WATTS, J.
This appeal concerns a dispute between Baltimore County (the "County") and DMJM H & N, Inc., now known as AECOM Services, Inc. ("DMJM"),
DMJM filed a cross-appeal and raised one issue, which we quote:
We answer the County's first question in the affirmative, and answer DMJM's question in the negative. As such, we shall reverse, in part, and affirm, in part, the judgment.
On December 18, 2000, the parties entered into the Department of Public Works Agreement for Architectural Services (the "contract") which appointed DMJM as the architect to provide professional architectural/engineering services in connection with the Project. Under the contract, DMJM was to be paid $4,516,779.16. As to changes in the work or services to be performed and payment, the contract provided, in pertinent part, as follows:
On September 19, 2005, the parties entered into an "Amendment to [the] Contract" increasing the contract payment from the original contract price of $4,516,779.16 to $4,785,752.36. The amendment was signed by the President of DMJM, the Administrative Officer of the County and the Baltimore County Council Chairman. The Amendment was approved for legal form and sufficiency by an Assistant County Attorney, and was reviewed and approved by the Director of the Office of Budget and Finance for the County.
On January 20, 2006, the County filed a two-count complaint against DMJM in the Circuit Court for Baltimore County alleging that DMJM breached the contract and negligently performed architectural/engineering services resulting in damages to the County in the amount of five million dollars. DMJM filed an Answer and Counterclaim. In the Counterclaim, DMJM alleged breach of contract and sought an award of $800,000 in unpaid fees and interest under the contract.
On April 16, 2008, the County filed an amended complaint, and DMJM filed an answer. The County propounded interrogatories including interrogatory number five which directed: "Itemize and show how you calculate any contractual damages claimed by your Counterclaim, and describe any non-economic damages claimed by you." On August 18, 2008, DMJM filed supplemental answers to interrogatories, including a supplemental answer to interrogatory number five, stating:
(Emphasis added). Attached to the supplemental answers to interrogatories, DMJM provided a spreadsheet which contained five categories, A, B, C, D, and E, titled as follows:
This spreadsheet was admitted at trial as the County's Exhibit 173B.
On January 7, 2009, the County filed a second amended complaint, and on May 1, 2009, the County filed a third amended complaint, setting forth six counts: (1) Breach of Contract; (2) Negligence; (3) Negligence-Special Representation; (4) Intentional Misrepresentation; (5) Negligent Misrepresentation; and (6) Concealment/Deceit. DMJM filed a Motion for Partial Summary Judgment. Following a hearing, the trial court granted DMJM's Motion for Partial Summary Judgment as to counts three, four, five, and six of the County's Third Amended Complaint. As a result, only count one (Breach of Contract) and count two (Negligence) of the Third Amended Complaint remained for trial.
On February 20, 2009, in a document titled "Second Supplemental Answers to Interrogatories," DMJM claimed damages totaling $2,173,714.37. Attached to the Second Supplemental Answers to Interrogatories was a spreadsheet listing five categories, A, B, C, D, and E, containing the same titles as those in the spreadsheet attached to DMJM's August 18, 2008, Supplemental Answers to Interrogatories. The amounts identified under each category were, however, different. Under category A, "[o]riginal A/E Services Agreement and Agreement Modification(s)," DMJM listed the unpaid contract amount claimed as $782,577.78. Under the remaining categories, DMJM listed the following amounts as "Proposal Amounts":
The spreadsheet contained an additional category, "F," titled "Subtotal, Additional Services," and under "Proposal Amount" DMJM listed $1,391,136.59. On the spreadsheet, DMJM listed the following totals:
Total Earned Fees: $6,176,888.95 Total Paid Fees: $4,003,174.58 Total Unpaid Fees: $2,173,714.37.
This spreadsheet was also attached to the County's Motion for Partial Summary Judgment and admitted into evidence at trial as the County's Exhibit 173A.
On April 21, 2009, DMJM filed an Amended Counterclaim for breach of contract, seeking an award of $2,175,000 in unpaid fees, and payment of prejudgment and postjudgment interest. On April 24, 2009, the County filed a Motion for Partial Summary Judgment and Memorandum in Support thereof, requesting that the trial court dismiss DMJM's claim for additional services on the following two grounds:
DMJM filed an Opposition, and following a hearing, the trial court denied the County's Motion for Partial Summary Judgment.
On May 1, 2009, the County filed Motions in limine seeking, in part, to preclude evidence of damages in excess of the contract amount. Specifically the County sought to preclude DMJM from introducing evidence of the claim for additional services. The circuit court denied the County's motion.
