Searching over 5,500,000 cases.


searching
Buy This Entire Record For $7.95

Download the entire decision to receive the complete text, official citation,
docket number, dissents and concurrences, and footnotes for this case.

Learn more about what you receive with purchase of this case.

TBC, Inc. v. Dei Sales, Inc.

United States District Court, D. Maryland

September 18, 2017

TBC, INC.
v.
DEI SALES, INC.

          MEMORANDUM

          CATHERINE C. BLAKE UNITED STATES DISTRICT JUDGE

         Plaintiff 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.[1]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 denied.

         BACKGROUND

         TBC 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.)

         In 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.[2] (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." (Id.)

         In 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.

         In 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).)

         On or 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.)

         On June 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.)

         Allan 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.)

         Mr. 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.)

         In 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.

         ANALYSIS

         I. DEI's Motion for Summary Judgment

         DEI has moved for summary judgment as to TBC's breach of contract and unjust enrichment claims.[3] The court considers each below.

         A. Legal Standard

         Federal 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. 1993)).

         B. Breach of Contract

         To 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 Polk ...


Buy This Entire Record For $7.95

Download the entire decision to receive the complete text, official citation,
docket number, dissents and concurrences, and footnotes for this case.

Learn more about what you receive with purchase of this case.