United States District Court, D. Maryland
L. Hollander, United States District Judge
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
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
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. 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").
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.
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.
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.
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.
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.
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.
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.
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.
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.
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.
facts are included in the Discussion.
Motion for Surreply
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.
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).
Motion for Judgment: Standard of Review
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).
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
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).
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
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).
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).
"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.
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.
Choice of Law
parties assume, without discussing, that Maryland law applies
to this dispute.
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).
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.
Principles of Contract Construction
analyzing the claim for breach of contract, it is helpful to
review the principles of contract formation and contract
interpretation under Maryland law.
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.
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, ...