United States District Court, D. Maryland, Southern Division
J. HAZEL, UNITED STATES DISTRICT JUDGE
case, Plaintiff Havtech seeks to recover from Defendant
Allegheny Engineering Co. (“AEC”) to recover for
an alleged breach of contract or, alternatively, in
quantum meruit and for unjust enrichment. ECF No. 2.
Pending before the Court is Defendant's Motion to
Dismiss. ECF No. 10. Plaintiff filed an Opposition, ECF No.
12, and Defendant replied, ECF No. 13. No. hearing is
necessary. See Loc. R. 105.6. For the following
reasons, Defendant's Motion to Dismiss will be denied.
is a limited liability company organized and existing under
Delaware law with its principal place of business in Howard
County, Maryland. ECF No. 2 ¶ 1. The company markets and
sells commercial heating, ventilation, and air-conditioning
(HVAC) equipment. Id. AEC is also in the business of
marketing and selling commercial HVAC equipment. ECF No. 2
¶ 2. It is a business corporation organized and existing
under Pennsylvania law and its principal place of business is
in McMurray, Pennsylvania. Id.
works with “building owners, contractors, and
mechanical engineers to select, package and configure HVAC
equipment components for project-specific applications”
at which point it will often sell the equipment package to
the purchaser. ECF No. 2 ¶ 3. Because Havtech and its
competitors have designated sales territories, sometimes
Havtech takes the first step of working with a purchaser to
market an equipment package, but will not take the second
step of making the sale because the purchaser is located
outside of Havtech's sales territory. ECF No. 2 ¶ 4.
When this situation occurs, it is known within the HVAC
equipment industry as a “split commission sale.”
ECF No. 2 ¶ 5-6. Havetech alleges that “it is
custom and practice in the HVAC equipment sales business that
when a split commission sale is made (i.e., when one
businesses has marketed a package that is sold to a purchaser
who is in another vendor's sales territory), the vendor
who gets the sale pays a designated percentage of the gross
profit to the entity who marketed the package.” ECF No.
2 ¶ 5.
and AEC are both parties to separate agreements with Daikin
Applied Americas, Inc. (Daikin), an HVAC equipment
manufacturer. ECF No. 2 ¶ 5, 7. Under these agreements,
Havtech and AEC are authorized to sell Daikin equipment to
purchasers in their designated sales territory. Id.
Specifically, AEC is authorized to sell Daikin equipment to
purchasers in Western Maryland. ECF No. 2 ¶ 7.
and AEC follow the industry's practice when they are
parties to a split commission sale; if Havtech markets a
package that AEC sells in its sales territory, AEC pays a
percentage of the sale's gross profits to Havtech, and
vice versa. ECF No. 2 ¶ 8. However, after AEC made two
recent split commission sales of Daikin equipment that
Havtech had marketed, it failed to pay Havtech. ECF No. 2
¶ 9-15. First, Havtech marketed Daikin equipment to a
purchaser working a construction project in AEC's sales
territory of Western Maryland known as Alleghany High School
Replacement. ECF No. 2 ¶ 10. AEC ultimately sold the
Daikin equipment package to the Western Maryland based
purchaser. Id. Based upon industry custom, the
parties' prior course of dealing, and an explicit
understanding, AEC was to pay Havtech $128, 412.00 for
Havtech's marketing efforts on the Alleghany High School
Replacement project. ECF No. 2 ¶ 11. According to the
Complaint, “AEC has acknowledged that it owes Havtech
the $128, 412.00, but it has not made payment, which is now
past due and owing.” ECF No. 2 ¶ 12.
marketing efforts also resulted in a split commission sale of
Daikin equipment by AEC in Western Maryland for a project
known as Hancock Middle/High School HVAC Replacement. ECF No.
2 ¶ 13. For this split commission sale, AEC was to pay
Havtech $154, 844.00. ECF No. 2 ¶ 14. AEC has allegedly
acknowledged that it owes Havtech this commission but has not
paid it despite it being “now past due and
owing.” ECF No. 2 ¶ 15.
