TBC, Inc. v. DEI Holdings, Inc. et al
MEMORANDUM. Signed by Chief Judge Catherine C. Blake on 9/18/2017. (jnls, Deputy Clerk)
IN THE UNITED STATES DISTRICT COURT
FOR THE DISTRICT OF MARYLAND
DEI SALES, INC.
Civil No. CCB-14-3644
Plaintiff TBC, Inc. (“TBC”) has sued defendant DEI Sales, Inc. (“DEI”) for failure to
compensate TBC adequately for its work.
Now pending are DEI’s motion for summary
judgment (ECF No. 104), TBC’s motion for leave to file a surreply to DEI’s motion for summary
judgment (ECF No. 113), DEI’s motion for other relief for contempt of ECF No. 97 (ECF No.
103), and TBC’s motion for leave to file a surreply to DEI’s motion for other relief for contempt
of ECF No. 97 (ECF No. 112). The motions have been fully briefed, and no hearing is necessary
to their resolution. See Local Rule 105.6.1 For the reasons discussed below, DEI’s motion for
summary judgment will be denied, DEI’s motion for other relief for contempt of ECF No. 97
will be granted, and TBC’s motions for leave to file surreplies will be denied.
TBC describes itself as an advertising and public relations agency. (Compl., ECF No. 2,
¶ 16.) DEI, a former client of TBC, is the surviving entity of a merger between DEI and Polk
Audio, Inc. (“Polk Audio”) in February 2014. (Mot. Summary Judgment Ex. 2, ECF No. 104-4
(Articles of Merger).) At all times relevant to the complaint, Polk Audio and DEI sold consumer
audio equipment, including headphones and speakers. (See Compl. ¶ 20.) DEI Holdings, Inc.
Accordingly, TBC’s requests for hearings (ECF Nos. 105-14 and 107-44) are denied.
(“DEI Holdings”), a former defendant in this action, was the parent company of both Polk Audio
and DEI. (See id. ¶ 2.)
In 2011, Polk Audio hired TBC to “carry[ ] out [its] advertising and integrated marketing
communications programs for it’s [sic] sports headphone product line.”
Judgment Ex. 1 (“2011 Contract”), ECF No. 104-3, § 1.) For those services, the parties agreed
that Polk Audio would pay TBC a monthly fee of $12,500, based on 83 agency hours per month
at a discounted, “blended” rate of $150.2 (2011 Contract, Addendum II, § I.A.) The 2011
Contract also provides for commissions, reimbursement, and payment of certain other costs by
Polk Audio. (2011 Contract, Addendum II.) For work outside the scope of services defined in
the contract—i.e., “work related to Polk Audio, Inc.’s headphone product line(s),” (2011
Contract, Addendum I)—the parties agreed that the compensation and reimbursement schedule
set out in Addendum II would not apply, (2011 Contract § III & Addendum II § I.D). Rather,
such services would be billed in accordance with their “mutual agreement.” (Id.)
In 2012, DEI contracted with TBC to promote its Active Sound Bar product and to
provide social media services. (Mot. Summary Judgment Ex. 3 (“2012 Contract”), ECF No.
104-5, Addendum I.) Like the 2011 Contract, the 2012 Contract states that out-of-scope work is
not covered by the agreement’s compensation and reimbursement schedule, and it provides that
such work will be billed in accordance with the parties’ “mutual agreement.” (2012 Contract §
III & Addenda I, II.) According to TBC, it was fully compensated for work performed pursuant
to the 2012 Contract, including out-of-scope work. (See Compl. ¶ 27.) Thus, the terms of the
2012 Contract are not at issue in this action.
According to the complaint, “[the] blended hourly rate is the average of the various hourly rates of the TBC
employees who performed most of the services and work under the [2011 Contract].” (Compl. ¶ 23.)
In 2013, Polk Audio engaged TBC to provide services related to a marketing campaign
for the Heritage Collection, a new line of personal audio equipment.
(See Opp. to Mot.
