United States District Court, D. Maryland
DEBORAH K. CHASANOW, District Judge.
Presently pending and ready for resolution in this contract case are cross motions for partial summary judgment filed by Plaintiffs and/or Counterdefendants the Hellenic Ministry of National Defense, the Hellenic Armed Forces, and the Hellenic Air Force Procurement Service (collectively, "HAF" or "Plaintiffs") (ECF No. 30) and Defendant and/or Counterplaintiff Eagle Van Lines, Inc. ("EVL" or "Defendant") (ECF Nos. 35 & 36). The issues have been fully briefed, and the court now rules, no hearing being deemed necessary. Local Rule 105.6. For the following reasons, Plaintiffs' motion will be granted in part. Defendant's motion will be denied.
A. Factual Background
Unless otherwise noted, the following facts are undisputed. Plaintiffs are units of the Greek government. The Hellenic Ministry of National Defense is a government cabinet department responsible for managing the armed forces for the Hellenic Republic. The Hellenic Armed Forces are the combined military forces of Greece. Hellenic Air Force Procurement Service is a government agency that engages vendors to transport and store military goods for the Hellenic Ministry of National Defense. (ECF No. 3 ¶¶ 1-3). EVL is a freight forwarding company based in Maryland. (ECF No. 3 ¶ 4). Beginning in 2005, Plaintiffs entered into a series of contracts with EVL to transport military goods and equipment from Greece to the United States, within the United States, and from the United States to Greece. (ECF No. 30-4 ¶ 4). Regardless of the channels used by the Hellenic Armed Forces to purchase particular goods, the goods were shipped to EVL, which would receive them on Plaintiffs' behalf and ship them to the appropriate branch of the Armed Forces in Greece. ( Id. ). The military goods included items acquired from the United States via foreign military sales ("FMS") or items purchased from vendors in the United States through direct commercial sales ("DCS"). (ECF No. 35-2 ¶ 5).
George Georgakopoulos is the President of EVL. He explained:
It was Eagle Van Lines' responsibility, at times, to receive goods shipped from overseas and transport them to its warehouses, receive goods shipped by vendors and store the goods in its warehouses, receive goods from the United States under the foreign sales and receive the items in its warehouses. Eagle Van Lines would pay for the delivery if a third party shipped the items to the warehouse or provide the transportation[, ] incurring the costs if it picked up the goods from an international shipment or from a vendor.
( Id. ¶ 7). "Throughout the time that EVL acted as freight forwarder for the Armed Forces, EVL would be paid for its services with respect to a given item only after that item had been received by the contractually determined Unit of each Armed Forces' Branch in Greece, in accordance with the payment terms of the contracts and Hellenic Legislation." (ECF No. 30-4 ¶ 5).
In early 2009, Plaintiffs and EVL entered into Contract No. 100/09, which covered EVL's provision of freight-forwarding services from March 1, 2009 through November 30, 2009. ( Id. ¶ 6; ECF No. 30-6, at 36). Article 3.1 of Contract 100/09 states:
The subject of this Contract is the transfer - forwarding (FREIGHT FORWARDER) of air transported materials of the HAF from Greece to the U.S.A. overseas (OVERSEAS), within the U.S.A. (DOMESTIC) and vice versa by the CONTRACTOR.
(ECF No. 30-6, at 6). Under Article 220.127.116.11 of Contract 100/09, Defendant's obligations included forwarding the materials within three (3) days from their arrival to their final recipient within the U.S. ( Id. at 9). Article 8.3. of Contract No. 100/09 states:
The Military Attaches will repay the CONTRACTOR in U.S. dollars for the services rendered by the contractor, within two (2) months at the latest from the date they received the required supporting documents, as the case may be, which the competent Services will receive in Greece, provided that a relevant inspection determines that they are appropriate.
( Id. at 19) (emphasis added). Contract No. 100/09 was set to expire on September 30, 2009, "but the contract provided that EVL was obligated to continue to receive and forward materials for two months after that expiration date, under the same terms and conditions." ( Id. ) (emphasis added). Thus, Contract No. 100/09 was in effect until November 30, 2009.
On August 18, 2009, EVL lost the procurement for freight-forwarding services for the period after November 30, 2009. (ECF No. 30-4 ¶ 8). The new contract was awarded to EVL's competitor, Imperio-Argo Group. ( Id. ). George Georgakopoulos testified during his deposition that "in 2009[, ] there was a xprocurement for freight forwarding services  that permitted a number of freight forwarding companies to make a bid on  Contract 05/09." (ECF No. 30-26, at 5). EVL submitted a bid, but the Greek government awarded the contract to Imperio-Argo. ( Id. ). EVL objected to the procurement award by filing an appeal to the State Legal Council of the Hellenic Republic, which suspended the commencement of the new contract with Imperio Argo until the appeal could be resolved. (ECF No. 3 ¶ 13).
