Klicos Painting Company, Inc. v. Saffo Contractors, Inc.

Filing 160

MEMORANDUM OPINION. Signed by Judge Richard D. Bennett on 7/16/2018. (dass, Deputy Clerk)

IN THE UNITED STATES DISTRICT COURT
FOR THE DISTRICT OF MARYLAND
KLICOS PAINTING COMPANY, INC.,

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Plaintiff/Counter-Defendant,

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v.

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SAFFO CONTRACTORS, INC.,

*

Defendant/Counter-Plaintiff.
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Civil No. RDB-15-2505

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*

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MEMORANDUM OPINION
On July 29, 2013, the Maryland Transportation Authority (“MDTA”) awarded the
Defendant/Counter-Plaintiff, Saffo Contractors, Inc. (“Saffo”), a contract to repair and
paint various highway bridges on I-95 and I-395 in Baltimore just south of Oriole Park at
Camden Yards and M&T Bank Stadium (“the 395 Project” or “the Project”). Saffo and the
Plaintiff/Counter-Defendant, Klicos Painting Company (“Klicos”), arranged to perform the
work together, but the parties disagree as to the terms of that arrangement. Specifically,
George Klicos and his cousin Nick Saffo had fundamental disagreements with respect to the
relationship of their companies, which ultimately led to this litigation. As a result of their
joint efforts in 2014, Saffo paid Klicos $2,738,600.73. The parties have made competing
claims that this amount constitutes unjust enrichment when compared to the value of the
work Klicos performed on the 395 Project. Saffo further contends that Klicos secured
$200,000 of the $2,738,600.73 by knowingly misrepresenting its intention to return to work
after the winter holiday season in December of 2014.
1

As one witness observed, “everybody wanted to be the lead man on the job.” (Tr. at
802.) It is undisputed, however, that Saffo was the General Contractor to which MDTA had
awarded the contract for the 395 Project. Klicos was a cleaning and painting subcontractor
that supplied about 45.47% of the cleaning and painting production hours in 2014.1 When
Klicos learned that Saffo was not going to include it on another project in Texas, the
relationship soured. Ultimately, Klicos sought additional payments without completing any
cleaning or painting work in 2015.
After a seven-day bench trial concluding on June 26, 2018, and for the reasons set
forth below, this Court concludes as follows.
1. Klicos intentionally misrepresented its intent to return to the 395 Project in 2015,
which caused Saffo to incur $200,000 in actual damages. Punitive damages are
warranted in the amount of $50,000.
2. Klicos retains $8,377.04 in unjust enrichment based upon Saffo’s overpayment
for the actual value to Saffo of Klicos’ work on the 395 Project. This amount
incorporates a deduction for a refund of the $200,000 fraudulently obtained by
Klicos.
3. Judgment shall be ENTERED in favor of Saffo on its intentional
misrepresentation claim and on the parties’ competing claims of unjust
enrichment.
4. Klicos SHALL PAY to Saffo a total of $58,377.04.
Pursuant to Federal Rule of Civil Procedure 52(a), the following memorandum constitutes
this Court’s findings of fact and conclusions of law.

1 The 45.47% is based on a comparison of the parties’ detailed payroll records for hourly employees working on-site. See
infra.

2

PROCEDURAL BACKGROUND
Klicos filed suit against Saffo on August 24, 2015. (ECF No. 1.) Saffo answered with
counter-claims on September 28, 2015. (ECF No. 11.) Klicos answered the counter-claims
on October 14, 2015 (ECF No. 13), and filed an Amended Complaint on June 16, 2016
(ECF No. 35). Saffo amended its Answer and Counterclaim. (ECF No. 31.) At that stage,
Klicos’ claims included breach of contract, unjust enrichment, and quantum meruit. (ECF
No. 35.) Saffo’s claims included unjust enrichment, conversion, replevin, detinue, fraud –
intentional misrepresentation (including punitive damages), negligent misrepresentation, and,
in the alternative, breach of contract. (ECF No. 31-1.)
On April 21, 2017, Saffo moved for summary judgment. (ECF No. 76.) On June 30,
2017, Klicos moved for partial summary judgment, challenging all claims except for portions
of Saffo’s breach of contract claim. (ECF No. 98.) On September 6, 2017, Judge J. Frederick
Motz of this Court granted in part and denied in part both parties’ motions. (ECF Nos. 105,
106.) Specifically, Judge Motz granted Saffo’s motion for summary judgment as to Klicos’
breach of contract and quantum meruit claims, and denied the motion as to the unjust
enrichment claim. (Id.) Klicos’ motion was granted as to Saffo’s claims for conversion,
replevin, detinue, negligent misrepresentation, contract damages related to a recycling unit
and delayed performance, and for attorneys’ fees. (Id.) Klicos’ motion was denied as to
Saffo’s claims for unjust enrichment and intentional misrepresentation, including punitive
damages. (Id.)
Based on the overlapping nature of the parties’ unjust enrichment claims, Judge Motz
held that the recovery for the competing unjust enrichment claims would be “measured by
3

‘the actual value realized by the defendant,’ and not the market value of the plaintiff’s
services rendered.” (ECF No. 105 at 9 (citing Dolan v. McQuaide, 215 Md. App. 24, 37-38
(Md. Ct. Spec. App. 2013)).) More specifically, “the operative question will be whether the
actual value realized by Saffo for Klicos’s work is more or less than $2,738,600.73.” (ECF
No. 105 at 10.) Judge Motz also stated that Klicos’ “expert report outlining Saffo’s profits
can be used, in conjunction with other witness testimony, to infer the value provided to
Saffo by Klicos’ work.” (Id.)
On February 23, 2018, this case was reassigned from Judge Motz to the undersigned.
On April 13, 2018, this Court clarified Judge Motz’ prior summary judgment ruling and held
that the prior entry of summary judgment in Saffo’s favor on Klicos’ breach of contract
claim was limited to the non-existence of a contract on November 21, 2013. (ECF Nos. 12223.) This decision enabled Klicos to press a breach of contract claim at trial only if Saffo
elected to pursue its own breach of contract claim at trial. On April 27, 2018, however, Saffo
informed this Court that it would not pursue a breach of contract claim at trial. (ECF No.
129.) The following claims are now pending:
(1) Klicos’ claim against Saffo for unjust enrichment,
(2) Saffo’s counter-claim for unjust enrichment, and
(3) Saffo’s counter-claim for intentional misrepresentation, including punitive
damages.
This Court conducted a seven-day bench trial2 from Monday, June 18, 2018 through
Tuesday, June 26, 2018.

2

Both parties requested a bench trial. (ECF Nos. 1, 111.)

4

FINDIN OF FA
NGS
ACT
Having cond
H
ducted that seven-day bench trial,, heard eye
ewitness and expert wi
d
itness
testimon and cons
ny,
sidered docu
umentary ev
vidence subm
mitted by th parties, t Court m
he
this
makes
the following findin of fact.
ngs
I.

Bid Prepara
B
ation & Con
ntract Awa
ard
In April 20
n
013, the Maryland Transportatio Author
M
T
on
rity (“MDT
TA”) issued an
d

Invitation for Bids (“IFB”) for a contract, No. FT-257
(
75-000-006, to repair a paint va
,
and
arious
bridges on I-95 and I-395 in so
o
d
outh Baltimo City (“th 395 Proj
ore
the
ject” or “th Project”). (Ex.
he
.
3.)3 The MDTA con
nducted a “P
Pre-Bid Meeting” on A
April 25, 201 (Ex. 5 at 41.) Biddin on
13.
t
ng
the Proje opened on May 16, 2013. (Id.)
ect
o
Michael Ost the head of Saffo’s Bridge Ma
M
t,
aintenance D
Division, w in charg of
was
ge
preparing Saffo’s bid. This pr
b
rocess requi
ired a deta
ailed analysi of the w
is
work require to
ed
complete the contra requirem
e
act
ments. With respect to cleaning an painting certain por
h
nd
rtions
of the br
ridges, Mr. Ost studied the structu plans an visited th actual wo site for a
O
ural
nd
he
ork
about
three da (Tr. at 421-22.)4 Mr. Ost ana
ays.
M
alyzed the s
square foota that wo
age
ould need t be
to
painted and how di
a
ifficult it wo
ould be to provide the laborers w safe acc to all o the
p
e
with
cess
of
locations (Id.) This analysis informed Mr. Ost’s es
s.
s
M
stimate of the total c
cost to Saff of
fo
performi under th contract. (Ex. 161.) In consulta
ing
he
.
ation with N
Nicholas (“N
Nick”) Saffo the
o,
Before trial, the partie submitted a “Joint Exhib List,” whic had been p
t
es
bit
ch
prepared in str
reamline fashio for
on
convenienc but numero exhibits stil faced objecti
ce,
ous
ll
ions when pre sented. The nu
umbering of tr exhibits rem
rial
mained
consecutive regardless of which party of
e
ffered the exhib but due to the contentiou nature of nu
bit,
us
umerous exhibits, this
Court will simply refer to the trial exhibit as “Exhibits” in this Memor
s
ts
”
randum Opinio
on.
4 The Tria Transcript has been broke
al
h
en out into sev volumes b
ven
based on each day of trial a with conti
h
and
inuous
pagination. Volume I cov pages 1 thr
vers
rough 229. Vol
lume II covers pages 230 thro
ough 395. Volu
ume III covers pages
s
gh
me
ages 617 throu 771. Volum V covers p
ugh
me
pages 772 throu 976. Volum VI
ugh
me
396 throug 616. Volum IV covers pa
covers page 997 through 1168. Volume VII covers pag 1169 throug 1282.
es
ges
gh
3

5

company’s President, Mr. Ost determined how much profit to build into Saffo’s bid. (Tr. at
423-24.) Mr. Ost identified $13,723,459.00 as Saffo’s total bid price. (Ex. 4 at 18.)
Having identified the total bid price, Mr. Ost next allocated the total price across the
various project milestones, or “items,” identified in the Schedule of Prices attached to the
IFB. (Ex. 3 at 209-24.) Rather than allocate prices based on square footage, Saffo decided to
“front-load” the bid by assigning a higher price per square foot to the items that could be
accomplished earlier in the Project. (Tr. at 435-36; Ex. 4 at 2-18.) Consistent with industry
practice, this approach aims to keep contractors cash-flow-positive throughout the duration
of a project. (Tr. at 436, 697-700.)
The MDTA also required bids to include two attachments regarding the involvement
of Minority Business Enterprises (“MBEs”) in the Project. (Ex. 3 at 3-5.) Saffo completed
the required forms by identifying certain percentages of the overall bid price that would be
paid to the following MBE subcontractors: Pioneer Contracting Company, Inc. (“Pioneer”);
Masonry Resurfacing & Construction Co. Inc.; Jo-Lyn Services, Inc.; Batta Environmental
Associates; Apex Petroleum Corporation; Acorn Supply & Distributing; and Atlantic Traffic
Safety Inc. (Ex. 4 at 27-34.) In total, Saffo’s bid-preparation efforts on the bid for the 395
Project took about two weeks (Tr. at 423), and Saffo submitted its bid on May 16, 2013. (Ex.
4 at 18.)
Later that same day, MDTA announced Blastech Enterprises (“Blastech”) as the
winning bidder. (Tr. at 438-440.) Not satisfied with such a result, Mr. Ost drove up to
Maryland that evening to review Blastech’s bid in person. (Id.) Mr. Ost discovered that
Blastech had not complied with the MBE requirements, and he initiated a bid protest. (Id.)
6