Summary Judgment Ex. 9 (“Burch Dep.”), ECF No. 107-14, at 62; id. Ex. 6 (“Tripodi Dep.”),
ECF No. 107-10, at 254.) The parties did not enter into a separate written contract, but they
agreed to at least some of the terms expressed in the 2011 Contract, including the payment of a
$12,500 monthly fee. (See Burch Dep. at 65-66, 300-01; Mot. Summary Judgment Ex. 4
(“Tripodi Aff.”), ECF No. 104-6, ¶ 10.) TBC provided services under those terms from January
1, 2013 through March 31, 2014. (See Tripodi Aff. ¶ 4.) During that period, TBC received the
$12,500 fee each month, in addition to other payments. (See id. ¶ 9; Mot. Summary Judgment
Ex. 6, ECF No. 104-8 (list of payments to TBC).)
On or around June 19, 2013, TBC’s Executive Vice President and Managing Director,
Howe Burch, attended a dinner meeting with the chairman and CEO of DEI Holdings and DEI,
James E. Minarik, DEI Holding’s Chief Marketing Officer, Blair Tripodi, and DEI Holding’s
Chief Design Officer, Michael DiTullo, at a Baltimore restaurant. (See Burch Dep. at 144-45.)
One of the topics discussed at dinner was the number of hours worked by TBC since January 1,
2013, which far exceeded the baseline of 83 hours per month (“additional hours”). (See id. at
145-48.) Mr. Burch explained that TBC was “getting killed on the hours” and could not continue
to work under those circumstances. (Id. at 145, 147.) According to Mr. Burch, he was assured
that TBC would be “made whole.” (Id. at 147-48.)
On June 21, 2013, Mr. Burch sent Mr. Tripodi an e-mail (“June 21st e-mail”) discussing
the additional hours, including an attached “TBC Manpower report” showing that TBC’s hours
for Polk Audio exceeded the baseline of 83 hours per month by 1,460 hours during the period of
January 1, 2013 to June 14, 2013. (See Mot. Summary Judgment Ex. 7, ECF No. 104-9; see also
Burch Dep. at 150-54.) Mr. Tripodi received and reviewed, but did not respond to, the June 21st
e-mail. (See Tripodi Aff. ¶¶ 17-19; Burch Dep. at 153-54.)
Allan Charles, TBC’s Chairman and Chief Creative Officer, spoke with Mr. Tripodi
regarding the additional hours on at least two occasions after the June 21st e-mail. (See Opp. to
Mot. Summary Judgment Ex. 10 (“Charles Dep”), ECF No. 107-15, at 120-21 (discussing
meetings on August 16, 2013, and September 22, 2013); see also Burch Dep. at 99, 154-55, 175,
183 (explaining that Mr. Charles met with Mr. Tripodi multiple times to discuss the additional
hours and to follow up on the June 21st e-mail).) According to Mr. Charles, Mr. Tripodi
promised to pay for the additional hours, stating that he was a “fair guy” and would “make
[TBC] whole.” (Charles Dep. at 121.)
Mr. Tripodi continued to request, and TBC continued to perform, work until January 28,
2014, when Mr. Tripodi informed Mr. Burch that Polk Audio and DEI were terminating their
contracts with TBC. (See Burch Dep. at 300; Tripodi Dep. at 122-23; Tripodi Aff. ¶¶ 4, 31.) On
January 30, 2014, Mr. Tripodi confirmed the termination by letter.
(See Mot. Summary
Judgment Ex. 14, ECF No. 104-16; Tripodi Aff. ¶ 32.) On February 7, 2014, TBC submitted an
invoice (“February 7th invoice”) for “3,261.50 actual work hours in 2013 in excess of the
original budgeted 996 work hours in 2013.” (See Mot. Summary Judgment Ex. 15, ECF No.
104-17, at 1.) The invoice listed the amount due for the 2013 calendar year as $489,225.00.
(Id.) Through a letter from counsel, Polk Audio and DEI rejected the invoice on February 28,
2014. (See Mot. Summary Judgment Ex. 16, ECF No. 104-18.)