In order to service Plaintiffs' transport requirements after November 30, 2009 and during the pendency of the procurement appeal, Plaintiffs engaged in negotiations with EVL regarding the terms of a contract that would govern from December 1, 2009 until the activation of a new contact with Imperio-Argo. (ECF No. 30-4 ¶ 10). The parties continued to negotiate a draft contract - Contract No. 47/10. Mr. Georgakopoulos stated that "[a] draft for negotiations only of a working document referred to as 47/10 had been initialed by representatives of the parties in January 2010. There were additional issues and discussions that remained unresolved which discussions never resumed. " (ECF No. 35-2, at 6) (emphases added). The parties disagree whether they were governed by the terms of Contract No. 47/10 after Contract No. 100/09 terminated on November 30, 2009. George Georgakopoulos gave the following testimony during his deposition:
Q: When did  any contract between Eagle Van Lines and any branch of the Hellenic government end? Was it November 30, 2009?
A: The last one, yes.
Q: And there has been since then no contract?
A: Absolutely no contract.
(ECF No. 30-26, at 7). Mr. Georgakopoulos also testified:
Q: Now looking at 47/10, at any point in January of 2010[, ] did Eagle Van Lines agree to the terms of this contract?
A: Agreed? It was negotiated. It was never agreed.
(ECF No. 30-26, at 5). Konstantinos Katirtzidis, Captain in the Hellenic Air Force General Staff, declared that "[a]lthough the draft contract [Contract No. 47/10] that had been signed by EVL  was still subject to final approval by the Minister of National Defense, both [Hellenic Air Force] (on behalf of the Armed Forces) and EVL proceeded on [the] basis that it was in effect. EVL continued to provide freight-forwarding services, and [Hellenic Air Force] continued to accept the benefit of those services, with the knowledge that EVL expected to be compensated for them." (ECF No. 30-4 ¶ 13).
Plaintiffs assert that on January 25, 2010, they learned that "EVL had included a counterfeit document (a Letter of Guarantee' that had supposedly been issued by Eagle Bank) in its unsuccessful application during the procurement for the contract that had been awarded to [Imperio Argo]." ( Id. ¶ 14). Plaintiffs maintain that as a result of that discovery, they terminated EVL's services as freight forwarder. ( Id. ¶ 15). Specifically, Plaintiffs provide as an exhibit to their motion a decision from Evangelos Venizelos, the Minister of National Defense, dated February 12, 2010, which states:
We approve the discontinuation, effective upon receipt of the present resolution, of the air transportation of materials of the Armed Forces (A.F.) from Greece to the U.S.A., within the U.S.A. and vice-versa by the company "EAGLE VAN LINES" due to their attempt to defraud the public sector, according to the rationale of the present resolution.
(ECF No. 30-11, at 4) (emphasis added). EVL contends that it received Plaintiffs' February 12, 2010 letter terminating its services on February 24, 2010. (ECF No. 35-2, ¶ 13, declaration of George Georgakopoulos) ("On February 24, 2010, I received by hand delivery and by email the letter from the Minister of National Defense from Mr. Nikolasos Klothakis who was the liaison officer placed in the offices of Eagle Van Lines by the Hellenic Air Force as a direct attache authorized to approve transportation and resolve issues that might arise under the freight forwarding contracts.")). EVL also denies submitting a fraudulent letter of guarantee. ( See ECF No. 35-2 ¶ 10 ("Eagle Van Lines did not author nor submit an alleged letter of credit purporting to be from Eagle Bank bearing a date of April 11, 2009.")).
There is some disagreement between the parties about the chain of events following the termination of EVL's services. Plaintiffs contend that they "instructed EVL that all unclassified goods in its possession belonging to the Hellenic Armed Forces were to be forwarded to another contractual freight forwarder of the Ministry of Defense, Stellar Maritime." (ECF No. 30-4 ¶ 17). According to Plaintiffs, "EVL refused to comply with that instruction unless the Armed Forces first paid on all EVL invoices that EVL claimed it was owed and storage fees charged by EVL since February 12, 2010." ( Id. ). On February 24, 2010, George Georgakopoulos wrote the following letter to Nikolaos Klothakis, Wing Commander for the Hellenic Air Force:
In response to the subject matter of your letter, we hereby inform you that we accept the decision of your Service, that is, for our company to deliver all materials that are in our warehouses to the transportation company you referenced in your letter [Stellar Maritime], but only under the following conditions:
a) Until the day of the scheduled delivery of the materials, every amount due by the Greek Government must have been repaid to our company, which to date amounts to USD 2, 746, 000.36
b) A complete inventory of all materials of the Armed Forces, in our warehouses must be conducted immediately and prior to every delivery of any material
c) Official notification to our company, by the competent DSS service, for the suitability and approval of the warehouse space of the company STELLAR MARITIME LTD C/O V. ALEXANDER AND CO INC.
