Faddis Concrete, Inc. v. Brawner Builders, Inc.
MEMORANDUM OPINION. Signed by Judge Ellen L. Hollander on 9/15/2017. (dass, Deputy Clerk)
IN THE UNITED STATES DISTRICT COURT
FOR THE DISTRICT OF MARYLAND
FADDIS CONCRETE, INC.,
Civil Action No. ELH-15-3975
BRAWNER BUILDERS, INC.,
Faddis Concrete, Inc. (―Faddis‖), a supplier of materials, filed suit against Brawner
Builders, Inc. (―Brawner‖), a general contractor for the Maryland State Highway Administration
(―SHA‖). ECF 1.1 The Complaint contains four counts: Breach of Contract (Count I); Breach of
Contractual Duties (Count II); Brawner‘s Interference with Statutory Rights (Count III); and
Unjust Enrichment and Imposition of Constructive Trust (erroneously labeled as Count XI, but
construed as Count IV).2 Id.
Now pending is Brawner‘s Motion for Judgment on the Pleadings (ECF 67, ―Motion‖),
which is supported by a copy of the ―Purchase Order‖ between Brawner and Faddis, dated
January 24, 2013, and executed by Brawner and Faddis on February 7, 2013. ECF 67-1.3 In the
Purchase Order, which I shall designate for convenience as the ―Subcontract,‖ Faddis is referred
to as the Seller and Brawner is identified as the Buyer. Faddis opposes the Motion (ECF 71,
Suit was filed in the Eastern District of Pennsylvania. By Order of November, 24, 2015
(ECF 20), the District Court for the Eastern District of Pennsylvania transferred the case to this
Court under 28 U.S.C. § 1631, or alternatively, pursuant to 28 U.S.C. § 1404(a). Id.
Jurisdiction is founded on diversity of citizenship. See 28 U.S.C. § 1332.
The Complaint proceeds directly from Count III to Count XI.
The Motion, which is 20 pages in length, was filed without a separate memorandum of
law. Rather, the legal argument in support of the Motion is included within the Motion. See
Local Rule 105.1 (requiring a motion to be accompanied by a legal memorandum).
―Opposition‖), supported by several exhibits. ECF 71-1.
Brawner has replied.
Also pending is plaintiff‘s motion for leave to file a surreply. ECF 74 (―Motion for
Surreply‖). Brawner opposes the Motion for Surreply (ECF 75) and Faddis has replied. ECF 77.
No hearing is necessary to resolve the motions. See Local Rule 105.6. For the reasons
that follow, I shall grant the Motion for Surreply. And, I shall grant the Motion in part and deny
it in part.
SHA awarded Brawner a prime contract with respect to the extension of a noise barrier
on a portion of southbound I-95 in Maryland (the ―Project‖). ECF 1, ¶ 5. In connection with the
Project, Brawner entered into the Subcontract with Faddis in February 2013 for the purchase of
―Noise Wall Panels‖ and other materials. ECF 67-1 at 1; ECF 1, ¶ 6. Faddis, a SHA-approved
supplier of materials (ECF 1, ¶ 6), began fabricating the concrete panels at its plant in
Downington, PA. Id. ¶ 7.
On May 2, 2014, during the course of Faddis‘s performance of the Subcontract, David
Coyne, a representative of SHA, sent a letter to Brawner stating that SHA believed Faddis‘s
concrete panels contained ―‗aggregate from an unapproved source‘‖ and warned that the
requisite panel strength could not be verified. Id. ¶ 8.
Faddis asserts that the statements in SHA‘s letter were false. Id. ¶ 9. As a result of
SHA‘s accusations, SHA halted Faddis‘s work on the Project. Id. ¶ 10. Moreover, athough SHA
The factual allegations are derived from the Complaint and the Subcontract, which was
submitted as an exhibit to Brawner‘s Motion and is integral to the Complaint. Based on the
procedural posture of the case, I must assume the truth of the well-pleaded factual allegations in
the Complaint. See, e.g., E.I. du Pont de Nemours & Co. v. Kolon Indus., Inc., 637 F.3d 435,
440 (4th Cir. 2011).
was informed by both plaintiff and defendant of its error, SHA suspended Faddis‘s Downington,
PA plant from production of any materials for all SHA projects. Id. ¶ 15. Faddis alleges that
this suspension made work on the Project more expensive (id. ¶ 16), idled its Downington plant,
and rendered the plant unprofitable. Id. ¶ 17. Indeed, Faddis contends that SHA caused ―a total
disruption‖ of Faddis‘s ―operation‖ at that plant. Id. ¶ 18.
Moreover, Faddis complains that during this period SHA notified the Virginia
Department of Transportation (―VDOT‖) and the Pennsylvania Department of Transportation
(―PDOT‖)—entities with which Faddis does business (id. ¶ 20)—of plaintiff‘s suspension ―for
quality reasons,‖ and warned them of the alleged quality problems. Id. ¶ 19. As a result, VDOT
suspended Faddis‘s Virginia plant, halted work on projects in Virginia, and barred Faddis from
bidding on Virginia contracts. Id. ¶¶ 21, 22. SHA subsequently admitted its error. Id. ¶ 23.
Although SHA notified VDOT and PDOT of its error (id. ¶ 26), Faddis suffered damages from
the disparagement and loss of business, for which it has not been compensated. Id. ¶ 27-29.
During or shortly after these events, on June 23, 2014, Faddis asked Brawner to ―pass
through‖ its claims for damages against SHA. Id. ¶¶ 37-39. As plaintiff explains it, in order for
Faddis, as subcontractor, to recover from SHA, the contract owner, the claim had to be initiated
by Brawner, the prime contractor, because only Brawner has contractual privity with both sides.
Id. ¶¶ 31-36. Moreover, Faddis avers that Brawner was ―obligated to pass through all of Faddis‘
claims . . . .‖ Id. ¶ 33.
