on the JHU Team lead by JHPIEGO . . . should the JHU Team
be selected to implement this project." J.A. 187.

   JHPIEGO was notified on September 28, 1998 that it had been
selected as the recipient of the USAID Award. USAID and JHPIEGO
subsequently entered into a Cooperative Agreement that provided for
incremental funding of the Award — $4.7 million in the first year,
with funding in subsequent years contingent upon transfers of funds
from USAID’s overseas missions. After entering into the Cooperative
Agreement with USAID, JHPIEGO met with Abt to discuss the terms
of a subagreement between them. In the interim, JHPIEGO and Abt
signed a temporary "pre-subagreement" designed to pay Abt for its
work on the MNH Program "pending finalization of the formal sub-
contract between JHPIEGO and Abt." J.A. 536-37. The initial pre-
subagreement covered the period from October 6, 1998 to October 30,
1998, and was later amended to extend its coverage to November 6,
1998.

   During the period covered by the pre-subagreement, Abt and
JHPIEGO exchanged several draft subagreements and negotiated
such terms as the period of the subagreement, Abt’s fees for its ser-
vices, and the number of Abt employees involved with the MNH Pro-
gram. On November 18, 1998, JHPIEGO sent Abt a revised draft
4                 ABT ASSOCIATES v. JHPIEGO CORP.
subagreement in which JHPIEGO changed many, but not all, of the
earlier provisions that Abt found objectionable. In a letter accompany-
ing that draft subagreement, JHPIEGO requested that Abt submit a
budget for the first year of the program by November 20. When Abt
failed to do so, JHPIEGO informed Abt that differences concerning
staffing and Abt’s profit and cost sharing allocation precluded them
from entering into a subagreement.2

   Abt sued JHPIEGO for breach of contract and various torts under
Maryland law. Following extensive discovery, the district court
granted summary judgment to JHPIEGO on all counts of Abt’s com-
plaint, and this appeal followed.

                                   II.

   Abt’s principal argument is that JHPIEGO breached a contract with
Abt to bid for and perform the MNH Program together, though it is
undisputed that the parties did not sign a comprehensive written con-
tract that evinces the terms of their relationship.3 The lack of a com-
prehensive writing is all the more striking given the scope and
significance of the alleged agreement — a five-year, multimillion-
dollar, multinational contract to provide services to a major govern-
ment agency. Nevertheless, Abt claims that a jury could find the exis-
tence of a binding agreement between Abt and JHPIEGO to
implement the MNH Program under either of two theories. First, Abt
contends that the parties entered into a binding oral agreement gov-
erning the MNH Program work. Second, Abt argues that the exchange
of letters with JHPIEGO established an enforceable agreement to
partner on the MNH Program, and that the precise terms of the agree-
ment are demonstrated by the application submitted by JHPIEGO to
USAID. Because we conclude that no jury could find, under either
theory, that the parties entered into a binding agreement to perform
the MNH Program work, we affirm the district court’s grant of sum-
mary judgment to JHPIEGO on Abt’s claim of breach of contract.
  2
    JHPIEGO successfully negotiated subagreements with the other mem-
bers of the Bidding Group.
  3
    The only comprehensive writing in the record describing the relation-
ship between Abt and JHPIEGO is the Teaming Agreement dated June
25, 1998, which Abt refused to sign.
                  ABT ASSOCIATES v. JHPIEGO CORP.                      5
                                   A.

   First, the record belies Abt’s argument that the parties entered into
an enforceable oral contract to partner on the MNH Program work.
To establish that a binding contract was made, a plaintiff must adduce
evidence of an offer and an acceptance, and of a meeting of the minds
as to the essential terms of the contract. Safeway Stores, Inc. v. Alt-
man, 
463 A.2d 829
, 831 (Md. 1983). The deposition testimony cited
by Abt in support of the existence of an oral contract neither recounts
the necessary sequence of offer and acceptance nor suggests mutual
assent to the essential terms of the supposed agreement. On the con-
trary, the deposition testimony establishes that significant open terms
remained as of July 13, 1998, the date by which Abt now claims a
binding oral contract was made. J.A. 1260-67 (Abt’s fee and cost-
sharing contribution remained open issues); J.A. 1283 (location of
program office not decided); J.A. 1404 (staffing issues remained
unresolved as of July 13, 1998).

