United States District Court, D. Maryland
Xinis United States District Judge
before the Court are cross-motions for summary judgment filed
by Mercantile Place #1 Limited Partnership
(“Plaintiff”) and Renal Treatment Centers - Mid
Atlantic, Inc. (“Defendant”). ECF Nos. 4 &
24. Plaintiff initially filed its Complaint on March 10, 2017
with the Circuit Court for Prince George's County. On
April 10, 2017, Plaintiff moved for summary judgment, ECF No.
4, and on May 8, 2017, Defendant removed the case to this
Court, and later entered a cross-motion for partial summary
judgment. ECF No. 24. On July 3, 2017, Plaintiff moved to
extend the time by which it could seek leave to amend the
Complaint until after the resolution of the dispositive
motions, ECF No. 27. Defendant also requested, and the Court
granted, that discovery be stayed pending resolution of the
cross-motions for summary judgment. ECF No. 38. The issues
are now fully briefed and a hearing was held on November 3,
2017. For the reasons stated below, Defendant's Motion
for Partial Summary Judgment on Damages, ECF No. 24, is
GRANTED and Plaintiff's Motion for Summary Judgment, ECF
No. 4, is DENIED. Plaintiff's Motion for Extension of
Time to Request Leave to Amend Complaint, ECF No. 27, is
following facts are undisputed. Plaintiff Mercantile Place #1
Limited Partnership (“Plaintiff” or
“Lessor”) is a Maryland Limited Partnership that
manages and leases real property throughout the state of
Maryland, including 1300 Mercantile Lane, Largo, Maryland
20774 (“Property”). ECF No. 2. Defendant Renal
Treatment Centers (“Defendant” or
“Lessee”) is a renal treatment facility
incorporated in Delaware and licensed to do business in
Maryland. Id. On November 22, 2000, Plaintiff and
another dialysis treatment facility entered into a Lease
(“Original Lease”). ECF No. 21-2. Defendant
replaced the original treatment facility as tenants of the
Property in 2004. The parties executed an amendment to the
Original Lease dated December 21, 2004 (“2004
Amendment”). ECF No. 28-1. The parties then executed a
new Lease Agreement on November 20, 2009 (“2009
Lease”). ECF No. 24-1. The parties agree that the 2009
Lease is the operative agreement for purposes of resolving
the pending motions. Id.; see also ECF Nos.
2 & 19.
the 2009 Lease, utilities are considered “rent”
payable to Plaintiff Lessor and are separately metered by
Defendant Lessee. See 2009 Lease, ECF No. 24-1 at
¶¶ 3, 4, 20. To determine the Defendant's
monthly water and sewer usage, Plaintiff formally requests
that an agent from Defendant's property management
company, Knollwood Development, enter the leased premises and
read the Lessee's water meter (“sub-meter”).
Based on these sub-meter readings, Plaintiff determines the
amount of “rent” charges against individual
Lessees. ECF No. 26 ¶ 10; see also Complaint,
ECF No. 2 at ¶ 6; Cohen Affidavit, ECF No. 21-1 at
¶¶ 43-48. Failure to pay water and sewer expenses
is a material breach of the Lease. See 2009 Lease,
ECF No. 24-1; see also Complaint, ECF No. 2.
2004, Defendant initiated a significant construction project
to remodel the Property. ECF Nos. 21 & 21-4. In the
construction plans, Defendant represented that new plumbing
would include a new sub-meter, water meter bypass valve, and
meter shut-off valves. ECF Nos. 21-4 & 26-5. Plaintiff
was provided with all project and design plans and, pursuant
to the terms of the 2004 Lease Amendment, possessed the right
to oversee construction and receive compensation for any time
spent reviewing the Lessee's changes to the Property.
See 2004 Amendment, ECF No. 28-1 at ¶ 8
(“Lessee acknowledges that Lessor has incurred, and
will continue to incur, costs related to its review of the
plans for the improvement of the Space and ultimately,
monitoring the installation of said improvements . . . Lessee
[will compensate] for the costs of associates of Lessor
reviewing plans and monitoring progress of the construction
of improvements over time.”).
2005, Defendant installed a new water sub-meter at the
Property. ECF No. 21 at ¶ 17. Thereafter, from July 26,
2005 to September 2016, Plaintiff was given monthly access to
the Defendant's Property to record the sub-meter reading
without incident. Each month, Defendant paid Plaintiff for
the amount of water as reflected in the sub-meter reading.
