United States District Court, D. Maryland
Frederick Motz, United States District Judge
Airport Square Holdings, LLC ("Airport Square")
brings this lawsuit against defendant GCCFC 2007-GG9 Colomary
Facilities, LLC ("Colomary") seeking declaratory
relief, damages, restitution, and the return of an escrow
deposit paid to Colomary in connection with a contract for
the sale of land. Airport Square asserts that its contract to
purchase two parcels of real property from Colomary is void,
that Colomary breached the contract between the parties, and
that Colomary has been unjustly enriched as a result of the
aborted land transaction. Colomary countersues for breach of
contract, seeking declaratory relief and the release of
Airport Square's cash deposit from the escrow account.
Now pending is Colomary's motion for summary judgment,
(ECF No. 27), and Airport Square's cross motion to grant
their Rule 56(d) application and to compel discovery, (ECF
No. 31). The motions are fully briefed and no oral argument
is necessary. See Local R. 105.6. For the reasons
set forth below, Colomary's motion for summary judgement
is granted, and Airport Square's Rule 56(d) application
and its motion to compel discovery are denied as
dispute arises out of contract for the sale of two parcels of
land known respectively as Airport Square 10 and Airport
Square 20 ("the Properties") in Linthicum,
Maryland. (ECF No. 2 ¶ 11). On or about March 3, 2016,
Airport Square entered into an Agreement for Sale and
Purchase of Property ("the Contract") and agreed to
purchase the Properties from Colomary for $14, 910, 000.
(Id. ¶ 27). Pursuant to the terms of the
Contract, Airport Square delivered a nonrefundable $1, 000,
000 deposit to an escrow agent, LNR Partners, LLC, on March
4, 2016. (Id. ¶ 30). The parties set a closing
date of March 29, 2016 at 2:00 pm on which Airport Square was
scheduled to deliver the balance of the Properties'
purchase price. (Id. ¶ 31). At the time the
Contract was executed, both properties were subject to
long-standing lease agreements with the United States Army
Corps of Engineers. (See Id. ¶ 9).
to Airport Square, prior to the closing date on the Contract,
it became aware that Colomary had previously entered into a
contract to sell the Properties to another buyer, Airport
Square Owner, LLC (the "First Purchaser"), in
February 2016. (Id. ¶ 12, 32). Colomary and the
First Purchaser had set a closing date for their contract on
March 1, 2016 at 2:00pm, and the First Purchaser delivered a
$500, 000 deposit to the escrow agent. (Id. ¶
15). Airport Square contends that the First Purchaser and
Colomary agreed to extend their original closing date by two
weeks and amended their original contract to reflect the
change. (Id. ¶¶ 16-17). Apparently in
consideration for the extension of the closing date, the
First Purchaser wired two additional deposits to the escrow
agent in the amounts of $260, 000 and $1, 250, 000 on
February 29, 2016 and March 1, 2016, respectively.
(Id. ¶ 19). Despite their allegedly amended
agreement, Colomary declared the First Purchaser in default
and terminated the sales contract on March 1, 2016.
(Id. ¶¶ 20-22). The First Purchaser
subsequently filed a complaint against Colomary in the
Circuit Court for Anne Arundel County seeking specific
enforcement of the parties' sales contract. (Id.
¶ 25, 32, Ex. A).
shortly before the closing date, Airport Square received
notice that the Properties' tenants, the United States
Army Corps of Engineers, planned to terminate its lease.
(Id. ¶ 33). According to Airport Square, the
lease termination had a significant adverse impact on the
value of the Contract. (Id.). On March 28, 2016,
approximately twenty-four hours before the closing date,
Airport Square requested Colomary supply all information
related to the termination of the tenant's lease
agreement. (Id. ¶ 34). When Airport Square
failed to deliver the balance of the purchase price for the
Properties on March 29, 2016, Colomary declared the plaintiff
in default of the Contract. (Id. ¶ 35).
of 2016, Airport Square filed a complaint in the Circuit
Court for Anne Arundel County, and Colomary filed a notice of
removal on August 16, 2016. (ECF No. 1 ¶ 1). Airport
Square filed a complaint in this court on August 16, 2016.
