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Faddis Concrete, Inc. v. Brawner Builders, Inc.

United States District Court, D. Maryland

September 15, 2017



          Ellen L. Hollander, United States District Judge

         Faddis Concrete, Inc. ("Faddis"), a supplier of materials, filed suit against Brawner Builders, Inc. ("Brawner"), a general contractor for the Maryland State Highway Administration ("SHA"). ECF 1.[1] The Complaint contains four counts: Breach of Contract (Count I); Breach of Contractual Duties (Count II); Brawner‘s Interference with Statutory Rights (Count III); and Unjust Enrichment and Imposition of Constructive Trust (erroneously labeled as Count XI, but construed as Count IV).[2] Id.

         Now pending is Brawner‘s Motion for Judgment on the Pleadings (ECF 67, "Motion"), which is supported by a copy of the "Purchase Order" between Brawner and Faddis, dated January 24, 2013, and executed by Brawner and Faddis on February 7, 2013. ECF 67-1.[3] In the Purchase Order, which I shall designate for convenience as the "Subcontract, " Faddis is referred to as the Seller and Brawner is identified as the Buyer. Faddis opposes the Motion (ECF 71, "Opposition"), supported by several exhibits. ECF 71-1. Brawner has replied. ECF 73 ("Reply").

         Also pending is plaintiffs motion for leave to file a surreply. ECF 74 ("Motion for Surreply"). Brawner opposes the Motion for Surreply (ECF 75) and Faddis has replied. ECF 77.

         No hearing is necessary to resolve the motions. See Local Rule 105.6. For the reasons that follow, I shall grant the Motion for Surreply. And, I shall grant the Motion in part and deny it in part.

         I. Factual Background[4]

         SHA awarded Brawner a prime contract with respect to the extension of a noise barrier on a portion of southbound I-95 in Maryland (the "Project"). ECF 1, ¶ 5. In connection with the Project, Brawner entered into the Subcontract with Faddis in February 2013 for the purchase of "Noise Wall Panels" and other materials. ECF 67-1 at 1; ECF 1, ¶ 6. Faddis, a SHA-approved supplier of materials (ECF 1, ¶ 6), began fabricating the concrete panels at its plant in Downington, PA. Id. ¶ 7.

         On May 2, 2014, during the course of Faddis‘s performance of the Subcontract, David Coyne, a representative of SHA, sent a letter to Brawner stating that SHA believed Faddis‘s concrete panels contained "'aggregate from an unapproved source‘" and warned that the requisite panel strength could not be verified. Id. ¶ 8.

         Faddis asserts that the statements in SHA‘s letter were false. Id. ¶ 9. As a result of SHA‘s accusations, SHA halted Faddis‘s work on the Project. Id. ¶ 10. Moreover, athough SHA was informed by both plaintiff and defendant of its error, SHA suspended Faddis‘s Downington, PA plant from production of any materials for all SHA projects. Id. ¶ 15. Faddis alleges that this suspension made work on the Project more expensive (id. ¶ 16), idled its Downington plant, and rendered the plant unprofitable. Id. ¶ 17. Indeed, Faddis contends that SHA caused "a total disruption" of Faddis‘s "operation" at that plant. Id. ¶ 18.

         Moreover, Faddis complains that during this period SHA notified the Virginia Department of Transportation ("VDOT") and the Pennsylvania Department of Transportation ("PDOT")-entities with which Faddis does business (id ¶ 20)-of plaintiff s suspension "for quality reasons, " and warned them of the alleged quality problems. Id. ¶ 19. As a result, VDOT suspended Faddis‘s Virginia plant, halted work on projects in Virginia, and barred Faddis from bidding on Virginia contracts. Id. ¶¶ 21, 22. SHA subsequently admitted its error. Id. ¶ 23. Although SHA notified VDOT and PDOT of its error (id. ¶ 26), Faddis suffered damages from the disparagement and loss of business, for which it has not been compensated. Id. ¶ 27-29.

         During or shortly after these events, on June 23, 2014, Faddis asked Brawner to "pass through" its claims for damages against SHA. Id. ¶¶ 37-39. As plaintiff explains it, in order for Faddis, as subcontractor, to recover from SHA, the contract owner, the claim had to be initiated by Brawner, the prime contractor, because only Brawner has contractual privity with both sides. Id. ¶¶ 31-36. Moreover, Faddis avers that Brawner was "obligated to pass through all of Faddis‘ claims . . . ." Id. ¶ 33.

         Faddis also gave notice of its claims to SHA directly. Id. ¶ 41; id. at 22. However, SHA informed Faddis that it could only bring a claim against SHA through the prime contractor, Brawner. Id. ¶ 42. But, Brawner refused to submit Faddis‘s claim to SHA. Id. ¶ 43.