The bid protest was successful, and MDTA ultimately awarded th contract to Saffo on July
s
,
A
y
he
n
;
)
29, 2013. (Id. at 440; Ex. 5 at 1.)
Klicos did not submit a bid on the Project. (T at 151-5 Mr. Os and Mr. S
K
n
e
Tr.
52.)
st
Saffo
testified that Klicos did not assist in prepar Saffo’s bid or in p
ring
protesting th initial con
he
ntract
award. (T at 424, 437-38, 877 On the other hand, George Kli
Tr.
4
7.)
o
icos, Mr. Sa
affo’s cousin (Tr.
n
at 143), testified tha he “discussed the nu
t
at
umbers” with Saffo and helped Saf connect with
th
d
ffo
Pioneer to meet the 4% particip
pating thresh for As MBEs. (Tr. 58, 60-61.)5 Despit his
hold
sian
te
assertion that he dis
n
scussed the numbers wi Saffo, G
ith
George Klico was caref to testify that
os
ful
y
there we “never” any discuss
ere
sions about front-loadi the con
ing
ntract to ear “easy mo
rn
oney”
from “ea bridges” earlier in th project. (Tr. at 99-10
asy
”
he
(
00.)
This Court is not con
T
nvinced by George Kl
licos’ gener
ralized asse
ertion of ha
aving
contribu to the bid by discussing the nu
uted
b
umbers with Saffo. Reg
h
garding the i
issue of Pio
oneer,
the docu
umentary ev
vidence cor
rroborates Klicos’ test
timony that at the ve least, K
t,
ery
Klicos
helped Saffo to line up Pioneer as an MBE subcontra
S
r
E
actor. Specif
fically, Exhi 121 con
ibit
ntains
an email conversatio on May 15, 2013 bet
on
1
tween Geor Klicos a Mr. Ost in which K
rge
and
t
Klicos
provides a bid from Pioneer. (Ex. 121.) This email conversatio occurred one day before
s
m
T
on
Saffo sub
bmitted its bid featuring Pioneer as an MBE s ubcontracto (Ex. 4 at 27.)
b
g
s
or.
t
II.

Contract Te
C
erms & Con
nditions
It is undisputed that the MDTA contract for th 395 Project was awa
t
e
he
arded to Saf as
ffo

the sole General Co
ontractor. (E 5 at 4.) Based on S
Ex.
Saffo’s bid, the total co
ontract price was
e

5

In additio to being cousins, Saffo and Klicos had suc
on
ccessfully worke together on earlier projects (Tr. at 144.)
ed
s.

7

$13,737,459.00. (Id. at 5.) The contract required that Saffo post a Performance Bond and
Payment Bond, both in the amount of $13,737,459.00. (Ex. 5 at 9, 11, 19.)
The contract obligated Saffo to complete all work within 540 days of the issuance of
the “Notice to Proceed.” (Id. at 7.) Based on that timeframe, the contract contains the
following liquidated damages provision:
It is expressly understood and agreed that in the event of failure on the part of
the Contractor, for any reason, except with the written consent of the MDT
A, to complete the furnishing and delivery of the materials and the doing and
performance of the work within the time period granted Five Hundred Fourty
(540) calendar days the MDTA shall have the right to deduct from any monies
due or which may become due from the Contractor, or, if no monies shall be,
the MDTA shall have the right to recover the amount of One Thousand
Seven Hundred Sixty Dollars ($1760.00) per day for each and every calendar
day elapsing between the time stipulated for the completion and the actual
date of completion, in accordance with the terms of this Contract; not as a
penalty, but as liquidated damages. Provided, however, that upon receipt of
written notice from the Contractor of the existence of causes over which the
Contractor has no control and which must delay the completion of work, the
MDTA may, at its discretion, extend the period specified for the completion
of the work, and in such case the Contractor shall become liable for liquidated
damages for delays commencing from the date on which the extended period
shall expire.
(Id.) The contract also provides for various rates of liquidated damages for failure “to make
good faith efforts to comply with the Minority Business Enterprise (‘MBE’) Program and
contract provisions.” (Id. at 8.)
The Schedule of Prices breaks the work down into categories. (See id. at 311-344.)
Category 1, Items 1001 to 1014, covered preparatory operations, and Category 4, Items 4001
to 4060, covered the on-site repair, cleaning, and painting work. (Id.) The contract required

8

Saffo to clean and paint 46 bridge structures, as identified by Items 4001 to 40486 in the
Schedule of Prices. (Id. at 311-344.) This work was subject to inspection and approval by
MDTA. (Id. at 7.)
In terms of performance specifications, the contract explicitly incorporates the 2008
version of the “Standard Specifications for Construction and Materials” (“Standard
Specifications”) by the MDTA State Highway Administration. (Ex. 124.) Mr. Ost described
this document as the “Bible” for this and other similar projects in Maryland. (Tr. at 445.)
Section 108 of the Standard Specifications governs “Mobilization,” which is
described as “preparatory operations that include the movement of personnel and
equipment to the project site and the establishment of the Contractor’s offices, buildings,
and other facilities necessary to begin work.” (Ex. 124 at 32.) “Materials” are “not
applicable” under this category of work (id.), and fabricating materials does not constitute
mobilization. (Tr. at 687.) According to the Standard Specifications, “[p]ayment of 50
percent of the Mobilization item will be made in the first monthly estimate after the
Contractor has established the necessary facilities. The remaining 50 percent will be prorated
and paid in equal amounts on each of the next five monthly estimates.” (Ex. 124 at 32-33.)
No further action is required after the first payment of 50% is approved. (Tr. at 457-58, 68990.) The Mobilization Line Item is intended to cover all of the General Contractor’s costs
for mobilization, and is not limited to only the mobilization necessary for cleaning and
painting. (Id. at 34.)

6

Of the 48 line items, two are blank (Items 4003 and 4006). (Ex. 5 at 320, 322.)

9

Section 436 of the Standard Specifications governs “Cleaning and Painting Existing
Structural Steel.” (Id. at 34.) This section identifies the acceptable cleaning systems, paint
systems, health and safety requirements, and Quality Control (“QC”) procedures. The
Contractor is required to provide various plans and drawings, known as “submittals,” to the
MDTA detailing how it will comply with all of these performance requirements. (Id. at 38.)
Another undisputed element of the MDTA contract is that “[t]he contractor shall be
responsible for certifying and submitting to [Maryland Department of Labor, Licensing and
Regulation (“DLLR”)] all of their subcontractors’ payroll records covering work performed
directly at the work site.” (Prevailing Wage Instructions for the Contractor and Subcontractor, Ex. 5 at
91.) This “certified payroll” requirement is intended to ensure the Contractor is complying
with Maryland’s wage and hour laws. (Id.; see also Tr. at 523.)
Payment for onsite cleaning and painting production work, however, was not based
on certified payroll. Rather, the contract calls for “lump sum” payments for each bridge. (Ex.
5 at 311-344.) In practice, MDTA’s onsite Project Engineer, Jason Smith, oversaw the
inspection of the onsite work for the purpose of, inter alia, deciding when to make monthly
lump sum “Progress Estimate” payments for the work completed. (Tr. at 692-96.) Multiple
witnesses testified that this process involved some negotiation between Mr. Smith and
Saffo’s Project Superintendent, Greg Hahn, to determine what percentage of the work on
each bridge had been completed according to the Standard Specifications. (Id. at 488 (Ost),
693-96 (Smith), and 786-87 (Hahn).)

10

III.

Preparation
P
ns
A. Bonds
A
On July 19 2013, Sa
O
9,
affo, as th General Contracto execute the req
he
l
or,
ed
quired

Performance Bond and Paymen Bond, bo in the am
nt
oth
amount of $
$13,737,459. (Ex. 5 a 11,
.00.
at
19.) Klic provided no bonds for the Pro
cos
d
oject and did not guaran or parti
d
ntee
icipate in Sa
affo’s
bonds. (T at 168-6
Tr.
69.)
B. Saffo’s Submittals
B
Saffo attended a pre-co
onstruction meeting w represen
with
ntatives of MDTA. (T at
Tr.
442-43.) Klicos did not attend the pre-con
nstruction m
meeting. (Tr. at 159-60, 443.) Follo
owing
this meeting, the MD
DTA issued a Notice to Proceed, effective October 7, 20 giving S
d
013,
Saffo
until on or about March 30, 20 (540 cal
M
015
lendar days later) to co
omplete the contract or risk
r
liquidate damages. (Tr. at 443-45.) Saf prepare various schedules a
ed
4
ffo
ed
and engine
eering
drawings detailing Saffo’s proj
s
S
ject plans and submitt these pl
a
ted
lans to MD
DTA for rev
view.
(Exs. 11, 13, 14; Tr. at 446-47.) MDTA ap
.
)
pproved these “submitt
tals” in Dec
cember 2013 and
3
January 2014. (Exs 11, 13, 14.) Klicos had no in
s.
1
nvolvement in prepar
t
ring the ori
iginal
submitta (Tr. at 16
als.
60-64, 446-5
51.)
C. Mobiliza
C
ation by Sa
affo
Saffo mobilized onsite in Decembe 2013 (Tr at 451), a on December 12, 2
i
er
r.
and
2013,
Saffo sen a letter to MDTA re
nt
o
equesting th initial 50% payment of Mobiliza
he
%
ation, Item 1
1011.
(Exs. 10, 12.) In MD
,
DTA’s Prog
gress Estima No. 1, w
ate
which covere the perio of Octob 7,
ed
od
ber
2013 to December 19, 2013, MDTA approved the f
M
first 50% pa
ayment of t Mobiliz
the
zation