STANDARD OF REVIEW
has moved to dismiss Plaintiff's Complaint on the ground
that it fails to state a claim upon which relief can be
granted. When deciding a motion to dismiss, a court
“must accept as true all of the factual allegations
contained in the complaint, ” and “draw all
reasonable inferences in favor of the plaintiff.”
E.I. du Pont de Nemours & Co. v. Kolon Indus.,
Inc., 637 F.3d 435. 440 (4th Cir. 2011) (citations and
internal quotation marks omitted). Pursuant to Rule 8(a)(2)
of the Federal Rules of Civil Procedure, a complaint must
contain a “short and plain statement of the claim
showing that the pleader is entitled to relief.”
Fed.R.Civ.P. 8(a)(2). But to survive a motion to dismiss
invoking Federal Rule of Civil Procedure 12(b)(6), “a
complaint must contain sufficient factual matter, accepted as
true, ‘to state a claim to relief that is plausible on
its face.'” Ashcroft v. Iqbal, 556 U.S.
662. 678 (2009) (citing Bell Atl. Corp. v. Twombly,
550 U.S. 544. 570 (2007)). The factual allegations must be
more than “labels and conclusion . . . Factual
allegations must be enough to raise a right to relief above
the speculative level.” Twombly, 550 U.S. at
555. A complaint will not survive Rule 12(b)(6) review where
it contains “naked assertion[s]” devoid of
“further factual enhancement.” Id. at
557. “A claim has facial plausibility when the
plaintiff pleads factual content that allows the court to
draw the reasonable inference that the defendant is liable
for the misconduct alleged.” Iqbal, 556 U.S.
at 663. “But where the well-pleaded facts do not permit
the court to infer more than the mere possibility of
misconduct, the complaint has alleged-but it has not
‘show[n]'-‘that the pleader is entitled to
relief.'” See Id. at 679 (citing Fed. Rule
Civ. Proc. 8(a)(2)).
Breach of Contract (Count I)
survive a motion to dismiss a breach of contract claim under
Maryland law, a plaintiff must allege facts showing that the
defendant materially breached a contractual obligation owed
to the plaintiff. See Taylor v. NationsBank, N.A.,
365 Md. 166, 175 (2001). A contractual obligation may exist
under an implied-in fact contract-an agreement that exists
based “on some act or conduct of the party sought to be
charged and arising by implication from circumstances which,
according to common understanding, show a mutual intention on
the part of the parties to contract with each other.”
Mogavero v. Silverstein, 142 Md.App. 259, 277 (2002)
(internal citations omitted). “A true implied contract,
or contract implied in fact, does not describe a legal
relationship which differs from an express contract: only the
mode of proof is different.” Id. Thus, a
plaintiff's breach of contract claim can survive a motion
to dismiss if the Complaint properly alleges that an
agreement can be inferred from the circumstances.
Id. An allegation indicative of an implied-in-fact
contract includes that services were rendered “to
indicate that the person rendering them expected to be paid
therefor, and that the recipient expected, or should have
expected, to pay for them.” Id. A plaintiff
must also allege details about the “intentions of the
parties as evidenced by the circumstances and the ordinary
course of dealing and the common understanding of men”
from which an agreement can legitimately be inferred.
Thomas v. Capital Med. Mgmt. Assocs., LLC, 189
Md.App. 439, 459 (2009).
Plaintiff has sufficiently alleged that an implied-in-fact
contract exists between the parties and that Defendant
materially breached its contractual obligations.
Specifically, Plaintiff alleges that in the parties'
ordinary course of dealing, when a split commission sale is
made- where one business has marketed an equipment package
that is ultimately sold to a purchaser outside the
company's sales territory-the vendor who makes the sale
pays the company a commission for its marketing services. ECF
No. 2 ¶ 5. From these circumstances, the Court can infer
that the parties intended to agree to pay a percentage of
their profits to each other when a split sale commission
occurs. As alleged, however, Defendant failed to pay
Plaintiff this commission in two specific instances,
id. ¶¶ 9-15, where Plaintiff had rendered
marketing services expecting to be paid and knowing that
Defendant “expected, or should have expected to pay
for” the services. 142 Md.App. at 277. According to the
Complaint, Defendant expected or should have ...