United States District Court, D. Maryland, Southern Division
MEMORANDUM OPINION AND ORDER
W. GRIMM UNITED STATES DISTRICT JUDGE
a dispute between Plaintiff Client Network Services, Inc.
(“CNSI”) and its former employee, Defendant
Stephen A. Smith, stemming from the termination of CNSI's
agreement with the State of Louisiana for CNSI to provide
Medicaid Management Information System (“MMIS”)
services for the state (“LMMIS Agreement”).
Pending are CNSI's Motion for Partial Summary Judgment as
to Counts I and II of the Complaint, ECF No. 45, and
Smith's Cross-Motion for Summary Judgment, ECF No.
I find that neither Smith's whistleblower argument nor
his statute of limitations argument bars CNSI's claims on
the record before me. Additionally, I find genuine disputes
of material facts exist as to all of CNSI's claims.
Accordingly, I will deny both parties' motions and this
case shall proceed to a bench trial as scheduled.
judgment is proper when the moving party demonstrates,
through “particular parts of materials in the record,
including depositions, documents, electronically stored
information, affidavits or declarations, stipulations . . .,
admissions, interrogatory answers, or other materials,
” 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), (c)(1)(A); see
Baldwin v. City of Greensboro, 714 F.3d 828, 833 (4th
Cir. 2013). If the party seeking summary judgment
demonstrates that there is no evidence to support the
nonmoving party's case, the burden shifts to the
nonmoving party to identify evidence that shows that a
genuine dispute exists as to material facts. See
Matsushita Elec. Indus. Co. v. Zenith Radio Corp., 475
U.S. 574, 585-87 & n.10 (1986). The existence of only a
“scintilla of evidence” is not enough to defeat a
motion for summary judgment. Anderson v. Liberty Lobby,
Inc., 477 U.S. 242, 251-52 (1986). Instead, the
evidentiary materials submitted must show facts from which
the finder of fact reasonably could find for the party
opposing summary judgment. Id.
court is presented with cross-motions for summary judgment,
it must “rule on each party's motion on an
individual and separate basis, determining, in each case,
whether a judgment may be entered in accordance with the Rule
56 standard.” Towne Mgmt. Corp. v. Hartford Acc.
& Indem. Co., 627 F.Supp. 170, 172 (D. Md. 1985).
“[T]he facts relevant to each [are] viewed in the light
most favorable to the non-movant.” Lynn v. Monarch
Recovery Mgmt., Inc., No. WDQ-11-2824, 2013 WL 1247815,
at *1 n.5 (D. Md. Mar. 25, 2013) (quoting Mellen v.
Bunting, 327 F.3d 355, 363 (4th Cir. 2003)).
argues that it is entitled to summary judgment on its Breach
of Contract (Count I) and Breach of the Duty of Loyalty
(Count II) claims because the relevant material facts are
undisputed. Pl.'s Mot. 22, 28. Smith contends that there
is no genuine dispute of material facts with regard to
CNSI's other two claims, Tortious Interference with
Contractual Relations (Count III) and Civil Conspiracy (Count
IV), and therefore he is entitled to summary judgment on
those claims. Def.'s Mem. 27, 30. Additionally, Smith
insists that CNSI's entire action is barred for two
reasons: (1) CNSI's claims are barred due to the modified
statute of limitations found in Smith's At Will
Employment Agreement (“Agreement”); and, (2)
whistleblower protections and public policy require summary
judgment to be entered in favor of Smith. Id. at 14,
17. I will address Smith's claims first.
argues that a clause in his employment agreement with CNSI
shortens “the statute of limitations to one year for
any claim arising out of [Smith's] employment, ”
and that CNSI learned of Smith's alleged wrongdoing more
than a year before it filed suit. Id. at 14. CNSI
counters that this clause applies only to claims brought by
Smith and not those brought by CNSI. Pl.'s Opp'n
13-14. There is no genuine dispute of material fact regarding
this issue - only contractual interpretation - and as such, I
will resolve this issue as a matter of law.
The clause states, in full:
Waiver of Jury Trial and Statute Limitations.
The parties hereby expressly waive any right to a
trial by jury for any disputes arising out of Employee's
employment with CNSI and/or the termination thereof,
regardless of whether or not such disputes specifically arise
under this Agreement. Employee hereby agrees that
any claim or lawsuit arising out of the Employee's
employment with CNSI and/or the termination thereof,
regardless of whether or not such dispute specifically arises
under this Agreement, must be filed within one year after
the date of the employment action that is the subject of
such claim or lawsuit and Employee hereby waives any
statute of limitations to the contrary.
Agr. ¶ 14, ECF No. 1-1 (emphasis added and
capitalization removed). This clause is unambiguous. Quite
clearly, while referring to time limits and to the modified
statute of limitations, the Agreement only references the
responsibilities of the Employee. Id.
(“Employee hereby agrees that any claim . . .
must be filed within one year . . . . Employee hereby
waives any statute of limitations to the
contrary.”) (emphasis added). I find that that the
statute of limitations provisions were intended to apply
unilaterally to Smith. Unilateral statute of limitations
provisions in a contract are permissible under Maryland law
when “supported by a ‘valid
justification.'” See Storto Enters., Inc. v.
Exxonmobil, Oil Corp., No. WDQ-10-1630, 2011 WL 231877,
at *5 (D. Md. Jan. 24, 2011) (quoting Walther v.
Sovereign Bank, 872 A.2d 735 (Md. 2005) (finding that a
unilateral arbitration clause is enforceable when
“supported by a ‘valid
justification'”)); see also Ceccone v. Carroll
Home Servs., LLC, No. 85, Sept. Term, 2016, 2017 WL
3205290, at *6 (Md. July 28, 2017) (“[T]he validity of
a contractual provision that purports to shorten a statutory
limitations period is measured by its reasonableness and by
whether certain defenses to contract formation can be
established. . . . Among the factors to be considered in
assessing reasonableness are the subject matter of the
contract, the duration of the shortened limitations period
compared to the period that would otherwise govern, the
relative bargaining power of the parties to the contract, and
whether the shortened limitations period is a one-sided
provision that applies to one party but not the
other.”). CNSI does not, however, provide any
justification for the unilateral term.
any justification, a one-sided term such as this may be
substantively unconscionable and, if also procedurally
unconscionable, void. See Freedman v. Comcast Corp.,
988 A.2d 68, 85 (Md. Ct. Spec. App. 2010) (quoting
Walther v. Sovereign Bank, 872 A.2d 735 (Md. 2005)).
Relevantly, the Agreement provides
If any term or provision of this Agreement shall, for any
reason, be adjudged by any court of competent jurisdiction to
be invalid or unenforceable, such judgment shall not affect,
impair or invalidate the remainder of this Agreement, but
shall be confined in its operation to the provisions of this
Agreement directly involved in the controversy in which such
judgment shall have been rendered. Notwithstanding the above,
it is the intent and desire of the parties that this
Agreement and all of its terms be enforceable and in the
event any provision as presently set forth is determined to
be invalid by a court of competent jurisdiction, the parties