United States District Court, D. Maryland
WEBB MASON, INC. Plaintiff,
VIDEO PLUS PRINT SOLUTIONS, INC., Defendant.
L. Hollander United States District Judge
breach of contract litigation, plaintiff Webb Mason, Inc.
(“Webb Mason”) has filed suit against Video Plus
Print Solutions, Inc. (“VPP”), alleging that VPP
accepted business from a customer of Webb Mason, in violation
of the “non-interference” clause of their
contract. See ECF 1 (“Complaint”),
¶¶ 3-6. VPP has moved to dismiss the Complaint or,
in the alternative, for summary judgment. See ECF
12. The motion is supported by a memorandum of law (ECF 12-1)
(collectively, the “Motion”) and exhibits. ECF
12-2 through 12-4. Webb Mason opposes the motion. ECF 17
(“Opposition”). VPP has replied. ECF 18
hearing is necessary to resolve the Motion. See
Local Rule 105.6. For the reasons that follow, I shall
construe the Motion under Rule 12(b)(6), and I shall deny the
Mason is an “integrated marketing solutions and
services provider engaged in the business of helping their
[sic] clients execute their marketing strategies.” ECF
1, ¶ 1. Among other things, Webb Mason helps clients
“design and produc[e] marketing and promotional
materials with the assistance of [its] preferred
vendors.” Id. ¶ 1. These “preferred
vendors” comprise a “Preferred Partner Network,
” which “consists of businesses that Webb Mason
identified as world-class suppliers that can provide Webb
Mason's customers with superior products at a cost
effective price.” Id. ¶ 1, 13. Suppliers
in the network gain access to Webb Mason sales executives,
who in turn offer the suppliers business opportunities with
Webb Mason's clients. Id. ¶ 14.
a Canadian corporation with its principal place of business
in Ontario, Canada. Id. ¶ 8. It “is a
video marketing device manufacturer, which sells a variety of
marketing devices, including video mailers.”
Id. ¶ 2. Video mailers are “marketing
mailers with a built-in screen that plays a prerecorded video
message.” Id. ¶ 19. On January 8, 2015,
VPP became a member of Webb Mason's Preferred Partner
Network by signing plaintiff's Preferred Partner
Agreement (“PPA” or “Agreement”).
Id. ¶ 18. A copy of the PPA is attached as an
exhibit to the Complaint. See ECF 1-1.
connection with joining Webb Mason's network, VPP agreed
to certain “minimum program requirements, ”
including a “non-interference requirement.” ECF
1, ¶ 15; see ECF 1-1 at 11. In relevant part,
the non-interference requirement of the PPA provides, ECF 1-1
[B]eginning on the date of the Contractor's most recent
receipt of Customer Information from the Company on a
specific Customer and for two (2) years thereafter,
Contractor (and its affiliates) shall not without the prior
written consent of the Company, (i) directly or indirectly
solicit, or accept the business of the Customer or induce the
Customer to cease doing business with the Company or
otherwise interfere with the Company's relationship with
the Customer or: (ii) use Customer information to solicit or
accept the business of, or otherwise interfere with, the
Company's relationship with any Excluded Customer.
in the Agreement, Webb Mason highlights its “policy to
prohibit suppliers in the Preferred Partner Network from
selling same or related products directly to
[plaintiff's] customers as identified through
confidential communications, request for quotation or actual
work product.” ECF 1-1 at 6. Webb Mason alleges that the
parties “have had numerous conversations about
VPP's non-interference obligations . . . and have
discussed prospective business activities that would have
infringed the non-interference clause” in the PPA.
Id. ¶ 26. CoStar, a commercial real estate
information company, is one of Webb Mason's
“long-standing customer[s].” Id. Webb
Mason alleges that VPP produced materials for CoStar, giving
rise to the breach of contract claim here. Id. at
particular, in January 2017 CoStar “began soliciting
bids for a marketing campaign” that required
“production of a video mailer.” ECF 1, ¶ 19.
The campaign was to be developed by CoStar for
Apartments.com. Id. On January 19, 2017, Webb Mason
requested a quote from VPP as to the development of the video
mailers requested by CoStar. Id. ¶ 20. At the
same time, Webb Mason communicated customer information about
CoStar to VPP, “including the logistics for the
Apartments.com marketing campaign project.”
January 22, 2017, VPP provided plaintiff with estimates for
pricing, “potential upgrade costs, shipping costs for
the devices, and a seven week production schedule.”
