United States District Court, D. Maryland
DEI SALES, INC.
CATHERINE C. BLAKE UNITED STATES DISTRICT JUDGE
TBC, Inc. ("TBC") has sued defendant DEI Sales,
Inc. ("DEI") for failure to compensate TBC
adequately for its work. Now pending are DEI's motion for
summary judgment (ECF No. 104), TBC's motion for leave to
file a surreply to DEFs motion for summary judgment (ECF No.
113), DEFs motion for other relief for contempt of ECF No. 97
(ECF No. 103), and TBC's motion for leave to file a
surreply to DEFs motion for other relief for contempt of ECF
No. 97 (ECF No. 112). The motions have been fully briefed,
and no hearing is necessary to their resolution. See
Local Rule 105.6.For the reasons discussed below, DEFs
motion for summary judgment will be denied, DEFs motion for
other relief for contempt of ECF No. 97 will be granted, and
TBC's motions for leave to file surreplies will be
describes itself as an advertising and public relations
agency. (Compl., ECF No. 2, ¶ 16.) DEI, a former client
of TBC, is the surviving entity of a merger between DEI and
Polk Audio, Inc. ("Polk Audio") in February 2014.
(Mot. Summary Judgment Ex. 2, ECF No. 104-4 (Articles of
Merger).) At all times relevant to the complaint, Polk Audio
and DEI sold consumer audio equipment, including headphones
and speakers. (See Compl. ¶ 20.) DEI Holdings,
Inc. ("DEI Holdings"), a former defendant in this
action, was the parent company of both Polk Audio and DEI.
(See Id. ¶ 2.)
2011, Polk Audio hired TBC to "carry[ ] out [its]
advertising and integrated marketing communications programs
for it's [sic] sports headphone product
line." (Mot. Summary Judgment Ex. 1 ("2011
Contract"), ECF No. 104-3, § 1.) For those
services, the parties agreed that Polk Audio would pay TBC a
monthly fee of $12, 500, based on 83 agency hours per month
at a discounted, "blended" rate of
$150. (2011 Contract, Addendum II, § LA.)
The 2011 Contract also provides for commissions,
reimbursement, and payment of certain other costs by Polk
Audio. (2011 Contract, Addendum II.) For work outside the
scope of services defined in the contract-i.e., "work
related to Polk Audio, Inc.'s headphone product line(s),
" (2011 Contract, Addendum I)-the parties agreed that
the compensation and reimbursement schedule set out in
Addendum II would not apply, (2011 Contract § III &
Addendum II § ID). Rather, such services would be billed
in accordance with their "mutual agreement."
2012, DEI contracted with TBC to promote its Active Sound Bar
product and to provide social media services. (Mot. Summary
Judgment Ex. 3 ("2012 Contract"), ECF No. 104-5,
Addendum I.) Like the 2011 Contract, the 2012 Contract states
that out-of-scope work is not covered by the agreement's
compensation and reimbursement schedule, and it provides that
such work will be billed in accordance with the parties'
"mutual agreement." (2012 Contract § III &
Addenda I, II.) According to TBC, it was fully compensated
for work performed pursuant to the 2012 Contract, including
out-of-scope work. (See Compl. ¶ 27.) Thus, the
terms of the 2012 Contract are not at issue in this action.
2013, Polk Audio engaged TBC to provide services related to a
marketing campaign for the Heritage Collection, a new line of
personal audio equipment. (See Opp. to Mot. Summary
Judgment Ex. 9 ("Burch Dep"), ECF No. 107-14, at
62; id. Ex. 6 ("Tripodi Dep"), ECF No.
107-10, at 254.) The parties did not enter into a separate
written contract, but they agreed to at least some of the
terms expressed in the 2011 Contract, including the payment
of a $12, 500 monthly fee. (See Burch Dep. at 65-66,
300-01; Mot. Summary Judgment Ex. 4 ("Tripodi
Aff"), ECF No. 104-6, ¶ 10.) TBC provided services
under those terms from January 1, 2013 through March 31,
2014. (See Tripodi Aff. ¶ 4.) During that
period, TBC received the $12, 500 fee each month, in addition
to other payments. (See Id. ¶ 9; Mot. Summary
Judgment Ex. 6, ECF No. 104-8 (list of payments to TBC).)
around June 19, 2013, TBC's Executive Vice President and
Managing Director, Howe Burch, attended a dinner meeting with
the chairman and CEO of DEI Holdings and DEI, James E.
Minarik, DEI Holding's Chief Marketing Officer, Blair
Tripodi, and DEI Holding's Chief Design Officer, Michael
DiTullo, at a Baltimore restaurant. (See Burch Dep.
at 144-45.) One of the topics discussed at dinner was the
number of hours worked by TBC since January 1, 2013, which
far exceeded the baseline of 83 hours per month
("additional hours"). (See Id. at 145-48.)
Mr. Burch explained that TBC was "getting killed on the
hours" and could not continue to work under those
circumstances. (Id. at 145, 147.) According to Mr.
Burch, he was assured that TBC would be "made
whole." (Id. at 147-48.)
21, 2013, Mr. Burch sent Mr. Tripodi an e-mail ("June
21st e-mail") discussing the additional hours, including
an attached "TBC Manpower report" showing that
TBC's hours for Polk Audio exceeded the baseline of 83
hours per month by 1, 460 hours during the period of January
1, 2013 to June 14, 2013. (See Mot. Summary Judgment
Ex. 7, ECF No. 104-9; see also Burch Dep. at
150-54.) Mr. Tripodi received and reviewed, but did not
respond to, the June 21st e-mail. (See Tripodi Aff.
