United States District Court, D. Maryland
ROGER L. COOK Plaintiff,
SCI MARYLAND FUNERAL SERVICES INC., ET AL., Defendants.
REPORT AND RECOMMENDATION
Mark Coulson United States Magistrate Judge.
Report and Recommendation addresses the Motion for
Attorneys' Fees filed by Defendant, SCI Maryland Funeral
Services, Inc. (“SCI”), against Plaintiff, Roger
L. Cook. (ECF No. 37.) The motion is supported by a
Memorandum of Points and Authorities, Declarations of Raymond
C. Baldwin, Counsel for Defendant, and of Brooks R. Amiot,
Esquire, who attested to the reasonableness of the fee award,
and a Supplemental Memorandum. (ECF No. 38, 40.) Mr.
Cook, who proceeds pro se, did not respond to
Defendant's Motion, and the time for doing so has passed.
Loc. R. 105.2 (D. Md. 2014). I find that a hearing is
unnecessary. See Fed. R. Civ. P. 55(b)(2); Loc. R.
105.6. For the reasons set forth below, I respectfully
recommend that the Court GRANT SCI's Motion for
FACTUAL AND PROCEDURAL HISTORY
December 3, 2014, Mr. Cook commenced this action against
Defendants alleging employment discrimination and retaliation
in violation of Title VII of the Civil Rights Act of 1964, 42
U.S.C. §§ 2000e, et seq. (ECF No. 1.) SCI
then counterclaimed against Mr. Cook, alleging breach of
contract and unjust enrichment. (ECF No. 9.) Specifically,
SCI alleged that, at the close of his employment with SCI,
Mr. Cook signed an “Independent Contractor/Consultative
Agreement” (“the Agreement”), under which,
inter alia, he “promised not to sue SCI and
released it from all employment related claims.”
(Countercl. ¶ 2.) SCI thus claimed that the Title VII
claims brought by Mr. Cook constituted a breach of the
Agreement, and it sought damages including the amount it paid
to Mr. Cook under the Agreement. (Id. ¶¶
each party moved to dismiss the claims against it, and in a
Memorandum Opinion dated July 28, 2015, the Court granted
SCI's motion to dismiss Mr. Cook's Title VII claims
and denied Mr. Cook's motion to dismiss SCI's breach
of contract and unjust enrichment claims. (ECF No. 20.) With
respect to Mr. Cook's Title VII claims, the Court found
that his allegations pertaining to his membership in a
protected class and the differential treatment of those
outside his class were insufficient to survive a motion to
dismiss. The Court noted that although Mr. Cook had included
those allegations in a supplemental filing, it was not
permitted to consider that filing because he had not filed a
motion to amend his complaint. Accordingly, the Court
dismissed Mr. Cook's discrimination claim
without prejudice and granted him the opportunity to
amend his complaint within 30 days. (ECF No. 21.) With
respect to SCI's counterclaim, the Court found that the
pleadings did not contain sufficient facts to allow it to
consider Mr. Cook's affirmative defenses concerning the
validity of the Agreement, and that it was therefore
inappropriate to dismiss SCI's counterclaims at that
Cook failed to file an amended complaint correcting the
insufficiencies in his initial pleading. Thus, on November 5,
2015, the Court dismissed his claims with prejudice
and directed him to submit an answer to SCI's
counterclaim within 14 days. (ECF No. 22.) However, Mr. Cook
failed to file an answer, and upon SCI's Motion for Entry
of Default against Mr. Cook, the Clerk entered an order of
Default against Mr. Cook on January 4, 2015. (ECF No. 30.)
SCI filed its Motion for Default Judgment on December 18,
2015, seeking to recover from Mr. Cook the $22, 106.91 it
paid Mr. Cook under the Agreement. (ECF No. 26.)
