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Klicos Painting Co., Inc. v. Saffo Contractors, Inc.

United States District Court, D. Maryland

September 9, 2017

KLICOS PAINTING CO., INC.
v.
SAFFO CONTRACTORS, INC.

          MEMORANDUM

          J. Frederick Motz United States District Judge.

         This case involves alleged breaches of oral contracts and related claims arising out of work performed on a project to repair and paint various bridges on 1-95 and 1-395. Defendant/Counterplaintiff Saffo Contractors, Inc. ("Saffo") has filed a motion for summary judgment and Plaintiff/Counterdefendant Klicos Painting Co., Inc. ("Klicos") has filed a partial motion for summary judgment. [ECF Nos. 76, 98]. The issues have been fully briefed, [ECF Nos. 86, 88, 95, 102, 103], and no hearing is necessary. See Local Rule 105.6 (D. Md. 2014). For the reasons stated below, both motions will be granted in part and denied in part.

         BACKGROUND

         On July 29, 2013, the Maryland Transportation Authority ("MDTA") awarded Saffo a contract to perform "Superstructure Repairs and Zone Painting of Various Bridges on 1-95 and I-395 South of Fort McHenry Tunnel" (Contract No. FT 2575-000-006) ("the Project"). In November, 2013, Saffo's principal, Nick Saffo, met with Klicos's principal, George Klicos, and other employees of both companies for a lunch meeting at Nick's Seafood to discuss the Project. George Klicos Depo. at 156-161. At that meeting, according to George Klicos, the parties reached an agreement to work on the Project together.[1] Id. George Klicos characterized the lunch meeting as "general discussions" and "pretty basic, basic conversations. I mean, nothing like, okay, this bridge, we're going to do this, or this bridge we're going to do this, or this bridge we're going to do this. It was very general what we're going to do, how we're going to do it and what the plan was." George Klicos Depo. at 158-59. As for the payment, George Klicos testified that as the money came in,

It would be divvied out as anything over and above actual costs at that time. We would split it up. We would divvy it out. There was no set amount going into it. It's as every - ultimately as every pay estimate came in, we were paid a sum. There was no formula as to why we got paid this or why we got paid that. There was never any formula going in as to how we would get paid, when I - how much I would get paid, exactly how much I would get paid.

         George Klicos Depo. at 165-66. In contrast, Nick Saffo testified that at the November lunch meeting, the parties discussed a lump sum subcontract agreement and made "no commitment at that time." Nick Saffo Depo. at 45-46. Nick Saffo testified that there was no discussion at that meeting about sharing or distributing profits. Id. at 48.

         Several months later, in March, 2014, Nick Saffo and George Klicos participated in a telephone conversation with two other Saffo employees. Ost Depo. at 110-20. During that call, according to Saffo employee Michael Ost, the parties agreed that Klicos would be a subcontractor to Saffo on the Project. Id. at 110-13. Ost testified that the agreement was:

Saffo was going to control all of the accounting and cash flow on the project, and there would be periodic distributions of cash flow to keep the operating account above negative. And based on [Klicos's] completion of all cleaning and painting services on all of the structures on the project, their incentive was going to be a 50/50 split on the profit at the end of the project.

Id. at 113. According to Ost, "The only requirement that was set in stone was completion - through the completion of the project." Id. at 131. Nick Saffo testified that in that phone call, they agreed, "if [Klicos] would bring the job in through the completion, and we all watched his cost and gave him a cash flow advancement to keep him operating that we would share in the total after completion." Nick Saffo Depo. at 67. George Klicos has no recollection of that March, 2014 telephone call. George Klicos Depo. at 265-67.

         On or about March 17, 2014, George Klicos signed a "Contractor's Request for Approval of Subcontractor, " which Saffo submitted to MDTA for approval to use Klicos as a subcontractor on the Project. Def. Mot. Ex. 1, 2. Klicos performed work on the Project from approximately March through November of 2014. George Klicos Depo. at 147. Klicos submitted periodic invoices to Saffo, and Saffo paid Klicos upon receipt of the invoices. According to George Klicos, the amounts of the invoices he sent were based on his review of Saffo's expenses, and "[s]aid okay, this month there's - give me $300, 000. That more than covers my expenses. That more than leaves you with enough money. The project is doing well. We're starting to divvy up the profit. They never objected to sending me the money." George Klicos Depo. at 289. When asked about his basis for requesting a particular amount at a particular time, George Klicos testified, "My basis is we had a deal You guys said you're going to do this. Give me my money." Klicos Depo. II at 504. He also said, "What prompts me to ask for my profit? Well, given the fact that you've been giving it to me. That's what prompts me." Klicos Depo II at 507. Saffo's position is that it was paying ongoing cash advances to Klicos to allow Klicos to undertake project-related expenses while maintaining positive cash flow. Nick Saffo Depo. at 80-81; Ost Depo. at 113; Tia Saffo Depo. at 224.

