United States District Court, D. Maryland
J.E. DUNN CONSTRUCTION CO.
S.R.P. DEVELOPMENT LIMITED PARTNERSHIP, et al
For J.E. Dunn Construction Company, as successor in interest to JE DUNN SOUTH CENTRAL, INC., formerly known as J.E. Dunn of Texas, Inc., Plaintiff: Adam Cizek, LEAD ATTORNEY, Robert Francis Carney, Whiteford Taylor and Preston LLP, Baltimore, MD.
S.R.P. Development Limited Partnership, also known as SRP Development, Defendant, Pro se.
The Smoot Corporation, as successor in interest to SMOOT DEVELOPMENT CORPORATION, Defendant, Pro se.
Robuck Investments, Inc., Defendant, Pro se.
For Metropolitan Baptist Church, Defendant, Cross Defendant: Natalie O Ludaway, LEAD ATTORNEY, Leftwich and Ludaway LLC, Washington, DC.
For J.E. Dunn Construction Company, as successor in interest to JE DUNN SOUTH CENTRAL, INC., Counter Defendant: Adam Cizek, LEAD ATTORNEY, Robert Francis Carney, Whiteford Taylor and Preston LLP, Baltimore, MD.
DEBORAH K. CHASANOW, United States 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
by Plaintiff J.E. Dunn Construction Company (" J.E. Dunn" or " Plaintiff" ) (ECF No. 95); (2) a cross motion for summary judgment filed by Defendants S.R.P. Development Limited Partnership, The Smoot Corporation (" Smoot" ), and Robuck Investment, Inc.'s (" Robuck" ) (collectively, " SRP" or " Defendants" ) (ECF No. 97); and (3) a motion for summary judgment filed by Defendant Metropolitan Baptist Church (" Metropolitan" ) (ECF No. 98). The issues have been briefed, and the court now rules, no hearing being deemed necessary. Local Rule 105.6. For the following 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. Factual Background
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:
Contractor [J.E. Dunn] will be furnished with Drawings and Specifications (the Bid Documents) issued by Design-Builder's Architect for the entire Project sufficiently developed so that Contractor can obtain bids from subcontractors and materialmen for the various scopes of work. Contractor shall have the right to bid any such scopes of work as a subcontractor. After the Bid Documents have been issued and an Estimated Cost of the Work determined, the Contractor and Design/Builder shall establish
the Guaranteed Maximum Price (" GMP" ) and the Contractor's Fee, including fee on the cost of Preconstruction Services described in Exhibit H, by executing a written Amendment to this Agreement (the " GMP Amendment" ).
(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). Consequently, on August 18, 2008, SRP sent a termination letter to J.E. Dunn, which stated in relevant part:
As you are aware, the Owner has terminated each of its contracts with SRP Development Limited Partnership (" SRP" ), and SRP has proposed that JE Dunn consent to the assignment of AIA Document A491 - 1996 Part 2 Standard Form of Agreement Between Design/Builder and Contractor (the " Agreement" ) from SRP to the Owner. At this juncture, JE Dunn has not consented to the proposed assignment.
Therefore, in the interests of moving the Project forward, and without waiving any rights thereunder, pursuant to § 14.1 of the Agreement, SRP hereby provides, to JE Dunn, Notice of Termination of the Agreement effective as of August 6, 2008, based upon the Owner's termination of the agreements with SRP. SRP hereby requests that JE Dunn coordinate a meeting among SRP, JE Dunn, and the Owner [Metropolitan] for the purposes of facilitating an efficient transition of the Project, and addressing any and all remaining issues.
. . . Please also confirm whether JE Dunn will submit to SRP additional invoices and billings. With regard to open invoices, as has been the practice over the course of the Project, the Owner [Metropolitan] will make payment directly to JE Dunn.
(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:
After Metropolitan terminated the Development and Design-Build Contracts, Metropolitan requested that [J.E.] Dunn continue performing work on the Project and represented to [J.E.] Dunn that it would pay [J.E.] Dunn for its work. At this time, Metropolitan represented that it was seeking additional financing to complete the entire project, including scopes of work and costs in excess of the work already approved by the Work Authorization packages 1 through 10.
(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
and " a draft AIA A101 contract was circulated and modified by the parties; however, ultimately, the contract was not executed." (ECF No. 95-3 ¶ 6). According to Mr. Sigler, at no point did Metropolitan object to the work performed or " retract its repeated requests that [J.E.] Dunn continue performing work on the Project or its representation that it would compensate [J.E.] Dunn for its work." (ECF No. 95-4 ¶ 7). Metropolitan never paid J.E. Dunn for the additional work performed, however. Mr. Martin contends that " [t]he reasonable value of the labor, materials and services, $3,629,891, provided directly to Metropolitan at its request [is] still due and owing to J.E. Dunn and J.E. Dunn has not been paid these amounts by Metropolitan, nor has it recovered them from any other source." (ECF No. 95-3 ¶ 7). J.E. Dunn also contends that SRP failed to pay J.E. Dunn amounts owed upon termination of the Subcontract in accordance with Article 14. More details will be provided in the analysis section below.
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.  (ECF No. 94-7).
B. Procedural Background
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
representations after the subcontract was signed. ( Id. at 26).
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.
II. Standard of Review
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 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, 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.
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. J.E. Dunn's Motion for Summary Judgment
J.E. Dunn seeks summary judgment on its breach of contract claim against SRP, Smoot, and Robuck (count I) and its quantum meruit claim against Metropolitan (count VIII). ( See ECF No. 31, amended complaint).
1. J.E. Dunn's Breach of Contract Claim against SRP
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 Northeast, 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. (ECF No. 31 ¶ 28). SRP terminated the Subcontract with J.E. Dunn on August 18, 2008, pursuant to Article 14.1 of the Subcontract, " based upon the Owner's [Metropolitan's] termination of the agreements with SRP." ( See ECF No. 34-3, at 2). Article 14.1 states: " If the Agreement between the
Owner and the Design/Builder is terminated, the Design/Builder may terminate this Agreement without cause." (ECF No. 33-3, at 13). Article 14.3 in turn provides:
Upon termination pursuant to Section 14.1 or 14.2, the amount to be paid the Contractor shall be  the Cost of the Work completed to date, less payments made to date, plus the cost of demobilizing and canceling existing subcontracts, material contracts and purchase orders and the Contractor's fee shall be calculated as if the Work had been fully completed by the Contractor, including a reasonable estimate of the Cost of the Work not actually completed.
( 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 and $96,462 of " non-retainage" (of the original $978,997 figure represented as the " amount ...