11

m,
me
000.00. (Ex 12.) Klico had no in
x.
os
nvolvement in Saffo’s o
onsite
line item which cam to $350,0
mobiliza
ation in Dec
cember 2013 (Tr. at 459
3.
9-60.)
D. Klicos’ Off-site Pre
D
O
e-Productio Work
on
Klicos was aware of th 395 Proj
K
a
he
ject before bidding op
pened (Ex. 5 at 41), a it
and
engaged in negotiati
ions to work as Saffo’s cleaning an painting s
k
nd
subcontractor. (Tr. at 57-58,
,
h
however, th Saffo for
hat
rmally subm
mitted
460-461, 878-879.)7 It was not until March 18, 2014, h
a Contra
actor’s Requ for App
uest
proval of Su
ubcontracto that listed Klicos Pa
or
d
ainting Com
mpany
as a sub
bcontractor for “Cleani & Paint
ing
ting Service Labor + Equipmen (Ex. 16 In
es;
nt.”
6.)
early 2014, after th original containmen designs h been su
he
nt
had
ubmitted an approve by
nd
ed
G
cos
w
avid R. Sch
hmidt Com
mpany to d
design
Saffo, George Klic began working with the Da
additiona containm
al
ment systems for plate birders and joints on th 395 Proj
s
b
he
ject. (Tr. at 16062, 450.) On or abo March 18, 2014, Kl
)
out
licos had pe
ersonnel on-site in Balt
timore for a tour
of the work-site. (Ex 133; Tr. at 169.)
x.
a
From Januar 29, 2013 through Ap 23, 201 Klicos d
F
ry
pril
13,
devoted 2,59
92.5 labor h
hours
towards fabricating and transporting equip
pment for t job. (Ex 146A; Tr at 1059-1061.)
the
x.
r.
id
600.73 for the labor an materials involved in that effort. (Ex.
t
nd
n
.
Saffo pai Klicos at least $178,6
22; Tr. at 551-52.) Exhibit 22 co
E
ontains Klic Invoice 2, which G
cos
George Klico acknowle
os
edged
was paid in full in a timely fash
d
hion (Tr. at 247) and w
t
which indica that Kl
ates
licos had alr
ready
received payment fo Invoice 1. (Ex. 22 at 3.) Klicos Invoice 2 is dated A
or
a
s
April 4, 2014 and
4
e
ed
and
23,
Klicos
therefore does not cover work performe between that date a April 2 2014. K

This Cou has already granted summ
urt
mary judgment in Saffo’s favor on Klicos’ br
i
r
reach of contra claim. (ECF Nos.
act
F
105-06, 122
2-23.)
7

12

ould have presumably covered thi time perio was nev introduc at
p
is
od,
ver
ced
Invoice 3, which wo
e
rd
e
Saffo paid K
Klicos $178
8,600.73 for prer
trial. The trial recor therefore only establishes that S
producti work.
ion
IV.

Cleaning & Painting Production
C
P
A. Project Manageme
A
M
ent
MDTA’s on-site Project Engineer was Jason S
M
Smith. As a employee of Greenm
an
man-

Pederson Inc., Mr. Smith worked on beh of MDT to ensur that the w
n,
half
TA
re
work laid o in
out
the contract for the 395 Projec was comp
ct
pleted accor
rding to the MDTA’s q
quality stand
dards.
(Tr. at 678-79.) A team of insp
pectors repo
orted to him on a daily basis, and he oversaw the
m
y
d
w
work of all contract on the Project. (Id. at 682, 694 Mr. Smit held prog
tors
P
4.)
th
gress meetin at
ngs
least onc a month with Saffo and other subcontract
ce
tors as need
ded. (Id. at 685.) Mr. S
Smith
also deci
ided how much MDTA would pay Saffo each month. (Id. at 694-696.)
m
A
y
.
Saffo’s on-site Project Superintend
S
dent was Gr Hahn. H worked closely with Mr.
reg
He
h
Smith on a daily bas to manag all aspect of the 395 Project, w
n
sis
ge
ts
5
which covere repair wo in
ed
ork
addition to cleaning and paintin (Id. at 81 Carlos G
g
ng.
19.)
Gonzaga, a Saffo empl
loyee, superv
rvised
the clean
ning and pa
ainting labor on Saff payroll.. (Id. at 482
rers
fo’s
2-83, 575, 986.) In term of
ms
Saffo ex
xecutives, Mr. Ost com
M
mmunicated with Jaso Smith “regularly,” and Nick S
d
on
Saffo
commun
nicated with Jason Smit “once in a while.” (Id at 681.)
th
d.
Klicos’ on-si Quality Control Supervisor wa Tony Ha
K
ite
as
atzileris. (Id at 297-98. He
d.
.)
coordina
ated with Mr. Hahn on a daily bas to determ where to work an to respon to
M
n
sis
mine
nd
nd
quality control issue (Id. at 298-99, 988.) Tony Hat
c
es.
)
tzileris was responsible for clockin in
e
ng
and cloc
cking out th cleaning and painting laborers o the proje (Id. at 9
he
a
g
on
ect.
980-82, 989.) He
13

pervised the work of all painters “once they arrived on site, but their
y
testified that he sup
ate
or
e
Hahn.” (Id. at 300.) Mr Hatzileris later
r.
immedia superviso after me would have been Mr. H
admitted that Carlo Gonzaga supervised four of fiv Saffo emp
d
os
ve
ployees. (Id at 986.) K
d.
Klicos
also relie on “John T.Z.” and Tony’s br
ed
n
d
rother, Mik Hatzileris to superv cleaners and
ke
s,
vise
s
painters working on
n-site. (Id. at 78.) Geor Klicos t
a
rge
tracked Klic finances on the Pr
cos’
roject
ording to Ja
ason Smith, visited the work site “ handful of times.” (
,
e
“a
(Tr. at 683.) Mr.
)
and, acco
Smith also testified that a Klicos repre
d
K
esentative p
participated in the pro
ogress mee
etings
nally but not regularly. (Id. at 685-86
t
(I
6.)
occasion
Jo
o-Lyn Servi
ices (“Jo-Ly
yn”) was inv
volved in th cleaning and paintin work, bu Johe
ng
ut
Lyn did not have a foreman or supervisor on-site. (Id. at 80-81.)
n
f
o
B. Producti Process
B
ion
s
“Cleaning an painting” bridges fo interstate highways i much mo technical and
nd
”
or
is
ore
risky tha mere roa maintena
an
ad
ance. In sho cleaning old, rusted metal brid
ort,
g
d
dges is a dif
fficult
process. For the purpose of the 395 Project, Saff broke th process down into the
p
P
fo
he
o
following six steps. (See Exs. 62 214.)
g
2,
1. Riggin This ste involves providing th laborers with access to the sur
ng:
ep
he
s
rfaces
pended sca
in need of clean
ning and pa
ainting. Susp
affolding an platform are
nd
ms
freque
ently necess to prov safe access to brid surfaces high abov the
sary
vide
dge
s
ve
groun water, or railways. (T at 416, 4
nd,
r
Tr.
476-77.)
2. Conta
ainment: Cleaning brid
dges of this sort may in
nvolve remo
oving hazar
rdous
mater
rial, and “c
containmen refers t the tem
nt”
to
mporary ins
stallation o an
of
impen
netrable bar
rrier under negative pre
n
essure to pr
rotect the en
nvironment (Tr.
t.
at 478.) In laym
man’s terms, a tent enc
capsulates th area wh
he
here worker are
rs
active cleaning and paintin (Tr. at 70 Failure to properly contain a w
work
ely
ng.
01.)
y
site co create significant environmen liability. (Tr. at 718.)
ould
e
ntal
)
3. Blast and prime coat: Blastin is when the real “cle
c
ng
eaning” takes place. On the
n
395 Project, the contractors propelled steel grit a
P
s
abrasive out of a nozz at
zle
14

high speed to re
emove rust and other i
imperfections from the surface o the
of
steel. (Tr. at 481.) Shortly th
hereafter, the prime coa of paint h to be ap
e
at
has
pplied
to the entire blas
e
sted surface to protect the steel a ensure t coating does
e
t
and
the
not fa (Tr. at 78
ail.
88.)
4. Stripe8 and interm
e
mediate coa The strip coat is m
at:
pe
manually app
plied to har
rd-toreach areas, such as corners and edges. The interm
h
mediate coat is applied to the
entire surface wit a spray ap
e
th
pplication. ( at 789.)
(Tr.
5. Finish coat: The finish co is appli
h
oat
ied to the entire surface with spray
applic
cation. (Tr. at 789.)
a
6. De-rig
gging and touch-up: This step ref
t
T
fers to the removal of the rigging and
f
g
conta
ainment syst
tems follow by pain
wed
nting touch-ups to the locations w
where
tact with th surface o the
the rigging and containment systems ca
c
t
ame in cont
he
of
bridge (Tr. at 433.) Th final st
e.
his
tep also i
involves so
ome degree of
e
enviro
onmental clean-up. (Tr. at 476.)
.
C. Producti Work Hours
C
ion
H
From March 2014 throu Decem
F
h
ugh
mber 2014, a crew of 20 to 30 workers perfor
rmed
to
the tasks described above as part of Saffo efforts t complete the cleani and painting
s
p
fo’s
e
ing
work on the 395 Project. (Id. at 183-84, 463.) Some were emp
n
P
e
ployed by Sa
affo; some were
employed by Klicos and some were empl
s;
e
loyed by Jo-Lyn Servic (Id. at 182-83, 310, 463ces.
64, 794-9 Bridge painters are “free agen who fre
96.)
e
nts”
equently mo from one contract to
ove
tor
another, even amon contract
ng
tors on the same project. (Id. at 77, 567.) I this case the
In
e,
precise breakdown of workers across the three cont
b
tractors vari through
ied
hout the pro
oject.
(See Ex. 136 at 43.)
The parties do not disp
T
d
pute that the companie respectiv payroll re
es’
ve
ecords for h
hourly
employees accuratel presents (a) how man hourly em
ly
(
ny
mployees wor
rked for eac contracto for
ch
or
each pay period and (b) how many hours those hourly employees worked. T final pag of
y
d
m
ly
s
The
ge
8

In certain portions of the transcript, “st
n
tripe” is recorded as “strike.”