A trial was held from June 1, 2009, to July 10, 2009. At trial, DMJM introduced into evidence an amended spreadsheet which purported to explain the claim for $2,159,077.79 in total unpaid fees, including the request for $1,471,498.95 for additional services. The spreadsheet, admitted at trial as DMJM's Exhibit 506, contained the same five categories, A, B, C, D, and E, as the spreadsheet attached to DMJM's first and second supplemental answers to interrogatories, and the County's Motion for Partial Summary Judgment, titled:
Under category A, "[o]riginal A/E Services Agreement and Agreement Modification(s)." DMJM listed the "Unpaid Contract Balance" as $687,578.84. Under the remaining categories, DMJM listed the following amounts as "Proposal Amounts":
The spreadsheet contained category "F," titled "Subtotal, Additional Services," and under "Proposal Amount" listed $1,471,498.95. On the spreadsheet, DMJM listed the following totals:
Total Earned Fees: $6,257,251.31 Total Paid Fees: $4,098,173.52 Total Unpaid Fees: $2,159,077.79.
At trial, Edward P. Blades, a Budget Analyst with the Office of Budget and Finance, testified that as of February 23, 2004, Baltimore County had already paid DMJM $4,098,000 under the contract. Blades testified that if he had received a
At the end of its case in chief, the County moved for judgment as to DMJM's claim for additional services, citing the reasons set forth in the County's Motion for Partial Summary Judgment. The trial court denied the motion for judgment. At the conclusion of DMJM's case and at the conclusion of all of the evidence, the County renewed the motion for judgment on the same grounds. The trial court denied both motions.
DMJM requested a Jury Instruction on Prejudgment Interest, and the trial court refused to give the instruction. The requested instruction read as follows:
After giving the jury instructions, the trial court at a bench conference asked counsel: "Each party wish[es] to adopt and incorporate by reference all arguments advanced before I gave the instructions, is that correct?" All counsel agreed.
The jury found that DMJM had not breached the contract with the County, and that DMJM had not been negligent in rendering architectural/engineering services to the County. The jury found that the County breached the contract and awarded DMJM $1,653,600.88 in damages.
On July 27, 2009, DMJM submitted a Memorandum in Support of Prejudgment Interest. The County filed an opposition. On August 10, 2009, the County filed a Notice of Appeal and on August 20, 2009, DMJM filed a Notice of Appeal. On September 4, 2009, DMJM filed a Motion to Revise Judgment and to Strike [the County]'s Notice of Appeal. On September 11, 2009, the trial court entered an Order denying DMJM's Request for Award of Prejudgment Interest, and denying DMJM's Motion to Revise the Judgment and to Strike [the County's] Notice of Appeal.
The parties dispute the applicable standard of review. The County points out that the denial of a motion for summary judgment is generally subject to de novo review. The County contends, however, that a different standard governs the denial of a motion for summary judgment that is followed by a trial. The County argues that the correct standard of review in the latter scenario is whether the party moving for judgment at the conclusion of evidence in the trial is entitled to judgment as a matter of law on the record as it stands at that time.
DMJM argues that the standard of review is de novo and that review is extremely narrow, with the appellate court limited to review of purely legal issues. DMJM argues that the County's proposed standard of review suggests that we review legal issues de novo, as well as, the sufficiency of the evidence to support the verdict. DMJM argues that the issue of sufficiency of the evidence to support the verdict is not before this Court, and we are precluded from consideration of evidence introduced at trial.
It is well settled that, "[t]his Court utilizes a de novo standard to analyze questions regarding a circuit court's interpretation of statutory provisions. Although the factual determinations of the circuit court are afforded significant deference on review, its legal determinations are not. Where the order involves an interpretation and application of Maryland statutory and case law, we must determine whether the lower court's conclusions are `legally correct' under a de novo standard of review." Powell v. Breslin, 195 Md.App. 340 (2010), cert. granted, 418 Md. 190, 13 A.3d 798 (2011) (internal quotations and citations omitted).
The standard of review that governs appellate review of the denial of a motion for judgment after trial was explained by the Court of Appeals in Adams v. Manown, 328 Md. 463, 472, n. 4, 615 A.2d 611 (1992):
(Internal citations omitted).
In ruling on a motion for judgment pursuant to Maryland Rule 2-519 in a jury trial, "[t]he trial judge must consider the evidence, including the inferences reasonably and logically drawn therefrom, in the light most favorable to the party against whom the motion is made. If there is any evidence, no matter how slight, legally sufficient to generate a jury question, the motion must be denied...." Barrett v. Nwaba, 165 Md.App. 281, 289, 885 A.2d 392 (2005) (citations and internal quotations omitted) (emphasis omitted). "We review a trial court's grant of a motion for judgment under the same analysis used by the trial court. In other words, we assume the truth of all credible evidence on the issue, and all fairly debatable inferences therefrom, in the light most favorable to the party against whom the motion is made." Id. at 290, 885 A.2d 392 (citations and internal quotations omitted).