Faddis also gave notice of its claims to SHA directly. Id. ¶ 41; id. at 22. However, SHA
informed Faddis that it could only bring a claim against SHA through the prime contractor,
Brawner. Id. ¶ 42. But, Brawner refused to submit Faddis‘s claim to SHA. Id. ¶ 43.
Faddis also alleges that Brawner owes plaintiff $132,026.94, constituting the unpaid
balance under the Subcontract, plus $36,353.00 for unpaid trucking charges. Id. ¶¶ 45-46, 50.
In its Opposition and an accompanying exhibit, Faddis notes that after the Complaint was
filed, Brawner sent a letter to SHA on Faddis‘s behalf. ECF 71 at 15.
Additional facts are included in the Discussion.
Motion for Surreply
Local Rule 105.2(a) provides that a party is not permitted to file a surreply without
permission of the court. The filing of a surreply ―is within the Court‘s discretion, see Local Rule
105.2(a), but they are generally disfavored.‖ EEOC v. Freeman, 961 F. Supp. 2d 783, 801
(D. Md. 2013), aff’d in part, 778 F.3d 463 (4th Cir. 2015); see also, e.g., Chubb & Son v. C & C
Complete Servs., LLC, 919 F. Supp. 2d 666, 679 (D. Md. 2013). A surreply may be permitted
when the party seeking to file the surreply ―would be unable to contest matters presented to the
court for the first time‖ in the opposing party‘s reply. Clear Channel Outdoor, Inc. v. Mayor &
City Council of Baltimore, 22 F. Supp. 3d 519, 529 (D. Md. 2014) (quotations and citations
omitted). However, a surreply is not permitted where the reply is responsive to an issue raised in
the opposition. See Khoury v. Meserve, 268 F. Supp. 2d 600, 605-06 (D. Md. 2003). In that
posture, there was a full opportunity to present the movant‘s arguments. Id. at 606.
In its Reply, Brawner has raised several new arguments. ECF 73. Therefore, to the
extent Faddis‘s surreply is responsive to these new arguments, I shall grant the Motion for
Surreply and will consider the corresponding parts of Faddis‘s attached surreply (ECF 74-1).
Motion for Judgment: Standard of Review
Defendant has moved for judgment on the pleadings pursuant to Fed. R. Civ. P. 12(c).
Under Rule 12(h)(2)(B), a defendant may assert ―failure to state a claim upon which relief can be
granted‖ in a Rule 12(c) motion. A Rule 12(c) motion ―for judgment on the pleadings‖ may be
filed ―[a]fter the pleadings are closed,‖ so long as it is ―early enough not to delay trial.‖ Fed. R.
Civ. P. 12(c). Such a motion is ―assessed under the same standard that applies to a Rule 12(b)(6)
motion.‖ Walker v. Kelly, 589 F.3d 127, 139 (4th Cir. 2009) (citing Edwards v. City of
Goldsboro, 178 F.3d 231, 243 (4th Cir. 1999)); see also McBurney v. Cuccinelli, 616 F.3d 393,
408 (4th Cir. 2010).
A defendant may test the legal sufficiency of a complaint by way of a motion to dismiss
under Rule 12(b)(6). In re Birmingham, 846 F.3d 88, 92 (4th Cir. 2017); Goines v. Valley Cmty.
Servs. Bd., 822 F.3d 159, 165-66 (4th Cir. 2016); McBurney v. Cuccinelli, 616 F.3d 393, 408
(4th Cir. 2010), aff’d sub nom. McBurney v. Young, 569 U.S. 221 (2013); Edwards v. City of
Goldsboro, 178 F.3d 231, 243 (4th Cir. 1999). A Rule 12(b)(6) motion constitutes an assertion
by a defendant that, even if the facts alleged by a plaintiff are true, the complaint fails as a matter
of law ―to state a claim upon which relief can be granted.‖
Whether a complaint states a claim for relief is assessed by reference to the pleading
requirements of Fed. R. Civ. P. 8(a)(2). That rule provides that a complaint must contain a
―short and plain statement of the claim showing that the pleader is entitled to relief.‖ The
purpose of the rule is to provide the defendants with ―fair notice‖ of the claims and the
―grounds‖ for entitlement to relief. Bell Atl. Corp. v. Twombly, 550 U.S. 544, 555-56 (2007).
To survive a motion under Fed. R. Civ. P. 12(b)(6), a complaint must contain facts
sufficient to ―state a claim to relief that is plausible on its face.‖ Twombly, 550 U.S. at 570; see
Ashcroft v. Iqbal, 556 U.S. 662, 684 (2009) (―Our decision in Twombly expounded the pleading
standard for ‗all civil actions‘ . . . .‖ (citation omitted)); see also Willner v. Dimon, 849 F.3d 93,
112 (4th Cir. 2017). But, a plaintiff need not include ―detailed factual allegations‖ in order to
satisfy Rule 8(a)(2). Twombly, 550 U.S. at 555. Moreover, federal pleading rules ―do not
countenance dismissal of a complaint for imperfect statement of the legal theory supporting the
claim asserted.‖ Johnson v. City of Shelby, ___ U.S. ____, 135 S. Ct. 346, 346 (2014) (per
Nevertheless, the rule demands more than bald accusations or mere speculation.
Twombly, 550 U.S. at 555; see Painter’s Mill Grille, LLC v. Brown, 716 F.3d 342, 350 (4th Cir.
2013). If a complaint provides no more than ―labels and conclusions‖ or ―a formulaic recitation
of the elements of a cause of action,‖ it is insufficient. Twombly, 550 U.S. at 555. Rather, to
satisfy the minimal requirements of Rule 8(a)(2), the complaint must set forth ―enough factual
matter (taken as true) to suggest‖ a cognizable cause of action, ―even if . . . [the] actual proof of
those facts is improbable and . . . recovery is very remote and unlikely.‖ Twombly, 550 U.S. at
556 (internal quotations omitted).
