DEBORAH K. CHASANOW, District Judge.
Presently pending and ready for resolution in this breach of contract case are: (1) a motion for summary judgment on counts I and VIII of its amended complaint filed
Unless otherwise noted, the following facts are undisputed. This case has three parties: J.E. Dunn, SRP, and Metropolitan and involves the efforts to build a new "megachurch" for
Metropolitan in Upper Marlboro, Maryland ("the Project"). On September 29, 2005, Metropolitan retained SRP to serve as its project manager for the Project through a Development Management Agreement ("Development Contract"), (ECF No. 33-1), and the Agreement Between Owner and Design Builder ("Design Build Contract") (ECF No. 33-2). The Development Contract provided that SRP would generally act as Metropolitan's trusted advisor by shepherding the Project through to completion, such as handling zoning, legal, financing issues, along with evaluating the drawings, cost estimates, and construction schedule of the general contractor. (ECF No. 33-1 § 2.2). The contract stated that each party reserved the right to cancel the agreement upon written notice to the other party. If the agreement were to be terminated for convenience, the parties were relieved of all further obligations, but Metropolitan would be obligated to pay SRP the costs and fees which had been authorized and incurred by SRP at the time of termination. (Id. § 6.1).
SRP subsequently entered into negotiations with J.E. Dunn for the Project's general contract services. J.E. Dunn evaluated the Project and provided a Guaranteed Maximum Price ("GMP") for the Project of $31,098,000. (ECF No. 33-4, at 2). A GMP is a method of cost control whereby the contractor is compensated for actual costs incurred not to exceed the GMP. On September 28, 2005, SRP acknowledged the GMP and authorized J.E. Dunn to begin procurement. (Id.). SRP retained J.E. Dunn to serve as the Project's general contractor and entered into a modified AIA A491—1996 Agreement Between Design/Builder and Contractor ("the Subcontract") on November 29, 2005. (ECF No. 33-3). Rees & Associates was the architect on the Project. (ECF No. 33-3, at 3). Article 4.2.4 of the Subcontract stated:
(ECF No. 33-3, at 6). Under Article 4.2.1 of the Subcontract, J.E. Dunn would recover a Contractor's Fee "as an amount equal to three and one-half percent (3.5%) of the Estimated Cost of the Work used to establish the [GMP]." (ECF No. 33-3, at 5). J.E. Dunn asserts that SRP and Metropolitan decided to release J.E. Dunn to perform particular scopes of work under the Subcontract and for the Project through ten (10) Work Authorization packages, in the total amount of $34,001,754. (ECF No. 94, Exh.A.1, Taylor depo, at 83 & Exh.A.9).
Construction started and problems ensued. On July 29, 2008, Metropolitan sent two letters to SRP terminating both agreements. (ECF No. 34-2).
(ECF No. 34-3, at 2).
SRP contends that J.E. Dunn did not respond to this letter. Instead, J.E. Dunn began to deal directly with Metropolitan and continued work on the Project. Tory Sigler, Vice President with J.E. Dunn, explained:
(ECF No. 95-4 ¶ 5). Mr. Sigler avers that J.E. Dunn performed work on the Project directly for Metropolitan from mid-August 2008 through early October 2008. (Id. ¶ 7). Jason T. Martin, Vice President and Regional General Counsel for J.E. Dunn, avers that J.E. Dunn and Metropolitan discussed executing a formal written contract
On November 24, 2008, J.E. Dunn served Metropolitan with a sworn Notice to Owner or Owner's Agent of Intention to Claim a Lien on the Property. (ECF No. 94-4). The Notice indicates that J.E. Dunn is owed $3,591,062 as of August 18, 2008 in connection with its Subcontract with SRP; and that Metropolitan owes it $3,629,891. (Id. at 3). On February 6, 2009, J.E. Dunn filed in the Circuit Court for Prince George's County a petition to establish and enforce a mechanic's lien on the Property in the amount of $7,220,953 (the combined total of the alleged amount owed by SRP and Metropolitan). (ECF No. 94-5). On March 31, 2009, a final mechanic's lien order was entered in the Circuit Court for Prince George's County in the principal amount of $7,220,953 in favor of J.E. Dunn against land owned by Metropolitan.