(ECF No. 30-31, at 2) (emphasis added). According to Defendant, "Eagle Van Lines began to receive solicitations from several individuals claiming to have the ability to affect Eagle's receipt of its outstanding invoices demanding money for the invoices to be paid." (ECF No. 35-2 ¶ 11). In other words, EVL contends that certain Greek officials attempted to solicit bribes as a condition to paying the outstanding invoices owed to EVL.
According to Plaintiffs, "[a]fter terminating EVL's services as freight forwarder, [they] took steps to ensure that goods would no longer be shipped to EVL. Those steps included notifying the U.S. agency that oversees the [Foreign Military Sales] program and various commercial vendors." (ECF No. 30-4 ¶ 18). EVL, on the other hand, maintains that "the Greek government did not act to alter the name of Eagle Van Lines as its freight forwarder until such time on or after March 15, 2010. The shipments to Eagle Van Lines continued until approximately May 10, 2010 again, without [their] solicitation or involvement, in causing the items to be forwarded to [EVL's] warehouse." (ECF No. 35-2 ¶ 13). Plaintiffs believe that EVL wrongfully continued to accept goods on behalf of the Hellenic Armed Forces and refused to turn them over to Stellar Maritime without first receiving compensation on all unpaid invoices and storage fees. EVL holds a different view, stating that it "remained on the government['s] Military Assistance Programs Address Directory (MAPAC) for some period of time up to March 15, 2010, if not later, which resulted in the shipment to Eagle Van Lines of items for the Greek government. Many of those items were shipped Code 4, meaning the freight charges had to be paid on delivery." (ECF No. 35-3 ¶ 10).
EVL continues to store many items in its warehouse that it received during varying time periods. Defendant maintains that as of May 5, 2014, "Eagle Van Lines is owed $1, 697, 233.90 in total unpaid invoices of which $1, 577, 430.70 is due under Contract 100/09 and for the period between December 1, 2009 to February 24, 2010, together with interest, storage, freight charges and carrier charges." (ECF No. 35-2 ¶ 18). According to Plaintiffs, the military goods and equipment held by EVL include: military transport airplanes; military helicopters; training aircrafts for pilot officers; aircraft spare parts; and ground support equipment. (ECF No. 3 ¶ 32).
B. Procedural Background
Plaintiffs filed a complaint on March 18, 2013. (ECF No. 1). They filed an amended complaint on June 14, 2013, asserting the following causes of action: (1) conversion (count I); and (2) breach of contract (count II). Plaintiffs seek declaratory judgment and injunctive relief, which they designate as counts III and IV of the amended complaint. (ECF No. 3). Defendant answered the complaint (ECF No. 7), and counterclaimed against Plaintiffs for breach of contract (ECF No. 8). Defendant requests a declaratory judgment and punitive damages, which relief it includes as separate causes of action. (ECF No. 8, at 5-6). Plaintiffs answered the counterclaim on August 9, 2013. (ECF No. 12).
Plaintiffs moved for partial summary judgment on April 15, 2014. (ECF No. 30). Defendant opposed the motion and also cross-moved for partial summary judgment. (ECF Nos. 35 & 36). Plaintiffs filed a reply in further support of their motion for partial summary judgment in which they opposed Defendant's cross-motion. (ECF No. 37).
II. Standard of Review
Both parties request partial summary judgment. 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." (emphasis added). "[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 (1986); Anderson v. Liberty Lobby, Inc., 477 U.S. 242, 250 (1986). Once a properly supported motion for summary judgment is filed, the nonmoving 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.
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 as a matter of law. In Anderson v. Liberty Lobby, Inc., 477 U.S. at 249 (1986), the Supreme Court explained that, in considering a motion for summary judgment, the "judge's function is not himself to weigh the evidence and determine the truth of the matter but to determine whether there is a genuine issue for trial." A dispute about a material fact is genuine "if the evidence is such that a reasonable jury could return a verdict for the nonmoving party." Id. at 248. Thus, "the judge must ask himself not whether he thinks the evidence unmistakably favors one side or the other but whether a fair-minded jury could return a verdict for the [nonmoving party] on the evidence presented." Id. at 252.
