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VETcorp, Inc. v. Mid-Atlantic Salt, LLC

United States District Court, D. Maryland

May 29, 2018

VETcorp, Inc.
v.
Mid-Atlantic Salt, LLC

          MEMORANDUM

          CATHERINE C. BLAKE, UNITED STATES DISTRICT JUDGE

         The plaintiff, VETcorp, Inc. (VET), has sued the defendant Mid-Atlantic Salt, LLC (MAS), for breaching two subcontracts by failing to supply road salt as required under the agreements.[1] In response, MAS has filed a motion for summary judgment as to all counts, and partial summary judgment to limit the scope of damages if VET were to succeed on its claims. MAS also has counter-sued VET for unpaid invoices. For the reasons stated below, MAS's motion will be denied in part and granted in part.

         Background

         For five years, from 2008 to 2013, VET and MAS dealt in road salt-VET as buyer and MAS as seller-without incident. (ECF No. 68, “Def.'s Mot., ” Wick Decl., Benoit Dep. p. 29). But their business together was relatively minor, totaling around $1.2 million over five years. (Id. at p. 30). That changed in the fall of 2013 when VET entered a bid to supply Montgomery County with road salt for the upcoming winter.[2] (Id. at Knutsen Dep., Ex. 1). To prepare its bid, VET asked MAS to provide a price quote for supplying the Montgomery County contract. (Def.'s Mot., Stein Decl., Ex. 1). And MAS did, telling VET that it could supply the contract, “which could approximate 100, 000 tons” of salt, with a price per ton of $53.50. (Id. at Ex. 3). MAS added, “[i]f you win the bid, [we] will follow with a formal written quote as we typically do for Vet Corp.” (Id.).

         VET submitted a bid to Montgomery County, offering a delivery price of $56.18 per ton of salt, (Def.'s Mot., Wick Decl., Knutsen Dep. Ex. 1 at E-2), the second-lowest bid the County received, (Stein Decl. Ex. 4). Although losing out on the primary contract, VET became a secondary supplier, and the company informed MAS that it would be called on only if the primary contractor could not perform. (Stein Decl., Ex. 5). The companies prepared delivery terms anyway, though they were unable to reach an agreement. (See Id. at ¶ 9, Ex. 6). And MAS never provided the formal quote it said it would if VET won the County's contract.

         Also in the fall of 2013, VET contacted MAS with a second business inquiry. VET had been awarded a contract from the U.S. Department of the Interior, National Park Service, by using a price quote from one of MAS's competitors, and VET wanted to know if MAS would match its competitor's bid. MAS was provided with its competitor's “quote sheet, ” which included delivery prices and an estimated total tonnage of 5, 350. (Id. at Ex. 7). MAS agreed to match the price quote. Other terms, such as the manner of delivery and payment, were left unstated. (Wick Decl., Benoit Dep., at pp. 110-11). Eventually, MAS submitted quote sheets for several of the delivery locations on the competitor's quote that VET signed and returned. (Stein Decl. at ¶ 19, Ex. 17).

         Then a severe Mid-Atlantic winter arrived and significantly burdened MAS's salt supply. (Id. at ¶ 12). VET submitted three orders for salt to MAS over December 2013 and January 2014 under its contract with Montgomery County, specifying the $53.50 per ton price MAS quoted, each of which was filled by MAS. (Id. at ¶ 16). VET also submitted around a dozen orders under the NPS contract during the same period, which MAS also filled for the price quoted to VET. (Pl.'s Opp., ECF No. 70, Benoit Decl. at ¶ 28).

         On February 3, 2014, however, MAS contacted its business partners, including VET, to let them know that its supply of salt in Baltimore was depleted, but it was expecting a new shipment of salt around February 21st. (Def.'s Mot., Stein Decl. at ¶ 12). The shipment did not arrive until March 6th. (Id. at ¶ 15). As a result, several of VET's orders under both the Montgomery County and NPS contracts were left unfilled. (Id. at Ex. 14; Pl.'s Opp., Benoit Decl. at ¶¶ 19, 29). Although NPS cancelled its pending orders with VET, and VET then cancelled all its pending NPS contract orders with MAS, [3] (Pl.'s Opp., Benoit Decl. at ¶ 30), VET still sought to fill its orders under the Montgomery County contract, (Def.'s Mot., Stein Decl. at ¶ 17, Ex. 15). The orders were never filled. After MAS received salt in March, it attempted to raise the price per ton of salt, arguing that the quote VET received for the Montgomery County contract was not binding because the parties never formalized it. (Id. at ¶ 18, Ex. 16). The parties were unable to resolve their dispute over pricing, and, sometime later, VET and Montgomery County mutually terminated their contract. (Def.'s Mot, Wick Decl., Knutsen Dep. at pp. 50-53). VET was not sued by either Montgomery County or NPS. (Def.'s Mot. Wick Decl., Benoit Dep. at pp. 144-47). After the winter season, it is undisputed that VET began withholding outstanding payments owed to MAS amounting to $95, 984.50. (Id. at pp. 181-82).

         VET brought suit in state court alleging breach of the parties' agreements under both the Montgomery County and NPS contracts. (ECF No. 2). The case was removed to federal court in December 2014. (ECF No. 1). After VET amended its complaint, (ECF No. 24), MAS filed a counterclaim against VET for unpaid invoices, (ECF No. 36). MAS now moves for summary judgment on all of VET's claims, and its counterclaim, and partial summary judgment as to the scope of damages. (ECF No. 68).

         Standard of Review

         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 nonmoving 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, 477 U.S. at 247-48. The court must view the evidence in the light most favorable to the nonmoving 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. Balt. 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)).

         Analysis

         MAS argues that summary judgment should be granted in its favor because: (1) the parties never entered into a contract under either the Montgomery County or the NPS bid; and (2) it is undisputed that VET has withheld payment owed to MAS. MAS's motion will be granted in part and denied in part. VET will be ordered to pay MAS the money it has been withholding. But because the existence of the contracts between the parties is materially disputed, summary judgment on these claims will be denied.

         I. Breach of Contract

         Among other elements, a valid contract is formed by an offer and acceptance and consideration. Acceptance is demonstrated by “an actual meeting of the minds regarding contract formation.” Cochran v. Norkunas, 919 A.2d 700, 713 (Md. 2007). “Acceptance may be manifested by acts as well as by words.” Id. And an offer is any communication that a party intends, if accepted, “to create an enforceable arrangement.” Audio Visual Associates, Inc. v. Sharp Electronics Corp., 210 F.3d 254, 259 (4th Cir. 2000) (applying Maryland law).

         A. Montgomery County

         MAS provides three reasons for why the parties here never entered a contract as to the Montgomery County bid: (1) MAS never issued a quote, so there could be no offer; (2) even if MAS did issue a quote, the quote does not constitute an offer; and (3) even if MAS issued a quote and the quote constitutes an offer, the contract lacked consideration. Because there is at least a genuine ...


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