15

Exhibit 36 summarizes the parties’ production work hours as found in Klicos’ certified
payroll records (Ex. 128), Saffo’s certified payroll records (Ex. 125), and Saffo’s business
records of Jo-Lyn’s hours (Ex. 129). (Ex. 136; Tr. at 520.) These records show that:
1. From April 20, 2014 to December 20, 2014, Klicos’ hourly employees worked
15,628.35 hours on the Project site (Exs. 128, 136);
2. From March 31, 2014 to December 21, 2014, Saffo’s hourly employees worked
11,962.59 hours on-site (Exs. 125, 136); and
3. From March 31, 2014 to December 21, 2014, Jo-Lyn’s hourly employees worked
6,780 hours on-site (Ex. 129).
Mr. Ost testified that Saffo employees performed most, if not all, of the rigging and
containment (Tr. at 484), but the parties did not offer evidence as to how the thousands of
hours of work were distributed across the various stages of the cleaning and painting
process. Regarding Jo-Lyn’s work, it is undisputed that Saffo paid Jo-Lyn to cover Jo-Lyn’s
payroll expenses for its hourly employees working on the 395 Project. (Tr. at 468-469, 797800; Ex. 130.) Mr. Klicos testified that having an employee on payroll involved assuming
certain risks, such as a worker’s compensation claim for any injury. (Tr. at 183.)
Aside from the payroll records, additional evidence of the parties’ respective
production work was either non-existent or speculative. In attempting to establish the
parties’ respective production efforts, Saffo did not seek credit – by way of employee records
or any other method of quantification – for cleaning and painting work performed by its
management personnel, Messrs. Hahn, Ost, and Saffo. Klicos, on the other hand, sought to
prove Tony Hatzileris’ production work hours on the Project. Tony Hatzileris, as a salaried
16

n
ertified payr
rolls submit
tted to the Prevailing W
Wage
employee, was not included in Klicos’ ce
Unit of the Marylan Department of Labo Licensing and Regul
t
nd
or,
g
lation. (Tr. a 632; Ex. 128.)
at
As a rebuttal witnes Tony Ha
ss,
atzileris testi
ified that du
uring Klicos onsite pro
s’
oduction wo in
ork
e
very week with the exception of a ten-day t to Gree and nat
w
trip
ece
tional
2014, he worked ev
holidays. (Tr. at 983-84.) Tony Hatzileris te
.
H
estified that he generally worked at least 12 ho a
y
t
ours
day. (Id. at 985.) He testified about his twice-daily task of clo
H
ocking empl
loyee hours his
s,
general supervisory role, and hi occasiona driving of equipment around the worksite. ( at
s
is
al
f
t
e
(Id.
980-85.)
Klicos, howe
K
ever, did no provide documentar evidence regarding Tony Hatzi
ot
ry
e
ileris’
work bet
tween his daily time-en duties. Mr. Hatzile mention his own “daily repo
d
ntry
M
eris
ned
n
orts,”
but those reports we never in
ere
ntroduced in evidence. ( at 988-8 Nor did Tony Hatz
n
(Id.
89.)
d
zileris
aver that he devote every sin hour on
t
ed
ngle
n-site to cle
eaning and painting pro
oduction on the
n
very
395 Proj
ject. This Court cannot simply ass
C
sume that ev hour of a salaried employee’s time
f
on-site was focused on cleaning and paintin producti
w
g
ng
ion, and onl speculatio could sup
ly
on
pport
a finding of which portion of his hours was devoted to cleaning and painting p
g
p
production.
D. Klicos’ Performanc Issues
D
P
ce
In attacking the value of Klicos’ wor hours, Sa elicited testimony a to deficie
n
t
rk
affo
as
encies
in the qu
uality of Kli
icos’ perfor
rmance. Mr. Smith test
tified that r
remediation was neede on
n
ed
multiple occasions to fix Klico work, an he specif
t
os’
nd
fically critic
cized Mike H
Hatzileris’ w
work,
saying th “Mike would repetit
hat
w
tively cross the line on what was al
llowed.” (Id at 708-09.) Mr.
d.
Hahn tes
stified that he had to re
h
emove a Klicos employ who had painted his own name on a
yee
d
s
e
bridge, which requ
w
uired re-blas
sting and re-painting. (Id. at 792
r
2-94.) Mr. Hahn adm
mitted,
17

r,
c
antify the n
number of hours Saf expende in
f
ffo
ed
however that he could not reliably qua
remedyin Klicos’ performance issues. (Id. at 849.)
ng
p
e
E. Payment from MD
E
ts
DTA to Saf
ffo
On a monthly basis, MD
O
DTA’s onsit superviso Mr. Smit would m with Sa
te
or,
th,
meet
affo’s
onsite manager, Gr Hahn, to assess Sa
m
reg
t
affo’s progr
ress on eac item. Mu
ch
ultiple witn
nesses
testified that this pr
rocess invol
lved some negotiation between M Smith an Mr. Hah to
n
Mr.
nd
hn
determin what per
ne
rcentage of the work on each bri
o
idge had be comple
een
eted. (Tr. at 488
t
(Ost), 69
93-96 (Smith and 786- (Hahn). This proc involved a “give an take” and did
h),
-87
.)
cess
d
nd
d
not represent a dire measure of square footage of p
ect
f
painting com
mpleted. (Id at 695-96.) Mr.
d.
)
Smith would then approve a Progress Es
w
a
P
stimate paym
ment to Saf (Id. at 4
ffo.
488-90, 693
3-96.)
Klicos had no inv
h
volvement in this proc
cess. (Id. at 696.) Saf deposite the Pro
t
ffo
ed
ogress
Estimate payments into its general oper
e
rating accou
unt, from w
which it al paid pr
lso
roject
expenses (Id. at 561-62.)
s.
From April 2014 throu December 2014, t general time perio during w
F
ugh
the
od
which
Klicos performed cleaning an painting work on-s
p
c
nd
site, Saffo received ni (9) Pro
ine
ogress
Estimate payments, Progress Estimate No 3 through Progress Estimate N 11. (Exs 23,
e
E
o.
h
No.
s.
26, 31, 37, 40, 45. 49, 55, 61, 148.) Prog
3
gress Estima No. 3 c
ate
covered the time perio of
e
od
March 20, 2014 thro
ough April 21, 2014 (Ex 23), but K
2
x.
Klicos did n have pro
not
oduction laborers
working on-site unt April 23, 2014, the first day of o
til
fi
on-site prod
duction wor reported in its
rk
certified payroll (Ex 128 at 124
x.
4).
As of Dece
A
ember 2014 MDTA had paid S
4,
h
Saffo $5,85
57,770.00 fo cleaning and
or
g
painting production work on th 395 Project. (Tr. at 97-99 (Stipu
n
he
ulation).) Pr
rogress Esti
imate
18

w
pensates wo through December 19, 2014, e
ork
establishes th at least s
hat
some
No. 11, which comp
work on 34 cleaning and paintin line item had been completed b that date (Ex. 61.)
g
ng
ms
by
e.
F. Payment from Saf to Klicos in 2014
F
ts
ffo
From March 2014 thro
F
h
ough Decem
mber 2014, Klicos subm
mitted mon
nthly invoices to
Saffo, an Saffo pa all of the (Exs. 21, 22, 30, 3 39, 46, 52, 60, 114 Tr. at 236
nd
aid
em.
2
36,
4;
6-47.)
George Klicos testified that he would issu these inv
e
ue
voices after having an i
initial discu
ussion
with “on of the Saffos,” who was “occa
ne
S
o
asionally” T Saffo, a owner an wife of Nick
Tia
an
nd
Saffo. (T at 236-37 865.)9 In making his initial requ
Tr.
7,
s
uest, Georg Klicos wo
ge
ould incorporate
an analys of the Pr
sis
roject’s curr profitab
rent
bility, due in part to his subjective un
n
nderstanding that
g
Saffo had agreed to pay Klicos 50% of the Project’s pr
d
rofits. (Id. at 236, 284, 2
t
286.)
After issuing the negotia
A
g
ated invoice by email (Exs. 21, 22 30, 36, 39 46, 52, 60 Tr.
es
2,
9,
0;
at 236-47 there we no dispu as to se
7.),
ere
utes
ecuring full and timely payment fr
rom Saffo. ( at
(Id.
236-47.) The parties stipulated that Saffo paid Klico a total of $2,738,60
d
os
f
00.73 for K
Klicos’
work on the 395-Pro
oject. (Tr. at 118-119 (S
t
Stipulation);; see also Ex. 114.)
George Klic
G
cos’ testimo
ony about the payme process undermin any im
ent
s
nes
mplicit
assertion that he wa unaware of Saffo’s fr
n
as
o
ront-loading strategy on the Projec (See Tr. a 99g
n
ct.
at
100.) Mr Klicos’ est
r.
timation of the Project’ profits de
’s
emonstrates that while h may not have
he
discussed the front-loading str
d
rategy directly with Saff (Tr. at 99-100), he w noneth
ly
fo
was
heless
aware of how the Pr
f
roject’s prof were sch
fits
heduled aga
ainst the rem
maining wor In additio to
rk.
on
tracking profits, Mr Klicos’ attempt to distinguish “less diffic
r.
a
cult” bridge from “ea
es
asier”

Mr. Klico also testified that “most of the time” he wo speak to M Ost in adv
os
t
ould
Mike
vance of sending the invoices. (Tr. at
282.)
9

19

d
mon
standing of the English language. (Id. at 99.) Mr. Klicos also
h
s
bridges defies comm unders
demonst
trated that he was famil with how MDTA w
h
liar
would pay lu
ump sum prices for spe
ecific
bridges based on the prices Saf had alloc
b
ffo
cated to the various stru
uctures (Id. at 101), and Mr.
d
Klicos te
estified that he made a pre-bid visi to gauge t size and difficulty o all the br
it
the
d
of
ridges
at issue (Id. at 59). Furthermor MDTA’s onsite Pro
re,
s
oject Engine Jay Sm
eer,
mith, provide an
ed
h
n
b
nstrating that this strat
tegy is know in
wn
in-depth explanation of “front-loading a bid,” demon
the industry. (Id. at 698-700.) This Court finds that th evidence taken toge
T
f
his
e,
ether, outw
weighs
any impl claim of ignorance by George Klicos rega
licit
arding Saffo strategy t generate m
o’s
to
more
profits earlier in the Project.
V.