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 (1986) ( quoting United States v. Diebold, Inc., 369 U.S. 654, 655 (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.
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)).
A. Plaintiffs' Motion for Partial Summary Judgment
1. Plaintiffs' Claims
Plaintiffs argue that they are "entitled to summary judgment on [their] claim to recover the goods held by EVL and to summary judgment as to liability on [their] claims for damages. " (ECF No. 30-1, at 15) (emphases added). Plaintiffs' amended complaint essentially contains claims for breach of contract and conversion; Plaintiffs also request injunctive and declaratory relief as separate counts in the amended complaint. (ECF No. 3, at 6-8). Plaintiffs seek the return of their property that they allege was converted, but do not clearly reference the legal mechanism for obtaining such relief. Plaintiffs' motion states:
A defendant who has tortuously detained personal property belonging to the plaintiff may be ordered to return the property. Such a remedy is commonly granted by way of a writ of replevin. Although the complaint here seeks to recover the goods from EVL by a different route - a request for injunctive relief, in conjunction with a claim for conversion - the difference is one of terminology, not of substance. Regardless of how the claim is labeled, the fact is that the Court can and should direct EVL to return the goods to [Plaintiffs].
(ECF No. 30-1, at 25) (emphasis added). Plaintiffs have not supplied any authority for the proposition that the court can direct the return of property irrespective of whether they have instituted a replevin action. Indeed, in Wallander v. Barnes, 341 Md. 553, 561 (1996) - a case cited by Plaintiffs - the court commented that "[t]he issue of the proper measure of damages necessarily involves classifying the cause of action, at least as to whether it is replevin, and, if so, the extent to which damages are awardable in replevin." (emphasis added). Plaintiffs are the "master[s] of [their] complaint, " and must properly plead causes of action which would entitle them to the relief sought. Custer v. Sweeney, 89 F.3d 1156, 1165 (4th Cir. 1996); EDI Predcast, LLC v. Carnahan, 982 F.Supp.2d 616, 632 (D.Md. 2013) ("But it is not clear that Plaintiff ever has thought seriously about the nature of its claims, the necessary elements and proofs, or even the simple question of what forms of damages it expects to collect and how, even though such consideration is required by Fed.R.Civ.P. 11(b). Neither party's summary judgment briefing provided a detailed (or, in many cases, even a sufficient) discussion of the elements and proofs required to make out a claim.") (emphasis added).
Judge Blake explained in Sprint Nextel Corp. v. Simple Cell, Inc., Civ. No. CCB-13-617, 2013 WL 3776933, at *8 (D.Md. July 17, 2013):
In Maryland, the common law tort of conversion contains two elements. First, the plaintiff must prove the defendant exerted "any distinct ownership or dominion... over the personal property of another in denial of his right or inconsistent with it." Darcars Motors of Silver Spring, Inc. v. Borzym, 379 Md. 249, 260 (2004) (quotation omitted). "This act of ownership for conversion can occur either by initially acquiring the property or by retaining it longer than the rightful possessor permits." Id. Second, the defendant must have "an intent to exercise dominion or control over the goods which is in fact inconsistent with the plaintiff's rights." Id. at 836. Similarly, an action for replevin permits a plaintiff to recover "personal property that is wrongfully detained by the defendants." Ganter v. Kapiloff, 516 A.2d 611, 612 (Md.App. 1986); see also McClung-Logan Equipment Co. v. Thomas, 172 A.2d 494, 498 (Md. 1961) ("[I]n order to maintain an action of replevin the plaintiff must prove his right to immediate possession at the time the writ issues.").
Importantly, "[t]he measure of damages in an action for conversion of personal property [generally] is the fair market value of the property at the time of conversion, with legal interest thereon to the date of the verdict." Transpacific Tire & Wheel, Inc. v. Orteck Intern., Inc., Civ. Action No. DKC XXXX-XXXX, 2010 WL 1375292, at *12 (D.Md. Mar. 30, 2010) ( quoting Keys v. Chrysler Credit Corp., 303 Md. 397, 415 (1985)). "When  the value of the property detained is the same upon its return,  damages are measured by the loss of use of the property." Postelle v. McWhite, 115 Md.App. 721, 728 (1997). An action for replevin, on the other hand, "is designed to obtain possession of personal property that is wrongfully detained by the defendant." Ganter, 69 Md.App. at 100; Wallander, 341 Md. at 561 ("Replevin may be said to be the appropriate remedy in all cases where the object of the suit is to ...