In reviewing a Rule 12(b)(6) motion, a court ―must accept as true all of the factual
allegations contained in the complaint‖ and must ―draw all reasonable inferences [from those
facts] in favor of the plaintiff.‖ E.I. du Pont de Nemours & Co. v. Kolon Indus., Inc., 637 F.3d
435, 440 (4th Cir. 2011) (citations omitted); see Semenova v. Maryland Transit Admin., 845 F.3d
564, 567 (4th Cir. 2017); Houck v. Substitute Tr. Servs., Inc., 791 F.3d 473, 484 (4th Cir. 2015);
Kendall v. Balcerzak, 650 F.3d 515, 522 (4th Cir. 2011), cert. denied, 565 U.S. 943 (2011). But,
a court is not required to accept legal conclusions drawn from the facts. See Papasan v. Allain,
478 U.S. 265, 286 (1986). ―A court decides whether [the pleading] standard is met by separating
the legal conclusions from the factual allegations, assuming the truth of only the factual
allegations, and then determining whether those allegations allow the court to reasonably infer‖
that the plaintiff is entitled to the legal remedy sought. A Society Without a Name v. Virginia,
655 F.3d 342, 346 (4th. Cir. 2011), cert. denied, 566 U.S. 937 (2012).
Under limited circumstances, when resolving a Rule 12(b)(6) motion, a court may
consider documents beyond the complaint without converting the motion to dismiss to one for
summary judgment. Goldfarb v. Mayor & City Council of Baltimore, 791 F.3d 500, 508 (4th
In particular, a court may properly consider documents that are ―explicitly
incorporated into the complaint by reference and those attached to the complaint as
exhibits . . . .‖ Goines, 822 F.3d at 166 (citations omitted); see also U.S. ex rel. Oberg v.
Pennsylvania Higher Educ. Assistance Agency, 745 F.3d 131, 136 (4th Cir. 2014); Anand v.
Ocwen Loan Servicing, LLC, 754 F.3d 195, 198 (4th Cir. 2014); Am. Chiropractic Ass’n v.
Trigon Healthcare, Inc., 367 F.3d 212, 234 (4th Cir. 2004), cert. denied, 543 U.S. 979 (2004);
Phillips v. LCI Int’l Inc., 190 F.3d 609, 618 (4th Cir. 1999). A court may also ―consider a
document submitted by the movant that was not attached to or expressly incorporated in a
complaint, so long as the document was integral to the complaint and there is no dispute about
the document‘s authenticity.‖ Goines, 822 F.3d at 166 (citations omitted); see also Woods v.
City of Greensboro, 855 F.3d 639, 642 (4th Cir. 2017); Kensington Volunteer Fire Dep’t. v.
Montgomery Cnty., 684 F.3d 462, 467 (4th Cir. 2012). To be ―integral,‖ a document must be one
―that by its ‗very existence, and not the mere information it contains, gives rise to the legal rights
asserted.‘‖ Chesapeake Bay Found., Inc. v. Severstal Sparrows Point, LLC, 794 F. Supp. 2d 602,
611 (D. Md. 2011) (citation omitted) (emphasis in original).
However, ―before treating the contents of an attached or incorporated document as true,
the district court should consider the nature of the document and why the plaintiff attached it.‖
Goines, 822 F.3d at 167 (citing N. Ind. Gun & Outdoor Shows, Inc. v. City of S. Bend, 163 F.3d
449, 455 (7th Cir. 1998)). ―When the plaintiff attaches or incorporates a document upon which
his claim is based, or when the complaint otherwise shows that the plaintiff has adopted the
contents of the document, crediting the document over conflicting allegations in the complaint is
proper.‖ Goines, 822 F.3d at 167. Conversely, ―where the plaintiff attaches or incorporates a
document for purposes other than the truthfulness of the document, it is inappropriate to treat the
contents of that document as true.‖ Id.
Brawner attached the Purchase Order. As noted, for convenience I have designated it as
the Subcontract. ECF 67-1. Faddis has identified it in the Complaint as the ―Material Contract.‖
ECF 1, ¶ 6. Clearly, the Subcontract is integral to the Complaint, and there is no dispute as to its
authenticity. Therefore, I shall consider it.
A. Choice of Law
Both parties assume, without discussing, that Maryland law applies to this dispute.
In regard to state law claims under diversity jurisdiction, federal courts apply federal
procedural law and the substantive law of the state in which the proceeding is brought. See, e.g.,
Erie R.R. v. Tompkins, 304 U.S. 64, 78 (1938); Leichling v. Honeywell Intern., Inc., 842 F.3d
848, 851 (4th Cir. 2016); see also Kerr v. Marshall Univ. Bd. of Governors, 824 F.3d 62, 74 (4th
Cir. 2016); Colgan Air, Inc. v. Raytheon Aircraft Co., 507 F.3d 270, 275 (4th Cir. 2007); C.
Wright & A. Miller, 19 Fed. Practice and Procedure, § 4501 (3d ed.). And, federal courts apply
the choice of law rules of the state in which the court sits. See, e.g., Klaxon Co. v. Stentor
Electric Mfg. Co., 313 U.S. 487, 496-97 (1941); Albemarle Corp. v. AstraZeneca UK Ltd., 628
F.3d 643, 652-53 (4th Cir. 2010); see also Prof’l Massage Training Cent., Inc. v. Accreditation
Alliance of Career Schools and Colls., 781 F.3d 161, 180 (4th Cir. 2015); Demetres v. E. W.
Const. Inc., 776 F.3d 271, 273 (4th Cir. 2015).
Under Maryland law, if a contract contains a choice of law provision, courts generally
apply the law of the specified jurisdiction. Cunningham v. Feinberg, 441 Md. 310, 326, 107
A.3d 1194, 1204 (2015). Article 18 of the Subcontract provides: ―This Agreement shall be
construed according to the laws of the State of Maryland, without regard to principles of conflict
of laws.‖ ECF 67-1 at 3. Therefore, I shall apply Maryland law.