The County argues that the trial court erroneously denied its Motion for Judgment at the conclusion of the trial as to DMJM's claim for additional services because there was no written contract amendment approved by the County Council obligating the County to pay for the services. The County explains that any amendment to the contract was required by Article 4 and Article 21.1 of the contract to be in writing and approved by the County Council, and the Council did not approve an amendment for the payment of the claimed additional services. The County points out that an examination of the captions in DMJM's spreadsheets demonstrate that DMJM was aware of the need for an amendment for the additional services to obligate the County for payment of the services, and was aware that the Council did not execute such an amendment.
The County maintains that three legal reasons compel the conclusion that the trial court erred in denying its motions for judgment: (1) the plain meaning of the contract; (2) the plain meaning of the applicable Baltimore County Charter and Baltimore County Code ("B.C.C.") sections; and (3) relevant case law.
First, the County argues that the contract language itself provides that any changes to the contract shall be made by written modification and that no compensation for additional services will be charged without authorization of the County.
Second, the County contends that a county or municipality may make a contract only in the manner prescribed by the legislature, and "if the essential formalities are lacking, the contract is invalid and unenforceable." The County argues that Baltimore County Charter § 715, § 402, § 508 and B.C.C. §§ 10-2-304, 10-2-306, 10-2-107, "set forth the process which must be complied with in obtaining requisite `approval and proper execution of the contract documents' so as to form a legally binding contract with Baltimore County." The process, as described by the County, is that: (1) County Council approval is required; (2) the County Executive or the County Administrative Officer is required to sign any contract on behalf of the County; and (3) the Director of Budget and Finance must first certify that funds for the designated purpose are available. The County points out that DMJM and the County previously entered into a properly executed contract amendment, thus proving DMJM was aware of the need for a properly executed contract amendment,
Third, relying primarily on Alternatives Unlimited, Inc. v. New Baltimore City Bd. of Sch. Comm'rs., 155 Md.App. 415, 425, 843 A.2d 252 (2004), the County argues relevant case law establishes the proposition that "a governmental entity, unlike a private corporation may never have an obligation imposed upon it to expend public funds except in the formal manner expressly provided by law." The County contends that those who contract with governmental agencies in Maryland are deemed to be on notice of the applicable procedures and requirements and the risk of non-compliance with these requirements and procedures is "borne on the other party, not the government."
In contrast, DMJM argues that the County is bound to pay for the additional services as the B.C.C. expressly allows changes to existing contracts without the formal approval of the County Council, and that under the B.C.C. only "purchase orders" and "contracts" as a whole can be void per se so as to create "no obligation or liability." DMJM contends that, in general, counties are bound by their contracts and the additional services DMJM performed on the project in this case were within the ambit of the approved contract and the changes clause therein. DMJM maintains the County's assertion of non-liability for the additional services is subject to estoppel.
Notwithstanding DMJM's positions, for the reasons below, we agree with the County that the contract language, the Baltimore County Charter and B.C.C., and relevant case law mandate reversal and explain.
The plain language of the contract required written authorization from the County Council to obligate the County for payment of the additional services. Appellate courts take "an objective approach to contract interpretation, according to which, unless a contract's language is ambiguous, we give effect to that language as written without concern for the subjective intent of the parties at the time of formation." Ocean Petroleum, Co. v. Yanek, 416 Md. 74, 86, 5 A.3d 683 (2010) (citing Cochran v. Norkunas, 398 Md. 1, 16, 919 A.2d 700 (2007)). When interpreting a contract, we are confined to "the four corners of the agreement," and we "ascribe to the contract's language its `customary, ordinary, and accepted meaning.'" Id. (citing Cochran, 398 Md. at 17, 919 A.2d 700; Fister v. Allstate Life Ins. Co., 366 Md. 201, 210, 783 A.2d 194 (2001) (internal quotation marks and citation omitted)). We do not consider the subjective intent of the parties, rather we consider "the perspective of a reasonable person standing in the parties' shoes at the time of the contract's formation." Id. (citing Cochran, 398 Md. at 17, 919 A.2d 700). As such, "the true test of what is meant is not what the parties to the contract intended it to mean, but what a reasonable person in the position of the parties would have thought it meant. The language of a contract is only ambiguous if, when viewed from this reasonable person perspective, that language is susceptible to more than one meaning." Id. at 86-87, 5 A.3d 683 (internal quotation marks and citations omitted).
