United States District Court, D. Maryland, Southern Division
W. Grimm United States District Judge.
2016, G-W Management Services, LLC (“G-W
Management” or “GWMS”) received a proposal
from a potential subcontractor, JayKal LED Solutions Inc.
(“JayKal”), as it was preparing a bid for a
lighting project (“Lighting Project”) at the
Walter Reed National Military Medical Center. G-W Management
included the pricing information it received from JayKal in
its final bid submission, was subsequently awarded the
Lighting Project contract, but did not use JayKal as a
subcontractor. JayKal viewed G-W Management's actions as
fraudulent and a breach of contract, and filed this
litigation. Compl., ECF No. 1. G-W Management has moved to
dismiss the case. ECF No. 14. G-W Management's Motion to
Dismiss is granted in part, as JayKal has failed to state a
claim for fraud, and is denied in part, as JayKal has stated
a claim for breach of contract. G-W Management must file its
Answer no later than November 7, 2017.
10, 2016, a request for proposal was issued for a Lighting
Project at the Walter Reed National Military Medical Center
(“WRNMMC” or “Walter Reed”). Compl.
¶ 10. JayKal, a manufacturer, supplier, and installer of
LED lighting products, initially sent its pricing to G-W
Management, a bidder on the Walter Reed contract, on June 3,
2016. Id. ¶ 14. On June 8, 2016, JayKal sent
its initial proposal to G-W Management for the Lighting
Project. Id. ¶ 15. G-W Management was informed
on June 9, 2016 that the Potomac Electric Power Company
(“Pepco”) would be accepting applications for
incentives coinciding with the bid proposal. Id.
¶ 16. The Pepco incentive announcement provided an
extension to the deadline to submit bid proposals, and during
that extension, JayKal updated its turn-key proposal
(“Proposal”), which then provided for $1, 153,
788 in LED lighting material. Id. ¶¶
17-18; Proposal, ECF No. 14-1. G-W Management included
JayKal's Proposal pricing in its June 27, 2016 bid
response for the Lighting Project. Compl. ¶ 22. On July
12, 2016, G-W Management was informed it was awarded the
Lighting Project contract. Id. ¶ 24.
14, 2016, G-W Management Project Executive Michael Heaton met
with JayKal's President, Sanjay Kapuria, at G-W
Management's offices. Id. ¶ 27. During the
meeting, the parties agreed to additional terms beyond the
Proposal, which included:
a. JayKal would complete the paperwork, certification, pre
and post-evaluation, and inspection needed to secure a Pepco
rebate that would be split evenly between GWMS and JayKal;
b. JayKal would complete all formalities and paperwork
required to receive federal tax credits, which would be split
evenly between GWMS and JayKal;
c. The terms of JayKal's agreement with GWMS were limited
to JayKal supplying the LED lighting material for the WRNMMC
d. GWMS would send the work order for the Agreement to JayKal
after the bond released in 10 days.
Id. Following the meeting, on July 15, 2016, JayKal
sent G-W Management an email confirming the “prior day
agreement about the Pepco rebate and federal tax credit
terms.” Id. ¶ 28. According to JayKal,
its June 24, 2016 updated Proposal and the parties'
discussion of terms during their July 14, 2016 meeting
resulted in a binding and enforceable contract. Id.
¶ 29. In its view, the agreement that was reached was
for JayKal to receive $1, 153, 788 for its LED lighting
material for the Lighting Project and for the Pepco rebates
and federal tax credits to be split equally between JayKal
and G-W Management. Id.
about August 3, 2016, G-W Management informed JayKal that it
was going to work with a different vendor instead of JayKal.
Id. ¶ 33. As a result, JayKal did not receive
$1, 153, 788 for supplying the LED lighting materials or its
portion of the Pepco rebates or federal tax credits.
Id. ¶ 34. JayKal alleges that it had relied on
G-W Management's false representations “that JayKal
would serve as GWMS's Lighting Project subcontractor and
enjoy the agreed-upon benefits, ” which
“entic[ed] JayKal to provide its specifications,
pricing, experience at WRNMMC, and excellent reputation in
the industry to win the Lighting Project bid.”
Id. ¶¶ 37-38.
email dated August 4, 2016, G-W Management stated that it
decided not work with JayKal because of concerns about
JayKal's ability to complete its work within the time
required by Walter Reed and concerns over its products
complying with the Buy American Act. Id. ¶ 40.
Kapuria responded that JayKal's products were compliant
with the Buy American Act and that JayKal could begin
delivery within two weeks, although it advised against doing
so ahead of Pepco approval. Id. ¶ 41.
“Kapuria also told Heaton that GWMS used JayKal's
proprietary pricing and specification data under the false
pretense that if GWMS won the Lighting Project bid it would
use JayKal as the Project's LED subcontractor and the
parties would split the Pepco rebates and federal tax
credits.” Id. ¶ 42. Heaton responded to
Kapuria's email and appeared to acknowledge that a
contract existed. Id. ¶ 43. He stated that G-W
Management used JayKal's pricing in its bid and that G-W
Management “would hold JayKal responsible for breaching
the Contract by purportedly forcing GWMS to retain a new
higher-priced subcontractor for the Lighting Project instead
of JayKal.” Id.
18, 2017, JayKal filed suit against G-W Management alleging
breach of contract and fraud. Id. ¶¶
58-68. JayKal seeks minimum damages of $1, 100, 000 for
breach of contract and $75, 000 in compensatory damages and
$500, 000 in punitive damages for fraud. Id.