Klicos’ Work Stoppage & Promis to Retur
K
e
se
rn
A. Saffo Snu Klicos in Texas Project
A
ubs
P
In late 2014, Mr. Klicos learned tha Saffo was not going to include Klicos in a large
n
s
at
s

project that Saffo had secured in Beaumo Texas. ( at 256-6 George Klicos beli
t
h
ont,
(Id.
67.)
e
ieved
that Saff was going to include Klicos in the project (id. at 266fo
e
t
-67), so Mr. Klicos felt that
.
t
Saffo ha “frozen” him out of the Texas project (id. at 268-70). Saffo’s dec
ad
f
.
cision made him
e
“upset” and “bothe
ered.” (Id. at 268.) Mr. Klicos initi
t
ially claimed that “it w
d
wasn’t the en of
nd
my world,” but then admitted that “Texas is what yo might say lit the fuse to this.” ( at
n
s
ou
y
e
(Id.
269-70.) From late 2014 throug March 20 George Klicos con
2
gh
015,
e
ntinued to ha
arbor frustr
ration
over Saff treatme of Klicos with respe to the Te
ffo’s
ent
ect
exas Project (Id. at 270 Ex. 82.)
t.
0;
B. Offseaso Painting Procedure
B
on
g
es
Winter paint is comm in the industry. (T at 254, 4
W
ting
mon
i
Tr.
495-96, 713, 807-08.) A the
,
As
395 Project entered the later mo
onths of 2014, Saffo’s O
Offseason P
Painting Pro
ocedure beg to
gan
20

guide Saffo’s approach to scheduling work on the Project. (Ex. 13.) The Offseason Painting
Procedure called for using direct-fire heaters at the beginning of the day to warm up the
interior of the containment tents followed by indirect heaters to maintain the internal
temperature during the day while paint coats were applied. (Tr. at 494-95.) This process
would enable painting throughout the Baltimore winter, which would also coincide with
fewer restrictions around Camden Yards and M&T Bank Stadium during the offseason for
both the Orioles and Ravens. (Id. at 252; Ex. 67.) Based on these procedures, Mr. Smith and
Mr. Hahn testified that there was no weather-related reason Klicos could not have worked in
in the winter of 2014 to 2015. (Tr. at 713, 808.)
George Klicos testified that the Offseason Painting Procedure would “not work in
the stadium parking lot,” which involved tub girders rather than I-beams and which would
be inappropriate for direct heaters. (Id. at 255.) Mr. Ost directly rebutted this testimony
stating that that there was “nothing whatsoever” about the structures around the stadiums
that would have made the Offseason Painting Procedure inapplicable. (Id. at 496.) This
Court finds that Mr. Ost effectively rebutted George Klicos’ assertion regarding the
possibility of painting around the stadiums in the winter. First, Mr. Ost’s testimony, on the
whole, was more detailed than Mr. Klicos’ testimony. For example, Mr. Ost’s description of
the heating involved both direct and indirect heat depending on the time of day and whether
paint was actively being applied. (Id. at 494-95.) Second, Mr. Ost provided examples of other
projects in Cecil County, Maryland and in Maine where Saffo worked in more challenging
circumstances. (Id. at 495-96.) Furthermore, even if some structures were temporarily

21

ble,
A’s
E
M
orroborated Mr. Ost’s recollection that
d
n
unavailab MDTA Project Engineer, Mr. Smith, co
the Offseason Paint Procedu enabled painting th
ting
ures
d
hroughout t winter (I at 713.)
the
Id.
C. Klicos Leaves for th Winter
C
he
Based on th Offseaso Painting Procedur both Sa
B
he
on
g
re,
affo and M
MDTA expe
ected
cleaning and paintin to continue through
ng
hout the w
winter, with the excepti of a ho
ion
oliday
om
ecember thr
rough early January. (I at 250, 491-92, 712
y
Id.
2-13.) Saffo and
o
break fro late De
Klicos both stoppe producti
b
ed
ion work around mid
a
d-December to take a break for the
r
r
holidays. (Id.) Saffo expected Klicos to re
.
K
eturn on Jan
nuary 9, 2015 (id. at 49 and Ge
96),
eorge
Klicos te
estified that Klicos inte
t
ended to re
eturn somet
time around January 8th, 9th, or 10th.
d
(Id. at 25 In fact, he testified that he to Tony Ha
50.)
d
old
atzileris to r
return in m
mid-January 2
2015.
(Id.)
VI.

Klicos’ Prom to Ret
K
mise
turn
When Klicos did not re
W
s
eturn to the Project in mid-Januar as Saffo expected (T at
e
ry
Tr.

496-97), Greg Hahn contacted Klicos repe
n
eatedly and requested t
that it return to the Pro
n
oject.
(Exs. 67, 77; Tr. at 253, 498-99 808-15.) Klicos refuse to do so, and an em from Ge
,
2
9,
K
ed
,
mail
eorge
Klicos to Mike Ost on Decem
o
mber 3, 2014 provides p
4
persuasive e
evidence of the reason why.
In that email, Klico states, “S
e
os
Spoke to Gr about Jan. Main pr
reg
roblem is N out of town
NO
guys are going to want to stay in Balto giv that the work will be sporadi[ due to w
w
ven
e
[c]
winter
weather.” (Ex. 118 at 1; see also Tr. at 132-3
a
T
33.)
Tia Saffo testified that in February 2015, Georg Klicos ca
T
n
2
ge
alled and sai “I need s
id:
some
money.” (Tr. at 858 He said he “wanted $200,000 t get his cr back up to Baltim
8.)
h
d
to
rew
p
more.”
(Id.) Ms. Saffo testif that she discussed the matter w Mr. Ost (id. at 500 858), and they
fied
e
with
0,
d
22

decided that if Klicos was going to return to the Project immediately, Saffo would provide
the additional $200,000. (Id. at 500.) Ms. Saffo testified that she had a second phone call with
Mr. Klicos in which she told him that as long as Klicos “was coming back right away,” Saffo
would pay the $200,000. (Id. at 859.) Mr. Klicos responded: “Absolutely.” (Id.) Ms. Saffo
testified that based on that promise from Mr. Klicos, she agreed to pay the invoice to be sent
by Klicos shortly thereafter. (Id. at 859.) Having observed their testimony at trial, this Court
finds Tia Saffo to be highly credible. Specifically, it is abundantly clear to this Court that the
$200,000 payment was made based upon the express promise of George Klicos to send
workers to return to the Project immediately.
George Klicos emailed Tia Saffo on February 9, 2015 to request $200,000 of
“available profit.” (Ex. 73; Tr. at 129-133, 860-61.) On February 11, 2015, Mr. Klicos sent an
invoice to Saffo for $200,000. (Ex. 74; Tr. at 131-32, 256-57.) On February 12, 2015, Mr.
Klicos sent an email to Nicholas Saffo and Gregory Hahn stating: “Sending crew up next
week.” (Ex. 77; Tr. at 257.)
The next day, on February 13, 2015, Saffo issued a payment to Klicos in the amount
of $200,000. (Ex. 114; Tr. at 258.)10 Ms. Saffo testified that, notwithstanding the Klicos’
“profit” label in the February 9th email, she agreed to make payment based solely on Klicos’
promise to return to work “right away.” (Tr. at 861.) In other words, both she and Mike Ost
testified that if Saffo had known that Klicos was not going to return to the Project, it would
not have paid the requested $200,000. (Tr. at 501, 859-860.)

10 The parties agree that this $200,000 payment in 2015 is included in the stipulated total amount of $2,738,600.73 Saffo
paid to Klicos on the Project. (Tr. at 1201, 1232.)

23

Despite the promise to return “next week” – as documented in the email on February
12, 2015 – Klicos did not send up a crew the following week. (Tr. at 258.) Rather, Mr. Klicos
testified that he sent Mike Hatzileris, Tony Hatzileris, John TZ, and Sophia Patellis back to
the work-site in “late February.” (Id. at 258, 274.) Mr. Klicos was immediately impeached at
trial on this claim by Klicos’ own internal payroll records showing that only Tony and Mike11
Hatzileris received payments for work on the 395 Project during the month of February. (Id.;
Ex. 216 at 30.) Additionally, Tony Hatzileris testified that only he and John TZ returned in
March 2015. (Tr. at 314-15.) Furthermore, Klicos’ certified payroll submission to the DLLR
for hourly employees on the 395 Project does not cover any work in 2015. (Ex. 128.) This
Court finds that Klicos did not return to the work-site until March 3, 2015, the date of an
MDTA Inspector’s Daily Report indicating that Klicos had 2 men on-site and stating that
“Klico[s] was organizing equip[ment] & material in Annapolis [S]t. yard.” (Ex. 81.) While
Klicos was in contact with some Baltimore-based painters, Klicos did not employ them to
perform cleaning and painting work on the 395 Project in 2015. (Tr. at 260-61.) Based on
this evidence, this Court finds that Klicos’ on-site work in March 2015 was aimed at
preparing Klicos’ equipment to leave Project.
George Klicos’ testimony also challenges Ms. Saffo’s account of his promise to return
in exchange for $200,000. First, Mr. Klicos testified that he was not asked by Tia Saffo to
make a promise that Klicos would return to the 395-Project “immediately” in exchange for
payment of the $200,000 and that he did not make such a promise. (Id. at 129-133.) Second,
George Klicos testified that on February 9, 2015, Klicos intended to send Klicos employees
11

Mike Hatzileris is listed as “Kominos” in the Klicos records. (Tr. at 289)

24

back to the 395 Project, “but the weather kept us from sending them back.”(Id. at 134,
250.)12
This Court does not find either of Mr. Klicos’ contentions credible. As a general
matter, Mr. Klicos’ testimony lacked credibility. George Klicos’s testimony was contradicted
by that of his own employee, Tony Hatzileris, regarding (a) whether Mr. Klicos had
instructed Mr. Hatzileris to return to the Project in January (compare Tr. at 250-51 with Tr. at
313-14), (b) whether Klicos used employees from other projects (compare Tr. at 189-90 with
Tr. at 312-13), (c) which Klicos employees returned to the Project in March 2015 (compare Tr.
at 258, 274 with Tr. at 314-15), and (d) whether Klicos’ foreman, Mike Hatzileris, can read
and write the English language (compare Tr. at 155-56 with Tr. at 304). Mr. Klicos’ testimony
was also questioned by MDTA’s Project Engineer Jason Smith, an unbiased third-party to
this suit, regarding Tony Hatzileris’ “regular” attendance at project meetings (compare Tr. at
171-72 with Tr. at 685-86) and the nature and frequency of Klicos’ performance (compare Tr.
at 186-87 with Tr. at 708, 711-12). Finally, Mr. Klicos’ own testimony equivocated on (a)
whether Baltimore-based painters ever returned to work in 2015 (compare Tr. 134 with Tr. at
260-61), (b) whether Klicos managed all the painting labor (Tr. at 185), and (c) who was
responsible for calculating “piecework” bonuses for Klicos employees (id. at 233-34).

12 In its Proposed Findings of Fact and Conclusions of Law, Klicos contends that “Mr. Klicos testified that there was no
telephone call between him and Tia Saffo on or about February 9, 2015.” (ECF No. 158 at 6 ¶13 (citing Tr. at 129/24133).) This purported testimony, however, does not appear in the record. Rather, Mr. Klicos admitted that he had
discussions with “Saffo representatives” before sending the $200,000 invoice. (Tr. at 131-32.) Conducting such a preinvoice conversation is consistent with the parties’ usual practice, which involved speaking to “one of the Saffos” and
emailing most invoices directly to Tia Saffo. (Id. at 236-47, 865; Exs. 21, 22, 30, 36, 39, 46, 52, 60.) To the extent the
occurrence of the conversation with Tia Saffo is in dispute, this Court first finds that George Klicos spoke to Tia Saffo on
or about February 9, 2015.