In this case, Article 4.1 of the contract states that:
On appeal, DMJM has identified no word or phrase in Article 4.1 which it alleges to be ambiguous. The plain meaning of the clause is clear and unambiguous—the County, by written order could make changes in the work or services to be performed by DMJM. If those changes caused an increase or decrease in the cost of the contract, an equitable adjustment would be made and the contract modified in writing accordingly. Any adjustment claims sought by DMJM, under Article 4.1 were required to be asserted in writing within thirty (30) days of DMJM's receipt of notification of changes by the County.
Article 4.2 of the contract states in simple and unambiguous language that: "No services for which an additional compensation will be charged
Article 7.2, relating to payment of the direct labor costs,
Article 21.1, entitled "Special Causes, Council Approval," states that DMJM by entering into the contract "covenants that this Agreement is subject to and in compliance
Under the objective approach to contract interpretation, the inquiry as to the meaning of the language of the contract is restricted to the four corners of the agreement, and as such, the customary, ordinary, and accepted meaning of the language of the contract is assigned to it. Ocean Petroleum Co., 416 Md. at 86, 5 A.3d 683. In this case, the language of the contract is unambiguous—that is, the language is not susceptible to more than one meaning—when viewed from the perspective of a reasonable person in the position of the parties. Based on a plain reading of the document, in simplest terms, DMJM did not comply with the procedures outlined under the contract for seeking compensation for additional services. There is no merit to DMJM's position that the contract allowed for the County to be obligated to pay for additional services beyond those authorized by a properly executed written amendment, approved by the County Council.
The plain meaning of the relevant provisions of the Baltimore County Charter and the B.C.C. support the conclusion that an enforceable contract amendment required approval by the County Council. As discussed above, Article 21.1 of the contract provides that DMJM agreed to comply with Charter § 715, titled, "[a]ppropriation control and certification of funds." In pertinent part, Charter § 715 provides:
(Emphasis added).
In addition to Charter § 715, the B.C.C. sections relevant to this matter are: § 10-2-304, § 10-2-306 and § 10-2-107. B.C.C. § 10-2-304, titled, "Certification by the Director of Budget and Finance," states that: "An order for purchases of services or commodities estimated to exceed $1,000 may not be issued until the Director of Budget and Finance shall first certify that funds for the designated purpose are available."
B.C.C. § 10-2-306, specifically titled, "Contracts" provides:
(Emphasis added) (italics in original) (footnotes added).
B.C.C. § 10-2-107, titled, "Unauthorized Purchases" provides:
We find the plain meaning of Charter § 715 and the B.C.C. sections to be clear and unambiguous. The sections require contracts to be approved by the County
Mindful of DMJM's contention that approval by the County Council was not required for an amendment to the contract, we will explore the legislative history of Charter § 715, B.C.C. § 10-2-304 and § 10-2-306. The legislative history of Charter § 715, B.C.C. § 10-2-304 and § 10-2-306 supports the conclusion that it was indeed the intent of the County Council that its approval be required for binding contracts with the County for services involving the expenditure of more than $25,000 per year and for amendments to those contracts. The discernable legislative history of § 715 reveals that the Charter section was enacted in 1978, by Bill No. 86, 1978, § 1, and was amended in 1982 by Bill No. 117, 1982, § 1, and in 1990 by Bill No. 129, 1990, § 3.
In 1978 by Bill No. 86, Charter § 715 was enacted with the following language:
(Emphasis added) (italics in original). Bill No. 86 explained that the purpose of the repeal and reenactment of Charter §§ 701-716 was "to clarify certain contract approval by county council; AND ... TO GIVE ADVANCE NOTICE TO THE COUNTY EXECUTIVE AND THE COUNTY COUNCIL IN CONNECTION WITH ALL CAPITAL PROJECTS EXCEEDING $25,000...." (Emphasis in original).
In 1982, in Bill No. 117, Charter § 715 was amended to separate the requirements that County Council approval is required where the contract is for services in excess of two years or involving expenditure of more than $25,000.00 per year, as follows:
(Emphasis in original). In 1982, Charter § 715 was also amended to include the following:
(Emphasis in original). At that time, the County Council stated the purpose of the amendment was to provide "that the dollar limit on small purchases which do not require certification by the Director of Finance may be changed by legislative act of the County Council[.]" (Emphasis in original).
In 1990, in Bill No. 129, Charter § 715 was amended to include the following language:
(Emphasis in original). The County Council stated the purpose of the amendment was to authorize "the County Council to determine the type and amount of contracts requiring Council approval."
The text of B.C.C. § 10-2-304 and § 10-2-306 was previously contained in B.C.C. § 26-7, titled "Contract procedure"
(Emphasis in original).