         Faddis also alleges that Brawner owes plaintiff $132, 026.94, constituting the unpaid balance under the Subcontract, plus $36, 353.00 for unpaid trucking charges. Id. ¶¶ 45-46, 50.

         In its Opposition and an accompanying exhibit, Faddis notes that after the Complaint was filed, Brawner sent a letter to SHA on Faddis‘s behalf. ECF 71 at 15.

         Additional facts are included in the Discussion.

         II. Motion for Surreply

         Local Rule 105.2(a) provides that a party is not permitted to file a surreply without permission of the court. The filing of a surreply "is within the Court‘s discretion, see Local Rule 105.2(a), but they are generally disfavored." EEOC v. Freeman, 961 F.Supp.2d 783, 801 (D. Md. 2013), aff'd in part, 778 F.3d 463 (4th Cir. 2015); see also, e.g., Chubb & Son v. C & C Complete Servs., LLC, 919 F.Supp.2d 666, 679 (D. Md. 2013). A surreply may be permitted when the party seeking to file the surreply "would be unable to contest matters presented to the court for the first time" in the opposing party‘s reply. Clear Channel Outdoor, Inc. v. Mayor & City Council of Baltimore, 22 F.Supp.3d 519, 529 (D. Md. 2014) (quotations and citations omitted). However, a surreply is not permitted where the reply is responsive to an issue raised in the opposition. See Khoury v. Meserve, 268 F.Supp.2d 600, 605-06 (D. Md. 2003). In that posture, there was a full opportunity to present the movant‘s arguments. Id. at 606.

         In its Reply, Brawner has raised several new arguments. ECF 73. Therefore, to the extent Faddis‘s surreply is responsive to these new arguments, I shall grant the Motion for Surreply and will consider the corresponding parts of Faddis‘s attached surreply (ECF 74-1).

         III. Motion for Judgment: Standard of Review

         Defendant has moved for judgment on the pleadings pursuant to Fed.R.Civ.P. 12(c). Under Rule 12(h)(2)(B), a defendant may assert "failure to state a claim upon which relief can be granted" in a Rule 12(c) motion. A Rule 12(c) motion "for judgment on the pleadings" may be filed "[a]fter the pleadings are closed, " so long as it is "early enough not to delay trial." Fed.R.Civ.P. 12(c). Such a motion is "assessed under the same standard that applies to a Rule 12(b)(6) motion." Walker v. Kelly, 589 F.3d 127, 139 (4th Cir. 2009) (citing Edwards v. City of Goldsboro, 178 F.3d 231, 243 (4th Cir. 1999)); see also McBurney v. Cuccinelli, 616 F.3d 393, 408 (4th Cir. 2010).

         A defendant may test the legal sufficiency of a complaint by way of a motion to dismiss under Rule 12(b)(6). In re Birmingham, 846 F.3d 88, 92 (4th Cir. 2017); Goines v. Valley Cmty. Servs. Bd, 822 F.3d 159, 165-66 (4th Cir. 2016); McBurney v. Cuccinelli, 616 F.3d 393, 408 (4th Cir. 2010), aff'd sub nom. McBurney v. Young, 569 U.S. 221 (2013); Edwards v. City of Goldsboro, 178 F.3d 231, 243 (4th Cir. 1999). A Rule 12(b)(6) motion constitutes an assertion by a defendant that, even if the facts alleged by a plaintiff are true, the complaint fails as a matter of law "to state a claim upon which relief can be granted." Whether a complaint states a claim for relief is assessed by reference to the pleading requirements of Fed.R.Civ.P. 8(a)(2). That rule provides that a complaint must contain a "short and plain statement of the claim showing that the pleader is entitled to relief." The purpose of the rule is to provide the defendants with "fair notice" of the claims and the "grounds" for entitlement to relief. Bell Atl. Corp. v. Twombly, 550 U.S. 544, 555-56 (2007).

         To survive a motion under Fed.R.Civ.P. 12(b)(6), a complaint must contain facts sufficient to "state a claim to relief that is plausible on its face." Twombly, 550 U.S. at 570; see Ashcroft v. Iqbal, 556 U.S. 662, 684 (2009) ("Our decision in Twombly expounded the pleading standard for 'all civil actions‘ . . . ." (citation omitted)); see also Willner v. Dimon, 849 F.3d 93, 112 (4th Cir. 2017). But, a plaintiff need not include "detailed factual allegations" in order to satisfy Rule 8(a)(2). Twombly, 550 U.S. at 555. Moreover, federal pleading rules "do not countenance dismissal of a complaint for imperfect statement of the legal theory supporting the claim asserted." Johnson v. City of Shelby, ___ U.S. ___, 135 S.Ct. 346, 346 (2014) (per curiam).