         By December, 2014, the painting work on the Project was about 50% -65% complete. Klicos Depo. II at 502-03. In December, Klicos stopped painting work on the project, citing winter weather conditions that were unfavorable for painting. George Klicos Depo. at 99-100. In February or March, 2015, some Klicos employees returned to the job site. Antonios Hatzileris Depo. at 81, Kominos Hatzileris Depo. at 79-80. According to Klicos, those employees were preparing the equipment to resume work, Id., but Saffo asserts, without citation, that the employees were there solely to remove equipment from the jobsite. [ECF No. 102 at 13]. In February, 2015, Klicos submitted an additional invoice for $200, 000 to Saffo, although Klicos employees had not performed significant work on the project for almost two months. George Klicos Depo. at 314. According to Tia Saffo, Saffo's business manager, during a telephone conversation, George Klicos promised to return his workers immediately to complete the job if the $200, 000 invoice were paid, and Saffo agreed to pay the invoice. Tia Saffo Depo. at 187-88. George Klicos does not recall that conversation with Tia Saffo. George Klicos Depo. at 316-17. In March, 2015, Klicos sent an additional invoice for $345, 000, although Klicos had performed no additional painting work since December. Saffo declined to pay that invoice, leading Klicos to withdraw from the project. George Klicos Depo. II at 560-64; George Klicos Depo. at 306-07. At a meeting on March 19, 2015, Saffo informed MDTA that "Klicos is no longer a part of the project." [ECF No. 86-11].

         In total, over the course of the Project, Saffo paid Klicos a total of $2, 738, 600.73. Klicos Mot. Exh. 9. The total expenses incurred by Klicos amounted to $1, 002, 043.26, Klicos Mot. Exh. 16, and the total gross payroll expended by Klicos amounted to $1, 006, 045.52. Saffo Mot. Exh. 17.

         For use on the Project, Klicos constructed a recycling unit upon a trailer owned by and registered to Klicos. Kominos Hatzileris Depo. at 47-49. Other expenses for the construction of the unit were billed to Saffo through the invoices submitted. George Klicos Aff. IT (July 15, 2017) at ¶ 10. Upon Klicos's departure from the job site in March, 2015, Klicos removed the recycling unit. Kominos Hatzileris Depo. at 82. According to the Saffo employee, Michael Ost, the two companies were going to distribute machines "between the two parties, assuming the successful completion of the project. It had not been determined who would take what." Ost Depo. at 124-25. Nick Saffo testified that, as to equipment, "If we purchased anything in the cost, that we were going to take a look at it at the end." Nick Saffo Depo. at 78. Finally, Ost also testified that the recycling unit "was going to be split at the end of the project, whether or not it was a dollar value, we never really came to terms." Ost Depo. II at 435.

         ANALYSIS

         Federal Rule of Civil Procedure 56(c) provides that summary judgment "should be rendered if the pleadings, the discovery and disclosure materials on file, and any affidavits show that there is no genuine issue as to any material fact and that the movant is entitled to judgment as a matter of law." Fed.R.Civ.P. 56(c)(2). Whether a fact is material depends upon the substantive law. See Anderson v. Liberty Lobby, Inc., Ml U.S. 242, 248 (1986).

         "A party opposing a properly supported motion for summary judgment '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)). Conclusory or speculative allegations do not create a genuine issue of material fact, nor does a "mere scintilla of evidence[.]" Thompson v. Potomac Elec. Power Co.,312 F.3d 645, 649 (4th Cir. 2002) (citing Phillips v. CSX Transp., Inc.,190 F.3d 285, 287 (4th Cir. 1999)). The court must "view the facts and draw reasonable inferences 'in the light most favorable to the party opposing the [summary judgment] motion, '" Scott v. Harris,550 U.S. 372, 378 (2007) (alteration in original) (quoting United States v. Diebold,369 U.S. 654, 655 (1962) (per curiam)). However, the court must abide by the "affirmative ...


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