25

Turning to the substance of Mr. Klicos’ negotiations with Saffo, Mr. Klicos’ own
email on February 12, 2015 reflects a promise to return “next week” and an indication that
Klicos “w[as] planning on coming up this week.” (Ex. 77; Tr. at 257; see also Ex. 118
(stating that a “[n]umber of guys will be coming up” next week).) Based on Tia Saffo’s
credible testimony, Mr. Klicos’ lack of credibility, and Mr. Klicos’ email reiterating a promise
to return either “this week” or “next,” this Court finds that Mr. Klicos promised to return to
the work-site within a week of February 12, 2015. (Exs. 73, 74, 77.)
This Court further finds that Mr. Klicos intended that promise to induce Saffo to pay
the $200,000 requested in his emails on February 9th and February 11th. (Exs. 73, 74.)
Klicos testified that – rather than compensate Klicos’ efforts to return on-site within a week
– the $200,000 was to be paid pursuant to his own subjective understanding of an ongoing
agreement to split the Project profits 50-50 (Tr. at 129-33.) First, this Court held at summary
judgment that Klicos failed to establish such an agreement existed. (ECF Nos. 105-06, 12223.) Second, it defies logic that in mid-February 2015, almost two months after Klicos left
the job-site (Tr. at 287-88; Exs. 128, 136) and a month after Saffo had expected Klicos to
return (Tr. at 496), Saffo would agree to disburse profits. Mr. Klicos knew, through repeated
contact over the prior month (see Exs. 67, 77, 118; Tr. at 253, 498-99, 808-15), that Saffo
wanted Klicos to return immediately. Promising to meet that demand was therefore intended
to induce the $200,000 payment in February 2015.
This Court also finds that Klicos never intended to honor the promise. At the time of
the promise, Mr. Klicos was harboring intense frustration with Saffo due to having been
denied participation in the Texas project. (Id. at 268-270; Ex. 82.) Indeed, Mr. Klicos
26

conceded in his pre-trial deposition that “Texas is what you might say lit the fuse to
this.” (Id. at 269-70.) This statement was a striking admission by Mr. Klicos. Lit fuses result
in some form of fiery destruction, and Mr. Klicos intended to receive payment from Saffo
on the 395 Project even as Klicos’ relationship with Saffo fell apart. Mr. Klicos’ testimony as
to his intent to have his workers return during that winter is not credible. For example, he
testified that he told Tony Hatzileris to return in January, but Hatzileris testified that Mr.
Klicos never gave him that instruction. (Compare Tr. at 250-51 with Tr. at 313-14.)
Mr. Klicos’ own statements contain partial truths regarding his state of mind during
this time period. In an email on December 3, 2014, Klicos states, “Spoke to Greg about Jan.
Main problem is NO out of town guys are going to want to stay in Balto given that the work
will be sporadi[c] due to winter weather.” (Ex. 118 at 1; see also Tr. at 132-33.) Mr. Klicos also
testified that he was “not going to spend money to send people up there to do nothing. I
would pay people to sit here and do nothing.” (Tr. at 133.) This Court credits (a) Mr. Klicos’
concern that Florida-based painters would not want to work during the winter and (b) his
desire to avoid spending money to send the painters up to Baltimore, but the Court rejects
that the weather precluded cleaning and painting in January and February. As this Court has
already found, the Offseason Painting Procedure enabled cleaning and painting on the 395
Project throughout the winter. Mr. Klicos’ complaints about the weather masked his true
intent, namely to seek additional payments while preventing Saffo from discovering that he
never intended to bring his painters back to work.

27

VII.

Project Com
P
mpletion
On March 9, 2015, Ge
O
9
eorge Klico sent an e
os
email to his cousin N
s
Nick Saffo li
isting

various grievances. (Ex. 82.) One of Mr. Klicos’ conc
g
O
K
cerns was th Saffo w using the 395
hat
was
e
Project to fund othe projects. (Id.) Mr. Kl
t
er
licos admitt that this concern w due in pa to
ted
s
was
art
Saffo’s exclusion of Klicos on the Texas project. (Tr. at 270, 294.) On March 10th and 12th,
e
f
t
h
Klicos so
ought an ad
dditional pa
ayment of $345,000, alo with ot
ong
ther demand (Exs. 85 92;
5,
ds.
Tr. at 50 08.)
02On or about March 12 2015, Mr. Klicos spo
O
t
2,
.
oke, in a “h
hostile” ton with Tia and
ne,
a
Nick Saf on a con
ffo
nference call (Tr. at 142 862.) Mr. Klicos test
l.
2,
tified that th Saffos ref
he
fused
to pay Klicos any more money on the Proj
K
m
ject. (Tr. at 142.) On th other han both Tia and
he
nd,
a
Nick Saf testified that, while they refused Klicos’ im
ffo
d
mmediate dem
mand for the $345,000, S
e
Saffo
did not tell Klicos th no future payments would ever be made. (T at 884-8 861-62.) Both
t
hat
e
w
Tr.
85,
indicated that Saffo was open to making future paym
d
o
ments if Kli
icos returne to work. (Id.)
ed
.
Consiste with this Court’s pri credibili determin
ent
s
ior
ity
nations, the Court finds that the Sa
s
affo’s
account of this conv
versation is accurate.
To Saffo’s su
T
urprise, Klic then rem
cos
moved equip
pment and le the Project permane
eft
ently.
(Tr. at 273, 508-09, 816.) Afte Klicos le the job, Saffo brou
2
er
eft
ught addition workers and
nal
s
continue work on the Proje (Tr. at 509-10, 71
ed
n
ect.
14-15.) On October 9 2015, MD
9,
DTA
terminated the Con
ntract for convenience (Ex. 104 Tr. at 51 13 While the work had
c
e.
4;
10.)
e
k
continue past Mar 2015, the original deadline f liquidate damages Saffo did not
ed
rch
t
l
for
ed
s,
d

Mike Ost testified tha this was the only time th a governm
O
at
hat
ment agency ha terminated a Saffo contra for
as
act
convenienc (Tr. at 510.)
ce.
13

28

introduce any evidence of liquidated damages imposed by MDTA. Rather, Saffo and MDTA
engaged in negotiations for settlement payments based on the early termination and other
delays. (See Ex. 104 at 2; Tr. at 107-114, 525.)
MDTA’s total payment for the cleaning and painting line items under the contract
came to $7,640,000.00. (Ex. 147; Tr. at 1080, 1084.) Saffo’s accounting expert in the
construction industry, Jeffrey Willoughby, testified that if costs are to be disregarded, the
completion is measured by units of production, which would be square footage under a
bridge painting contract. (Tr. at 1123.) Mr. Anthony Ardito, an accounting expert originally
retained by Klicos but called by Saffo, agreed that the unit of production is an acceptable
accounting method. (Tr. at 1102-03.) Under that measure, the total production of cleaning
and painting work completed under the contract came to 414,253 square feet. (Ex. 147.) As
of December 2014, when Klicos completed its production work, the parties had completed
cleaning and painting of 280,426 square feet. (Ex. 147; Tr. at 1079.) Thus, as of that date, the
parties had completed 67.69% of the square footage completed under the contract. (Ex. 147;
Tr. at 1078-79.)

CONCLUSIONS OF LAW
As set forth on the record at the bench-trial, the parties agree that the Court’s
resolution of the $200,000 at issue in Saffo’s intentional misrepresentation claim would alter
the value calculations in the parties’ competing claims of unjust enrichment (Tr. at 1201,
1232), so the Court will address the intentional misrepresentation claim first.

29

I.

ntentional Misreprese
entation
In
Under Maryl
U
land law, the tort of inte
e
entional mis
srepresentat 14 has th following five
tion
he
g

elements
s.
(1 That the defendant made a false representa
1)
m
e
ation to the plaintiff, (2 that its
e
2)
fa
alsity was ei
ither known to the defe
n
endant or th the repre
hat
esentation w made
was
with reckless indifference as to its truth, (3) that the m
w
s
s
misrepresenta
ation was
made for the purpose of defrauding the plaintiff, (4) that t plaintiff relied on
m
e
f
g
the
f
th misrepresentation an had the right to rely on it, and (5) that the plaintiff
he
nd
y
e
su
uffered com
mpensable in
njury resulti from th misrepres
ing
he
sentation. M Envtl.
Md.
Trust v. Gayno 370 Md. 89, 803 A.2 512, 516 (Md. 2002).
T
or,
2d
.
On Site Pers., LLC v. C-Care, LL JFM-13P
LC,
-03700, 2015 WL 21296 *13 (D. Md. May 6
5
685,
6,
2015) (M
Motz, J.); see also MPJI-C 11:1. The five elem
Cv
ese
ments must b proven b clear and
be
by
convinci evidence Md. Envtl. Trust, 370 Md. at 97; s also MPJI
ing
e.
l.
M
see
I-Cv 1:15.
“T failure to perform a promise does not e
The
m
establish fra
audulent int
tent.” First U
Union
Nat’l Ba v. Steele Software Sys Corp., 154 Md. App 97, 149, 838 A.2d 4
ank
s.
p.
404, 435 (2
2003).
Rather, a promise constitutes “false representation” i the perso did not i
c
“
if
on
intend to do the
o
promised act when the promise was made. Tufts v. Poo 219 Md. 1, 147 A.2 717 (1959 see
d
e
ore,
2d
9);
also First Union, 154 Md. App at 134, 838 A.2d a 427; MP
t
p.
at
PJI-Cv 11:3. “In evalu
uating
circumst
tantial evide
ence of frau
udulent inten courts co
nt,
onsider the subsequent conduct o the
t
of
promisor, changes of circumst
tances occu
urring after the alleged false rep
dly
presentation, and
,
other cir
rcumstances surroundi the tran
s
ing
nsaction.” F
First Union, 154 Md. A
App. at 149, 838
,
A.2d at 434; accord. Dynacorp Ltd v. Aramtel Ltd., 208 M App. 40 453, 56 A 631, 66
4
D
d.
l
Md.
03,
A.3d
60-61
(Md. Ct. Spec. App. 2012).

14

This tort also goes by th names of “fr
t
he
raud” or “deceit.” B.N. v. K.K. , 312 Md. 135, 149, 538 A.2d 1175, 1182 (1988).