J.E. Dunn filed a complaint on July 15, 2011, alleging claims for breach of contract, negligence, negligent misrepresentation, quantum meruit, unjust enrichment, and promissory estoppel against Defendants SRP, Smoot, and Robuck. (ECF No. 1). SRP, Smoot and Robuck then moved to dismiss, alleging lack of subject matter jurisdiction or, in the alternative, for failure to state a claim. The motion was granted in part and denied in part on September 20, 2012. (ECF Nos. 25 & 26). As relevant here, the opinion indicated that "Smoot and Robuck, as SRP general partners, may be liable for any outstanding obligation after exhaustion of SRP's assets and, for that reason, are proper parties to this suit. . . . Because Smoot and Robuck may not be held individually liable, JE Dunn may not satisfy any judgment against them without first exhausting the assets of SRP." (ECF No. 25, at 17-18). The decision also held that "to the extent that JE Dunn alleges negligent misrepresentation based on pre-contractual negotiations that induced it to enter into the subcontract, Maryland law supports that it was owed an independent duty that SRP's representations be accurate and the allegations in the first Count V for negligent misrepresentation are sufficient in the pre-contractual phase." (Id. at 22). The negligence and negligent misrepresentation claims were dismissed, however, insofar as they were based on an alleged duty by SRP to manage the project in accordance with industry standards or to make accurate
On October 12, 2012, Plaintiff filed an amended complaint—the operative pleading here—adding Metropolitan as a defendant and adding claims for breach of contract, quantum meruit, unjust enrichment, and promissory estoppel against Metropolitan. (ECF No. 31). SRP initially filed an answer, two cross-claims against Metropolitan, and counterclaimed against J.E. Dunn on October 26, 2013, (ECF No. 33), and later filed an amended pleading on December 16, 2013 (ECF No. 64). Specifically, SRP counterclaimed against J.E. Dunn for breach of contract (count I) and pre-contractual negligent misrepresentation (count II). SRP asserted cross-claims against Metropolitan for breach of contract (count III), and for tortious interference with contractual relations (count IV), the basis for which will be discussed below. J.E. Dunn filed a motion to strike this amended pleading or, in the alternative, to dismiss the counterclaims. The court issued a memorandum opinion and order on August 5, 2014, granting J.E. Dunn's motion to dismiss the amended counterclaims and dismissing counts I and II as to J.E. Dunn. (ECF Nos. 75 & 76).
On October 3, 2014, J.E. Dunn moved for partial summary judgment as to Counts I and VIII of its amended complaint as to SRP and Metropolitan, respectively. (ECF No. 95). SRP filed an opposition and a cross motion for summary judgment on counts I through V of J.E. Dunn's complaint. (ECF No. 97). J.E. Dunn filed an opposition to the cross motion and a reply in support of its own motion. (ECF No. 99.) SRP filed a reply in support of its own motion. (ECF No. 102). Metropolitan did not oppose J.E. Dunn's motion, but it did file a motion for summary judgment as to SRP's two cross-claims for breach of contract and tortious interference with contractual relations. (ECF Nos. 96 & 98). SRP did not oppose the motion.
Rule 56(a) of the Federal Rules of Civil Procedure, permits a party to move for summary judgment or partial summary judgment by identifying "each claim or defense—or the part of each claim or defense—on which summary judgment is sought." "[P]artial summary judgment is merely a pretrial adjudication that certain issues shall be deemed established for the trial of the case. This adjudication . . . serves the purpose of speeding up litigation by" narrowing the issues for trial to those over which there is a genuine dispute of material fact. Rotorex Co. v. Kingsbury Corp., 42 F.Supp.2d 563, 571 (D.Md.1999) (internal quotation marks omitted) (noting that "numerous courts have entertained and decided motions for partial summary judgment addressing particular issues").
A motion for summary judgment will be granted only if there exists no genuine dispute as to any material fact and the moving party is entitled to judgment as a matter of law. See Fed.R.Civ.P. 56(a); Celotex Corp. v. Catrett, 477 U.S. 317, 322, 106 S.Ct. 2548, 91 L.Ed.2d 265 (1986); Anderson v. Liberty Lobby, Inc., 477 U.S. 242, 250, 106 S.Ct. 2505, 91 L.Ed.2d 202 (1986). Once a properly supported motion for summary judgment is filed, the non-moving party is required to make a sufficient showing on an essential element of that party's claim as to which that party would have the burden of proof to avoid summary judgment. Celotex, 477 U.S. at 322-23, 106 S.Ct. 2548.
Summary judgment is appropriate under Federal Rule of Civil Procedure Rule 56(a) when there is no genuine dispute as to any material fact, and the moving party is plainly entitled to judgment in its favor
In undertaking this inquiry, a court must view the facts and the reasonable inferences drawn therefrom "in the light most favorable to the party opposing the motion." Matsushita Elec. Indus. Co. Ltd. v. Zenith Radio Corp., 475 U.S. 574, 587, 106 S.Ct. 1348, 89 L.Ed.2d 538 (1986) (quoting United States v. Diebold, Inc., 369 U.S. 654, 655, 82 S.Ct. 993, 8 L.Ed.2d 176 (1962)); see also EEOC v. Navy Fed. Credit Union, 424 F.3d 397, 405 (4th Cir. 2005). The mere existence of a "scintilla" of evidence in support of the non-moving party's case is not sufficient to preclude an order granting summary judgment. See Anderson, 477 U.S. at 252, 106 S.Ct. 2505.
