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Edi Precast, LLC v. Carnahan

United States District Court, Fourth Circuit

November 12, 2013

EDI PRECAST, LLC, Plaintiff,
v.
RAYMOND K. CARNAHAN, JR., et al. Defendants.

MEMORANDUM OPINION

PAUL W. GRIMM, District Judge.

This Memorandum Opinion disposes of Plaintiff EDI Precast, LLC's ("EDI") Partial Motion for Summary Judgment, ECF No. 52, and accompanying Memorandum, ECF No. 52-1; Defendants Raymond K. Carnahan, Jr. and Northern Virginia Erectors, LLC's ("NVE")[1] Opposition, ECF No. 58; Plaintiff's Supplement ("Pl.'s Supp."), ECF No. 61; and Defendants' Response to Plaintiff's Supplement ("Defs.' Supp. Resp."), ECF No. 63.

I also have received Defendants' Request for a Hearing, ECF No. 53. Having reviewed the filings, I find that a hearing is unnecessary. See Loc. R. 105.6. For the reasons stated herein, Plaintiff's Motion is GRANTED in part and DENIED in part.

I. FACTUAL BACKGROUND

In reviewing a motion for summary judgment, the Court considers the facts in the light most favorable to the non-movant, drawing all justifiable inferences in that party's favor. Ricci v. DeStefano, 557 U.S. 557, 585-86 (U.S. 2009); George & Co., LLC v. Imagination Entm't Ltd., 575 F.3d 383, 391-92 (4th Cir. 2009); Dean v. Martinez, 336 F.Supp.2d 477, 480 (D. Md. 2004). Unless otherwise stated, this background is composed of undisputed facts. Where a dispute exists, I consider the facts in the light most favorable to Defendants. See Ricci, 557 U.S. at 585-86; George & Co., 575 F.3d at 391-92; Dean, 336 F.Supp.2d at 480.

Plaintiff is a "specialized labor service company in the business of installation and erection of structural and architectural precast stone and concrete in mostly commercial projects." Second Am. Compl. ¶ 12, ECF No. 49-1; see Raymond Carnahan, Jr. and N. Va. Erectors, LLC Answer to Second Am. Compl. for Declaratory and Inj. and Other Relief and for Damages ("Answer") ¶ 12 (admitting same), ECF No. 50.[2] EDI is a Maryland limited liability company formed in 2007 by Thomas E. Nicholson. Nicholson Dep. 19:16-20:11, Pl.'s Mem. Ex. 1, ECF No. 52-2; Entity Detail for EDI Precast LLC, Defs.' Opp'n Ex. 1, ECF No. 58-1. Before 2007, Nicholson operated an entity with a similar name, namely EDI, Inc., which also specialized in precast concrete work. Nicholson Dep. 15:10-20.

Defendant Carnahan worked for EDI, Inc. from the time of its formation in about 2001, and continued to work for EDI Precast, LLC until he was terminated in January 2012.[3] Carnahan Dep. 16:18-20, 18:4-11, Pl.'s Mem. Ex. 2, ECF No. 52-3. When Carnahan began working for EDI, he was a job-site foreman, but in around 2008 he was promoted to a position that has been described as "field superintendent, " id. 20:4-17, or "job superintendent/senior project manager, " Second Am. Compl. ¶ 16; see Answer ¶ 16 (admitting same). "At all times relevant to [this action], Mr. Carnahan... [held] a position of trust and leadership. He direct[ed] and overs[aw] EDI's operations on the job site, supervise[d] the employees, and [was] the direct liaison with the vendors and customers." Second Am. Compl. ¶ 16; see Answer ¶ 16 (admitting same). In 2007, Carnahan executed a Covenant not to Compete on which the counterparty was identified as "EDI, LLC, a Maryland corporation (the Employer')" and for which Nicholson signed as president. Covenant not to Compete (the "Noncompete Agreement"), Pl.'s Mem. Ex. 5, ECF No. 52-6.[4]

At some point in time, Carnahan began doing precast concrete jobs on the side, in addition to his work for EDI. Carnahan Dep. 44:17-20. In 2009, Carnahan created NVE, a Virginia limited liability company, through which he "d[id] some of this side work." Carnahan Dep. 91:8-16; see Certificate of Organization of N. Va. Erectors, LLC, Pl.'s Mem. Ex. 6, ECF No. 52-7. Plaintiff has provided a Table of Jobs ("Job List") that sets forth work done by Carnahan or NVE that was not done under the auspices, or with approval, of EDI. Job List, Pl.'s Mem. Ex. 5; Carnahan Dep. 48:2-12.[5] According to the Job List, Defendants have performed twenty-two precast jobs for Arban Precast Stone Ltd. ("Arban") between 2007 and 2011, totaling $336, 407 worth of work. Job List. Although Carnahan testified at his deposition that the Job List "contain[s] all of the precast or steelwork that [he] did either as an individual or through Northern Virginia Erectors... and not through EDI, " Carnahan Dep. 48:6-12, it also is undisputed that Carnahan and/or NVE performed precast work at the National Zoo in December 2011, even though that work was not listed on the Job List. See Second Am. Compl. ¶¶ 29, 31-32; Answer ¶¶ 29, 31-32 (admitting certain factual allegations contained therein).