30

A. Klicos In
A
ntentionally Deceived Saffo
y
d
George Klicos’ promise to return within a we of Febr
G
e
eek
ruary 12, 20 was a “
015
“false
represen
ntation” bec
cause, at the time of the promise he did no intend to return in that
e
t
e,
ot
n
timefram Proving an opponen fraudule intent u
me.
nt’s
ent
under this st
tandard is no small task but
k,
George Klicos mad a striking admission when he te
de
g
estified that “Texas is what you m
t
might
he
his.” (Id. at 269-70.) Ha
2
aving learned of Saffo’s decision to exclude K
s
o
Klicos
say lit th fuse to th
from the Texas pro
e
oject in late 2014, Klico was motiv
os
vated to int
tentionally d
deceive Saff on
fo
the 395 Project in retaliation. He knew th 395 Proj
r
H
he
ject was fro
ont-loaded f early pr
for
rofits,
and he used the win weathe to disguis his plan to get out of the Project before S
u
nter
er
se
Saffo
required Klicos to complete the more difficult and less profi
t
d
d
itable work As this C
k.
Court
observed above, Mr Klicos lack credibil regardin weather-r
d
r.
ked
lity
ng
related restri
ictions as w as
well
Klicos’ intent and actual work in 2015 George Klicos was undermin by his own
5.
s
ned
employees, the MD
DTA Project Engineer, and his ow statemen about K
t
wn
nts
Klicos’ consi
istent
lack of interest in sending pa
ainters to th work-site On the other hand Tia Saffo was
he
e.
d,
o
corrobor
rated by he colleagues, Mr. Klic own do
er
cos’
ocumentatio of the p
on
promise, and his
agitation at not be
n
eing include in the Texas project. As a pr
ed
T
rincipal of Klicos Painting
Compan Mr. Klic had all the knowl
ny,
cos
ledge and c
control nec
cessary to b sure tha his
be
at
intention would be carried out
ns
e
t.
Mr. Klicos’ intent to break his own promi also sat
M
b
o
ise
tisfies the s
second elem
ment:
knowled of the statement’s falsity. As to the third element, Mr. Klicos made this false
dge
s
d
promise to defraud Saffo. Specifically, he made the pr
m
romise to Sa
affo’s financ manager Tia
cial
r,
Saffo, in order to in
n
nduce her to pay Klicos $200,000 f work it never inten
o
s
for
nded to perf
form.
31

ade
icos on-site, and Klico said he “w
os
wanted $20
00,000 to ge his
et
Saffo ma clear it needed Kli
crew bac up to Baltimore.” Klicos knew that a pr
ck
K
w
romise to re
eturn within a week w
n
would
loosen Saffo’s purse strings, an he was motivated to defraud to Saffo based on the T
S
e
nd
m
o
o
Texas
project.
Tia Saffo and Mike Ost both credib testified that they ag
T
d
bly
greed to ma the $200
ake
0,000
payment based on Klicos’ prom to return to work right away. (Tr. at 501, 859-861.) Both
t
K
mise
had
were jus
stified in re
elying on Mr. Klicos’ promise as the two c
M
s
companies h success
sfully
worked together on multiple projects bef
n
p
fore and be
ecause Mr. Klicos and Mr. Saffo were
cousins. (Tr. at 143
3-44.) Finall due to its reliance on Klicos’ false repre
ly,
i
esentation, S
Saffo
sustained $200,000 in actual da
d
i
amages, the amount pai to Klicos on Februa 13, 2015 just
id
s
ary
5,
days afte the fraudu
er
ulent promise was made
e.
B. Punitive damages
B
Saffo also se
eeks punitiv damages in an amou left to th discretio of this C
ve
unt
he
on
Court.
Under Maryland law an award of punitiv damages is appropr
M
w,
d
ve
s
riate if the defendant a
acted
with “ac
ctual malice which is “consciou and deli
e,”
i
us
iberate wro
ongdoing, e or wrongful
evil
motive, intent to inj
i
jure, ill will, or fraud.” Bowden v. Ca
B
aldor, Inc., 35 Md. 4, 23, 710 A.2d 267,
50
d
276 (199 (interna quotation marks om
98)
al
n
mitted). In the case of a claim for intent
tional
misrepre
esentation, “the defend
“
dant’s actual knowledge of falsity, coupled w his intent to
l
e
with
deceive the plaintiff by means of the false statement, c
t
f
o
s
constitutes t actual m
the
malice requir to
red
support an award of punitive damages.” Ellerin v. Fairf Sav., F.S
d
E
rfax
S.B., 337 M 216, 234 652
Md.
4,
A.2d 1117, 1126 (1995); see MPJI-Cv 10:1 Again, t
M
15.
this state of mind must be prove by
en
clear and convincing evidence. Scott v. Jenki 345 Md.. 21, 29, 690 A.2d 1000 (1997).
d
g
ins,
0
32

George Klic had mo than rec
G
cos
ore
ckless indiff
ference tow
wards the tr
ruth of his own
promise. As the pro
.
omisor who by virtue of his posi
o,
ition with t compan had suffi
the
ny,
icient
control to ensure that the promise was intentional never fu
t
lly
ulfilled, Geo
orge Klicos had
s
ntation. Ell
llerin, 337 M at 234, 652 A.2d at 1
Md.
1126.
“knowledge of [the] falsity” of the represen
ad
nsistently ask
king for tha very prom for a m
at
mise
month, and Klicos expe
ected
Saffo ha been con
and inten
nded that Sa would rely on his false promis to return This Cour therefore finds
affo
f
se
n.
rt
that punitive damag are justifi in this case.
ges
fied
Saffo has not sought a specific amo
s
ount of puni
itive damag but this Court finds that
ges,
s
$50,000 sufficiently sanctions Klicos’ con
K
nduct. Punit
tive damage should ai to “dete the
es
im
er
wrongdo and othe from eng
oer
ers
gaging in th same misc
he
conduct.” A
Alexander & Alexander, I v.
Inc.
B. Dixon Evander & Assocs., 88 Md. App 672, 596 A.2d 687 (Ct. Spec. App. 1991) cert.
n
p.
),
denied, 32 Md. 1, 59 A.2d 158 (1991) (su
23
90
8
ubsequent hi
istory omitt
ted); see also MPJI-Cv 1
10:14.
The amo
ount should also be cali
ibrated “to the gravity o the defen
t
of
ndant’s cond
duct” and sh
hould
“not be disproportio
onate to . . . the defend
dant’s ability to pay.” Bo
y
owden v. Cald Inc., 350 Md.
ldor,
0
4, 27–28 710 A.2d 267, 278 (1998) (quotin Ellerin, 337 Md. at 2 652 A.2 at 1130). This
8,
ng
242,
2d
Court fin that pun
nds
nitive damag in the am
ges
mount of $5
50,000 will a
achieve thes objectives
se
s.
II.

Unjust Enri
U
ichment
Under Maryl
U
land law, the elements of unjust en
e
o
nrichment ar as follows
re
s:
1. A benefit conferred upon the de
t
u
efendant by the plaintif
y
ff;
2. An appre
eciation or knowledge by the defen
k
b
ndant of the benefit; and
d
3. The acce
eptance or retention by the de
efendant of the bene under such
efit
circumsta
ances as to make it in
nequitable fo the defe
or
endant to re
etain the be
enefit
33

without the payment of its value.
Alternatives Unlimited, Inc. v. New Baltimore City Bd. of Sch. Comm’rs, 155 Md. App. 415, 496, 843
A.2d 252, 300 (Md. Ct. Spec. App. 2004); accord. Hill v. Cross Country Settlements, LLC, 402 Md.
281, 295, 936 A.2d 343, 351 (2007); see also MPJI-Cv 9:32. In the case of a contract implied at
law, the “measure of recovery is the gain to the defendant, not the loss by the plaintiff.”
Alternatives Unlimited, 155 Md. App. at 485. The proper amount of restitution need not be
calculated with “mathematical certainty.” Jackson v. 2109 Brandywine, LLC, 180 Md. App. 535,
575-76, 952 A.2d 304, 328 (2008).
In this case, the parties’ competing unjust enrichment claims are two sides of the
same coin. The overlapping nature of the claims led Judge Motz of this Court to earlier
observe that “the operative question will be whether the actual value realized by Saffo for
Klicos’s work is more or less than $2,738,600.73.” (ECF No. 105 at 10.) This Court also held
that the amount due to Klicos “is measured by ‘the actual value realized by the defendant,’
and not the market value of the plaintiff’s services rendered.” (Id. at 9 (citing Dolan v.
McQuaide, 215 Md. App. 24, 38 (2013)).) In ruling on a motion in limine, this Court reiterated
that market value is not a concern when “services were the effective catalyst for a
quantifiable gain.” (ECF No. 136 at 11 (quoting Slick v. Reinecker, 154 Md. App. 312, 337,
839 A.2d 784, 799 (Md. Ct. Spec. App. 2002)).) In this case, Klicos’ on-site cleaning and
painting work was to a certain degree “the effective catalyst for a quantifiable gain,” namely
the payments from MDTA to Saffo. (ECF No. 136 at 12.) With some tweaks based on
evidence at trial, this framework will guide the Court’s analysis of whether either party has
been unjustly enriched.
34

A. Actual Value Realiz by Saff
A
V
zed
fo
Saffo, as th General Contracto on the 395 Proje
he
l
or
ect, engage Klicos as a
ed
subcontr
ractor to perform clean and pain
ning
nting work as required under Saffo contract with
o’s
t
the MD
DTA. By co
ompleting work on-site Klicos e
w
e,
enabled Saf to get p
ffo
paid by MD
DTA
accordin to the con
ng
ntract and th accompa
he
anying Sched of Prices.
dule
At trial, Klicos attempte to prove that it cont
A
ed
tributed to Saffo’s rece of paym
eipt
ments
for “Mo
obilization.” According to the Stan
ndard Speci
ifications, “[p]ayment o 50 percent of
of
the Mob
bilization ite will be made in the first mon
em
m
nthly estima after the Contractor has
ate
e
establish the nece
hed
essary facili
ities. The re
emaining 50 percent w be prora
0
will
ated and pa in
aid
equal am
mounts on each of the next five monthly estim
e
m
mates.” (Ex 124 at 32-33.) No fu
x.
urther
action is required after the fi paymen of 50% is approved (Tr. at 4
s
a
irst
nt
d.
457-58, 689
9-90.)
Addition
nally, “mater
rials” are “n applicab under this categor of work (Ex. 124 at 32),
not
ble”
ry
t
and fabri
icating mate
erials does not constitut mobilizat
n
te
tion (Tr. at 6
687).
Saffo mobiliz onsite in Decembe 2013, and on Decem
zed
i
er
d
mber 12, 20
013, Saffo sent a
letter (Ex. 10) to MDTA reque
M
esting the in
nitial 50% p
payment of the Mobili
f
ization line item.
(Tr. at 451.) In MD
DTA’s Progr Estimat No. 1, M
ress
te
MDTA appro
oved the fir 50% pay
rst
yment
of the Mobilization line item which came to $3
M
m,
c
350,000.00. (Ex. 12.) Klicos had no
d
involvem
ment in Sa
affo’s onsite mobilizat
e
tion in De
ecember 20
013. (Tr. a 459-60.) Any
at
preparato efforts by Klicos therefore did not res
ory
d
sult in any quantifiabl gain to S
le
Saffo
because MDTA had already ap
d
pproved and begun issu paymen for the M
d
uing
nts
Mobilization line
n
item of the Contrac In this unjust enric
ct.
u
chment con
ntext, Klicos off-site p
s’
preparatory w
work