A "party cannot create a genuine dispute of material fact through mere speculation or compilation of inferences." Shin v. Shalala, 166 F.Supp.2d 373, 375 (D.Md. 2001) (citation omitted). Indeed, this court has an affirmative obligation to prevent factually unsupported claims and defenses from going to trial. See Drewitt v. Pratt, 999 F.2d 774, 778-79 (4th Cir.1993) (quoting Felty v. Graves-Humphreys Co., 818 F.2d 1126, 1128 (4th Cir.1987)).
J.E. Dunn seeks summary judgment on its breach of contract claim against SRP, Smoot, and Robuck
Under Maryland law, to establish a breach of contract, there must be a contractual obligation owed by the defendant to the plaintiff and a material breach of that obligation. RRC Ne., LLC v. BAA Md., Inc., 413 Md. 638, 658, 994 A.2d 430 (2010). J.E. Dunn contends that SRP breached the Subcontract by failing to pay J.E. Dunn all amounts earned under the Subcontract on or before the date of termination on August 18, 2008.
(Id. at 14) (emphasis added).
"Cost of the Work" is defined in Article 6 of the Subcontract. Specifically, Article 6.1 provides: "The term Cost of the Work shall mean costs necessarily incurred by the Contractor [J.E. Dunn] in the proper performance of the Work. Such costs shall be at rates not higher than the standard paid at the place of the Project except with prior consent of the Design/Builder. The Cost of the Work shall include only those items set forth in this Article 6." (Id. at 6) (emphasis added). Article 6 then discusses: labor costs; subcontract costs; costs of materials and equipment incorporated in the completed construction; costs of other material and equipment, temporary facilities and related items; miscellaneous costs; other costs; and emergencies: repairs to damaged, defective or nonconforming work. (Id. at 7-8).
Two separate calculations need to be made, then, in order to ascertain the damages owed to J.E. Dunn due to the termination of the contract: the remaining cost of work done, with appropriate adjustments, and the remaining contractor's fee. J.E. Dunn seeks damages in the amount of $3,591,062 for the Cost of the Work and "lost profits" in the amount of $183,927.02. (ECF No. 95-2 ¶¶ 5-6; ECF No. 95-1, at 5).
J.E. Dunn seeks to establish these amounts in an ultimately insufficient affidavit from Travis Noble, a former Assistant Vice President with J.E. Dunn. The affidavit states that at the time the Subcontract was terminated on August 18, 2008, the Cost of the Work invoiced by J.E. Dunn totaled $28,746,696, for which J.E. Dunn was paid $25,155,634, leaving an unpaid balance of $3,591,062. J.E. Dunn argues that of the $3,591,062 allegedly owed by SRP for Cost of the Work upon termination, $1,779,908 was invoiced through and including certified Application for Payment No. 34, which application SRP does not dispute it received. (ECF No. 99, at 15). J.E. Dunn believes that it is still owed $1,779,908 for the Cost of the Work, consisting of $1,683,446 of past retainage
Mr. Noble further declares that the value of the remaining Costs of the Work to
SRP correctly argues that "J.E. Dunn's only proof with regard to the `Cost of the Work' are its invoices and the Affidavit of Travis Noble which only states the total amount J.E. Dunn claims is the Cost of the Work based on J.E. Dunn's Applications for Payment Nos. 34, 35, and 36." (ECF No. 97-1, at 33) (emphasis added). Application No. 34 reflects that $978,997 was the "amount certified" by the architect. The only "evidence" J.E. Dunn submits to show the amounts still due under Application No. 34 is a summary affidavit from Mr. Noble and J.E. Dunn's answer to an interrogatory in which it again summarily represents that of "the Cost of the Work owed through Application and Certification for Payment No. 34, $1,683,446 represents retainage and $96,462 represents non-retainage." (ECF No. 94-11, at 7).
J.E. Dunn argues that it had no duty to submit "back up" documentation to substantiate the Cost of the Work and that the summary affidavit from Mr. Noble suffices. (ECF No. 99, at 34). Federal Rule of Evidence 1006 states:
Rule 1006 "is a rule to admit charts into evidence as a surrogate for underlying voluminous records that would otherwise be admissible into evidence." United States v. Janati, 374 F.3d 263, 272 (4th Cir.2004). "The purpose of this Rule is to reduce the volume of written documents that are introduced into evidence by allowing in evidence accurate derivatives from the voluminous documents." Id. at 272 (emphasis added).