The complaint asserts five grounds for declaratory relief,
asking the court to hold that the Contract between Airport
Square and Colomary is void due to
impossibility/impracticability (Count I), frustration of
purpose (Count II), fraudulent inducement (Count III), and
mutual mistake (Count IV), and that the Contract's
liquidated damages clause is in actuality an unenforceable
penalty (Count V). Additionally, Airport Square asserts a
breach of contract claim (Count VI) and an unjust enrichment
claim (Count VII). Defendant Colomary filed an answer and two
counterclaims on August 17, 2016, seeking a declaration that
Colomary is entitled to possession of the escrow deposit
(Count 1), and asserting breach of contract (Count II). (ECF
No. 7). On November 9, 2016, Colomary filed a motion
for summary judgment pursuant to Rule 56 of the Federal Rules
of Civil Procedure. (ECF No. 27). Plaintiff filed a cross
motion under Rule 56(d) and 57 of the Federal Rules of Civil
procedure, asking the court to deny or defer Colomary's
motion for summary judgment to allow Airport Square time to
take discovery and to compel Colomary to respond to discovery
demands. (ECF No. 31).
56(a) of the Federal Rules of Civil Procedure provides the
"court shall grant summary judgment 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). "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). A genuine issue of material fact exists where
"the evidence is such that a reasonable jury could
return a verdict for the non-moving party." Id.
When reviewing a motion for summary judgment, the court must
take all facts and inferences in the light most favorable to
the non-moving party. Scott v. Harris, 550 U.S. 372,
the party seeking summary judgment bears the initial burden
of demonstrating the absence of a genuine dispute of material
fact, see Celotex Corp. v. Catrett, 477 U.S. 317,
323 (1986), the party opposing summary judgment must "do
more than simply show that there is some metaphysical doubt
as to the material facts, " Matsushita Elec. Indus.
Co. v. Zenith Radio Corp., 475 U.S. 574, 586 (1986);
see also In re Apex Express Corp., 190 F.3d 624, 633
(4th Cir. 1999). The non-movant '"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)); see also Adickes v. S. H. Kress
& Co., 398 U.S. 144, 160 (1970). A court should
enter summary judgment when a party fails to make a showing
sufficient to establish elements essential to a party's
case, and on which the party will bear the burden of proof at
trial. Celotex Corp., 477 U.S. at 322.
Square seeks declaratory judgment from the court that the
Contract between Airport Square and Colomary is void (Count
1-IV) and that the liquidated damages clause in the sales
agreement is an unenforceable penalty (Count V).
Additionally, Airport Square asserts two affirmative claims
for breach of contract (Count VI) and unjust enrichment
(Count VII) against defendant Colomary.
Square's claims regarding the voidability of the Contract
rest on two primary factual contentions: (1) Colomary was
aware of the fact that the United States Army Corps of
Engineers intended to terminate its long-term lease and
actively concealed this information from the plaintiff; and
(2) Colomary wrongfully terminated a valid sales contract
with the First Purchaser and did not disclose to Airport
Square that Colomary could not deliver valid title. Based on
these allegations, Airport Square claims the parties'
agreement is voidable under a number of theories: (1)
impossibility/impracticability; (2) frustration of purpose;
(3) fraudulent inducement; and (4) mutual
mistake. Plaintiff also asks the court to
declare the liquidated damages provision in the parties'
sales agreement unenforceable because it constitutes a
addition to seeking declaratory judgment, Airport Square also
claims that defendant Colomary breached the Contract between
the parties when it purported to terminate the agreement
following Airport Square's failure to deliver the balance
of the purchase price on March 29, 2016. Lastly, Airport
Square asserts that Colomary has been unjustly enriched by
wrongfully terminating the Contract and depriving plaintiff
of the $1, 000, 000 escrow deposit. In response, Colomary
argues that Airport Square has breached their valid sales
agreement and seeks declaratory judgment that defendant is
entitled to retain the escrow deposit as liquidated damages
for plaintiffs unjustified breach.
first address Airport Square's requests for declaratory
judgment on the issue of voidability. I will then address
the parties' arguments regarding liquidated damages and
their competing breach of contract claims. Finally, 1 will
analyze the Airport Square's unjust enrichment claim.
Validity of the Contract
to Airport Square, the fact that Colomary allegedly remained
bound by a prior sales contract with the Properties'
First Purchaser rendered the Contract impossible and
impracticable to perform. Because Colomary was contractually
obligated to sell the properties to the First Purchaser,
plaintiff contends, Colomary was unable to convey valid title
to Airport Square. Colomary insists that any former sales
agreement with the First Purchaser had been properly
terminated prior to the ...