The legislative history of B.C.C. § 26-7 is contained in Bill No. 171, 1989, § 1, in which the County Council explained that the purpose of Title 26 was to provide "the rules and regulations for purchasing," to explain "contract procedure," and to identify the "power and duties of the purchasing agent[.]"
In 1995, B.C.C. § 26-7 was recodified into B.C.C. § 15-84. Bill No. 69-95, § 6, 1995. B.C.C. § 15-84, titled "Contract procedure," contained the following language:
(Emphasis in original). The legislative history of B.C.C. § 15-84 is contained in Bill No. 69-95, § 6, 1995, which provided that the purpose of the bill was to explain generally "the duties, functions, responsibilities and authorities of the offices, departments and personnel of the Baltimore County government."
In 1996 B.C.C. § 15-84 was amended, pursuant to Bill No. 49-96, § 7, 1996, to include the following language:
(Emphasis in original). Bill No. 49-96, § 7 stated that one of its purposes was to explain the "duties, functions, responsibilities and authorities of the offices, departments and personnel of the Baltimore County government."
The legislative history of Baltimore County Charter § 715, B.C.C. § 10-2-304 and § 10-2-306 clearly demonstrates that the County Council's intent was to create a process by which County Council approval is required prior to the execution of a contract for services involving a term in excess of two years or the expenditure of more than $25,000 per year or such amount as may be set by legislative act of the County Council. There is no indication that the County Council intended to exempt, from the County Council approval requirement, contract amendments where services exceed a cost of $25,000 or the two year duration. When Charter § 715 was enacted in 1978, in Bill No. 86, the County Council explicitly stated that the purpose of Bill No. 86 was to provide the Council advance notice of all capital projects exceeding $25,000. Charter § 715 also provides that no office, department, board, commission, or agency of the County can contract to expend funds without the Director of Finance first certifying that the funds for the designated purpose are available. B.C.C. § 10-2-306 requires compliance with Charter § 715 stating that all contracts must be sent to the Director of Budget and Finance for certification that the County has the funds available.
Since 1978, the Charter has required County Council approval of contracts, and hence notice, of capital projects exceeding $25,000 per year, as well as, certification from the Director of Budget and Finance that the funds are available for such projects.
Relying on B.C.C. § 10-2-504, DMJM wrongly contends that the B.C.C. "expressly allows changes to existing contracts without formal approval of the County Council." We find no merit to DMJM's position. B.C.C. § 10-2-504 provides:
(Emphasis in original). Pursuant to B.C.C. § 10-2-504(b), where a professional capital improvement services contract previously approved by the County Council requires an increase in cost over the original contract price, the Director of Public Works shall prepare a report, which is submitted to each member of the County Council. In the report, the Director of Public Works is required to explain: (1) the change in the professional capital improvement services contract; (2) the costs of the change; and (3) the reasons for the change. B.C.C. § 10-2-504(c) provides that "[i]f after 7 days after the date of the report is actually delivered to the Council members, the County Administrative Officer has not received notice from any Council member to the contrary, the Department of Public Works may proceed with amending the professional services contract."
Relevant case law supports the conclusion that the County may contract only by the method prescribed by the legislature. Case law is clear that, "a governmental entity, unlike a private corporation, may never have an obligation imposed upon it to expend public funds except in the formal manner expressly provided by law." Alternatives Unlimited, Inc., 155 Md.App. at 425, 843 A.2d 252. "It is well settled that a county or municipality can make a contract
In Gontrum v. Mayor & City Council of Baltimore, 182 Md. 370, 375, 35 A.2d 128 (1943), the seminal case setting forth the principle that a government entity may never have an obligation imposed upon it except in the formal manner expressly provided by law, the Court of Appeals stated:
Following Gontrum, in Hanna v. Board of Education, 200 Md. 49, 52, 58, 87 A.2d 846 (1952), the Court of Appeals found that a contract between a construction company and the Board of Education of Wicomico County for the construction of a high school was null and void as the contract violated a section of the Maryland Public Education Law, which required competitive bidding on contracts. Citing Gontrum, 182 Md. at 375, 35 A.2d 128, the Court explained that: "The rule is firmly established that one who makes a contract with a municipal corporation or administrative agency is bound to take notice of the limitations of its powers to contract." Hanna, 200 Md. at 57, 87 A.2d 846. The Court found that, because the contract was in violation of the statute, it was null and void. Id. at 58, 87 A.2d 846.
Speaking for this Court, in Alternatives Unlimited, Inc., 155 Md.App. at 425-26, 843 A.2d 252, Judge Charles E. Moylan, Jr. explained the rationale of Gontrum:
Judge Moylan explained:
Id. at 467-69, 843 A.2d 252 (emphasis omitted) (footnote added).