Here, SRP challenges the accuracy of the summary affidavit and J.E. Dunn has not come forward with any documents substantiating the accuracy of the amounts it seeks in damages. J.E. Dunn indicates in a footnote in the reply memorandum that:
(ECF No. 99, at 36-37 n. 61; ECF No. 99-3, July 17, 2014 letter from J.E. Dunn to SRP regarding 3½ bankers' boxes of documents). J.E. Dunn has the burden to prove damages and that it is entitled to judgment as a matter of law, and the affidavit from Mr. Noble and its own answers to interrogatories which provide only a summary are not sufficient to prove a specific amount in damages purportedly owed by SRP.
Similarly, J.E. Dunn's "evidence" in support of damages claimed under Application for Payment No. 35 is problematic. J.E. Dunn indicates (in a footnote in its memorandum in opposition to SRP's cross motion for summary judgment) that it calculated the $1,811,152 figure—which it believes covers the amount owed by SRP from July 18, 2008 to August 18, 2008 under Application for Payment No. 35—as follows:
(ECF No. 99, at 23 n. 39). Arguments made by counsel are not evidence, however. Aside from the summary affidavit from Travis Noble attesting to the total amount in damages allegedly owed by SRP for the Cost of the Work, J.E. Dunn has provided no evidence justifying its entitlement to the $1,811,152 in damages it seeks under Application No. 35. Moreover, Application for Payment No. 35 purportedly covers the period from June 20, 2008 to August 21, 2008, which overlaps with the time period covered in Application for Payment No. 34, covering the period from June 20, 2008 to July 17, 2008. (ECF No. 94-8, at 187-190). Unlike the other applications for payment, there is no "amount certified" by the architect under Application No. 35. J.E. Dunn argues:
(ECF No. 99, at 22).
There are multiple problems with J.E. Dunn's arguments. First, the $28,793,908 figure referenced by J.E. Dunn is reflected on Application No. 35 as an amount representing
Based on the foregoing, summary judgment will be denied on the breach of contract claim by J.E. Dunn against SRP.
J.E. Dunn also moves for summary judgment on the quantum meruit claim against Metropolitan in count VIII of its amended complaint. Metropolitan has not opposed the motion. Even where the nonmoving party fails to respond, however, the requested relief is not automatically granted. See Fed.R.Civ.P. 56(e)(2). Rather, the court must "review the motion, even if unopposed, and determine from what it has before it whether the moving party is entitled to summary judgment as a matter of law." Custer v. Pan Am. Life Ins. Co., 12 F.3d 410, 416 (4th Cir.1993).
J.E. Dunn asserts that Metropolitan is liable to it in the amount of $3,629,891 under a theory of quantum meruit. (See ECF No. 31 ¶ 23). Quantum meruit refers to restitution for the value of a benefit bestowed on one party by another. See, e.g., Dolan v. McQuaide, 215 Md.App. 24, 37-38, 79 A.3d 394 (2013) (explaining that "quantum meruit is not truly a cause of action but a measure of recovery available in an action for contract implied-in-fact or for unjust enrichment"). Three elements must be established by a plaintiff to sustain a claim for quantum meruit: "(1) [a] benefit conferred upon the defendant by the plaintiff; (2) an appreciation
J.E. Dunn asserts that its quantum meruit claim against Metropolitan is based on an "implied-in-fact contract." J.E. Dunn submits an affidavit from Tory Sigler, the Vice President for J.E. Dunn, in which he avers:
(ECF No. 95-4 ¶¶ 5-8) (emphases added).
J.E. Dunn has established liability as to the quantum meruit claim. It continued to perform work on the Project directly for Metropolitan after the termination of the Subcontract with SRP and until mid-October 2008. J.E. Dunn submitted affidavits establishing that it was not compensated for the work performed for Metropolitan on the Project.
J.E. Dunn's motion for summary judgment will be denied as to the amount of damages sought for the quantum meruit claim, however. A measure of recovery on a quantum meruit claim based on an implied-in-fact contract, which is how J.E. Dunn characterizes its relationship with Metropolitan after the termination of the Subcontract, is "based on the amount that the parties intended as the contract price or, if that amount is unexpressed, the fair market value of the plaintiff's services." Alternatives Unlimited, Inc. v. New Baltimore City Bd. of School Com'rs, 155 Md.App. 415, 484, 843 A.2d 252 (2004) (quoting Mogavero v. Silverstein, 142 Md.App. 259, 276, 790 A.2d 43 (2002)). The record is insufficient to establish as a matter of law the reasonable value of services rendered to Metropolitan. J.E. Dunn represents in its motion for summary judgment that SRP—with the consent of Metropolitan—allowed
Much like its breach of contract claim against SRP, J.E. Dunn again does not include any supporting documentation to substantiate the $3,629,891 figure as the value of its services or as the amount remaining outstanding for work performed for Metropolitan under the Work Authorization packages after the termination of the Subcontract with SRP. Nor has J.E. Dunn provided the two payment applications it purportedly sent to Metropolitan for work performed. The record lacks sufficient evidence to prove J.E. Dunn's entitlement to the $3,629,891 figure it seeks in damages against Metropolitan. Accordingly, summary judgment will be granted as to liability on the quantum meruit claim, but denied as to damages.