         Nevertheless, the rule demands more than bald accusations or mere speculation. Twombly, 550 U.S. at 555; see Painter's Mill Grille, LLC v. Brown, 716 F.3d 342, 350 (4th Cir. 2013). If a complaint provides no more than "labels and conclusions" or "a formulaic recitation of the elements of a cause of action, " it is insufficient. Twombly, 550 U.S. at 555. Rather, to satisfy the minimal requirements of Rule 8(a)(2), the complaint must set forth "enough factual matter (taken as true) to suggest" a cognizable cause of action, "even if . . . [the] actual proof of those facts is improbable and . . . recovery is very remote and unlikely." Twombly, 550 U.S. at 556 (internal quotations omitted).

         In reviewing a Rule 12(b)(6) motion, a court "must accept as true all of the factual allegations contained in the complaint" and must "draw all reasonable inferences [from those facts] in favor of the plaintiff." E.I. du Pont de Nemours & Co. v. Kolon Indus., Inc., 637 F.3d 435, 440 (4th Cir. 2011) (citations omitted); see Semenova v. Maryland Transit Admin., 845 F.3d 564, 567 (4th Cir. 2017); Houck v. Substitute Tr. Servs., Inc., 791 F.3d 473, 484 (4th Cir. 2015); Kendall v. Balcerzak, 650 F.3d 515, 522 (4th Cir. 2011), cert. denied, 565 U.S. 943 (2011). But, a court is not required to accept legal conclusions drawn from the facts. See Papasan v. Allain, 478 U.S. 265, 286 (1986). "A court decides whether [the pleading] standard is met by separating the legal conclusions from the factual allegations, assuming the truth of only the factual allegations, and then determining whether those allegations allow the court to reasonably infer" that the plaintiff is entitled to the legal remedy sought. A Society Without a Name v. Virginia, 655 F.3d 342, 346 (4th. Cir. 2011), cert. denied, 566 U.S. 937 (2012).

         Under limited circumstances, when resolving a Rule 12(b)(6) motion, a court may consider documents beyond the complaint without converting the motion to dismiss to one for summary judgment. Goldfarb v. Mayor & City Council of Baltimore, 791 F.3d 500, 508 (4th Cir. 2015). In particular, a court may properly consider documents that are "explicitly incorporated into the complaint by reference and those attached to the complaint as exhibits . . ." Goines, 822 F.3d at 166 (citations omitted); see also U.S. ex rel. Oberg v. Pennsylvania Higher Educ. Assistance Agency, 745 F.3d 131, 136 (4th Cir. 2014); Anand v. Ocwen Loan Servicing LLC, 754 F.3d 195, 198 (4th Cir. 2014); Am. Chiropractic Ass'n v. Trigon Healthcare, Inc., 367 F.3d 212, 234 (4th Cir. 2004), cert. denied, 543 U.S. 979 (2004); Phillips v. LCI Int'l Inc., 190 F.3d 609, 618 (4th Cir. 1999). A court may also "consider a document submitted by the movant that was not attached to or expressly incorporated in a complaint, so long as the document was integral to the complaint and there is no dispute about the document‘s authenticity." Goines, 822 F.3d at 166 (citations omitted); see also Woods v. City of Greensboro, 855 F.3d 639, 642 (4th Cir. 2017); Kensington Volunteer Fire Dep't. v. Montgomery Cnty., 684 F.3d 462, 467 (4th Cir. 2012). To be "integral, " a document must be one "that by its 'very existence, and not the mere information it contains, gives rise to the legal rights asserted.‘" Chesapeake Bay Found, Inc. v. Severstal Sparrows Point, LLC, 794 F.Supp.2d 602, 611 (D. Md. 2011) (citation omitted) (emphasis in original).

         However, "before treating the contents of an attached or incorporated document as true, the district court should consider the nature of the document and why the plaintiff attached it." Goines, 822 F.3d at 167 (citing N. Ind. Gun & Outdoor Shows, Inc. v. City of S Bend, 163 F.3d 449, 455 (7th Cir. 1998)). "When the plaintiff attaches or incorporates a document upon which his claim is based, or when the complaint otherwise shows that the plaintiff has adopted the contents of the document, crediting the document over conflicting allegations in the complaint is proper." Goines, 822 F.3d at 167. Conversely, "where the plaintiff attaches or incorporates a document for purposes other than the truthfulness of the document, it is inappropriate to treat the contents of that document as true." Id.

         Brawner attached the Purchase Order. As noted, for convenience I have designated it as the Subcontract. ECF 67-1. Faddis has identified it in the Complaint as the "Material Contract." ECF 1, ¶ 6. Clearly, the Subcontract is integral to the Complaint, and there is no dispute as to its authenticity. Therefore, I shall consider it.