¶¶ 17-19; Burch Dep. at 153-54.)
Charles, TBC's Chairman and Chief Creative Officer, spoke
with Mr. Tripodi regarding the additional hours on at least
two occasions after the June 21st e-mail. (See Opp.
to Mot. Summary Judgment Ex. 10 ("Charles Dep"),
ECF No. 107-15, at 120-21 (discussing meetings on August 16,
2013, and September 22, 2013); see also Burch Dep.
at 99, 154-55, 175, 183 (explaining that Mr. Charles met with
Mr. Tripodi multiple times to discuss the additional hours
and to follow up on the June 21st e-mail).) According to Mr.
Charles, Mr. Tripodi promised to pay for the additional
hours, stating that he was a "fair guy" and would
"make [TBC] whole." (Charles Dep. at 121.)
Tripodi continued to request, and TBC continued to perform,
work until January 28, 2014, when Mr. Tripodi informed Mr.
Burch that Polk Audio and DEI were terminating their
contracts with TBC. (See Burch Dep. at 300; Tripodi
Dep. at 122-23; Tripodi Aff. ¶¶ 4, 31.) On January
30, 2014, Mr. Tripodi confirmed the termination by letter.
(See Mot. Summary Judgment Ex. 14, ECF No. 104-16;
Tripodi Aff. ¶ 32.) On February 7, 2014, TBC submitted
an invoice ("February 7th invoice") for "3,
261.50 actual work hours in 2013 in excess of the original
budgeted 996 work hours in 2013." (See Mot.
Summary Judgment Ex. 15, ECF No. 104-17, at 1.) The invoice
listed the amount due for the 2013 calendar year as $489,
225.00. (Id.) Through a letter from counsel, Polk
Audio and DEI rejected the invoice on February 28, 2014.
(See Mot. Summary Judgment Ex. 16, ECF No. 104-18.)
September 2014, TBC filed a complaint in Maryland court,
naming DEI Holdings, DEI, Polk Audio, Polk Audio, LLC, Boom
Movement, LLC, Definitive Technology, LLC, and Sound United,
LLC as defendants. (See Compl.) The complaint
alleged counts of intentional misrepresentation, concealment,
breach of fiduciary duty, negligent misrepresentation,
constructive fraud, breach of contract, breach of the
covenant of good faith and fair dealing, unjust enrichment,
and conversion. (Id. ¶¶ 106-267.) The
defendants removed the case to this court, asserting
diversity jurisdiction. (See Notice of Removal, ECF
No. 1.) In March 2015, the court dismissed all claims except
for TBC's breach of contract and unjust enrichment claims
against DEI. (Mem. & Order of March 24, 2015, ECF Nos.
30-31.) These motions followed.
DEI's Motion for Summary Judgment
moved for summary judgment as to TBC's breach of contract
and unjust enrichment claims. The court considers each below.
Rule of Civil Procedure 56(a) provides that summary judgment
should be granted "if the movant shows 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) (emphases added). "A dispute is
genuine if 'a reasonable jury could return a verdict for
the non-moving party.'" Libertarian Party of Va.
v. Judd, 718 F.3d 308, 313 (4th Cir. 2013) (quoting
Dulaney v. Packaging Corp. of Am., 673 F.3d 323, 330
(4th Cir. 2012)). "A fact is material if it 'might
affect the outcome of the suit under the governing
law.'" Id. (quoting Anderson v. Liberty
Lobby, Inc., 477 U.S. 242, 248 (1986)). Accordingly,
"the mere existence of some alleged factual
dispute between the parties will not defeat an otherwise
properly supported motion for summary judgment[.]"
Anderson, Ml U.S. at 247-48. The court must view the
evidence in the light most favorable to the non-moving party,
Tolan v. Cotton, 134 S.Ct. 1861, 1866 (2014) (per
curiam), and draw all reasonable inferences in that
party's favor, Scott v. Harris, 550 U.S. 372,
378 (2007) (citations omitted); see also Jacobs v. N.C.
Admin. Office of the Courts, 780 F.3d 562, 568-69 (4th
Cir. 2015). At the same time, the court must "prevent
factually unsupported claims and defenses from proceeding to
trial." Bouchat v. Bait. Ravens Football Club,
Inc., 346 F.3d 514, 526 (4th Cir. 2003) (quoting
Drewitt v. Pratt, 999 F.2d 774, 778-79 (4th Cir.
Breach of Contract
prevail on a breach of contract claim under Maryland law,
"a plaintiff must prove that the defendant owed the
plaintiff a contractual obligation and that the defendant
breached that obligation." Int'l Waste Indus.
Corp. v. Cape Envtl. Mgmt., Inc.,988 F.Supp.2d 542, 550
(D. Md. 2013) (quoting Taylor v. NationsBank, N.A.,776 A.2d 645, 651 (Md. 2001)). TBC alleges that DEI breached
the 2011 Contract. (See Compl. ¶¶ 248-249
(alleging breach of the "Polk Contract" and
resulting damages); ¶ 22 (defining "Polk
Contract" as the contract executed by Polk Audio and TBC
on March 1, 2011).) Thus, the court must determine whether