SRP seeks summary judgment on J.E. Dunn's breach of contract claim, quasi-contractual claims in counts two through four of the amended complaint, and the negligent misrepresentation claim in count five.
SRP's arguments for judgment in its favor on the breach of contract claim by J.E. Dunn take two forms. First, it argues that it is undisputed that SRP had the right to terminate the Subcontract without cause pursuant to Article 14.1, and it could not have breached the contract by exercising this right. (ECF No. 97-1, at 16-17). J.E. Dunn does not challenge SRP's termination of the Subcontract, however, but argues that SRP did not fulfill its payment obligations under Article 14.3. SRP's second argument is that there can be no breach of contract where a party fails to satisfy a condition precedent to payment. (ECF NO. 97-1, at 17-18). On this front, SRP construes Article 11.3 of the Subcontract as obligating it to make payment to J.E. Dunn upon termination "only upon actual receipt by S.R.P. of an Application for Payment." (ECF No. 97-1, at 10). Article 11.3 of the Subcontract states:
(ECF No. 33-3, at 10) (emphasis added).
Where a contractual duty is subject to a condition precedent, there is no duty of performance until the condition precedent has occurred or been performed. Chirichella v. Erwin, 270 Md. 178, 181, 310 A.2d 555 (1973) (citing Griffith
Nothing in Article 14.3—which covers amounts to be paid to J.E. Dunn upon termination pursuant to Article 14.1—or in Article 14.5—which covers calculation of payment upon termination—conditions payment to J.E. Dunn on receipt of an application for payment. Article 11.3, which is the provision on which SRP relies to evade all liability for any amount still owed under the Subcontract, covers submission of an Application for Payment in the context of progress payments. There is no question that J.E. Dunn was to be compensated upon termination of the contract with SRP without cause, provided there is a demand for payment and a proper accounting of the amount owed. It is uncontroverted that SRP received Application for Payment No. 34, and part of J.E. Dunn's claim for breach of contract damages is based on SRP's failure to pay amounts owed under this application. The parties dispute whether SRP ever received Application for Payment No. 35. Mr. Taylor of SRP gave deposition testimony that J.E. Dunn never submitted Application for Payment No. 35. (See ECF No. 94, Appendix A, Taylor depo, at 193 ("J.E. Dunn never submitted pay application 35 to me.")). J.E. Dunn, on the other hand, believes SRP received Application for Payment No. 35 because it is addressed to SRP (as compared to Application for Payment No. 36, which is addressed to Metropolitan). Based on the foregoing, SRP's motion for summary judgment on J.E. Dunn's breach of contract claim will be denied.
SRP argues that J.E. Dunn cannot recover on its claims for quantum meruit and unjust enrichment as a matter of law because no quasi-contractual claims can exist when a contract in fact exists between the parties. (ECF No. 97-1, at 19-20). Citing Ver Brycke v. Ver Brycke, 379 Md. 669, 843 A.2d 758 (2004), J.E. Dunn counters that "a party may bring a quasicontractual claim under Maryland law even when an express written contract governing the same subject matter exists where, as here, it is alleged that a breach of contract has occurred." (ECF No. 99, at 24). J.E. Dunn contends that because SRP allegedly breached the Subcontract, it
J.E. Dunn's arguments are unpersuasive. "[U]njust enrichment and quantum meruit, both `quasi-contract' causes of action, are remedies to provide relief for a plaintiff when an enforceable contract does not exist but fairness dictates that the plaintiff receive compensation for services provided." Cnty. Cmm'rs of Caroline Cnty. v. J. Roland Dashiell & Sons, Inc., 358 Md. 83, 96, 747 A.2d 600 (2000) (quoting Dunnaville v. McCormick & Co., 21 F.Supp.2d 527, 535 (D.Md.1998)) (internal quotation marks omitted). In Maryland, "[t]he general rule is that no quasi-contractual claim can arise when a contract exists between the parties concerning the same subject matter on which the quasi-contractual claim rests." J. Roland Dashiell & Sons, 358 Md. at 96, 747 A.2d 600 (internal citation omitted); see also FLF, Inc. v. World Publ'ns, Inc., 999 F.Supp. 640, 642 (D.Md.1998) ("It is settled law in Maryland, and elsewhere, that a claim for unjust enrichment may not be brought where the subject matter of the claim is covered by an express contract between the parties."). Although a plaintiff may plead in the alternative by asserting claims for unjust enrichment and breach of contract, when doing so the "plaintiff's claim for unjust enrichment must include an allegation of fraud or bad faith in the formation of the contract." Jones v. Pohanka Auto N., Inc., 43 F.Supp.3d 554, 573 (D.Md.2014) (dismissing a plaintiff's claim for unjust enrichment, where the plaintiff had acknowledged the existence of a contract with defendant, because "nowhere in the complaint [did plaintiffs] actually allege bad faith in the formation of [the contract]"); Kwang Dong Pharm. Co. v. Han, 205 F.Supp.2d 489, 497 (D.Md.2002) (absent evidence of fraud or bad faith, "unjust enrichment claims are barred where an express contract exists"). Moreover, "although [plaintiff] may not recover under both contract and quasi-contract theories, it is not barred from pleading these theories in the alternative where the existence of a contract concerning the subject matter is in dispute." Swedish Civil Aviation Admin. v. Project Mgmt. Enters., Inc., 190 F.Supp.2d 785, 792 (D.Md.2002); Abt Assoc., Inc. v. JHPIEGO Corp., 104 F.Supp.2d 523, 534 (D.Md.2000) ("[W]hen there is an express contract dealing specifically with the services rendered, quantum meruit is unavailable").