Nicholson testified, and Defendants have not disputed, that prior to 2007, Arban was one of the top three or four manufacturers of precast stone that would employ EDI and Arban gave EDI somewhere between three and five jobs per year. Nicholson Dep. 48:2-21. Nicholson has asserted that Plaintiff was "doing a fair amount of work with [Arban], then it stopped, " id. at 37:1-15, which Carnahan also is not able to confirm or dispute. See Carnahan Dep. (Defs.' Excerpts) 53:3-8, Defs.' Opp'n Ex. 2, ECF No. 58-2.

Carnahan acknowledges that he did work for Arban. Carnahan Dep. 44:17-20, 48:6-49:2. According to Carnahan, this began when Allen Massey of Arban approached Carnahan about work on the Prince William Adult Detention Center. Id. (Defs.' Excerpts) 53:10-54:18. Carnahan testified that the jobs "were offered directly to Mr. Carnahan by entities which knew he worked for the plaintiff." See Defs.' Opp'n 2. He did not, at any time, inform Massey that he was doing those jobs as an independent contractor and not as an employee of EDI, and in fact, Carnahan believed that Massey "knew and understood [Carnahan was] an employee of EDI." Carnahan Dep. (Defs.' Excerpts) 55:15-21. Carnahan did not speak with anyone at EDI before taking work from Arban in his individual capacity, id. at 56:14-18, and he did not know whether those jobs ever were offered to EDI, id. at 69:11-14.

It is undisputed that Carnahan used EDI employees to perform work for Arban, although Carnahan maintains that any such employees were doing Arban projects only during their time off from EDI, and were not paid by EDI for any of Carnahan's side work. See Defs.' Opp'n 2; see also NVE General Ledger for Jan. 1, 2011 to Dec. 3, 2011 (the "NVE Ledger") 1, Pl.'s Mem. Ex. 9, ECF No. 52-10.[6] Plaintiff has submitted a supplement that it argues shows that certain employees "listed in the [US Army Corps of Engineers (USACE')] Payroll Reports as working for NVE... also reported hours on EDI precast concrete jobs on the same days." Pl.'s Supp. 3. However, Defendants maintain that those employees were working on evenings and weekends, and that they "were physically capable of working the proscribed [ sic ] ours [ sic ] for both employers, and being paid by both employers, on those days." Def.'s Supp. Resp. 2. And Carnahan has so testified. See Carnahan Dep. (Defs.' Supp. Excerpt) 112:8-17, Defs.' Supp. Opp'n Ex., ECF No. 63-1.

Plaintiff alleges that certain EDI equipment and materials were used by Carnahan and NVE. Carnahan has testified that generally he rented his equipment, Carnahan Dep. (Defs.' Excerpts) 77:17-20, but that there were occasions when EDI equipment was used at NVE job sites. First, Carnahan testified that Mark Williams was an EDI employee authorized to use an EDI welder for side work, and that he occasionally brought an EDI welding machine to NVE projects. See id. at 80:4-83:2. Carnahan also testified that Chris McCarthy, another EDI employee, once brought an EDI welding machine to a job site at the National Zoo. Id. at 83:1-8. Although Carnahan had told McCarthy not to bring the welding machine to the National Zoo, the welding machine was used for NVE precast work at that site. Id. at 83:18-84:6. Carnahan also testified that "there were times that" he used his EDI cell phone for his side work. Id. at 122:12-124:11.

Plaintiff also argues that there is circumstantial evidence that Carnahan and NVE used "welding materials, welding rods, gas, welding gas, or welding air, " Pl.'s Mem. 9, because there are no records of NVE having purchased those items. However, Plaintiff has produced no evidence that any such material was taken from EDI, and Carnahan has not so admitted.

Plaintiff commenced this action by filing an eleven-count complaint in this Court on January 12, 2012, naming Mr. Carnahan and NVE as defendants. Compl., ECF No. 1. Since then, Plaintiff has sought and received leave to amend its complaint on two separate occasions, in December 2012, see Mot. for Leave of Court to File Am. Compl., ECF No. 35; Paperless Order, ECF No. 36, and March 2013, see Pl.'s Mot. for Leave of Court to File Second Am. Compl., ECF No. 44; Paperless Order, ECF No. 48. Plaintiff's amended complaints have added minor factual allegations, added Mr. Carnahan's wife, Christine S. Carnahan, as a defendant, and added three additional counts.