                                   B.

   We also reject Abt’s argument that a binding agreement governing
performance of the MNH Program work was created by an exchange
of letters, because material terms remained unresolved as of July
1998, and, indeed, throughout the course of the negotiations between
the parties. While a contract may be entered into by letters evincing
an offer and an acceptance, the terms of such a contract must be "in
all respects definitely understood and agreed upon," Peoples Drug
Stores, Inc. v. Fenton Realty Corp., 
62 A.2d 273
, 275 (Md. 1948),
and must be discernible from the face of the letters or, in certain cir-
cumstances, from parol evidence. Johns Hopkins Univ. v. Ritter, 
689 A.2d 91
, 93-94 & n.4 (Md. 1996) (conversations between parties
admissible to show terms of agreement where letters forming agree-
ment did not "purport to be a complete and fully integrated contract").

   In Abt’s view, the requirement of an offer was satisfied by
JHPIEGO’s letter stating that "[w]e are very pleased that [Abt] has
agreed to partner with JHPIEGO on the technical bid in response to
the USAID-funded [MNH Program]." J.A. 184. Abt argues that it
accepted JHPIEGO’s offer — thus creating a binding contract — by
returning a letter that stated that "Abt Associates Inc. is pleased to be
6                 ABT ASSOCIATES v. JHPIEGO CORP.
a partner on the JHU Team led by [JHPIEGO] on the implementation
of the Maternal and Neonatal Health RFA . . . should the JHU Team
be selected to implement this project." J.A. 187. Yet the letters cited
by Abt are devoid of any terms concerning the implementation of the
MNH Program. In the absence of evidence of the essential terms of
an agreement, we agree with the district court that the exchange of
letters did not create a valid contract to perform the MNH Program
work.

   Nor are those terms furnished extrinsically by JHPIEGO’s applica-
tion to USAID, for that application merely "illustrates how the MNH
Team would develop and implement a model country program that
takes into consideration . . . the MNH strategic objective." J.A. 204
(summary portion of application) (emphasis added). The application
to USAID, by its terms, does no more than demonstrate how the Bid-
ding Group would approach the MNH Program in a hypothetical
country. See also J.A. 702 (deposition testimony that JHPIEGO and
Abt, in preparing the application, did not know the countries in which
the MNH Program would be implemented); J.A. 708, 712-13 (number
of countries served by the MNH Program would not be determined
until after the Award was made). Since the full amount of the Award,
the countries served by the MNH Program, and the costs, expenses,
and staffing needs of the Program could not be determined until after
the Award was made, the illustrative budget in the application does
not represent the parties’ binding agreement as to the key terms of
performing the MNH Program work.

   Accordingly, because the record does not support Abt’s contention
that the parties mutually assented to the terms of an agreement to
implement the MNH Program together, we affirm the district court’s
grant of summary judgment to JHPIEGO on Abt’s claim of breach of
contract.4
   4
     Because the parties never agreed to the essential terms of a contract
to perform the MNH Program work, we also affirm the district court’s
grant of summary judgment to JHPIEGO on Abt’s claims that JHPIEGO
tortiously breached such contract and that JHPIEGO breached a duty of
good faith and fair dealing arising out of such contract. Cf. Howard
Oaks, Inc. v. Maryland Nat’l Bank, 
810 F. Supp. 674
, 677 (D. Md. 1993)
(explaining that Maryland law does not recognize a cause of action for
breach of a duty of good faith and fair dealing in the absence of a con-
tract between the parties).
                  ABT ASSOCIATES v. JHPIEGO CORP.                        7
                                   III.