Recently, in State of Md. Comm'n on Human Relations, 166 Md.App. at 41, 887 A.2d 64, we held that a trial court did not err in finding a settlement agreement between the Commission and Baltimore City void, as the agreement was beyond the power of the officials to enter when they had not followed prescribed procedures. In that case, the Commission proceeded
Maryland appellate courts have repeatedly stated:
Id. at 42, 887 A.2d 64 (quoting Alternatives Unlimited, Inc., 155 Md.App. at 427, 843 A.2d 252) (citations omitted) (emphasis in original). Under the analysis required by the precedents discussed above, it is clear that the absence of a written contract amendment approved by the County Council is dispositive of DMJM's claim for payment of additional services—the County cannot be obligated under a contract unless the contract is executed in the formal manner prescribed by law.
DMJM bases its argument that counties are bound by their contracts to the same extent as private entities on Montgomery County v. Revere Nat'l Corp., 341 Md. 366, 671 A.2d 1 (1996). In Revere, 341 Md. at 383, 671 A.2d 1, the Court of Appeals held that a settlement agreement incorporated into a court order between a county and a private company was a final judgment that was valid and enforceable. The County sought to void the agreement alleging fraud, contending that the agreement exceeded the County's authority. Id. at 376, 671 A.2d 1. The Court reasoned that "cases have recognized certain unusual and narrowly limited situations when final judgments based on consent of the parties, although not subject to revision under rules like Maryland Rule 2-535, have been deemed non-preclusive or subject to collateral attack." Id. at 380, 671 A.2d 1. In this vein, the Court discussed Kelley v. Town of Milan, 127 U.S. 139, 8 S.Ct. 1101, 32 L.Ed. 77 (1888), stating that "under the Kelley principle the act of placing a settlement agreement made by a local government in the form of a court judgment, . . . will not cure the lack of fundamental power in the governmental entity to make the agreement." Id. at 381, 671 A.2d 1. In Revere, the Court found that the substance of the agreement was not clearly ultra vires,
DMJM ignores crucial differences between the facts of Revere and the present situation. In Revere, there was an executed contract, in the form of the settlement agreement, granting Revere the use of billboards, contrary to Montgomery County's zoning regulation, which was incorporated into a court order. In Revere, the Court engaged in an analysis of whether the settlement agreement entered into and incorporated in a court order was made in the method prescribed by law, and determined that the agreement was not ultra vires. As such, the Court of Appeals found the agreement valid. In Revere, the Court stated, "`as long as the execution of the contract [is] within the power of the governmental unit,' the local government is answerable in damages for breaching that contract." 341 Md. at 385, 671 A.2d 1 (citation omitted). In Revere, to be sure, the Court also stated: "[U]nder Maryland law counties and municipalities are normally bound by their contracts to the same extent as private entities." Id. at 384, 671 A.2d 1. This statement, however, was made in the context of counties being bound by contracts properly made in the method prescribed by law and not ultra vires. The Court's holding in Revere does not conflict with the precedent set forth by the Court of Appeals in Gontrum in 1943, and reiterated by Judge Moylan in Alternatives Unlimited, Inc., in 2004, and, as such, does not change our analysis in this case—the County cannot be bound by a contract unless the contract is executed in the formal manner prescribed by law.
DMJM contends that "counties asserting that a contract is void are subject to estoppel." DMJM argues that "Maryland law has allowed equitable estoppel to be asserted against governmental entities when `both parties to the transaction have acted and proceeded as if all preliminary formalities and regulations [have] been complied with, and rights have attached.'" DMJM argues that compliance with Articles 4.1 and 4.2 of the contract is subject to the principles of waiver, estoppel, or modification.
The County responds that DMJM's counterclaim alleged only a breach of contract. The County contends that DMJM failed to raise the doctrine of estoppel at trial. As such, the County argues that it is too late for DMJM to raise the issue of estoppel as this issue was
Preliminarily, we conclude that DMJM has failed to preserve the issue of estoppel for appellate review. Maryland Rule 8-131(a) ("Ordinarily, the appellate court will not decide any other issue unless it plainly appears by the record to have been raised in or decided by the trial court."). DMJM failed to raise the issue of estoppel when the County filed its Motion for Partial Summary Judgment. In DMJM's Opposition to the County's motion, DMJM argued that the additional services were within the ambit of the contract and payment for the additional services did not require formal modification of the contract.
DMJM failed to argue estoppel in its Opposition to the County's Motion for Partial Summary Judgment and, at trial, when opposing the County's motion for judgment. "A contention not raised below either in the pleadings or in the evidence and not directly passed upon by the trial court is not preserved for appellate review." Zellinger v. CRC Dev. Corp., 281 Md. 614, 620, 380 A.2d 1064 (1977) (citation omitted). We conclude, DMJM has not preserved the issue of estoppel for consideration.
