United States District Court, D. Maryland
CATHERINE C. BLAKE, District Judge.
Plaintiff MHD-Rockland, Inc. ("Rockland") brings this lawsuit against defendant Aerospace Distributors, Inc. ("ADI"), alleging that ADI materially breached the parties' contract. Now pending are ADI's motion for summary judgment on Rockland's second amended complaint ("SAC"), and Rockland's cross-motion for summary judgment on Count II of its SAC.
The parties have fully briefed the issues, and no oral argument is necessary. See Local R. 105.6. For the following reasons, ADI's and Rockland's motions will be denied.
Rockland is a Maryland company and ADI is a Delaware company with its office in Washington. (ECF No. 32 ¶ 1). In September 2009, Rockland ordered four airplane wheel assemblies from ADI for $40, 700 ($10, 175 per wheel assembly). Rockland's purchase order requested that the wheel assemblies be in "OH, " or overhauled, condition. (ECF No. 38-2 at p. 3) ADI shipped four "OH" wheel assemblies to Rockland on October 30, 2009. ( Id. at pp. 5-6).
Upon receiving the wheel assemblies, Rockland shipped all four to its customer, the Royal New Zealand Air Force ("NZA"). (ECF No. 38-2 at p. 12). Rockland informed ADI that NZA had rejected two of the four assemblies, claiming that they were damaged. (Westerfield Decl., ECF No. 38-8 ¶ 3). ADI disputed that allegation, and informed Rockland that a blasting process used by NZA to remove paint from the wheel assemblies can also cause damage. ( Id.; ECF No. 38-7 at p. 3). After negotiating potential solutions, ADI requested that Rockland ship the two allegedly defective units to it for inspection, and ADI also agreed to ship two replacement assemblies to Rockland (for NZA) "as a business accommodation." (ECF Nos. 38-8 ¶¶ 8-9; 38-2 at p. 14).
ADI purchased the two replacement assemblies from Aermeccanica. (ECF Nos. 38-8 ¶ 10; 38-10). API (the former co-defendant in this case) certified that they were in OH condition after it "inspected" the assemblies through a non-destructive test and visual inspection on May 12, 2011. (ECF Nos. 38-8 ¶ 11; 38-2 at pp. 20-23). ADI shipped the replacement assemblies to Rockland on May 17, 2011. (ECF No. 38-9 at p. 2). To satisfy NZA, Rockland quickly shipped the replacement assemblies without an inspection because "we [Rockland] had no way to determine their quality." (ECF No. 38-2 at p. 20).
Upon receiving the replacement assemblies, NZA Sergeant John Urlich conducted a "visual inspection, " which "led [him] to believe that" they were damaged. (ECF No. 39-1 ¶ 4). Based on that belief, Urlich decided he had to remove the paint from the assemblies "to verify [his] visual inspection." Id. He was "very careful" when removing the paint, and states that he "did not cause any further damage... [t]he defects in the replacement wheel assemblies existed before I removed the paint to verify the defects." ( Id. ¶ 5). Urlich informed Rockland that the replacement wheels suffered from various defects and, therefore, were "not in an overhauled condition as the vendors have asserted." (ECF No. 38-2 at p. 21) (internal quotation marks omitted). NZA shipped the replacement assemblies back to Rockland, who had UTC Aerospace evaluate them. (ECF No. 39-4). UTC determined that the replacement assemblies were damaged "beyond economical repair (BER)." (ECF No. 39-4 at pp. 5, 7).
Rockland mailed a letter to ADI on February 24, 2012, demanding $57, 300 as compensation for its replacement costs, lost time and labor, and damage to its reputation. (ECF No. 38-2 at p. 25) (stating that "the replacement halves [were] once again well out of tolerance"). ADI refused to pay, reiterating its position that the wheel assemblies were in proper condition when shipped, and that NZA's paint-blasting procedures caused the damage that NZA and Rockland were now complaining of.
On July 3, 2013, Rockland filed this lawsuit in Maryland state court. Defendants removed the case to this court on August 21, 2013, asserting diversity jurisdiction. See 28 U.S.C. § 1332. The court previously granted ADI's motion to dismiss three of the four original counts, which left only Rockland's breach of contract count and its damages claim for $20, 350. (ECF No. 22). Rockland subsequently filed a second amended complaint that included a new second count seeking in the alternative rescission and restitution. (ECF No. 32).
ADI filed a motion for summary judgment on July 16, 2014, (ECF No. 38), and Rockland filed a cross-motion for summary judgment on August 4, 2014. (ECF No. 39).
Federal Rule of Civil Procedure 56(a) provides that summary judgment should be granted "if the movant shows 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). The Supreme Court has clarified that this does not mean that any factual dispute will defeat the motion. "By its very terms, this standard provides that the mere existence of some alleged factual dispute between the parties will not defeat an otherwise properly supported motion for summary judgment; the requirement is that there be no genuine issue of material fact." Anderson v. Liberty Lobby, Inc., 477 U.S. 242, 247-48 (1986) (emphasis in original). Whether a fact is material depends upon the substantive law. See id.
"A party opposing a properly supported motion for summary judgment may not rest upon the mere allegations or denials of [his] pleadings, ' but rather must set forth specific facts showing that there is a genuine issue for trial.'" Bouchat v. Baltimore Ravens Football Club, Inc., 346 F.3d 514, 522 (4th Cir. 2003) (alteration in original) (quoting Fed.R.Civ.P. 56(e)). The court must "view the facts and draw reasonable inferences in the light most favorable to the party opposing the [summary judgment] motion, '" Scott v. Harris, 550 U.S. 372, 378 (2007) (alteration in original) (quoting United States v. Diebold, 369 U.S. 654, 655 (1962)), but the court also must abide by the "affirmative obligation of the ...