United States District Court, D. Maryland, Southern Division
MARK A. GREEN, et al., Plaintiffs,
JENKINS SERVICES, LLC, Defendant.
W. Grimm United States District Judge.
Mark and Marcia Green (the “Greens”) entered into
a contract (“Contract”) with Defendant Jenkins
Services, LLC d/b/a Jenkins Restorations
(“Jenkins”) for Jenkins to demolish their house,
which had been destroyed by fire, and rebuild it. Jenkins
worked on the demolition and architectural planning but did
not begin construction because the land was found unsuitable
for an on-site sewage system, and as a result, Jenkins was
unable to acquire the necessary construction permits. Stip.
Facts ¶¶ 16, 37-38, ECF No. 88-1. The Greens
sued for damages on various grounds based on Jenkins's
failure to perform, Compl., ECF No. 2, and the parties have
filed cross-motions for summary judgment on the Greens'
breach of contract and money-had-and-received claims, the two
claims that remain at this stage of the
litigation. ECF Nos. 88, 89.
that no genuine dispute of material facts exists regarding
Jenkins's liability for breach of contract. But, the
amount of damages to which the Greens are entitled cannot be
determined on the record before me. I also find that the
Greens cannot recover under their money-had-and-received
claim, as they have prevailed on their breach of contract
claim, which entitles them to the same damages. Lastly, I
find the Greens' request for statutory interest to be
premature. Accordingly, I will grant the Greens' motion
in part and deny it in part, grant Jenkins's motion in
part and deny it in part, and this case shall proceed to a
trial regarding the remaining damages.
Greens owned a single family home on land they owned in
Prince George's County, Maryland. Stip. Facts ¶ 1.
On January 15, 2014, the Greens' home was destroyed by a
fire. Id. ¶ 9. The Greens filed a claim with
their insurer, USAA Casualty Insurance Company, who accepted
the claim to cover the loss. Id. ¶ 10. The
Greens, Jenkins, and a USAA adjuster signed an Authorization
of Work on February 2, 2014 for the rebuilding of the
Greens' home. Id. ¶ 11 (citing
Authorization of Work, Jt. R. 84). USAA directed Wells Fargo
Bank, N.A. to hold the funds it was providing in escrow as
the home was rebuilt. Id. ¶¶ 14-15.
12, 2014, the Greens entered into the Contract with Jenkins
to demolish and rebuild their home. The Contract included a
“Description of Work” that stated the scope of
the work Jenkins was to perform. Stip. Facts ¶ 21
(citing Description of Work, Jt. R. 95-167). The Greens
agreed to pay $581, 222.90 in installments (either personally
or from the insurance policy funds in escrow) to Jenkins.
Stip. Facts ¶¶ 15-16, 18-24. Jenkins was paid a
total of $133, 311.88 from the Greens and Wells Fargo.
Id. ¶ 29.
agreed to obtain the necessary permits. Contract § 2,
Jt. R. 86. As part of the permitting process, Prince
George's County (“County”) issued a
demolition permit, and the Health Department conducted three
percolation tests to determine whether a septic system could
be installed. Id. ¶¶ 30-33. The property
failed all three percolation tests. Id. ¶¶
33-34. The test results caused the County to deem the
property unsuitable for an on-site sewage system.
Id. ¶¶ 36-37. Following the failed tests,
the County wrote a letter informing the Greens that the
property would require public sewerage facilities before it
could issue a permit for the home to be rebuilt. Id.
¶ 37 (citing June 9, 2015 Cty. Ltr., Jt. R. 179). After
that, “Jenkins ceased attempting to obtain permits for
the construction, ” and the house was not rebuilt.
Id. ¶ 38. By that time, however, Jenkins had
incurred labor costs for the demolition (although it is not
clear whether it completed demolition), as well as costs for
a dumpster and a backhoe loader and operator; architectural
and drafting fees; estimating and consulting fees; and costs
for taxes, insurance, permits, and fees. Invoice, Jt. R. 194.
February 9, 2016, the Greens demanded repayment of the $133,
311.88 they had provided to Jenkins. Stip. Facts ¶ 38.
On February 17, 2016, Jenkins acknowledged that it was
overpaid by $12, 526.36, which it then refunded during the
pendency of this case. Id. ¶¶ 39, 43.