In September 2014, TBC filed a complaint in Maryland court, naming DEI Holdings,
DEI, Polk Audio, Polk Audio, LLC, Boom Movement, LLC, Definitive Technology, LLC, and
Sound United, LLC as defendants. (See Compl.) The complaint alleged counts of intentional
misrepresentation, concealment, breach of fiduciary duty, negligent misrepresentation,
constructive fraud, breach of contract, breach of the covenant of good faith and fair dealing,
unjust enrichment, and conversion. (Id. ¶¶ 106-267.) The defendants removed the case to this
court, asserting diversity jurisdiction. (See Notice of Removal, ECF No. 1.) In March 2015, the
court dismissed all claims except for TBC’s breach of contract and unjust enrichment claims
against DEI. (Mem. & Order of March 24, 2015, ECF Nos. 30-31.) These motions followed.
DEI’s Motion for Summary Judgment
DEI has moved for summary judgment as to TBC’s breach of contract and unjust
enrichment claims.3 The court considers each below.
A. Legal Standard
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 non-moving 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
As noted in the court’s previous opinion, the court will construe TBC’s claim for “quantum meruit” as one for
unjust enrichment. (See Mem. of March 24, 2015, at 10 n.5.)
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)).
B. Breach of Contract
To prevail on a breach of contract claim under Maryland law, “a plaintiff must prove that
the defendant owed the plaintiff a contractual obligation and that the defendant breached that
obligation.” Int’l Waste Indus. Corp. v. Cape Envtl. Mgmt., Inc., 988 F. Supp. 2d 542, 550 (D.
Md. 2013) (quoting Taylor v. NationsBank, N.A., 776 A.2d 645, 651 (Md. 2001)). TBC alleges
that DEI breached the 2011 Contract. (See Compl. ¶¶ 248-249 (alleging breach of the “Polk
Contract” and resulting damages); ¶ 22 (defining “Polk Contract” as the contract executed by
Polk Audio and TBC on March 1, 2011).) Thus, the court must determine whether Polk Audio
had an obligation under the 2011 Contract, either as written or as subsequently modified, to pay
TBC for additional hours worked in 2013.4
The parties entered into the 2011 Contract on March 1, 2011, and it remained in effect
As DEI notes, TBC does not always clearly distinguish between a modification of the 2011 Contract and the
formation of a new contract between the parties in 2013. (See Opp. to Mot. Summary Judgment at 9 (referring to
“2013 Contract/Agreement”).) Because the breach of contract claim in TBC’s complaint relates solely to the 2011
Contract, (see Compl. ¶¶ 248-49), the court will not consider arguments that rely on the existence of a separate
operative agreement, see Bell Atlantic Corp. v. Twombly, 550 U.S. 544, 563 (2007) (claim must be supported by
facts consistent with the allegations in the complaint).
until March 31, 2014. (See Mot. Summary Judgment Ex. 14 (letter dated January 30, 2014,
notifying TBC that the 2011 and 2012 Contracts would terminate in 60 days).) Section II of the
2011 Contract provides that TBC “will perform the services described in the Scope of Services
Schedule attached . . . as Addendum I.” (2011 Contract § II.) Addendum I specifies that “[t]his
Scope of Services covers work related to Polk Audio, Inc.’s headphone product line(s).” (2011
Contract, Addendum I.) “Work related to other products and/or services are [sic] outside of this
Scope of Services and if desired, supplemental Agreements will be provided.” (Id.)
Addendum II sets out the agency compensation and reimbursement schedule. (2011
Contract, Addendum II.)
The parties agreed that TBC would receive, among other
compensation, “a monthly fee of $12,500 for the services listed in Addendum I,” to be billed and
paid on a monthly basis. (2011 Contract, Addendum II § I.A-D.) For work outside of the scope
of services, the contract provides that TBC’s services “must be approved in advance and in
writing by Client, are not included in the fees described in [Addendum II], and will be billed by
Agency to Client in accordance with the mutual agreement of the parties.” (2011 Contract § III.)
Addendum II contains a similar provision. (2011 Contract, Addendum II § I.D (“As specified in
Section III of this Agreement, work that is outside the Scope of Services Schedule (Addendum I)
is not covered by the Compensation and Commissions noted above and will be estimated,
approved and billed separately, in accordance with the parties’ mutual agreement.”).)