B. Principles of Contract Construction
In analyzing the claim for breach of contract, it is helpful to review the principles of
contract formation and contract interpretation under Maryland law.
In general, a contract is defined as ―a promise or set of promises for breach of which the
law gives a remedy, or the performance of which the law in some way recognizes as a duty.‖
Richard A. Lord, 1 Williston on Contracts § 1:1, at 2-3 (4th ed. 1990); accord Restatement
(Second) Contracts § 1, at 5 (1981); see also Maslow v. Vanguri, 168 Md. App. 298, 321, 896
A.2d 408, 421-22, cert. denied, 393 Md. 478, 903 A.2d 416 (2006). ―A contract is formed when
an unrevoked offer made by one person is accepted by another.‖ Prince George’s County v.
Silverman, 58 Md. App. 41, 57, 472 A.2d 104, 112 (1984). Thus, mutual assent is an integral
component of every contract. See, e.g., Cochran v. Norkunas, 398 Md. 1, 14, 919 A.2d 700, 708
(2007); Advance Telecom Process LLC v. DSFederal, Inc., 224 Md. App. 164, 177, 119 A.3d
175, 183 (2015). See also Mitchell v. AARP, 140 Md. App. 102, 116 (2001) (―An essential
element with respect to the formation of a contract is ‗a manifestation of agreement or mutual
assent by the parties to the terms thereof; in other words, to establish a contract the minds of the
parties must be in agreement as to its terms.‘‖ (citations omitted)). ―Manifestation of mutual
assent includes two issues: (1) intent to be bound, and (2) definiteness of terms.‖ Cochran, 398
Md. at 14, 919 A.2d at 708.
A contract may be oral or written, as well as express or implied. ―‗An express contract
has been defined as an actual agreement of the parties, the terms of which are openly uttered or
declared at the time of making it, being stated in distinct and explicit language, either orally or in
writing.‘‖ Maryland Cas. Co. v. Blackstone Int’l Ltd., 442 Md. 685, 706, 114 A.3d 676, 688
(2015) (quoting Cnty. Comm’rs of Caroline Cnty v. Roland Dashiell & Sons, Inc., 358 Md. 83,
94, 747 A.2d 600, 606 (2000)). Whether oral or written, a contract must express with certainty
the nature and extent of the parties‘ obligations and the essential terms of the agreement. Cnty.
Comm’rs for Carroll Cnty. v. Forty W. Builders, Inc., 178 Md. App. 328, 377-78, 941 A.2d
1181, 1209-10 (2008); see Canaras v. Lift Truck Services, 272 Md. 337, 346, 322 A.2d 866, 871
(1974). If an agreement omits an important term, or is otherwise too vague or indefinite with
respect to an essential term, it is not enforceable. Mogavero v. Silverstein, 142 Md. App. 259,
272, 790 A.2d 43, 51 (2002); see L & L Corp. v. Ammendale, 248 Md. 380, 385, 236 A.2d 734,
737 (1967); Schloss v. Davis, 213 Md. 119, 123, 131 A.2d 287, 290 (1956) (stating that a
―contract may be so vague and uncertain as to price or amount as to be unenforceable‖).
―‗The cardinal rule of contract interpretation is to give effect to the parties‘ intentions.‘‖
Dumbarton Imp. Ass’n. Inc. v. Druid Ridge Cemetery Co., 434 Md. 37, 51, 73 A.3d 224, 232
(2013) (citation omitted). To determine the parties‘ intentions, courts look first to the written
language of the contract. Walton v. Mariner Health of Maryland, Inc., 391 Md. 643, 660, 894
A.2d 584, 594 (2006) (―[G]enerally, when seeking to interpret the meaning of a contract our
search is limited to the four corners of the agreement.‖); Hartford Acc. & Indem. Co. v. Scarlett
Harbor Assoc. Ltd. P’ship, 109 Md. App. 217, 291, 674 A.2d 106, 142 (1996) (―[T]he court
- 10 -
must, as its first step, determine from the language of the agreement what a reasonable person in
the position of the parties would have meant at the time the agreement was effectuated.‖), aff’d,
346 Md. 122, 695 A.2d 153 (1997).
―Maryland courts interpreting written contracts have long abided by the law
of objective contract interpretation, which specifies that ‗clear and unambiguous language‘ in an
agreement ‗will not give way to what the parties thought the agreement meant or was intended to
mean.‘‖ Urban Growth Prop. Ltd. P’ship v. One W. Baltimore St. Assocs. LLC, No. 882, Sept.
Term, 2015, 2017 WL 526559, at *5 (Md. Ct. Spec. App. Feb. 9, 2017) (citation omitted)
(unpublished); see Cochran v. Norkunas, 398 Md. 1, 16, 919 A.2d 700, 709 (2007); Huggins v.
Huggins & Harrison, Inc., 220 Md. App. 405, 417, 103 A.3d 1133, 1139 (2014) (internal
quotations and alteration omitted). The court‘s ―task, therefore, when interpreting a contract, is
not to discern the actual mindset of the parties at the time of the agreement . . . .‖ Dumbarton,
434 Md. at 52, 73 A.3d at 232. Rather, the court is to ―‗determine from the language of the
agreement itself what a reasonable person in the position of the parties would have meant at the
time it was effectuated.‘‖ Id. (quoting General Motors Acceptance v. Daniels, 303 Md. 254,
261, 492 A.2d 1306, 1310 (1985)).
As indicated, to determine the parties‘ intentions, courts first look to the written language
of the contract. See Walton, 391 Md. at 660, 894 A.2d at 594. ―‗The words employed in the
contract are to be given their ordinary and usual meaning, in light of the context within which
they are employed.‘‖ DIRECTV, Inc. v. Mattingly, 376 Md. 302, 313, 829 A.2d 626, 632–33
(2003) (citations omitted). A court will presume that the parties meant what they stated in an
unambiguous contract, without regard to what the parties to the contract personally thought it
meant or intended it to mean. See Dumbarton, 434 Md. at 51, 73 A.3d at 232; Dennis v. Fire &
- 11 -
Police Employees Ret. Sys., 390 Md. 639, 656, 890 A.2d 737, 747 (2006); PaineWebber Inc. v.
