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On Site Personnel, LLC v. C-Care LLC

United States District Court, District of Maryland

May 6, 2015

ON SITE PERSONNEL, LLC,
v.
C-CARE, LLC, et al.

MEMORANDUM

J. Frederick Motz United States District Judge

Plaintiff On Site Personnel, LLC (“On Site”) brings this lawsuit against Defendants C-Care, LLC (“C-Care”); Affable Services, LLC (“Affable”); and their respective Presidents: Ullrich Metzler and Sonam Kunga. On Site alleges three claims against C-Care under Maryland law: breach of contract, fraudulent inducement, and unjust enrichment. On Site also alleges that Affable, Metzler, and Kunga tortiously interfered with the contract between On Site and C-Care. On Site seeks monetary and injunctive relief. Pending is a motion for summary judgment filed by C-Care and Metzler only (“defendants”). (ECF No. 48). The motion is fully briefed, and a hearing was held on April 30, 2015. For the reasons set forth below, defendants’ motion for summary judgment is granted.

BACKGROUND

C-Care is “a contract manufacturer for hair care, hair color, [and] skin care” products who contracts with temporary staffing companies that provide workers to package, pack, and warehouse C-Care’s products. (ECF No. 50-1 at 16:7–18). As of early 2011 C-Care had contracts with two temporary staffing companies: PSI Personnel, LLC (“PSI”) and Affable. (ECF No. 50-2 at 10:7–12; 13:13–14). Each provided about half of C-Care’s temporary staffing needs. The relationship between C-Care and PSI soured toward the end of 2011, and Plaintiff On Site, another temporary staffing services company, replaced PSI. (ECF No. 48-5 at 16). Due to a dispute over payments, PSI filed a lawsuit against C-Care and On Site in 2012 that was settled in April 2013. (ECF No. 50-3 at 19:5–7). To finance the settlement with PSI, On Site provided $150, 000. (Id. at 28:13–21). In exchange for that payment C-Care promised to, and then did, contract with On Site in April 2013 to continue providing temporary staffing services (“The Agreement”). (ECF No. 48-8). The Agreement was for two years (with an automatic renewal absent notice by either party) and specified that On Site had “the exclusive opportunity to refer and place fifty percent (50%) of C-Care’s needs for temporary staff.” (Id. at ¶ 1.b.). As for payment, the Agreement required On Site to warrant that its rates “not exceed the lesser of . . . (ii) the rates for staffing services that C-Care pays other staffing services.” (Id. at ¶ 7.a). Addendum A to the Agreement contained the hourly rates for various service staff categories that On Site would charge C-Care.

During that time, Affable provided the other half of C-Care’s temporary staffing needs. The two companies signed a contract on August 22, 2011 that was similar to the Agreement between On Site and C-Care except for one notable difference: Affable was not obligated to match a lower rate charged to C-Care by another competitor. (ECF No. 48-7). Sonam Kunga founded Affable in 2011, and states that he is the only person who has ever owned any part of Affable. (ECF No. 48-11 at 25:18–26:12). On Site disputes Kunga’s testimony, arguing that other evidence demonstrates ownership or control of Affable by Ullrich Metzler, the President of C-Care. (ECF Nos. 50-13, 50-14, 50-15). Metzler denies any ownership or control, but admits that he met Kunga prior to Affable’s founding while Kunga was working for PSI on a project at Metzler’s home. (ECF No. 50-2 at 18:1–17).

In June 2013, Metzler and Andy Davis-C-Care’s vice president of finance and administration-met with On Site President “Paul” Nguyen to inform him that C-Care was being charged lower rates by a different temporary staffing service, and that On Site would need to match those rates pursuant to the Agreement. (ECF Nos. 50-7 at 20:3–12; 50-6). Although C-Care’s counsel stated at the time that it was “now able to procure other staffing services at rates below that On Site is charging C-Care, ” (emphasis added), Metzler and Davis admit that Affable was charging those lower rates since 2011. (ECF Nos. 50-8; 50-2 at 28:18–32:1). In response to being informed of the lower rates requested by C-Care, On Site’s Nguyen stated he would be unable to comply because it would prevent him from breaking even after paying necessary expenses and taxes. (ECF No. 48-5 at 87:4–19) (“I mean, it’s not feasible . . . I don’t want it.”). C-Care provided the following documentation in August 2013 as evidence of the lower rates charged by Affable: an August 18, 2013 invoice; redacted timesheets; and a handwritten check stub. (ECF No. 50-11). On Site deemed those documents insufficient, and requested a copy of the contract between Affable and C-Care in addition to asking other questions aimed at the true relationship between Affable and C-Care. (ECF No. 50-16).

After negotiations between the parties ended, C-Care deemed On Site to be in breach of the Agreement as of September 4, 2013 because it was not matching the lower rates charged by Affable. (ECF No. 50-11). C-Care continued to use On Site for staffing, however, until the end of 2013 to ensure continuity of operations. (ECF No. 50-2 at 61:10–12). As of early 2014, Affable was able to provide additional temporary staff to compensate for the loss of On Site.

On Site filed a complaint on December 6, 2013, and an amended complaint on January 27, 2014 against Affable, Kunga, On Site, and Metzler. (ECF Nos. 1, 26). C-Care filed a counterclaim against On Site on February 10, 2014. (ECF No. 29). C-Care and Metzler filed the pending motion for summary judgment on November 26, 2014. (ECF No. 48).

STANDARD

Summary judgment is appropriate when the record shows that there is no genuine issue as to any material fact and the movant is entitled to judgment as a matter of law. Fed. R. Civ. P 56(a); Celotex Corp v. Catrett, 477 U.S. 317, 322 (1986). A genuine dispute about a material fact exists only “if the evidence is such that a reasonable jury could return a verdict for the nonmoving party.” Anderson v. Liberty Lobby, Inc., 477 U.S. 242, 248 (1986). When reviewing a motion for summary judgment, the court must look at the facts and inferences drawn from there in the light most favorable to the non-moving party. Scott v. Harris, 550 U.S. 372, 378 (2007).

Although the moving party bears the burden to demonstrate the absence of any genuine issue of material fact, Adickes v. S.H. Kress & Co., 398 U.S. 144, 157 (1970), the non-moving party may not merely rest upon allegations or denials in pleadings, but must, by affidavit or other evidentiary showing, set out specific facts showing a genuine issue remains for trial. Fed. R. 5 Civ. P. 56(c)(1)(A). A court should enter summary judgment where a non-moving party fails to make a sufficient showing to establish the elements essential to the party’s claim and on which the party will bear the burden of proof at trial. See Celotex, 477 U.S. at 322.

If there is insufficient evidence for a reasonable jury to render a verdict in favor of the non-moving party, there is no genuine issue of material fact, and summary judgment may be granted. See Anderson, 477 U.S. at 248. The court must not yield its obligation “to prevent factually unsupported claims and defenses from proceeding to trial.” Bouchat v. Baltimore Ravens Football Club, Inc., 346 F.3d 514, 526 (4th Cir. 2003). Conversely, the motion should be denied if factual issues exist “that properly can be resolved only by a finder of fact because they may reasonably be resolved in favor of either party.” Anderson, 477 U.S. at 250.

ANALYSIS

I. Claims against C-Care.

On Site’s amended complaint contains three counts against C-Care: breach of contract (Count I), fraudulent inducement (Count III), and unjust ...


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