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East Yard, LLC v. Heritage-Crystal Clean, LLC

United States District Court, D. Maryland

June 27, 2017

EAST YARD, LLC Plaintiff,
v.
HERITAGE-CRYSTAL CLEAN, LLC, Defendants.

          MEMORANDUM OPINION

          A. DAVID COPPERTHITE, UNITED STATES MAGISTRATE JUDGE

         Introduction

         Defendants have filed a motion for summary judgment (ECF 48), Plaintiff has filed a response (ECF50). Defendants filed a reply (ECF 54). Plaintiff likewise filed a motion for summary judgment (ECF 49). Defendants filed a response (ECF 51). Plaintiff filed a reply (ECF 55). All filings are timely and the motions are ripe for review. No hearing is necessary pursuant to Local Rule 105.6.

         The Facts

         Plaintiff, East Yard, LLC ("East Yard") owns commercial property known commonly as 1935 Chesapeake Avenue, Baltimore. Maryland. Defendants, who are related businesses (collectively "FCC"), are in the business of recycling and refining oil. On June 4. 2012, the parties entered into a lease (Letter of Intent and Reservation) whereby FCC would lease the property from East Yard and would obtain certain rights such as the right to extend the lease in order to allow FCC time to obtain permits and licensing required to conduct their oil refinery business.

         On September 30, 2014, the parties entered into a First Amendment to Letter of Intent and Reservation ("Amendment") which is the subject of this litigation. The Amendment changed the extended reservation period to include 6 months from October 1. 2014 until April 1, 2015. During that time and in consideration for the extended reservation period, FCC paid East Yard $150, 000 in 6 equal installments of $25, 000. There is no dispute among the parties that the amount was paid. At the end of the reservation period. April 1, 2015, FCC notified East Yard that FCC would not purchase the property. East Yard alleges that FCC owes East Yard the additional fee of $150, 000. FCC argues that the 6 payments of $25, 000 each represent the $150, 000 fee and it has been paid in full, or in the alternative, that the liquidated damages is a penalty and unenforceable.

         Standard of Review

         Pursuant to Rule 56, a movant is entitled to summary judgment where the pleadings, depositions, answers to interrogatories, and admissions on file, together with the affidavits, if any. show that there is no genuine issue as to any material fact. Fed.R.Civ.P. 56(a): See Celotex Corp. v. Catrett, 477 U.S. 317, 322-23 (1986). The Supreme Court has clarified that not every factual dispute will defeat a motion for summary judgment but rather, there must be a genuine issue of material fact. Anderson v. Liberty Lobby. Inc., 411 U.S. 242. 247-248 (1986) ("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."). An issue of fact is material if, under the substantive law of the case, resolution of the factual dispute could affect the outcome. Id. at 248. There is a genuine issue as to material fact "if the evidence is such that a reasonable jury could return a verdict for the nonmoving party." Id: see Dulaney v. Packaging Corp. of Am., 673 F.3d 323, 330 (4th Cir. 2012). On the other hand, if after the court has drawn all reasonable inferences in favor of the nonmoving party, "the evidence is merely colorable, or is not significantly probative, summary judgment may be granted." Anderson 477 U.S. at 249-50.

         The party seeking summary judgment bears the initial burden of either establishing that no genuine issue of material fact exists or that a material fact essential to the non-movant's claim is absent. Celotex, 477 U.S. at 322-24. Once the movant has met its burden, the onus is on the non-movant to establish that there is a genuine issue of material fact. Matsushita Elec. Indus. Co. Ltd. v. Zenith. Radio Corp.. 475 U.S. 574, 586 (1986). In order to meet this burden, the non-movant "may not rest upon the mere allegations or denials of [its] pleadings, " but must instead "set forth specific facts showing that there is a genuine issue for trial." Fed.R.Civ.P. 56(e); see Celotex, 477 U.S. at 324.

         In evaluating a motion for summary judgment, the Court must "view the facts in the light most favorable to the non-moving party." Anderson, 477 U.S. at 255; see also United States v. Diehold, Inc.. 369 U.S. 654, 655 (1962) ("On summary judgment the inferences to be drawn from the underlying facts contained in such materials must be viewed in the light most favorable to the party opposing the motion"). At the same time, the court also must abide by the "affirmative obligation of the trial judge 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) (quoting Drewitt v. Pratt, 999 F.2d 774. 778-79 (4th Cir. 1993)).

         Analysis

         A federal court exercising diversity jurisdiction must apply the choice of law rules of the state in which it sits. See Seabulk Offshore. Ltd. v. Am. Home Assurance Co., 377 F.3d 408. 418-19 (4th Cir.2004). The parties agree that Maryland law applies. In determining the meaning of contractual language. Maryland courts have long adhered to the principle of the objective interpretation of contracts. Wells v. Chevy Chase Bank, F.S.B. 363 Md. 232, 250 (2001). Under the objective interpretation principle, where the language employed in a contract is unambiguous, a court shall give effect to its plain meaning and there is no need for further construction by the court. Id. "If a written contract is susceptible of a clear, unambiguous and definite understanding ... its construction is for the court to determine." Rothman v. Silver. 245 Md. 292, 296 (1967).

         However, "[t]he clear and unambiguous language of an agreement will not give way to what the parties thought the agreement meant or was intended to mean." Wells at 251. See also Beckenheimer's Inc. v. Alameda Assocs. Ltd. Partnership. 327 Md. 536. 547 (1992) ("A party's intention will be held to be what a reasonable person in the position of the other party would conclude the manifestations to mean").

         The words employed in the contract are to be given their ordinary and usual meaning, in light of the context within which they are employed. Kasten Constr. Co. v. Rod Enters.. Inc..268 Md. 318. 329. 301 A.2d 12, 18 (1973): Liller v. Logsdon.261 Md. 367, 370, 275 A.2d 469. 470-71 (1971); Belmont Clothes. Inc. v. Fleet. 229 Md. 462, 467. 184 A.2d 731, 734 (1962): ST Sys. Corp. v. Maryland Nat'l Bank.112 Md.App. 20, 34. 684 A.2d 32, 39 (1996). Whether a contract is ambiguous is a question of law. Philadelphia Indem. Ins. Co. v. Maryland Yacht Club. Inc.129 Md.App. 455, 468 (1999). ...


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