January 5, 2016, in accordance with 28 U.S.C. § 636 and
Local Rules 301 and 302, Judge Quarles referred this case to
me for a report and recommendation on SCI's Motion for
Default Judgment. (ECF No. 32). On March 9, 2016, I issued a
Report and Recommendation, recommending that the Court grant
SCI's motion for default judgment as to its breach of
contract claim but decline to award SCI's requested
damages, the return of the payments it made under the
contract, because those damages were not compensatory in
nature, as required under Maryland law for breach of contract
claims. I further recommended that the Court issue its ruling
without prejudice to SCI's ability to instead seek
attorney's fees as the appropriate measure of damages for
its breach of contract claim. See e.g., Cefali v. Buffalo
Brass Co., Inc., 748 F.Supp. 1011, 1026 (W.D.N.Y. 1990)
(explaining that when a former employee breached covenant not
to sue his former employer for employment related claims,
“[attorney's] fees [could] be seen as a direct
measure of the damages for the alleged breach of
contract”). Accordingly, SCI has filed the instant
Motion for Attorneys' Fees.
contract giving rise to the breach of contract claim for
which the Court granted SCI's motion for default judgment
provided in pertinent part:
For and in consideration of the payment described in Section
3, [Mr. Cook] does hereby covenant not to sue and fully and
forever waives, releases, and discharges . . . [SCI] . . .
from all liabilities, claims, damages or causes of action . .
including, but not limited to, those arising out of [Mr.
Cook's] previous employment with [SCI].
(ECF No. 7-3.) In my first report and recommendation, which
has since been adopted by the Court (ECF No. 36), I
determined that SCI had stated a claim for liability on its
breach of contract claim, since the contract established an
obligation owed by Mr. Cook to SCI, and since Mr. Cook
breached that obligation by initiating a lawsuit against SCI
that stemmed from his employment. I found, however, that the
damages sought by SCI - a return of the payments it made to
Mr. Cook under the contract - were not appropriate, as they
were recessionary, rather than compensatory, in nature.
Accordingly, I recommended that the Court decline to award
SCI the damages it sought, without prejudice to its ability
to request some other, proper measure of damages.
seeks reimbursement of the attorney's fees it spent
defending against the employment-related suit brought by Mr.
Cook, which it contends were the natural and proximate
consequence of his breach. For breach of contract claims,
Maryland courts generally award damages “which will
place the injured party in the monetary position he would
have occupied if the contract had been properly
performed.” Hall v. Lovell Regency Homes Ltd.
P'ship, 708 A.2d 344 (Md.App. 1998). Maryland courts
follow the rule of Hadley v. Baxendale, 156 Eng.Rep.
145 (1854), and hold that upon a breach, the non-breaching
party is entitled to compensatory damages which are the
natural and proximate consequence of the breach, or which are
reasonably within the parties' contemplation at the time
of contracting. Munday v. Waste Mgmt. of N. Am.,
Inc., 997 F.Supp. 681 (D. Md. 1998).
first blush, requiring Mr. Cook to reimburse SCI for the
attorney's fees it spent defending against his
employment-related lawsuit appears to fall squarely within
the realm of damages which would place SCI in the monetary
position it would have occupied had Mr. Cook kept his promise
not to sue SCI for claims arising from his employment.
However, the Maryland Court of Special Appeals' recent
opinion in Kaye v. Wilson-Gaskins, 135 A.3d 892 (Md.
Ct. Spec. App. 2016) requires that I engage in an additional
inquiry before reaching that conclusion.
Maryland Court of Special Appeals in Kaye, in
interpreting the breach of a settlement agreement containing
a release of claims, discussed at length the legal
distinctions between covenants not to sue versus
releases/discharges 135 A.3d at 902-07. In Kaye,
after providing a release of claims, the plaintiff brought
suit against the settling defendant for such claims.
Id. at 900-01. The defendant argued that the release
operated as an “implied” covenant not to sue,
entitling defendant to collect contract damages for its
breach. Id. In rejecting defendant's argument,
the Court of Special Appeals first pointed out that,
historically, the release of one tortfeasor operated as a
release of all joint tortfeasors. Id. at 904. To
overcome this common law rule, a plaintiff seeking to settle
with one but not all joint tortfeasors would not execute a
“release, ” but instead would execute an
agreement not to sue the settling tortfeasor, preserving
claims against non-settling defendants.Id.
Similarly, the Court of Special Appeals observed that where a
release purported to release future claims that had not yet
accrued, this too needed to be considered as an implied
covenant not to sue because one could not technically release
a claim to which one had not yet acquired a right.
Id. at 905. The Kaye court stated that in
both instances, notwithstanding the language chosen (or
implied), the covenant not to sue should have the same