         IV. Discussion

         A. Choice of Law

         Both parties assume, without discussing, that Maryland law applies to this dispute.

         In regard to state law claims under diversity jurisdiction, federal courts apply federal procedural law and the substantive law of the state in which the proceeding is brought. See, e.g., Erie R.R. v. Tompkins, 304 U.S. 64, 78 (1938); Leichling v. Honeywell Intern., Inc., 842 F.3d 848, 851 (4th Cir. 2016); see also Kerr v. Marshall Univ. Bd. of Governors, 824 F.3d 62, 74 (4th Cir. 2016); Colgan Air, Inc. v. Raytheon Aircraft Co., 507 F.3d 270, 275 (4th Cir. 2007); C. Wright & A. Miller, 19 Fed. Practice and Procedure, § 4501 (3d ed.). And, federal courts apply the choice of law rules of the state in which the court sits. See, e.g., Klaxon Co. v. Stentor Electric Mfg. Co., 313 U.S. 487, 496-97 (1941); Albemarle Corp. v. AstraZeneca UK Ltd., 628 F.3d 643, 652-53 (4th Cir. 2010); see also Prof'l Massage Training Cent., Inc. v. Accreditation Alliance of Career Schools and Colls., 781 F.3d 161, 180 (4th Cir. 2015); Demetres v. E. W. Const. Inc., 776 F.3d 271, 273 (4th Cir. 2015).

         Under Maryland law, if a contract contains a choice of law provision, courts generally apply the law of the specified jurisdiction. Cunningham v. Feinberg, 441 Md. 310, 326, 107 A.3d 1194, 1204 (2015). Article 18 of the Subcontract provides: "This Agreement shall be construed according to the laws of the State of Maryland, without regard to principles of conflict of laws." ECF 67-1 at 3. Therefore, I shall apply Maryland law.

         B. Principles of Contract Construction

         In analyzing the claim for breach of contract, it is helpful to review the principles of contract formation and contract interpretation under Maryland law.

         In general, a contract is defined as "a promise or set of promises for breach of which the law gives a remedy, or the performance of which the law in some way recognizes as a duty." Richard A. Lord, 1 Williston on Contracts § 1:1, at 2-3 (4th ed. 1990); accord Restatement (Second) Contracts § 1, at 5 (1981); see also Maslow v. Vanguri, 168 Md.App. 298, 321, 896 A.2d 408, 421-22, cert. denied, 393 Md. 478, 903 A.2d 416 (2006). "A contract is formed when an unrevoked offer made by one person is accepted by another." Prince George's County v. Silverman, 58 Md.App. 41, 57, 472 A.2d 104, 112 (1984). Thus, mutual assent is an integral component of every contract. See, e.g., Cochran v. Norkunas, 398 Md. 1, 14, 919 A.2d 700, 708 (2007); Advance Telecom Process LLC v. DSFederal, Inc., 224 Md.App. 164, 177, 119 A.3d 175, 183 (2015). See also Mitchell v. AARP, 140 Md.App. 102, 116 (2001) ("An essential element with respect to the formation of a contract is 'a manifestation of agreement or mutual assent by the parties to the terms thereof; in other words, to establish a contract the minds of the parties must be in agreement as to its terms.‘" (citations omitted)). "Manifestation of mutual assent includes two issues: (1) intent to be bound, and (2) definiteness of terms." Cochran, 398 Md. at 14, 919 A.2d at 708.

         A contract may be oral or written, as well as express or implied. '"An express contract has been defined as an actual agreement of the parties, the terms of which are openly uttered or declared at the time of making it, being stated in distinct and explicit language, either orally or in writing.‘" Maryland Cas. Co. v. Blackstone Int'l Ltd.,442 Md. 685, 706, 114 A.3d 676, 688 (2015) (quoting Cnty. Comm'rs of Caroline Cnty v. Roland Dashiell & Sons, Inc.,358 Md. 83, 94, 747 A.2d 600, 606 (2000)). Whether oral or written, a contract must express with certainty the nature and extent of the parties‘ obligations and the essential terms of the agreement. Cnty. Comm'rs for Carroll Cnty. v. Forty W. Builders, Inc.,178 Md.App. 328, 377-78, 941 A.2d 1181, 1209-10 (2008); see Canaras v. Lift Truck Services,272 Md. 337, 346, 322 A.2d 866, 871 (1974). If an agreement omits an important term, or is otherwise too vague or indefinite with respect to an essential term, it is not enforceable. Mogavero v. Silverstein, 142 Md.App. 259, 272, 790 A.2d 43, ...

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