East, 363 Md. 408, 414, 768 A.2d 1029, 1032 (2001); see also, e.g., Scarlett Harbor, 109 Md.
App. at 291, 674 A.2d at 142 (―Where the language of a contract is clear, there is no room for
construction; it must be presumed that the parties meant what they expressed.‖).
Moreover, a court will not ―add or delete words to achieve a meaning not otherwise
evident from a fair reading of the language used.‖ Brensdel v. Winchester Constr. Co., 392 Md.
601, 623, 898 A.2d 472, 485 (2006). Indeed, ―[i]t is a fundamental principle of contract law that
it is ‗improper for the court to rewrite the terms of a contract, or draw a new contract for the
parties, when the terms thereof are clear and unambiguous, simply to avoid hardships.‘‖
Calomiris v. Woods, 353 Md. 425, 445, 727 A.2d 358, 368 (1999) (quoting Canaras v. Lift Truck
Servs., 272 Md. 337, 350, 322 A.2d 866, 873 (1974)); see Loudin Ins. Agency, Inc. v. Aetna Cas.
& Sur. Co., 966 F.2d 1443 (Table), 1992 WL 145269, at *5 (4th Cir. 1992) (per curiam) (―[A]
court will not rewrite the parties‘ contract simply because one party is no longer satisfied with
the bargain he struck.‖).
Under Maryland law, the elements of a claim for breach of contract are ―‗contractual
obligation, breach, and damages.‘‖ Tucker v. Specialized Loan Servicing, LLC, 83 F. Supp. 3d
635, 655 (D. Md. 2015) (quoting Kumar v. Dhanda, 198 Md. App. 337, 17 A.3d 744, 749
(2011)). To ―prevail in an action for breach of contract, a plaintiff must prove that the defendant
owed the plaintiff a contractual obligation and that the defendant breached that obligation.‖
Taylor v. NationsBank, N.A., 365 Md. 166, 175, 776 A.2d 645, 651 (2001); accord Belyakov v.
Med. Sci. & Computing, 86 F. Supp. 3d 430, 437 (D. Md. 2015); see also RRC Northeast, LLC v.
BAA Maryland, Inc., 413 Md. 638, 658, 994 A.2d 430, 442 (2010). In other words, ―[i]t is the
- 12 -
parties‘ agreement that ultimately determines whether there has been a breach.‖ Mathis v.
Hargrove, 166 Md. App. 286, 318-19, 888 A.2d 377, 396 (2005).
In Polek v. J.P. Morgan Chase Bank, N.A., 424 Md. 333, 362, 36 A.3d 399, 416 (2012),
the Maryland Court of Appeals said: ―Maryland law requires that a plaintiff alleging a breach of
contract ‗must of necessity allege with certainty and definiteness facts showing a contractual
obligation owed by the defendant to the plaintiff and a breach of that obligation by defendant.‘‖
(citation omitted) (emphasis in Polek); see also Robinson v. GEO Licensing Co., L.L.C., 173 F.
Supp. 2d 419, 423 (D. Md. 2001).
C. Faddis’s Claims
As indicated, the Complaint contains four counts: ―Breach of Contract‖ (Count I),
―Breach of Contractual Duties‖ (Count II); ―Interference with Statutory Rights‖ (Count III), and
―Unjust Enrichment‖ (renumbered as Count IV). ECF 1.
In Count I, for breach of contract, Faddis appears to make two distinct claims: (1)
Brawner owes Faddis a balance due under the Subcontract (ECF 1, ¶ 50); and (2) Brawner is
liable, in an undetermined amount, for its alleged failure to pass through to SHA Faddis‘s claims
against SHA. Id. ¶ 49.
In Count II, Faddis alleges ―breach of contractual duties.‖ Brawner asserts (ECF 67 at
10), and Faddis acknowledges (ECF 71 at 12-13), that there is no distinct cause of action for
―breach of contractual duties.‖ Indeed, Faddis‘s allegations in Count I and Count II are nearly
identical. Count I alleges, inter alia: ―Brawner breached its Material Contract with Faddis by
failing to pass through and allow pursuit of claims against the SHA thereby assuming the
responsibility for these damages.‖ ECF 1, ¶ 13. Similarly, Count II alleges that ―Brawner,
without excuse, justification or explanation to Faddis, failed and refused to pass on Faddis‘s
- 13 -
claims to the SHA, thereby irreparably prejudicing Faddis [sic] rights,‖ and therefore ―Brawner
assumed responsibility for the consequences of its actions including the liability of the SHA for
damages to Faddis.‖ Id. ¶ 14.
I shall construe Count I as the breach of contract claim with respect to Faddis‘s claim of
money due and owing from Brawner on the Subcontract. And, I shall construe Count II as
Faddis‘s claim against Brawner based on Brawner‘s failure to pass through to SHA Faddis‘s
claims against SHA.
1. Count I: Breach of Contract
Plaintiff claims that defendant owes plaintiff the balance due under the Subcontract, in
the amount of $132,026.94, and unpaid trucking charges in the amount of $36,353.00 (ECF 1,
¶ 50). Brawner disputes the allegations (ECF 24, ¶¶ 46, 50). However, Brawner does not argue
that Faddis has failed to state a claim on which relief can be granted.
Although Brawner asserts in its Motion that that Faddis attributes its damages to the
―shutdown of its plants in Pennsylvania and Virginia and its debarment from doing work in
Virginia‖ (ECF 67 at 15, 15 n.6), rather than from Brawner‘s failure to pay, the Complaint does
not state that the unpaid balance results from the plant closures.
The allegations in the
Complaint must be construed as true at this juncture. See E.I. du Pont de Nemours & Co. v.
Kolon Indus., Inc., 637 F.3d 435, 440 (4th Cir. 2011).