   Abt next asserts a series of claims seeking to recover under various
quasi-contract and tort theories. We agree with the district court that
these claims are meritless, and we therefore affirm the district court’s
grant of summary judgment to JHPIEGO on the remaining counts of
Abt’s complaint.

   First, Abt seeks to recover under theories of quantum meruit and
unjust enrichment for its work on the Bidding Group’s application to
USAID. A plaintiff may not recover under these theories unless he
had a reasonable expectation of being paid for the benefit he con-
ferred upon the defendant. Cleaves v. Sharp & Dohme, Inc., 
171 A. 374
, 377-78 (Md. 1934). Here, Abt could not have had a reasonable
expectation of payment for its effort on the application, which is a
cost of business akin to a manufacturer’s expenses in vying for a sale.
Cf. 
id. at 378 (manufacturer
has no reasonable expectation of payment
for cost of preparing bids and samples). Rather, Abt’s reasonable
expectations were limited to payment for any work actually per-
formed on the MNH Program after the date of the Award and to the
opportunity to negotiate a long-term subagreement with JHPIEGO.
Pursuant to the pre-subagreement between the parties, Abt was paid
$42,800 for post-Award work on the MNH Program between October
6 and November 23, 1998. J.A. 536-37. Moreover, during that time,
the parties attempted unsuccessfully to negotiate a final subagreement.5
Because Abt’s only reasonable expectations were fulfilled, the district
court properly granted summary judgment to JHPIEGO on Abt’s
quantum meruit and unjust enrichment claims.
  5
    To the extent Abt now argues that JHPIEGO breached a duty to nego-
tiate a subagreement in good faith, such claim is not asserted on the face
of Abt’s complaint. J.A. 6-19. Even if it were, Abt has failed to adduce
evidence that JHPIEGO breached any duty of good-faith negotiation. On
the contrary, the parties negotiated extensively for over a month. During
that time, they exchanged several draft subagreements in which
JHPIEGO made numerous concessions to Abt. J.A. 571-72 (letter from
JHPIEGO to Abt detailing concessions regarding, inter alia, scope of
work, period of performance, cost rate, and intellectual property rights).
The parties’ ultimate inability to reach a final agreement does not, stand-
ing alone, create a genuine issue of material fact as to JHPIEGO’s good
faith in the negotiations.
8                ABT ASSOCIATES v. JHPIEGO CORP.
   Second, Abt argues that the district court erred in granting sum-
mary judgment on its claim of promissory estoppel. To recover under
a theory of promissory estoppel, a plaintiff must demonstrate reliance
upon "a clear and definite promise" by the defendant. Pavel Enters,
Inc. v. A.S. Johnson Co., 
674 A.2d 521
, 532 (Md. 1996). Abt has
proffered no evidence that JHPIEGO promised it a role in the MNH
Program as a partner pursuant to the supposedly binding terms set
forth in the application to USAID. See supra at 4-6. Absent evidence
of "a clear and definite promise" by JHPIEGO, we affirm the district
court’s grant of summary judgment on this count.

   Finally, Abt contends that JHPIEGO committed fraud by making
numerous misrepresentations about Abt’s intended role in the MNH
Program, with the purpose of fraudulently inducing Abt to collaborate
with JHPIEGO on the application for the Award. The record, how-
ever, contains no evidence that JHPIEGO’s alleged misrepresenta-
tions were made with knowledge as to their falsity or with reckless
indifference as to their truth. Everett v. Baltimore Gas and Elec. Co.,
513 A.2d 882
, 889-90 (Md. 1986) (setting forth the elements of fraud
under Maryland law). Thus, the district court properly granted sum-
mary judgment to JHPIEGO on Abt’s claim of fraud.

                           CONCLUSION

  For the reasons stated herein, we affirm the judgment of the district
court.

                                                          AFFIRMED

Source:  CourtListener

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