It is uncontroverted that the Subcontract governs the terms, scope, and compensation (and all other relevant aspects) surrounding the relationship between J.E. Dunn and SRP. J.E. Dunn cannot recover under quantum meruit or unjust enrichment in the face of an express contract. Accordingly, SRP's motion for summary judgment will be granted as to the quantum meruit and unjust enrichment claims.
J.E. Dunn also asserts a promissory estoppel claim against SRP. (ECF No. 31 ¶¶ 39-43). Specifically, the amended complaint includes allegations that "SRP, Robuck and Smoot Corp. promised JE Dunn that if it supplied labor, materials and services to the Project and in furtherance of the Design-Build Contract, SRP, Robuck and/or Smoot Corp. would compensate JE Dunn for such labor, materials and services." (Id. ¶ 40). J.E. Dunn further avers that it reasonably relied on these promises and supplied the labor, materials, and services for the Project. (Id.
Summary judgment will be granted to SRP on the promissory estoppel claim. Judge Blake noted in Goss v. Bank of America, N.A., 917 F.Supp.2d 445, 450-51 (D.Md.2013):
(emphasis added). "A party may bring an action seeking both breach of contract and promissory estoppel, because if the court finds that the contract is unenforceable it may nonetheless provide relief based on detrimental reliance." Wright Solutions, Inc. v. Wright, Civ. Action No. CBD-12-178, 2013 WL 1702548, at *5 (D.Md. Apr. 18, 2013); Whiting-Turner Contracting Co. v. Liberty Mut. Ins. Co., 912 F.Supp.2d 321, 343 (D.Md.2012) ("In Maryland, promissory estoppel is, in essence, an alternative means of obtaining contractual relief." (internal quotation marks omitted)). A claim for promissory estoppel is "a device for contractual recovery, when an element of a traditional bilateral contract is lacking[,]" such as acceptance or consideration. Md. Transp. Auth. Police Lodge No. 34 of Fraternal Order of Police v. Md. Transp. Auth., 195 Md.App. 124, 218, 5 A.3d 1174 (2010), rev'd in part on other grounds, 420 Md. 141, 21 A.3d 1098 (2011). "Once it is established, either by an admission of a party or by a judicial finding, that there is in fact an enforceable contract between the parties . . . then a party may no longer recover under the theory of promissory estoppel." Jay Dee/Mole Joint Venture v. Mayor and City Council of Baltimore, 725 F.Supp.2d 513, 531 (D.Md.2010); Wright Solutions, Inc., 2013 WL 1702548, at *6 ("If the Court finds that the parties' Agreements are enforceable, Plaintiff would not be entitled to any relief separate from its cause of action for breach of contract.").
Here, though, neither party challenges the enforceability of the Subcontract. Cf. Whiting-Turner Contracting Co., 912 F.Supp.2d at 344 (declining to dismiss a
Under Maryland law, to prevail on a claim of negligent misrepresentation, a plaintiff must establish that: (1) the defendant, owing a duty of care to the plaintiff, negligently asserted a false statement; (2) the defendant intended that his statement would be acted upon by the plaintiff; (3) the defendant had knowledge that the plaintiff would probably rely on the same, which, if erroneous, would cause loss or injury; (4) the plaintiff, justifiably, took action in reliance on the statement; and (5) the plaintiff suffered damage proximately caused by the defendant's negligence. See Swinson v. Lords Landing Vill. Condo., 360 Md. 462, 477, 758 A.2d 1008 (2000). As explained above, the negligent misrepresentation claim against SRP was dismissed by memorandum opinion issued on September 20, 2012, insofar as that claim was based on an alleged duty by SRP to manage the project in accordance with industry standards or to make accurate representations after the Subcontract was signed. (ECF No. 25, at 26). The court allowed the claim to proceed only to the extent that J.E. Dunn alleged negligent misrepresentation based on precontractual negotiations that induced it to enter into the Subcontract. (Id. at 22).