Alternatively, as to the merits, we conclude that the doctrine of estoppel is inapplicable in this case. Equitable estoppel is an "equitable remedy." Alternatives Unlimited Inc., 155 Md.App. at 463, 843 A.2d 252. Municipal corporations are not exempt from application of equitable estoppel principles; however, "in practice we have applied the doctrine more narrowly."
(Internal citations omitted) (emphasis added).
DMJM contends that in contract cases where damages are sought, prejudgment interest is discretionary with the trier of fact and the trial court erred in failing to give the requested instruction on prejudgment interest.
The County contends the trial court properly denied DMJM's request for prejudgment
In this case, DMJM asked the trial court to instruct the jury on the issue of prejudgment interest. "We apply the abuse of discretion standard of review when considering a trial judge's denial of a proposed jury instruction." Collins v. Nat'l R.R. Passenger Corp., 417 Md. 217, 228 (2010), cert. dismissed, ___ U.S. ___, 131 S.Ct. 1811, 179 L.Ed.2d 673 (2011). DMJM requested that the trial court instruct the jury on prejudgment interest, in part, as follows, "you may, but are not required to, award prejudgment interest from the date upon which you determine the County's obligation to pay, and the amount, were certain." In order to address DMJM's contention—that the trial court abused its discretion in failing to instruct the jury on prejudgment interest —we must first analyze the circumstances under which a trial court is required to submit the issue of prejudgment interest to the jury.
"[P]rejudgment interest as a matter of right is the exception rather than the rule." Ver Brycke v. Ver Brycke, 379 Md. 669, 702, 843 A.2d 758 (2004). There are three rules regarding prejudgment interest: (1) as a matter of right— prejudgment interest is allowed as a matter of right when "the obligation to pay and the amount due [have] become certain, definite, and liquidated by a specific date prior to judgment so that the effect of the debtor's withholding payment was to deprive the creditor of the use of a fixed amount as of a known date"; (2) absolute non-allowance—"where the recovery is for bodily harm, emotional distress, or similar intangible elements of damage not easily susceptible of precise measurement, the award itself is presumed to be comprehensive, and pre-judgment interest is not allowed"; and (3) if the case falls in between the as of right and absolute non-allowance, "pre-judgment interest is within the discretion of the trier of fact." Buxton v. Buxton, 363 Md. 634, 656-57, 770 A.2d 152 (2001) (internal quotations and citations omitted).
Maryland appellate courts have not considered whether a trial judge erred in failing to submit to the jury, as the trier of fact, the issue of prejudgment interest in a breach of contract case where the award falls between the circumstances of prejudgment interest as a matter of right or clear disallowance. In this case, it is undisputed that DMJM was not entitled to prejudgment interest as a matter of right. Prejudgment interest, however, would not have been absolutely disallowed on DMJM's breach of contract claim, assuming the jury entered a verdict in its favor. The question is whether the trial judge erred in not submitting the issue of prejudgment interest to the jury prior to the verdict. Specifically, we must address whether the trial court was required to submit the issue of prejudgment interest to the jury, prior to the verdict, in a breach of contract action, where there was a dispute as to: (1) whom damages would be awarded—whether damages would be awarded in favor of the County's claim for negligence or breach of contract or in favor of DMJM's claim for breach of contract; (2) the amount of damages, if any owed; and (3) when the damages occurred.
In tort cases, prejudgment interest has been disallowed on the theory that the amounts sought were not due and owing until judgment, and the prevailing party was not deprived of the use of the interest. Id. at 656-57, 770 A.2d 152. The Court of Appeals has previously held—in a case in which the plaintiff sought recovery for real estate commissions sales and damages for tortious interference and for conspiracy to interfere with his alleged real estate listing contract—that where there is a dispute as to the amount of damages, the damages do not become liquidated until the verdict, fixing the amount. Taylor v. Wahby, 271 Md. 101, 113, 314 A.2d 100 (1974). In Taylor, 271 Md. at 103, 314 A.2d 100, the appellee, a real estate broker, sued several parties for real estate commissions of a property sale for which he was responsible. The trial court determined that "inasmuch as both the interference with the contracts and the conspiracy to interfere with them were effective and complete when the [property was deeded to the buyer], interest should be allowed on the real estate commissions due [appellee] . . . and should be calculated from the dates of the respective deeds." Id. at 112, 314 A.2d 100. The Court of Appeals disagreed with the trial court, indicating that the case upon which the trial judge relied "involved a chattel having a readily ascertainable market value and in regard to which the plaintiffs were required to pay out substantial sums over a period of years." Id. at 113, 314 A.2d 100. The Court explained:
Id. (footnote omitted) (emphasis added). Accordingly, the Court remanded the case to the trial court to adjust the interest to run from the time the judgment was rendered. Id. at 117, 314 A.2d 100.