Id. ¶¶ 22-23. On that same date, Webb
Mason submitted its bid to CoStar, using VPP's estimates.
Mason did not win the bid for the project. Id.
¶ 24. However, VPP “worked directly with CoStar on
the video mailers project.” Id. ¶ 25.
According to Webb Mason, VPP negotiated pricing for CoStar
and received payment directly from CoStar, despite knowing
“that a portion of the project was for CoStar's
Apartments.com marketing campaign.” Id. Webb
Mason asserts: “Not only did VPP accept business from
CoStar, in direct violation of the noninterference clause of
the Preferred Partner Agreement, [but] VPP sold video mailers
to CoStar for the exact project that Webb Mason told VPP
about . . . .” Id. ¶ 27. Webb Mason
contends that this activity “caused Webb Mason to lose
its bid for CoStar's Apartments.com project.”
Id. at 40.
Motion, VPP asserts that it submitted a quotation to Jack
Nadel International (“JNI”), a company not a
party to this litigation, for a project unknown to them that
turned out to be the same Apartments.com project. ECF 12-1 at
4. But, Webb Mason does not mention JNI or any other third
party in the Complaint.
VPP outlines its version of the facts in its Motion
(see ECF 12-1 at 2-5), and it may ultimately prove
those facts, those facts are not pertinent at this stage of
the litigation. To the contrary, as discussed,
infra, I must consider only the facts alleged in the
Standard of Review
noted, VPP has moved to dismiss or, in the alternative, for
summary judgment. ECF 12. A motion styled in the alternative,
either to dismiss or for summary judgment, implicates the
court's discretion under Rule 12(d) of the Federal Rules
of Civil Procedure. See Kensington Vol. Fire Dept., Inc.
v. Montgomery Cty., 788 F.Supp.2d 431, 436-37 (D. Md.
a court “is not to consider matters outside the
pleadings or resolve factual disputes when ruling on a motion
to dismiss.” Bosiger v. U.S. Airways, 510 F.3d
442, 450 (4th Cir. 2007). However, under Rule 12(b)(6), a
court, in its discretion, may consider matters outside of the
pleadings, pursuant to Rule 12(d). If the court does so,
typically “the motion must be treated as one for
summary judgment under Rule 56, ” and “[a]ll
parties must be given a reasonable opportunity to present all
the material that is pertinent to the motion.”
Fed.R.Civ.P. 12(d). But when, as here, the movant expressly
captions its motion “in the alternative, ” as one
for summary judgment, and submits matters outside the
pleadings for the court's consideration, the parties are
deemed to be on notice that conversion under Rule 12(d) may
occur. At that point, the court “does not have an
obligation to notify parties of the obvious.”
Laughlin v. Metro. Wash. Airports Auth., 149 F.3d
253, 261 (4th Cir. 1998).
district judge has “complete discretion to determine
whether or not to accept the submission of any material
beyond the pleadings that is offered in conjunction with a
Rule 12(b)(6) motion and rely on it, thereby converting the
motion, or to reject it or simply not consider it.” 5C
Alan Wright & Arthur Miller, et al., Federal
Practice & Procedure § 1366 (3d ed). This discretion
“should be exercised with great caution and attention
to the parties' procedural rights.” Id. at
149. In general, courts are guided by whether consideration
of extraneous material “is likely to facilitate the
disposition of the action, ” and “whether
discovery prior to the utilization of the summary judgment
procedure” is necessary. Id. at 165-67.
judgment is generally inappropriate “where the parties
have not had an opportunity for reasonable discovery.”
E.I. du Pont de Nemours & Co. v. Kolon Indus.,
Inc., 637 F.3d 435, 448-49 (4th Cir. 2011); see
Putney v. Likin, 656 Fed.Appx. 632, 638-640 (4th Cir.
2016) (per curiam); McCray v. Maryland Dep't of
Transp., 741 F.3d 480, 483 (4th Cir. 2014)
(“McCray”). However, “the party
opposing summary judgment ‘cannot complain that summary
judgment was granted without discovery unless that party has
made an attempt to oppose the motion on the grounds that more
time was needed for discovery.'” Harrods Ltd.
v. Sixty Internet Domain Names, 302 F.3d 214, 244 (4th
Cir. 2002) (hereinafter, “Harrods”)
(quoting Evans v. Tech's. Applications & Serv.