35

constitutes a cost to Klicos that does not measure the actual value realized by Saffo.
Alternatives Unlimited, 155 Md. App. at 485.
Under Alternatives Unlimited, 155 Md. App. at 485, and Slick, 154 Md. App. at 337, this
Court’s task is to determine what portion of the payments from MDTA is attributable to
Klicos’ on-site cleaning and painting production work. MDTA paid Saffo $7,640,000.00 for
all cleaning and painting completed under the contract (Ex. 147; Tr. at 1080, 1084), and it
paid $5,857,770.00 for cleaning and painting production work during Klicos’ time on the 395
Project (Tr. at 97-99 (Stipulation)). As an initial matter, a portion of the MDTA payments
received during Klicos’ time on the Project is attributable to Saffo’s decision to front-load
the Schedule of Prices. This strategy involves assigning higher prices to work that would be
completed earlier in the project. The goal is to keep the Project cash-flow positive, but this
approach comes with back-end risks should the later work prove even more difficult than
expected.15
In order to give Saffo credit for selecting this strategy, along with its attendant risks,
this Court must select a starting value that accounts for the higher profits assigned to earlier
work. Based on the expert accounting testimony of Mr. Ardito and Mr. Willoughby (Tr. at
1102-06, 1123), the best method for identifying that amount in this case is to have the
starting value reflect the percentage of square footage completed with Klicos’ help compared
to the total square footage completed on under contract. Saffo initially requested a
comparison to the total square footage contemplated under the contract, but this Court finds

Furthermore, Klicos was aware that the earlier work had higher profit margins and it left the Project before the more
difficult work came due.

15

36

that such an approach would over-compensate Saffo, especially when it negotiated a
settlement with MDTA for the early termination of the contract. Mr. Ardito questioned
whether the unit of production method, based on square footage, is applicable to the
damages context, but this Court finds that such an opinion in a case for unjust enrichment is
a legal conclusion more properly committed to the discretion of this Court. This Court finds
that the unit of production method will help this Court determine how much credit Saffo is
owed for its front-loading strategy.
As of December 2014, the parties had completed cleaning and painting of 280,426
square feet. (Ex. 147; Tr. at 1079.) The total square footage of cleaning and painting
completed under the contract came to 414,253 square feet. (Ex. 147.) Thus, while Klicos was
on the job, the parties completed 67.69% of the square footage completed under the
contract. (Ex. 147; Tr. at 1078-79.) MDTA’s total payment for the cleaning and painting line
items under the contract came to $7,640,000.00. (Ex. 147; Tr. at 1080, 1084.) Taking 67.69%
of $7,640,000.00 amounts to $5,171,850.63. (Ex. 147.) To give Saffo credit for its decision to
use a front-loading strategy, and thereby even out the revenue per square foot, this Court
will use $5,171,850.63 as the starting point for analyzing the parties’ respective production
efforts in 2014.
To analyze the parties’ production efforts, this Court will use the parties’ respective
on-site production work hours. This approach properly accounts for the fact that the
cleaning and painting process involves important on-site work before and after paint is
actually applied to the bridges. Specifically, both parties contributed to the rigging,
containment, and clean-up work required under the contract. Square footage is inappropriate
37

in this context because MDTA did not pay based on strict square footage measurements (Tr.
at 695-96.), and neither party even attempted to quantify the square footage of paint applied
by its own painters. In order to compare the parties’ on-site production work hours, Exhibit
136 provides a very clear picture of the parties’ respective efforts.
Exhibit 136 summarizes the parties’ production hours based on payroll records.
Klicos’ hourly employees worked 15,628.35 hours on the Project site. (Exs. 128, 136.)
Saffo’s hourly employees worked 11,962.59 hours on-site. (Exs. 125, 136.) Jo-Lyn’s hourly
employees worked 6,780 hours on-site. (Ex. 129.) While salaried employees for Saffo and
Klicos may have devoted additional hours to cleaning and painting production, Saffo did not
offer any evidence of such hours. Klicos offered Tony Hatzileris’ testimony regarding his
on-site work, but Klicos’ minimal evidentiary submission, untethered to any documentary
evidence, calls for speculation by this Court. Furthermore, Klicos’ own proposed formula
does not offer any quantification of Tony Hatzileris’ contribution to on-site production. (See
ECF No. 158 at 14.)
Klicos initially sought credit for Jo-Lyn’s work hours, but as this Court held during
trial, it is undisputed that Jo-Lyn was a subcontractor to Saffo, who paid Jo-Lyn’s payroll
costs. (Tr. at 468-469, 797-800; Ex. 130.) Additionally, the laborers were “free agents” (Tr. at
77, 567), and Klicos only shouldered the employment and liability risks for the employees on
its own payroll (Tr. at 183). Any payments from Klicos to Jo-Lyn would therefore constitute
costs to Klicos rather than a benefit to Saffo. Klicos essentially asks this Court to simply
wave a wand to place Saffo’s subcontractor Jo-Lyn, its employees, and their work under
Klicos’ umbrella. This Court sees no basis to do so.
38

Comparing the parties’ on-site prod
C
t
duction hou Klicos c
urs,
contributed about 45.4 16
d
47%
of the cl
leaning and painting production. Taking 45.4
d
p
47% of the $5,171,850
e
0.63 amoun to
nts
$2,351,622.96. (Ex. 147 (utilizin the exact fraction rat
ng
t
ther than ro
ounded 45.4
47%).)17
B. Saffo’s Payment to Klicos
B
P
The parties stipulated th Saffo pai Klicos a total of $2,7
T
s
hat
id
738,600.73 for Klicos’ w
work
on the 395-Project (Tr. at 1183
-119 (Stipul
lation); see a Ex. 114) but two d
also
),
deductions from
this amo
ount are nec
cessary to re
eflect the va Saffo c
alue
conferred on Klicos for the purpo of
n
r
ose
any unju enrichm
ust
ment claim. First, the parties agre that the $200,000 at issue in the
p
eed
n
intention misrepr
nal
resentation claim are included in the sti
ipulated to
otal amoun of
nt
$2,738,600.73 Saffo paid to Klicos on the Project. (
o
K
(Tr. at 1201 1232.) As this Cour has
1,
s
rt
already found that Klicos must return the $200,000 as actual dam
f
K
t
s
mages for Sa
affo’s intent
tional
misrepre
esentation claim, that amount mu be dedu
c
a
ust
ucted from the $2,738,
,600.73 to a
avoid
double recovery by Saffo.
Additionally, a portion of the $2,738,600.73 compensat Klicos for off-site preA
,
ted
producti work. From Januar 29, 2013 through A
ion
F
ry
3
April 23, 20
013, Klicos devoted 2,5
592.5
labor ho
ours towards fabricating and trans
sporting equ
uipment for the job (E 146A; T at
r
Ex.
Tr.
1059-106 and Saffo paid Kl
61),
licos $178,6
600.73 for t
those effort (Ex. 22; Tr. at 551ts.
-552.)
This Co
ourt has al
lready held that Klic
d
cos’ pre-pro
oduction w
work did n catalyze the
not
e

The exac fraction is 0.4
ct
4546966128944
4975.
During trial this Court held that Klico had no viable theory of un
t
os
njust enrichmen as to Saffo’s settlements w the
nt
s
with
MDTA for the early term
r
mination and oth delays. (See Tr. at 347-52.) To reiterate, K
her
)
Klicos played n role in causi the
no
ing
MDTA to make those payments to Sa
p
affo, so it cann claim that any portion o those payme
not
of
ents constitute unjust
enrichment retained by Saffo. Klicos essentially seek compensatio for costs it incurred, but any such cos are
t
S
e
ks
on
t
t
sts
irrelevant under Alternativ Unlimited, Inc v. New Baltimo City Bd. of S Comm’rs, 155 Md. App. 415, 485 (Md. Ct Spec.
u
ves
c.
ore
Sch.
t.
App. 2004)
).
16
17

39

mobilization payments by MDTA, and that the relevant benefit conferred by Klicos is its onsite cleaning and production work, not preparatory costs. It would be unfair, or inapposite,
for the Court to compare the benefit to Saffo of Klicos’ on-site cleaning and painting
production work alone with the benefit to Klicos of Saffo’s payments for both on-site and offsite work. Such an approach would tip the scales in favor of Saffo’s unjust enrichment claim.
(See Tr. at 1061 (testimony by construction damages expert Scott Lowe regarding a
deduction of the pre-production work in order to match MDTA revenue to labor hours).) In
other words, the $178,600.73 emerges as a side bargain not encompassed by the unjust
enrichment claim related to MDTA’s payment for cleaning and painting production. While
Saffo may have used MDTA’s mobilization payments to fund this side bargain, Klicos did
not cause or catalyze the mobilization payments. This Court cannot say that the exchange of
$178,600.73 for Klicos’ off-site pre-production work was unjust in any way, but the Court
must deduct $178,600.73 in order to ensure a comparison of apples to apples.
With these two deductions, the benefit conferred by Saffo upon Klicos for the
cleaning and painting work amounts to $2,360,000.00. When compared to the benefit
conferred by Klicos upon Saffo, $2,351,622.96, the amount of unjust enrichment retained by
Klicos comes to $8,377.04.
CONCLUSION
Having conducted a seven-day bench trial from June 18, 2018 through June 26, 2018,
heard eyewitness and expert witness testimony, considered documentary evidence submitted
by the parties, heard the parties’ legal arguments, and reviewed the parties’ Proposed
Findings of Fact and Conclusions of Law, this Court concludes as follows.
40

1. Klicos intentionally misrepresented its intent to return to the 395 Project in 2015,
which caused Saffo to incur $200,000 in actual damages. Punitive damages are
warranted in the amount of $50,000.
2. Klicos retains $8,377.04 in unjust enrichment based upon Saffo’s overpayment
for the actual value to Saffo of Klicos’ work on the 395 Project. This amount
incorporates a deduction for a refund of the $200,000 fraudulently obtained by
Klicos.
3. Judgment shall be ENTERED in favor of Saffo on its intentional
misrepresentation claim and on the parties’ competing claims of unjust
enrichment.
4. Klicos SHALL PAY to Saffo a total of $58,377.04.
A separate order follows.
July 16, 2018

______/s/___________________
Richard D. Bennett
United States District Judge

41