In Wartzman v. Hightower Prods., Ltd., 53 Md.App. 656, 668, 456 A.2d 82 (1983), after a jury trial, the appellee filed a cross-appeal alleging that the trial court abused its discretion in failing to permit the jury to consider prejudgment interest on the jury's award of reliance damages. In that case, "Hightower filed suit alleging breach of contract and negligence for [Wartzman's] failure to have created a corporation authorized to raise the capital necessary to fund [a] venture. At the trial, Hightower introduced into evidence its obligations and expenditures incurred in reliance on the defendant law firm's creation of a corporation." Id. at 660, 456 A.2d 82. The trial court instructed the jury that in order to find liability, the plaintiff must prove three things:
Id. at 666, 456 A.2d 82. The jury returned a verdict in favor of Hightower in the amount of $170,508.43, and on appeal, Hightower argued that the trial court erred in failing to present the issue of prejudgment interest to the jury. Id. at 661, 668, 456 A.2d 82. Finding no error, we stated:
Id. at 668-69, 456 A.2d 82.
In Republic Ins. Co. v. Prince George's County, 92 Md.App. 528, 530-31, 608 A.2d 1301 (1992), the plaintiff sought to recover under a performance bond issued by Republic. After a jury trial, Prince George's County appealed the trial court's denial to award prejudgment interest. Id. at 539, 608 A.2d 1301. We found no error in the trial court's refusal to award prejudgment interest, stating:
Id. (emphasis added).
In Pulte Home Corp. v. Parex, Inc., 174 Md.App. 681, 772, 923 A.2d 971 (2007), aff'd, 403 Md. 367, 942 A.2d 722 (2008), although the issue of prejudgment interest was submitted to the jury, this Court reversed the jury's award of prejudgment interest, concluding that Pulte failed to present evidence at trial warranting an award of prejudgment interest. Pulte, a builder, sued several defendants, including Parex, on various claims.
Id. at 771-72, 923 A.2d 971 (footnote omitted). This Court reasoned that although evidence of the settlement agreements reached prior to trial could form the basis for a jury to find that the sum due to Pulte was certain by a specific date, no such evidence was before the jury. Id. at 772, 923 A.2d 971. The lack of evidence of the settlement agreements left Parex's obligation to pay Pulte unliquidated and uncertain. Id.
In a case such as this, following the principles drawn from the authorities discussed above, we hold that where breach of contract damages are unliquidated or not reasonably ascertainable until the verdict, a party is not entitled to a discretionary determination on the issue of prejudgment interest by the jury, prior to the verdict in the case. Prior to the verdict in this case, the amount of damages, if any, due DMJM was not liquidated or
After reviewing the jury instruction and the evidence, namely DMJM's Exhibit 532, we do not believe the trial court's refusal to give the requested instruction was an abuse of discretion.
Having addressed the trial court's refusal to submit the issue of prejudgment interest to the jury, prior to verdict, the question becomes whether the trial court erred in not submitting the issue to the jury, after the jury returned the verdict awarding DMJM $1,653,600.88. On return of the verdict, the following occurred:
Once the jury returned the verdict, DMJM did not renew the request that the issue of prejudgment interest be submitted to the jury, but rather, asked if this was something the court would do as part of entering the verdict in the case. In response, the trial judge asked for a memorandum from DMJM. At no point after the verdict did DMJM ask the trial court to submit the issue of prejudgment interest to the jury. As such, we find that DMJM has not preserved for our review the question of whether the trial court was required to submit the issue of prejudgment interest to the jury after return of the verdict.
Assuming arguendo, that the additional services were covered by the base contract, on appeal, the parties have agreed to not "challenge or otherwise question the portion of the judgment for base contract services in the amount of $687,579.00[.]" As such, if the additional services were part of the original contract, the County's agreement to pay DMJM the unpaid balance of the contract price would sufficiently address DMJM's claim for the additional services.
(Emphasis added).
The following day, the trial judge asked if either party wished to be heard on their proposed jury instructions. In response, DMJM stated:
The Court responded: "Okay." Following a discussion on other jury instructions, the jury returned and the trial judge instructed the jury. The trial judge did not instruct the jury on the issue of prejudgment interest. After the jury instructions were given, the trial judge called counsel to the bench, and asked: "Each party wish to adopt and incorporate by reference all argument advanced before I gave the instructions, is that correct?" DMJM's counsel responded: "Nothing additional."