As these provisions show, the 2011 Contract’s billing and payment provisions apply only
to work within the scope of services. (See 2011 Contract § III & Addendum II § I.A-D.) In this
action, however, TBC seeks recovery exclusively for out-of-scope work.5 (Compl. ¶¶ 43-45; see
Viewing the facts in the light most favorable to TBC, the evidence shows that out-of-scope work—specifically,
TBC’s work on the Heritage Campaign—constituted all or nearly all of its work for Polk Audio in 2013. (See Burch
Opp. to Mot. Summary Judgment, ECF No. 107, at 9-10.) Accordingly, any obligation for DEI
to pay the February 7th invoice must arise from a modified version of the 2011 Contract, rather
than the original written agreement.
DEI contends, as an initial matter, that the parties could not have modified the 2011
Contract because it contains both a non-modification clause and a non-waiver clause.6 The
relevant provisions read:
This is the entire agreement between the parties relating to the subject matter of
this Agreement and all prior understandings and agreements, whether oral or
written, are void and of no effect. Neither party is relying on any statement or
representation of the other that is not expressly contained herein. No waiver of
any provision of this Agreement shall be construed as constituting a waiver of any
such provision on a subsequent occasion. This Agreement may be modified only
by a written document signed by the parties and may not be assigned by either
party without the written consent of the other.
(2011 Contract § IX.E.)
In Maryland, however, the presence of a non-modification or non-waiver clause is not
dispositive. Rather, the parties to a contract “may modify their original agreement by their
conduct ‘notwithstanding a written agreement that any change to a contract must be in writing.’”
Galloway v. Santander Consumer USA, Inc., 819 F.3d 79, 88 (4th Cir. 2016) (quoting Univ.
Nat’l Bank v. Wolfe, 369 A.2d 570, 576 (Md. 1977)). This rule applies even where the written
contract contains a non-waiver clause. See id. (citing Hovnanian Land Inv. Group, LLC v.
Annapolis Towne Ctr. at Parole, 25 A.3d 967, 978-83 (Md. 2011)). In Hovnanian, the Maryland
Dep. at 66; Charles Dep. at 101-02.) At trial, of course, TBC bears the burden of proving that any work for which it
seeks to recover was out-of-scope and therefore subject to the terms of the parties’ agreement for such work.
DEI also argues that TBC’s contract modification theory is inconsistent with the pleadings because the complaint
does not mention a specific orally modified contract. Under the pleading standard set out in Twombly, however, see
550 U.S. at 563, the complaint provides sufficient notice of TBC’s claim, (see, e.g., Compl. ¶¶ 22-24 (describing
terms of 2011 Contract); id. ¶¶ 43-45 (describing parties’ subsequent agreement with respect to 2013 work); id. ¶ 44
(alleging that TBC agreed to perform work in 2013 “outside the Scope of Services as set forth in the 
Contract”); id. ¶¶ 248-249 (alleging breach of the  Contract).)
Court of Appeals held that “a party may waive, by its actions or statements, a condition
precedent in a contract, even when that contract has a non-waiver clause.” Hovnanian, 25 A.3d
at 983. Although the contract at issue in Hovnanian did not contain a non-modification clause,
the court referred to non-modification and non-waiver clauses interchangeably, and its analysis
relied on both kinds of cases. See id. at 981 (describing the approach of commentators to “nonwaiver or non-modification clauses”); id. (“Since Pelton, Maryland courts have consistently
reaffirmed that a party can modify or waive contractual provisions despite a provision purporting
to limit those abilities.”). Hovnanian thus stands for the principle that Maryland law declines “to
give dispositive and preclusive effect to contractual limitations on future changes to that contract
. . . whether it is mutual modification, novation, waiver of remedies, or . . . a waiver of condition
precedent.” Galloway, 819 F.3d at 88 (quoting Hovnanian, 25 A.3d at 978-83).