See ECF No. 21 at ¶ 17.
September 26, 2016, one of Plaintiff's partners, Seth
Cohen (“Mr. Cohen”) had occasion to inspect the
Property with plumber Mike Mallick. Cohen Affidavit, ECF No.
21-1 at ¶ 22. During the inspection, Mr. Cohen and Mr.
Mallick observed that the plumbing did not include water
meter shut-off valves. The gentlemen also discovered that the
water meter bypass valve was open to Defendant's water
supply, allowing water to be used by Defendant that was
unmetered and thus unrecorded. ECF Nos. 19-2 & 21.
immediately informed Plaintiff that the meter bypass valve
was open and that once the valve was closed, Plaintiff would
“closely monitor the meter.” ECF No. 19-2.
Plaintiff proceeded to take daily readings of the sub-meter
for the first week, followed by weekly readings until the
next regularly scheduled monthly reading. ECF No. 19-2. The
purpose of these readings was to ascertain Defendant's
average monthly water usage when properly metered and compare
this data to Defendant's historic monthly usage.
Id. Plaintiff would use these readings to perform an
analysis “over the next couple of months” to
approximate the Defendant's correct monthly usage,
determine when the bypass valve was first opened, and
“initiate revised billing so that the unmetered water
can be paid for.” Id. Upon receipt of
Plaintiff's email, Defendant immediately closed the
bypass valve. ECF No. 19.
September 27, 2016 until October 27, 2016, Plaintiff recorded
sub-meter readings averaging 8, 817 gallons per day.
Complaint, ECF No. 2 at ¶ 32. Previous monthly readings
from the installation of the new sub-meter in July 2005 to
Plaintiff's discovery of the open valve in 2016 averaged
around 4, 089 gallons per day. Id. at ¶ 12.
Based upon this data, the Plaintiff invoiced the Defendant on
October 28, 2016, for unpaid water totaling $326, 754.28 and
citing Paragraph 5 of the 2009 Lease which states:
Lessee does hereby covenant and agree to take and to hold,
and does hereby take and hold, the Premises for the said term
at the said rental, payable as aforesaid and under the
conditions, covenants and agreements contained therein, and
agrees to pay all bills for electricity, water and sewer
service chargeable against the Premises as same shall become
due and payable.
2009 Lease, ECF No. 24-1 at ¶ 5. Plaintiff created the
October 28, 2016 billing statement by applying the newly
recorded daily average of 8, 817 gallons per day to the prior
eleven years and adjusting each monthly water bill for
historical water and sewer costs that had not already been
paid. ECF No. 21; see also ECF Nos. 4-2, 4-3, &
4-4. Defendant refused to pay this invoice, pleading
ignorance of the open water bypass valve, pointing to
Plaintiff's “failure to mitigate damages, ”
challenging Plaintiff's methodology to calculate the
unpaid rent, and asserting that the statute of limitations
has run on a lion's share of Plaintiff's claimed
damages. ECF No. 19. At an impasse, Plaintiff filed suit,
alleging breach of contract and seeking $326, 754.28 in
damages, plus interest of at least $16, 337.72. See
Complaint, ECF No. 2 at ¶¶ 16 -18; see
also 2009 Lease, ECF No. 24-1. The viability of this
claim thus gives rise to the pending motions.
STANDARD OF REVIEW
court shall grant summary judgment 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); Celotex Corp. v. Catrett, 477
U.S. 317, 322 (1986) (citing predecessor to current Rule
56(a)). The party moving for summary judgment bears the
burden of demonstrating the absence of any genuine dispute of
material fact. Adickes v. S.H. Kress & Co., 398
U.S. 144, 157 (1970). If sufficient evidence exists for a
reasonable jury to render a verdict in favor of the
non-moving party, summary judgment must be denied. See
Anderson v. Liberty Lobby, Inc.,477 U.S. 242, 248
(1986). The facts, and all inferences drawn from the facts,
must be viewed in the light most favorable to the non-moving
party. Scott v. Harris, 550 U.S. 372, 378 (2007);
Iko v. Shreve, 535 F.3d 225, 230 (4th Cir. 2008).
The opposing party cannot rest on the mere allegations or
denials of his pleading but instead must, by affidavit or
other evidentiary showing, point to facts that give rise to a
genuine dispute that is material to the claims. Fed.R.Civ.P.