As currently pleaded, the Second Amended Complaint sets forth fourteen counts, evidently intended to cover every conceivable theory of liability at least once and, as explained below, apparently without much advance consideration of whether a number of the counts feasibly could be asserted under the facts that have been identified. They are: Count I: Breach of Duty of Loyalty; Count II: Tortious Interference with Economic Relationship; Count III: Fraud-Non-Disclosure or Concealment; Count IV: Fraud-Intentional Misrepresentation; Count V: Civil Conspiracy-Ray Carnahan, Jr.; Count VI: Tortious Interference with Contract; Count VII: Trespass and Conversion; Count VIII: Misappropriation of Trade Secrets; Count IX: Injunctive Relief-Temporary Restraining Order, Preliminary Injunction, and Permanent Injunction; Count X: Accounting; Count XI: Declaratory Relief; Count XII: Civil Conspiracy- Christine S. Carnahan; Count XIII: Breach of Contract-Raymond K. Carnahan, Jr.; and Count XIV: Unjust Enrichment-Raymond K. Carnahan, Jr. and Christine S. Carnahan.

Also on January 12, 2012, Plaintiff filed a Motion for Ex Parte Temporary Restraining Order and/or Preliminary Injunction, ECF No. 4. A hearing on the TRO was held on January 13, and Defendants consented to the entry of a TRO. See Civil Minutes, ECF No. 9; Temporary Restraining Order, ECF No. 10. Pursuant to a joint motion of the parties, see Joint Mot. Requesting Inj. Order by Consent, ECF No. 11, Chief Judge Chasanow entered an injunction finding, inter alia, that Mr. Carnahan executed the Noncompete Agreement with Plaintiff and was subject thereto, Order Granting Inj. by Consent ("Inj.") 2, ECF No. 13. As of its effective date, the Injunction supersedes the Noncompete Agreement and, inter alia, bars Carnahan or NVE from engaging in precast work for a period of twenty-four months, which period will restart in the event that the Injunction is violated, but which currently ends on February 2, 2014. Id. Under the terms of the Injunction, Carnahan currently is permitted to solicit bids for precast work that will commence after February 2, 2014. Id. at 3-4. The Injunction resolves Count IX of the Second Amended Complaint.

On April 25, 2013, Plaintiff filed the instant motion seeking partial summary judgment with respect to liability on Count I: Breach of Duty of Loyalty; Count III: Fraud-Non-Disclosure/Concealment; Count V: Civil Conspiracy; Count VII: Trespass and Conversion; Count XIII: Breach of Contract; and Count XIV: Unjust Enrichment. Pl.'s Mot. 1. Defendants Carnahan and NVE filed their Opposition on May 9, 2013. Defs.' Opp'n. Plaintiff declined to exercise its right of reply, and the time to do so now has expired. Loc. R. 105.2(a). On August 21, 2013, Plaintiff filed a supplement to its summary judgment motion, seeking to demonstrate that Carnahan improperly employed EDI employees while they were on the clock for EDI, see Pl.'s Supp., and Defendants responded on August 29, 2013, Def.'s Supp. Resp.

II. SUMMARY JUDGMENT STANDARD

Summary judgment is proper when the moving party demonstrates, through "particular parts of materials in the record, including depositions, documents, electronically stored information, affidavits or declarations, stipulations..., admissions, interrogatory answers, or other materials, " that "there is no genuine dispute as to any material fact and the movant is entitled to judgment as a matter of law." Fed.R.Civ.P. 56(a), (c)(1)(A); see Baldwin v. City of Greensboro, 714 F.3d 828, 833 (4th Cir. 2013). If the party seeking summary judgment demonstrates that there is no evidence to support the nonmoving party's case, the burden shifts to the nonmoving party to identify evidence that shows that a genuine dispute exists as to material facts. See Celotex v. Catrett, 477 U.S. 317 (1986). The existence of only a "scintilla of evidence" is not enough to defeat a motion for summary judgment. Anderson v. Liberty Lobby, Inc., 477 U.S. 242, 251 (1986). Instead, the evidentiary materials submitted must show facts from which the finder of fact reasonably could find for the party opposing summary judgment. Id. "[U]nder Fed.R.Civ.P. 56, as amended in 2010, facts in support of or opposition to a motion for summary judgment need not be in admissible form; the requirement is that the party identify facts that could be put in admissible form." Mallik v. Sebelius, ____ F.Supp.2d ____, 2013 WL 4559516, at *12 (D. Md. Aug. 28, 2013) (citing Niagara Transformer Corp. v. Baldwin Techs., Inc., No. DKC-11-3415, 2013 WL 2919705, at *1 n.1 (D. Md. June 12, 2013)).

A "genuine" dispute of material fact is one where the conflicting evidence creates "fair doubt"; wholly speculative assertions do not create "fair doubt." Cox v. Cnty. of Prince William, 249 F.3d 295, 299 (4th Cir. 2001); see also Miskin, 107 F.Supp.2d at 671. The substantive law governing the case determines what is material. See Hoovan-Lewis v. Caldera, 249 F.3d 259, 265 (4th Cir. 2001). A fact that is not of consequence to the case, or ...


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