Co., 80 F.3d 954, 961 (4th Cir. 1996)); see also
Dave & Buster's, Inc. v. White Flint Mall,
LLLP, 616 Fed.Appx. 552, 561 (4th Cir. 2015).
raise adequately the issue that discovery is needed, the
nonmovant must file an affidavit or declaration pursuant to
Rule 56(d) (formerly Rule 56(f)), explaining why, “for
specified reasons, it cannot present facts essential to
justify its opposition, ” without needed discovery.
Fed.R.Civ.P. 56(d); see Harrods, 302 F.3d at 244-45
(discussing the affidavit requirement of former Rule 56(f)).
A nonmoving party's Rule 56(d) request for additional
discovery is properly denied “where the additional
evidence sought for discovery would not have by itself
created a genuine issue of material fact sufficient to defeat
summary judgment.” Strag v. Bd. of Trs., Craven
Cmty. Coll., 55 F.3d 943, 954 (4th Cir. 1995); see
Amirmokri v. Abraham, 437 F.Supp.2d 414, 420 (D. Md.
2006), aff'd, 266 Fed.Appx. 274 (4th Cir. 2008),
cert. denied, 555 U.S. 885 (2008).
nonmoving party that believes that further discovery is
necessary before consideration of summary judgment, but that
fails to file a Rule 56(d) affidavit, does so at its peril,
because “‘the failure to file an affidavit . . .
is itself sufficient grounds to reject a claim that the
opportunity for discovery was inadequate.'”
Harrods, 302 F.3d at 244 (quoting Evans, 80
F.3d at 961); see also Dave & Buster's,
Inc., 616 Fed.Appx. at 561. But, the nonmoving
party's failure to file a Rule 56(d) affidavit does not
obligate a court to issue a summary judgment ruling that is
the Fourth Circuit has placed “‘great
weight'” on the Rule 56(d) affidavit, and has said
that a mere “‘reference to Rule 56(f) [now Rule
56(d)] and the need for additional discovery in a memorandum
of law in opposition to a motion for summary judgment is not
an adequate substitute for [an] affidavit, '” the
appellate court has “not always insisted” on a
Rule 56(d) affidavit. Harrods, 302 F.3d at 244
(quoting Evans, 80 F.3d at 961). Indeed, the failure
to file an affidavit may be excused “if the nonmoving
party has adequately informed the district court that the
motion is pre-mature [sic] and that more discovery is
necessary, ” or when the “nonmoving party's
objections before the district court ‘served as the
functional equivalent of an affidavit, '” and if
the nonmoving party “was not lax in pursuing
discovery.” Harrods, 302 F.3d at 244-45
(quoting First Chicago Int'l v. United Exchange Co.,
LTD, 836 F.2d 1375, 1380-81 (D.C. Cir. 1988)).
Mason did not file an affidavit or declaration under
Fed.R.Civ.P. 56(d). But, it has indicated that it believes
summary judgment is premature, as reflected in its opening
protest: “VPP seeks to require Webb Mason to
‘try' its case in the Complaint.” ECF 17 at
2. Moreover, Webb Mason points out that “[i]t is
inappropriate to convert a motion to dismiss to a motion for
summary judgment at an early stage of the litigation when
parties have not had an opportunity to conduct reasonable
discovery.” Id. at 6. Further, it highlights
that Rule 8 “‘defers until after discovery any
challenge to [the complaint's] claims insofar as they
rely on facts'” and that “the Court
‘must account for the possibility that a noticed claim
would become legally sufficient if the necessary facts were
to be developed during discovery.'” Id.
(citing Teachers' Retirement Systems of Louisiana v.
Hunter, 477 F.3d 162, 170 (4th Cir. 2007)).
view, plaintiff is entitled to conduct reasonably discovery.
As the Fourth Circuit stated in McCray, 741 F.3d at
483: “Summary judgment before discovery forces the
non-moving party into a fencing match without a sword or
mask.” A party “needs an ‘adequate
opportunity' to present its case and ‘demonstrate a
genuine issue of material fact.'” Adams
Housing, LLC v. City of Salisbury, Md., 672 Fed.Appx.
220, 222 (4th Cir. 2016) (per curiam) (quoting U.S. Dev.
Corp. v. Peoples Fed. Sav. & Loan Ass'n, 873
F.2d 731, 735 (4th Cir. 1989)).
I decline to convert the Motion to one for summary judgment.
Instead, I shall construe it as a ...