Jenkins also “prepared an itemized statement of the
costs it charged against the $133, 311.88 which the
Plaintiffs dispute.” Id. ¶ 41;
see Invoice, Jt. R. 194-97.
16, 2016, the Greens filed suit against Jenkins and others
for, inter alia, breach of contract and money had
and received. Compl., ECF No. 2; Am. Compl., ECF No. 29.
Following the Greens' voluntary dismissal of their claims
against the other defendants and all other claims against
Jenkins, ECF Nos. 72, 73, 80, 81, 90,  the Greens and
Jenkins filed cross-motions for summary judgment on the two
remaining claims-breach of contract (Count XI) and money had
and received (Count XII). Def.'s Mot.; Pls.' Mot.
judgment is proper when the moving party demonstrates,
through “particular parts of materials in the record,
including depositions, documents, electronically stored
information, affidavits or declarations, stipulations . . .,
admissions, interrogatory answers, or other materials,
” 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), (c)(1)(A); see
also Baldwin v. City of Greensboro, 714 F.3d 828, 833
(4th Cir. 2013). If the party seeking summary judgment
demonstrates that there is no evidence to support the
nonmoving party's case, the burden shifts to the
nonmoving party to identify evidence that shows that a
genuine dispute exists as to material facts. See
Matsushita Elec. Indus. Co. v. Zenith Radio Corp., 475
U.S. 574, 585-87 & n.10 (1986). The existence of only a
“scintilla of evidence” is not enough to defeat a
motion for summary judgment. Anderson v. Liberty Lobby,
Inc., 477 U.S. 242, 251-52 (1986). Instead, the
evidentiary materials submitted must show facts from which
the finder of fact reasonably could find for the party
opposing summary judgment. Id. A
“genuine” dispute of material fact is one where
the conflicting evidence creates “fair doubt”;
wholly speculative assertions do not create “fair
doubt.” Cox v. Cty. of Prince William, 249
F.3d 295, 299 (4th Cir. 2001); see also Miskin v. Baxter
Healthcare Corp., 107 F.Supp.2d 669, 671 (D. Md. 1999).
The substantive law governing the case determines what is
material. See Hooven-Lewis v. Caldera, 249 F.3d 259,
265 (4th Cir. 2001). A fact that is not of consequence to the
case, or is not relevant in light of the governing law, is
not material. Id.; see also Fed. R. Evid.
401 (defining relevance).
of Contract “Under Maryland law,  ‘[t]he
formation of a contract requires mutual assent (offer and
acceptance), an agreement definite in its terms, and
sufficient consideration.'” Spaulding v. Wells
Fargo Bank, N.A., 714 F.3d 769, 777 (4th Cir. 2013)
(quoting CTI/DC, Inc. v. Selective Ins. Co. of Am.,
392 F.3d 114, 123 (4th Cir.2004)). “It is axiomatic
that for a contract to be valid, both parties must mutually
assent to be bound by it.” NeighborCare Pharmacy
Servs., Inc. v. Sunrise Healthcare Ctr., Inc., No.
JFM-05-1549, 2005 WL 3481346, at *2 (D. Md. Dec. 20, 2005).
When construing an unambiguous contract, “courts focus
on the four corners of the agreement[, ] and ascribe to the
contract's language its customary, ordinary, and accepted
meaning.” Dynacorp Ltd. v. Aramtel Ltd., 56
A.3d 631, 670 (Md. Ct. Spec. App. 2012) (citations and
quotation marks omitted); see 100 Inv. Ltd. P'ship v.
Columbia Town Ctr. Title Co., 60 A.3d 1, 23 (Md. 2013).
In these circumstances, the contract's construction is
“an issue of law for resolution by the trial
judge.” Bd. of Educ. of Charles Cty. v. Plymouth
Rubber Co., 569 A.2d 1288, 1296 (Md. Ct. Spec. App.
breach of contract is “a failure without legal excuse
to perform any promise which forms the whole or part of a
contract . . . .” In re Ashby Enters., Ltd.,
250 B.R. 69, 72 (Bankr. D. Md. 2000) (quoting Conn.
Pizza, Inc. v. Bell Atl.-Wash., D.C., Inc., 193
B.R. 217, 225 (Bankr. D. Md. 1996) (quoting Weiss v.