The question here, then, is whether the parties modified the 2011 Contract in a manner
that obligated DEI to pay the February 7th invoice. “[W]hether subsequent conduct of the
parties amounts to a modification or waiver of their contract is generally a question of fact to be
decided by the trier of fact.” University National Bank, 369 A.2d at 576. This case is no
exception. The evidence in the record—including the deposition testimony of Mr. Burch, Mr.
Charles, and Mr. Tripodi; the June 21st e-mail; and evidence showing that DEI paid TBC
$12,500 per month in 20137—reflects genuine disputes of fact regarding DEI’s payment
obligations for the work completed in 2013. The court considers several of these issues below.
The parties dispute, for example, whether the parties agreed that Polk Audio would pay
Because the 2011 Contract does not govern payment for out-of-scope work, the evidence showing that TBC
received the $12,500 monthly fee each month in 2013 is, on its own, sufficient to create a dispute of fact as to the
modification of the 2011 Contract. (See Tripodi Aff. ¶ 9; Mot. Summary Judgment Ex. 6 (list of payments to
DEI for additional hours worked. At their depositions, both Mr. Burch and Mr. Charles testified
that Mr. Tripodi was aware of the additional hours and repeatedly promised to pay TBC for
them. (See, e.g., Burch Dep. at 116 (“Mr. Tripodi had told TBC, myself, and Mr. Charles on
multiple occasions that he recognized that we were . . . over hours significantly, and that he
would make us whole, and pay us for those overages in 2013. So we believed him.”); Charles
Dep. at 121 (“He said he would pay us. I promise you—the words he used to me were, I promise
you I will make you whole. I’m a fair guy. I will pay you for your hours.”).) Mr. Tripodi offers
a conflicting account, stating that the $12,500 fee was a flat-fee retainer paid pursuant to the
2011 Contract “regardless of whether TBC actually worked the assumed 83 hours in that
month,” (Tripodi Aff. ¶ 8), and that TBC at no time indicated that the work requested by Mr.
Tripodi in 2013 “would be in excess of the retainer,” (id. ¶ 20).
The parties also contest the significance of the June 21st e-mail, in which Mr. Burch
informed Mr. Tripodi of the exact number of additional hours TBC had worked through midJune and sought to have “a conversation” regarding those hours. (See Mot. Summary Judgment
Ex. 7 at 1.) Mr. Tripodi states that he interpreted the e-mail as “an attempt by TBC and Mr.
Burch to impress [him],” rather than a request for payment. (Tripodi Aff. ¶ 18.) Mr. Burch, by
contrast, describes the e-mail as part of a series of exchanges during which he and Mr. Charles
repeatedly informed Mr. Tripodi of the additional hours, and Mr. Tripodi repeatedly promised to
pay. (See Burch Dep. at 153-55.)
Finally, numerous factual disputes remain as to the terms of any modified agreement.8
The evidence suggests that, initially, the parties agreed that at least some of the terms outlined in
Because the terms of the agreement under which the parties were operating are unclear, the court will not consider
the parties’ arguments regarding waiver at this time.
the 2011 Contract would apply to TBC’s work in 2013. (See, e.g., id. at 65 (explaining that the
parties agreed to continue their relationship under the terms of the 2011 Contract); Tripodi Aff. ¶
10 (stating that TBC was paid the monthly fee “pursuant to the 2011 Contract” in 2013).)
Because the 2011 Contract reflects different requirements for in-scope and out-of-scope work,
however, it is unclear which provisions the parties intended to govern the 2013 work, as well as
whether they continued to modify the 2011 Contract throughout 2013. Both Mr. Burch and Mr.
Charles testified, for example, that it was the parties’ regular practice for Mr. Tripodi to approve
work verbally or by e-mail, although the 2011 Contract requires certain approvals to be in
writing. (Burch Dep. at 68-73; Charles Dep. at 103.) Because the parties in Maryland “may
modify their original agreement by their conduct,” even where a non-modification or non-waiver
clause is present, see Galloway, 819 F.3d at 88 (citing University National Bank, 369 A.2d at
576), the court cannot say that, as a matter of law, the written terms of the 2011 Contract control.