Accordingly, I shall deny Brawner‘s Motion with respect to Count I.
2. Count II: Breach of Contractual Duties
The central dispute with respect to the second breach of contract claim is whether
Brawner‘s contract with Faddis required Brawner to ―pass through‖ to SHA Faddis‘s claims
- 14 -
Brawner contends that, on the basis of the Subcontract, Brawner was not required to
facilitate Faddis‘s claims against SHA. ECF 67 at 8. Therefore, it argues that Faddis cannot
state a claim for breach of contract on this basis. Id. at 9-10.
Conversely, Faddis maintains, inter alia, that pursuant to various provisions of the
Subcontract, and under the Code of Maryland Administrative Regulations (―COMAR‖), Brawner
was obligated to pass through its claims against SHA. It also relies on the implied covenant of
good faith and fair dealing and industry practice.
―Pass through claims‖ are claims by an allegedly damaged party against
an allegedly responsible party with whom it has no contractual relationship. These
claims are presented by or through an intervening party in privity with both. The
most common example of a pass through claim is a claim by a subcontractor
arising out of the actions of the owner that is passed through to the owner by the
Carl A. Calvert & Carl F. Ingwalson, Jr., Pass Through Claims and Liquidation Agreements,
Constr. Law., Oct. 1998, at 29.
Ordinarily, these types of claims are provided for by
―liquidating‖ or ―liquidation‖ agreements between the subcontractor and the prime contractor.
See 3 Philip L. Bruner & Patrick J. O‘Connor, Bruner & O’Connor Construction Law § 8:51
(2017); 1 Construction Contract Deskbook § 5:30 (2017).
Under a liquidating agreement, the prime contractor derives its standing to assert the
claims of the subcontractor against the owner, based on the prime contractor‘s own liability to
the subcontractor. See, e.g., Honeywell, Inc. v. J.P. Maguire Co., No. 93 CIV. 5253DABHBP,
2000 WL 307398, at *12 (S.D.N.Y. Mar. 23, 2000) (―A liquidating agreement cannot
exist . . . where the prime contractor is not contractually liable for the subcontractor‘s claims.‖);
J. L. Simmons Co. v. United States, 304 F.2d 886, 888 (Ct. Cl. 1962) (―[A] prime contractor may
sue the Government for damages incurred by one of its subcontractors . . . . only when the prime
contractor has reimbursed its subcontractor for the latter‘s damages or remains liable for such
- 15 -
reimbursement in the future.‖). A liquidating agreement can itself create such liability. See
Interstate Contracting Corp. v. City of Dallas, 135 S.W.3d 605, 610 (Tex. 2004).
Liquidating agreements are not created by implication, however. Although liquidating
agreements ―need not take any particular form,‖ there is ―no liability in the general contractor
absent an actual contractual commitment to that effect.‖ Barry, Bette & Led Duke Inc. v. State,
240 A.D.2d 54, 56, 669 N.Y.S.2d 741, 743 (1998). Therefore, ―[i]f a subcontractor wants a
prime contractor to be a guarantor of job performance, it should bargain for the inclusion in its
subcontract of a provision to that effect.‖ Triangle Sheet Metal Works, Inc. v. James H. Merritt
& Co., 79 N.Y.2d 801, 803, 588 N.E.2d 69, 70 (1991).
Faddis has not alleged the existence of a liquidating agreement, either in the Complaint or
in its response to Brawner‘s Motion. Rather, it points, inter alia, to three provisions of the
Subcontract to support its position.
First, Faddis notes that, under the terms of the Subcontract, ―[t]he materials to be
furnished and/or work to be performed by [Faddis] shall be specified and in accordance with
Drawings and Specifications prepared‖ by SHA. ECF 67-1 at 1. Second, Faddis observes that it
was required to ―provide on delivery Certification stating that the material conforms with TC
1.02 of Maryland State Highway Administration‘s Standard Specifications for Construction
Materials.‖ Id. Third, Faddis quotes a contract provision requiring that Faddis ―expressly
warrant that such materials and work will be in exact accordance with this Order and with the
General Conditions, Special Conditions, Contract Drawings and Specifications pertaining to the
Construction Contract, so far as applicable to this Order.‖ Id. at 3.
Relying on these three provisions of the Subcontract, Faddis contends that its Subcontract
with Brawner incorporates by reference Brawner‘s contract with SHA. Faddis suggests that it is
- 16 -
therefore entitled to a pass-through claim. ECF 71 at 15. It may be that Faddis was bound to
conditions laid out in the prime contract between Brawner and SHA, but that document has not
been submitted to the Court. In any event, it does not follow that because Faddis was required to
comply with provisions or standards established by SHA, it is therefore entitled to remedies
available to Brawner under the prime contract.
As indicated, Faddis also relies on the implied covenant of good faith and fair dealing.
ECF 71 at 12-13.
However, Maryland does not recognize an independent claim for breach of
the covenant of good faith and fair dealing. Baker v. Sun Co. (R & M), 985 F. Supp. 609, 610
(D. Md. 1997); see Howard Oaks, Inc. v. Maryland Nat. Bank, 810 F. Supp. 674, 677 (D. Md.
1993) (―[U]nless the contract itself obligates a party to perform a certain duty, no independent
duty of good faith compels it to do so.‖).
To be sure, breach of the covenant may be alleged as part of an action for breach of
contract. But, there is no ―duty requiring affirmative steps beyond those required by the contract
itself.‖ Swedish Civil Aviation Admin. v. Project Mgmt. Enters., Inc., 190 F. Supp. 2d 785, 794
(D. Md. 2002) (citing Parker v. The Columbia Bank, 91 Md. App. 346, 366, 604 A.2d 521, 531
(1992)). Indeed, the Fourth Circuit has said: ―[W]hile the implied duty of good faith and fair
dealing as recognized in Maryland requires that one party to a contract not frustrate the other
party‘s performance, it is not understood to interpose new obligations about which the contract is
silent, even if inclusion of the obligation is thought to be logical and wise.‖ E. Shore Markets,
Inc. v. J.D. Assocs. Ltd. P’ship, 213 F.3d 175, 184 (4th Cir. 2000).