SRP argues that the negligent misrepresentation claim fails because J.E. Dunn cannot establish the justifiable reliance element "as the evidence shows that J.E. Dunn was directly involved in the precontract due diligence and investigation along with the project architect, Rees Associates, before S.R.P. entered into the Development Contract and Design/Build Contract with Metropolitan and before J.E. Dunn entered into the Subcontract with SRP." (ECF No. 97-1, at 23). SRP submits as evidence the Guaranteed Maximum Price Proposal, dated September 20, 2005, which SRP contends J.E. Dunn was directly involved in developing and which was presented upon the conclusion of the conceptual phase of the project. (See ECF No. 94, Exh. A.2). Mr. Taylor of SRP also gave the following deposition testimony:
(ECF No. 94, Exh. A.1, Taylor depo, at 25-26). SRP contends that "J.E. Dunn was an active participant with Rees, the Project architect, [and as such] it had access to the information regarding the scope of the Project and was capable o[f] its own investigat[ion] and determining the costs of the Project before entering into the Subcontract." (ECF No. 97-1, at 24).
The amended complaint recites that "SRP breached its duty to JE Dunn by making material misstatements to JE Dunn regarding the propriety of the manner of calculating JE Dunn's compensation under the SRP Subcontract in light of SRP's representations and agreements with Metropolitan." (ECF No. 31 ¶ 46). In its opposition to SRP's cross-motion for summary judgment, J.E. Dunn asserts that its negligent misrepresentation claim is based "on SRP's misrepresentation to JE Dunn that Metropolitan was aware that a firm, fixed price GMP had not and could not be agreed to until the Project design and construction documents became sufficiently detailed to allow JE Dunn to obtain proposals from subcontractors for the entire scope of the Project." (ECF No. 99, at 26). J.E. Dunn cites its answer to SRP's interrogatories, in which it further explains:
(ECF No. 99-2, at 3-4) (emphases added).
To prevail, J.E. Dunn has the burden to prove the elements of a negligent misrepresentation claim by a preponderance of the evidence. J.E. Dunn provides sparse details, if any, as to how it justifiably relied on any purportedly false statements made by SRP as to the extent of Metropolitan's understanding regarding pricing and the damages J.E. Dunn suffered as a result. The only "evidence" it has produced concerning the negligent misrepresentation claim is its response to SRP's interrogatories; it offers no affidavits or deposition testimony to show that it justifiably relied to its detriment on alleged misrepresentations by SRP to J.E. Dunn "as to what Metropolitan, the funding source, understood about the GMP." (ECF No. 99, at 27). For instance, absent from the record is any evidence about how any such purported misrepresentations induced J.E. Dunn to enter into the Subcontract with SRP. On the other hand, the deposition testimony from Paul Taylor cited by SRP that J.E. Dunn maintained control over the final scope of the project and that J.E. Dunn, the architect, and Metropolitan all had to agree on the conceptual document which detailed the different types of products, services and goods that were going to be supplied into the conceptual documents, does not necessarily relate to or negate
Finally, citing cases outside of the Fourth Circuit, SRP also contends that "[a]s for the damage element of the negligent misrepresentation claim, J.E. Dunn's tort and contract claims merge because J.E. Dunn has conceded that it cannot establish separate damages resulting from S.R.P.'s alleged negligent misrepresentation." (ECF No. 97-1, at 25) (citing The Cincinnati Gas & Elec. Co. v. General Elec. Co., 656 F.Supp. 49 (S.D.Ohio 1986); Medical Billing, Inc. v. Medical Management Sciences, Inc., 212 F.3d 332 (6th Cir.2000)). Unlike the quasi-contractual claims of unjust enrichment, quantum meruit, and promissory estoppel, however, negligent misrepresentation is a tort claim. The fact that J.E. Dunn ultimately may not be entitled to a separate recovery for negligent misrepresentation does not warrant entering judgment in favor of SRP on this claim at this juncture.
Metropolitan moves for summary judgment on SRP's two cross-claims against it for breach of contract and tortious interference with contractual relations.
SRP asserts in its amended pleading:
(ECF No. 64 ¶¶ 33-35) (emphasis added).
Metropolitan argues that the breach of contract cross-claim is time-barred. (ECF No. 98, at 4-5). SRP has not opposed the motion. The same standard of review set forth above on an unopposed motion for summary judgment applies to Metropolitan's unopposed motion.