Viewing the evidence in the light most favorable to TBC, genuine issues of material fact
preclude summary judgment. It is for the fact-finder to decide whether the conduct of the parties
shows that they modified the 2011 Contract and, if they did, the terms of such modification. The
court therefore will deny DEI’s motion for summary judgment as to TBC’s breach of contract
C. Unjust Enrichment
DEI also moves for summary judgment as to TBC’s claim of unjust enrichment, arguing
that the claim fails as a matter of law. First, DEI contends that the existence of an express
contract between the parties precludes TBC’s claim. Second, DEI argues that, on the undisputed
facts, TBC cannot satisfy the elements of unjust enrichment under Maryland law.
As the court noted in its previous opinion, “a claim of unjust enrichment, which is a
quasi-contract claim, ‘may not be brought where the subject matter of the claim is covered by an
express contract between the parties,’” Janusz v. Gilliam, 947 A.2d 560, 567 (Md. 2008)
(quoting Cty. Comm’rs of Caroline Cty. v. J. Roland Dashiell & Sons, Inc., 747 A.2d 600, 607
(Md. 2000)). Courts have recognized exceptions to this rule, however, “when there is evidence
of fraud or bad faith, there has been a breach of contract or a mutual rescission of the contract,
when rescission is warranted, or when the express contract does not fully address a subject
matter.” Id. at 567-68 (quoting J. Roland Dashiell & Sons, 747 A.2d at 608-09). Here, the 2011
Contract specifically excludes out-of-scope work from its billing and payment provisions, (see
2011 Contract § III & Addendum II § I.A-D), and the parties point to no other written contract as
governing the subject matter, (see Burch Dep. at 65). Thus, DEI is not entitled to summary
judgment on the basis that an express contract precludes TBC’s unjust enrichment claim.
Alternatively, DEI argues that TBC cannot satisfy the elements of the cause of action. In
Maryland, an unjust enrichment claim has three elements: (1) “[a] benefit conferred upon the
defendant by the plaintiff”; (2) “[a]n appreciation or knowledge by the defendant of the benefit”;
and (3) “the acceptance or retention by the defendant of the benefit under such circumstances as
to make it inequitable for the defendant to retain the benefit without the payment of its value.”
Berry & Gould, P.A. v. Berry, 757 A.2d 108, 113 (Md. 2000) (quoting Cty. Comm’rs, 747 A.2d
at 607 n.7). Viewing the evidence in the light most favorable to TBC, the court concludes that
there are unresolved issues of fact as to all three elements. The parties dispute, for example, the
content of conversations between Mr. Burch, Mr. Tripodi, and Mr. Minarik on June 19, 2013;
between Mr. Charles and Mr. Tripodi on August 16, 2013; and between Mr. Charles and Mr.
Tripodi on September 22, 2013. It will be necessary for the fact-finder to assess the credibility
of witnesses and weigh their testimony to determine whether these conversations show, inter
alia, knowledge and inequitable retention of a benefit by DEI. See Gray v. Spillman, 925 F.2d
90, 95 (4th Cir. 1991) (citing Anderson v. Liberty Lobby, Inc., 477 U.S. 242, 249 (1986)
(weighing of evidence and credibility determinations are tasks for the jury, not the court)). In
light of these ongoing disputes, summary judgment is not appropriate.
For the reasons discussed above, DEI’s motion for summary judgment as to TBC’s unjust
enrichment claim will be denied.
DEI’s Motion for Other Relief for Contempt of ECF No. 97
DEI has filed a motion for other relief for contempt of ECF No. 97, Judge Copperthite’s
order that TBC produce the requested timekeeper records in native format with metadata (“native
format”). (Order of July 25, 2016, ECF No. 97.) The parties agree that TBC has not produced
the records in the format specified in the order. Rather, it produced a .csv file based on a “query”
to a database maintained by Landmark, its vendor. TBC contends, inter alia, that (1) the .csv file
is a “permissible ‘near-native’ format,” (Opp. to Mot. for Contempt, ECF No. 105, at 4); (2) the
use of a query is “the most efficient means of pulling up specific timekeeping data from TBC’s
entire database while protecting the integrity of TBC’s database and preventing the production of
unrelated and not discoverable data,” (id. at 7); (3) producing the data in native format would be
expensive and time-consuming; and (4) DEI has not sufficiently justified its need for the data in
native format. These arguments are not persuasive.