Faddis has failed to specify any express provision of the contract that Brawner has
breached. Accordingly, its claim based on the implied covenant of good faith and fair dealing
- 17 -
In the alternative, Faddis contends that even if Brawner has not breached a specific
provision of the Subcontract, ―Brawner affected the purpose of the Material Contract in a vital
way and circumvented its obligations contravening the purpose of the Material Contract.‖ ECF
71 at 19. Faddis cites Swedish Civil Aviation Admin., 190 F. Supp. 2d 785, in support of this
argument. There, the court said that ―a breach of contract does occur if it ‗affects the purpose of
a contract in an important or vital way.‘‖ Id. at 791 (quoting Sachs v. Regal Bank, FSB, 119 Md.
App. 276, 283, 705 A.2d 1 (1998), aff’d, 352 Md. 356, 722 A.2d 377 (1999)). Faddis argues that
because its performance of the Subcontract was affected, the Subcontract was breached.
Faddis‘s reliance on Swedish Civil Aviation Admin., 190 F. Supp. 2d 785, is misplaced.
That case does not obviate the requirement of a breach of contract; the proposition refers to
materiality. In Sachs, on which Swedish Civil Aviation Admin. relied, the Maryland Court of
Special Appeals said, 119 Md. App. at 283, 705 A.2d at 4: ―The law is clear that a breach of
contract will be deemed material if it affects the purpose of the contract in an important or vital
way.‖ (Emphasis added).
Moreover, Swedish Civil Aviation Admin. underscores that in order to survive a motion to
dismiss, a complaint for breach of contract must allege facts showing a contractual obligation
owed by the defendant to the plaintiff and a breach of that obligation by the defendant. Swedish
Civil Aviation Admin., 190 F. Supp. 2d at 791 (citing Continental Masonry Co., Inc. v. Verdel
Constr. Co., Inc., 279 Md. 476, 480, 369 A.2d 566, 569 (1977)). Faddis has not alleged breach
of a specific term of the Subcontract. Therefore, the argument that ―Brawner affected the
purpose of the Material Contract in a vital way‖ (ECF 71 at 19) is unavailing.
In the absence of an applicable contractual provision in the Subcontract or a liquidating
agreement, Faddis points to several authorities which it argues require a prime contractor to pass
- 18 -
through the claims of a subcontractor to the owner: (1) COMAR, (2) the General Provisions of
the Maryland Department of Transportation Standard Specifications for Construction and
Materials (―General Provisions‖), (3) Maryland case law, and (4) industry practice. ECF 71 at 45, 7. None of these can sustain the claim.
COMAR contains a compilation of all administrative regulations issued by Maryland
state agencies, including SHA. In its Opposition, Faddis repeatedly cites COMAR 21.10.04.02.
That provision sets forth procedures for the filing of claims against a Maryland agency by a
contractor. It states: ―Contemporaneously with or within 90 days of the filing of a notice of a
claim on a construction contract . . . a contractor shall submit the claim to the appropriate
procurement officer.‖ COMAR 21.10.04.02.B. Further, the regulation provides, id.:
The claim shall be in writing and shall contain:
(1) An explanation of the claim, including reference to all contract provisions upon which
it is based;
(2) The amount of the claim;
(3) The facts upon which the claim is based;
(4) All pertinent data and correspondence that the contractor relies upon to substantiate
the claim; and
(5) A certification by a senior official, officer, or general partner of the contractor or the
subcontractor, as applicable, that, to the best of the person‘s knowledge and belief, the
claim is made in good faith, supporting data are accurate and complete, and the amount
requested accurately reflects the contract adjustment for which the person believes the
procurement agency is liable.
According to Faddis, this regulation compels the contractor to file a subcontractor‘s
claims against an agency. ECF 71 at 7, 16-18. I disagree. The regulation details when and how
a contractor is to file a claim, but it does not provide that the contractor must do so. Had
Brawner elected to pursue Faddis‘s claims against SHA, or had it been required to do so by some
provision in the Subcontract, COMAR 21.10.04.02 would apply as to the process for doing so.
But, it would stretch too far to read the word ―shall‖ in the regulation to compel an action not
otherwise included in or contemplated by the parties‘ agreement. The use of the word ―shall‖ in
- 19 -
the regulation presupposes the filing of a claim, but no language in this chapter of COMAR
compels such a filing. Therefore, COMAR does not provide Faddis with an independent basis
for its claim.
Faddis follows the same line of argument with respect to the General Provisions. ECF 71
at 16-18. As Faddis notes, COMAR and the General Provisions are quite similar on this matter.
General Provisions § 5.14 and COMAR specify the same filing period and the same components
for claims against a state agency.
See GP-5.14 Filing of Claim by Contractor; COMAR
21.10.04.02, Filing of Claim by Contractor. And, just as COMAR does not itself require a prime
contractor to pursue a subcontractor‘s potential claims, the General Provisions do not
independently afford Faddis any right against Brawner to demand that it pursue a claim against
Faddis‘s reliance on Maryland legal precedent is misplaced. Faddis primarily cites a
1984 decision of the Maryland Court of Appeals, Bd. of Cty. Comm’rs of Frederick Cty. v. Cam
Const. Co., 300 Md. 643, 480 A.2d 795 (1984). Faddis claims, inaccurately, that the case stands
for the proposition that ―[p]ass through claims in [subcontracting relationships] are permitted and
expected under Maryland law.‖ ECF 71 at 3. Permitted, yes; expected, no. The Cam Const. Co.
Court recognized that the ―the concept of privity is not an absolute bar to a suit brought by a
prime contractor against the owner for damages as to which a subcontractor is the real party in
interest.‖ 300 Md. at 647, 480 A.2d at 797. The court observed, id. at 652, 480 A.2d at 800:
―The record does not foreclose [the prime contractor‘s] being obligated under liquidating
agreements to pay any recovery from the County over to the respective subcontractors.‖
Allowing such a suit is a far cry from a general obligation requiring such a suit.