Sheet Metal Fabricators, Inc., 110 A.2d 671, 675 (Md.
1955)) (quotation marks omitted)). Under Maryland law,
“[t]he elements of a claim for breach of contract
include ‘contractual obligation, breach, and
damages.'” Tucker v. Specialized Loan
Servicing, LLC, 83 F.Supp.3d 635, 655 (D. Md. 2015)
(quoting Kumar v. Dhanda, 17 A.3d 744, 749 (Md. Ct.
Spec. App. 2011)). “When performance is due, . . .
anything short of full performance is a breach, even if the
party who does not fully perform was not at fault and even if
the defect in his performance was not substantial.”
See Nat. Prod. Sols., LLC v. Vitaquest Int'l,
LLC, No. CCB-13-436, 2014 WL 6383482, at *4 (D. Md. Nov.
13, 2014) (citing Restatement (Second) of Contracts §
235 cmt. b (1981)).
Obligations and Impossibility
moves for summary judgment, arguing that although it had
agreed to rebuild the Greens' home, its ability to do so
became impossible through no fault of its own when the land
failed the water table and percolation tests required to
obtain a building permit and, consequently, the County did
not issue a permit. Def.'s Mem. 7-8. The Greens move for
summary judgment, arguing that Jenkins assumed the risk by
unequivocally promising to gain all required permits, or
alternatively, that rebuilding their home is not impossible
but merely more expensive. Pls.' Opp'n & Mem.
contract becomes impossible to perform due to “the
inability to obtain a necessary governmental permit to carry
out a contract” and by no fault of the alleged
breaching party, that party is excused from performing its
contractual obligations, provided that “such
interference was not foreseeable at the time of the execution
of the contract and the risk was not assumed by the
promisor.” Acme Moving & Storage Corp. v.
Bower, 306 A.2d 545, 547-48 (Md. 1973). This is an
exception to the “general rule of the common law that
when the impossibility of performance arises after the
formation of the contract, the failure of the promisor to
perform is not excused, ” which the Maryland courts
noted had “unjust consequences.” Id.
(quoting State v. Dashiell, 75 A.2d 348, 354 (Md.
1950)). The general rule “was founded on the theory
that if the promisor makes his promise unconditionally, he
takes the risk of being held liable even though performance
should become impossible by circumstances beyond his
control.” Id. (quoting Dashiell, 75
A.2d at 354). Now, under this exception, “a contractual
duty is discharged where performance is subsequently
prevented or prohibited by a judicial, executive, or
administrative order, in the absence of circumstances showing
either a contrary intention or contributing fault on the part
of the person subject to the duty.” Id.
(quoting Dashiell, 75 A.2d at 354 (citing
Wischhusen v. Am. Medicinal Spirits Co., 163 A. 685
(Md. 1933); Fast Bearing Co. v. Precision Dev. Co.,
44 A.2d 735 (Md.1945); 2 Restatement (First) of Contracts
§ 458)). But, as noted, “if the circumstances
surrounding the formation of the contract are such as to
indicate that the possibility of such interference was
recognized and the risk of its [sic] was assumed by the
promisor, ” then “an order which interferes with
the performance of the contract is not an excuse.”
Id. (quoting Dashiell, 75 A.2d at 354).
“in those cases where a regulation of an administrative
agency is already in force at the time of the formation of
the contract, the decisive question is whether or not the
promisor assumed the risk of interference by the
regulation.” Dashiell, 75 A.2d at 354. If the
contracting party “ha[s] knowledge that it was
necessary to obtain a permit, and they knew or ought to have
known that there was a possibility that there might be [an
issue] in obtaining the permit, ” then the party
“recognized and assumed the risk of getting the
permit.” Id. Notably, a party is bound by what
it promised to do in the contract and “[w]hat he
promised to do is to be found in the words he used, and in
what is reasonably implied by those words. Compliance with a
governmental requirement of which he knew, or should have
known or foreseen, is reasonably implied.” Damazo
v. Neal, 363 A.2d 252, 256 (Md. Ct. Spec. App. 1976).
Contract between the parties states that “Jenkins
Restorations shall comply with applicable building code and
with all local requirements for building permits,
inspections, and zoning. Jenkins Restorations shall obtain
the necessary permits.” Contract § 2, Jt. R. 86.
This clause is unambiguous and ...