Under Federal Rule of Civil Procedure 26, the parties are entitled to “obtain discovery
regarding any nonprivileged matter that is relevant to any party’s claim or defense and
proportional to the needs of the case.” Fed. R. Civ. P. 26(b)(1). Proportionality considerations
include “the importance of the issues at stake in the action, the amount in controversy, the
parties’ relative access to relevant information, the parties’ resources, the importance of the
discovery in resolving the issues, and whether the burden or expense of the proposed discovery
outweighs its likely benefit.” Id. Where a party seeks the production of electronically stored
information (“ESI”), the party from whom discovery is sought may avoid production if it can
show that the ESI is “not reasonably accessible because of undue burden or cost.” Fed. R. Civ.
P. 26(b)(2)(B). Even upon such a showing, however, the court may order the material to be
produced if the requesting party shows good cause.
Further, the court “may specify
conditions for the discovery.” Id.
Here, the requested records are reasonably accessible and of critical importance to the
claims, which center on alleged additional hours worked by TBC.
presumption is that the producing party should bear the cost of responding to properly initiated
discovery requests.” Thompson v. U.S. Dep’t of Housing and Urban Dev., 219 F.R.D. 93, 97 (D.
Md. 2003) (citing Oppenheimer Fund Inc. v. Sanders, 437 U.S. 340, 358 (1978); Murphy Oil
USA v. Fluor Daniel, 2002 WL 246439 (E.D. La. Feb. 19, 2002)).
TBC states that the
production would take approximately five calendar days and cost about $5,000. These costs are
not unduly burdensome in comparison to the amount in controversy.
Moreover, the plain terms of Judge Copperthite’s order direct TBC to “produce the time
records as requested, specifically the original timekeeper records in native format with metadata
to the extent that it exists.”
(Order of July 25, 2016.)
TBC did not file a request for
reconsideration or motion for other relief.9
Rather, it appears to have substituted its own
judgment for the court’s as to whether a .csv file based on a query constitutes an appropriate
substitute for records in native format.
In light of the above, the court will grant DEI’s motion for other relief for contempt of
ECF No. 97. Federal Rule of Civil Procedure 37(b) lists the sanctions a court may impose for a
party’s failure to obey a discovery order, which include: directing that the matters covered by the
order be taken as established for purposes of the action; prohibiting the non-compliant party from
proceeding on certain theories or introducing certain evidence; dismissing the action in whole or
part; and treating the failure to comply as contempt of court. Fed. R. Civ. P. 37(b)(2)(A).
Regardless of whether the court imposes sanctions, it must award reasonable attorneys’ fees to
the prevailing party “unless the failure [to comply] was substantially justified or other
circumstances make an award of expenses unjust.” Fed. R. Civ. P. 37(b)(2)(C).
DEI requests that the court dismiss the case or preclude TBC from introducing any
evidence related to the time records, which it acknowledges would likely result in dismissal.
Dismissal is the most severe sanction available, and it ordinarily should not be imposed without
warning. See Hathcock v. Navistar Int’l Transp. Corp., 53 F.3d 36, 40-41 (4th Cir. 1995). Such
a severe sanction is not warranted here. Rather, the court will order TBC to produce the
requested records, in native format with metadata, unless some other query is agreed to, within
21 business days, and to pay reasonable costs associated with the preparation and filing of DEI’s
motion for other relief in the amount of $2,050.00.
Although TBC did not request relief from compliance with the order, it appears to question its validity, suggesting
that the order was hastily entered by the court and is the product of misrepresentations by DEI. These arguments are
not convincing. In any case, the court need not consider them, as such claims should have been raised in a direct
challenge to the order, rather than as a defense to non-compliance with its terms.