Metropolitan has the burden of proof on its statute of limitations affirmative defense. See Newell v. Richards, 323 Md. 717, 725, 594 A.2d 1152 (1991) ("As a general rule, the party raising a statute of limitations defense has the burden of proving that the cause of action accrued prior to the statutory time limit for filing the suit."). In Maryland, the default statute of limitations for civil actions is three years "unless another provision of the Code provides a different period of time." Md. Code Ann., Cts. & Jud. Proc. § 5-101. In contract cases, the statute of limitations generally "begins to run from the date of the breach, for it is then that the cause of action accrues and becomes enforc[ea]ble." Mayor and Council of Federalsburg v. Allied Contractors, Inc., 275 Md. 151, 157, 338 A.2d 275 (1975). Metropolitan asserts that "S.R.P.'s breach of contract claim relies on Metropolitan's termination letter sent on July 29, 2008[,]" (ECF No. 98-1, at 4-5), but SRP's breach of contract claim actually rests on Metropolitan's purported failure to pay SRP the full five percent
Article 3.1 of the Development Contract states: "As compensation for the Development Manager's Services, Owner shall pay SRP a fee equal to 5% of the total construction budget for the Project (the "Development Manager's Fee")." (ECF No. 33-1, at 5). Article 3.3 of the Development Contract covers payment of the Development Fee:
(Id.) (emphasis added). Article 3.5 of the Development Contract provides that "SRP shall provide Owner with monthly invoices for the Development Manager's Fee and expense reimbursement due which shall be submitted monthly through the construction invoicing process. Invoices shall include a breakdown of expenses submitted and reasonable documentation of such expense items." This provision does not specify a time frame for payment of invoices, however.
The Development Contract was terminated by letter from Metropolitan to SRP dated July 29, 2008. (ECF No. 34-2, at 3). The letter stated that Metropolitan was terminating the Development Contract pursuant to Article 6.1. (Id.). Article 6.1 states, in relevant part:
(ECF No. 33-1, at 6) (emphasis added). The Development Contract does not specify a time frame for when payment of the Development Manager's Fee "that has been authorized and incurred by it at the time of termination" becomes due under Article 6.1. Judge Bredar explained in Mayor and City Council of Balt. v. Unisys Corp., 59 F.Supp.3d 729, 733-34 (D.Md. 2014):
Here, SRP filed its original cross-claim against Metropolitan asserting breach of contract on October 26, 2012, (ECF No. 33), more than four years after Metropolitan sent the July 29, 2008 letter terminating the Development Contract. Nothing on the record indicates that any event following the termination letter extended the accrual of the purported breach by Metropolitan. Based on the foregoing, the breach of contract cross-claim by SRP against Metropolitan is time-barred.
SRP's tortious interference cross-claim against Metropolitan alleges:
(Id. ¶¶ 38-42).
The United States Court of Appeals for the Fourth Circuit explained a tortious interference with contractual relations claim in Painter's Mill Grille, LLC v. Brown, 716 F.3d 342, 353-54 (4th Cir. 2013):
Metropolitan seeks summary judgment on SRP's cross-claim for tortious interference with contractual relations on the basis that this claim also is time-barred and accrued on July 29, 2008, when Metropolitan terminated its Development Contract with SRP. (ECF No. 98-1, at 5). The problem here is that SRP's tortuous interference with contractual relations claim against Metropolitan appears to be based, at least in part, on the theory that Metropolitan improperly induced J.E. Dunn to breach its contract with SRP. For the reasons explained in the August 5, 2014 memorandum opinion, however, SRP did not state a plausible claim for breach of contract against J.E. Dunn. (See ECF No. 75, at 10-16).
Based on the allegations in the amended pleading, SRP also appears to base the tortious interference with contractual relations cross claim on the theory that Metropolitan interfered with SRP's economic relationships by "contracting" with J.E. Dunn and terminating its contracts with SRP. More recent cases hold that the statute of limitations for a tortious interference with contractual relations claim accrues upon the date the contract is breached or terminated. See, e.g., Dual Inc. v. Lockheed Martin Corp., 383 Md. 151, 168, 857 A.2d 1095 (2004) ("We hold that, absent a showing of fraud or intentional concealment, the statute of limitations for a claim for tortious interference with contractual relations, based on the termination of a contract, begins to accrue on the date that the contract was terminated."); Abbott v. Gordon, Civ. Action No. DKC 09-0372, 2009 WL 2426052, at *5 (D.Md. Aug. 6, 2009). The termination letters to SRP from Metropolitan were issued on July 29, 2008, but the cross-claim was not asserted until October 26, 2012—more than three years later. Accordingly, this cross-claim also is time-barred.
For the foregoing reasons, J.E. Dunn's motion for summary judgment will be denied. SRP's cross motion for summary judgment will be granted in part and denied in part. Metropolitan's motion for summary judgment will be granted. A separate order will follow.
(ECF No. 33-3, at 11).