TBC’s Motions for Leave to File Surreplies
Finally, TBC has filed two motions for leave to file surreplies: one in regard to DEI’s
motion for summary judgment (ECF No. 113), and one in regard to DEI’s motion for other relief
for contempt of ECF No. 97 (ECF No. 112). “Unless otherwise ordered by the court, surreply
memoranda are not permitted to be filed.” Khoury v. Meserve, 268 F. Supp. 2d 600, 605 (D. Md.
2003) (citing Local Rule 105.2(a)). The court may permit a surreply where the moving party
would be unable to contest matters that were presented to the court for the first time in a reply.
Id. (citing Lewis v. Rumsfeld, 154 F. Supp. 2d 56, 61 (D.D.C. 2001)).
Regarding the motion for summary judgment, TBC contends that DEI raises the
following new legal theories and issues: (1) TBC relies upon a 2013 contract; (2) DEI cannot
determine what work TBC performed in 2013; (3) TBC has not alleged that James Minarik was
acting on behalf of DEI or for any other entity; and (4) DEI is not the proper party. None of
these arguments warrants a surreply. The first and third respond directly to points made in
(See Opp. to Mot. Summary Judgment at 9 (referring to “2013
Contract/Agreement”); id. at 9-10 (stating that James Minarik acted “on behalf of [DEI]” in
engaging TBC for work in 2013).) The second is DEI’s commentary on the evidence presented
by TBC. And the fourth does not appear to be an accurate description of the issues raised on
page six of DEI’s reply.
Regarding the motion for other relief for contempt, TBC asserts that DEI raised two “new
and incorrect allegations” in its reply. (Mot. for Surreply to Mot. for Contempt, ECF No. 112, at
1.) First, TBC asserts that DEI’s reply brief raises the “implication that it did not have an
opportunity to design a ‘mutually acceptable query’ to produce ‘a report of data to which both
sides could agree met the spirit of the July 25, 2016 Order.” (Id. (citing Reply to Mot. for
Contempt, ECF No. 109, at 4).) Setting aside whether an “implication” is an appropriate basis
for a surreply, TBC does not accurately summarize DEI’s argument at page 4. A longer excerpt
reads as follows:
TBC further argues that it need not produce the native timekeeper data as ordered
by this Court because it provided other, newly created documents well after the
discovery deadline that excuse its compliance with this Court’s Order. . . . TBC is
not empowered to create new documents after the discovery deadline and provide
them after the discovery deadline to meet its discovery obligations. Moreover,
TBC created these documents without any attempt to allow DEI Sales to review
the data fields, data tables, and other database attributes to design a mutually
acceptable query to produce a report of data to which both sides could agree met
the spirit of the July 25, 2016 Order.
(Reply to Mot. for Contempt at 4 (emphasis added).) This language is both responsive to and
consistent with TBC’s own account, which explains that it attempted to resolve the discovery
dispute by preparing a letter with supporting documentation and presenting it to DEI. (See Opp.
to Mot. for Contempt at 13 (“Plaintiff’s Counsel provided Defendant’s Counsel with a
comprehensive letter dated August 25, 2016 and ten (10) enclosures . . . reflecting the results of
Second, TBC points to DEI’s statement “that Plaintiff is requesting or ‘initially’
requested damages in the amount of Twelve Million Dollars ($12,000,000.00).” (Motion for
Surreply to Mot. for Contempt (citing Reply to Mot. for Contempt at 9).)
description accurately reflects the language in DEI’s reply brief, it does not present a new issue
that TBC would be unable to contest. See Khoury, 268 F. Supp. 2d at 605 (citing Lewis, 154 F.
Supp. 2d at 61). Rather, it is a statement of the record that either accurately or inaccurately
describes the amount of damages requested by TBC. The court has the full record at its disposal,
and further briefing in the form of a surreply is not required.
For the reasons stated above, DEI’s motion for summary judgment will be denied, DEI’s
motion for other relief for contempt of ECF No. 97 will be granted, and TBC’s motions for leave
to file surreplies will be denied. A separate order follows.
September 18, 2017
Catherine C. Blake
United States District Judge
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