- 20 -
In its Opposition, plaintiff defends its contract claim with an appeal to ―industry
practice.‖ ECF 71 at 3, 4, 5, 6, 7, and 19. The only authority that plaintiff cites for its contention
that ―industry practice require[s]‖ the defendant to pursue its claims is a case from the Supreme
Court of Texas that discusses the pass-through process: Interstate Contracting Corp. v. City of
Dallas, 135 S.W.3d 605 (Tex. 2004). But, that court also said: ―If the contractor disputes the
merits of its subcontractor‘s claims, it is entitled to (1) refuse to enter into a pass-through
arrangement with the subcontractor, or (2) refuse to pursue the subcontractor‘s claims against the
owner.‖ Id. at 617. Standing alone, contravention of an alleged ―industry practice‖ is inadequate
to establish a claim for breach of contract.
For these reasons, I shall grant defendant‘s Motion with respect to Count II, i.e.,
plaintiff‘s claim for breach of contract concerning Faddis‘s claims against SHA.
3. Count III: Interference with Statutory Rights
Faddis styles its third count against Brawner as a claim for ―Interference with Statutory
Rights.‖ ECF 1 at 15. According to Faddis, SHA violated Faddis‘s procedural and substantive
due process rights, and is liable for a violation of Faddis‘s civil rights under 42 U.S.C. § 1983.
ECF 1, ¶ 59. Plaintiff asserts that it is entitled to damages from SHA, but Brawner interfered
with Faddis‘s ability to obtain damages by not timely pursuing its claim, and thus Brawner
assumed SHA‘s liability. Id. ¶¶ 60-65.
Brawner counters that (1) ―the Complaint is silent as to what, if anything, Brawner did to
‗assume‘ such liability‖ (ECF 67 at 11); (2) ―[a]s a matter of law, Brawner cannot be held
directly (or indirectly) liable for the SHA‘s alleged violation of Faddis‘s civil rights because
Brawner is not a state actor‖ (id. at 12); and (3) ―Faddis also fails to sufficiently plead how the
SHA‘s actions (or some action of Brawner) deprived Faddis of a federal constitutional right.‖ Id.
- 21 -
I agree with all three of Brawner‘s arguments.
As a threshold matter, I have not
uncovered a cause of action for ―interference with statutory rights.‖ Moreover, of the seven
substantive allegations in this count, only one of them refers to actions by Brawner. ECF 1, ¶ 65.
The remaining allegations concern actions by SHA, which is not a defendant in this case. Id. ¶¶
Faddis‘s allegations can be generously construed two ways: first, as a kind of derivative
civil rights claim against Brawner under 42 U.S.C. § 1983; and second, as some species of
tortious interference with business relations. Neither claim can be successful as pleaded.
―To state a claim under 42 U.S.C. § 1983, plaintiffs must allege: (1) a deprivation of a
constitutional right or some right secured by the laws of the United States, and (2) that the
deprivation was caused by the state actor.‖ Flanagan v. Anne Arundel Cty., 593 F. Supp. 2d 803,
809 (D. Md. 2009) (citing West v. Atkins, 487 U.S. 42, 48 (1988)). Brawner is not a state actor
(ECF 1, ¶ 2), nor does Faddis allege that Brawner itself violated any of Faddis‘s civil rights.
Furthermore, ―private corporations can only be held liable under § 1983 if ‗an official policy or
custom of the corporation causes the alleged deprivation of federal rights.‘‖ Rodriguez v.
Smithfield Packing Co., 338 F.3d 348, 355 (4th Cir. 2003) (quoting Austin v. Paramount Parks,
Inc., 195 F.3d 715, 728 (4th Cir. 1999)). Faddis has alleged no such official policy or custom.
As for Faddis‘s second potential claim, the tort of intentional interference with
contractual or business relations is ―well-established in Maryland.‖ Macklin v. Robert Logan
Assocs., 334 Md. 287, 296, 639 A.2d 112, 116 (1994). Broadly stated, it provides that ―one not
privileged to do so who purposely induces or causes a third person not to perform a contract or
enter into or continue a business relation with another is liable for the harm caused thereby.‖
- 22 -
United Rental Equipment Co. v. Potts & Callahan Contracting Co., 231 Md. 552, 560, 191 A.2d
570, 574 (1963).
The Maryland Court of Appeals reiterated the elements of the tort in Blondell v.
Littlepage, 413 Md. 96, 125, 991 A.2d 80, 97 (2010) (quoting Kaser v. Financial Protection
Marketing, Inc., 376 Md. 621, 628-29, 831 A.2d 49, 53 (2003)), as follows:
A claim for intentional interference with contractual or business relations requires
the following elements: ―(1) intentional and wilful acts; (2) calculated to cause
damage to the plaintiffs in their lawful business; (3) done with the unlawful
purpose to cause such damage and loss, without right or justifiable cause on the
part of the defendants (which constitutes malice); and (4) actual damage and loss
See also View Point Med. Sys., LLC v. Athena Health, Inc., 9 F. Supp. 3d 588, 615 (D. Md.
2014) (citation omitted).
The tort has ―two general manifestations.‖ Macklin, 334 Md. at 297, 639 A.2d at 117.
The first manifestation is often described as ―‗inducing the breach of an existing contract,‘‖ and
the second, ―more broadly, constitutes maliciously or wrongfully interfering with economic
relationships in the absence of a breach of contract.‖ Blondell, 413 Md. at 125, 991 A.2d at 97
(citation omitted). In other words, under Maryland law, one may claim tortious interference with
a contract or, in the absence of a contract or breach of contract, one may claim tortious
interference with business or economic relations.
Maryland courts have ―‗never permitted recovery for the tort of intentional interference
with a contract when both the defendant and the plaintiff were parties to the contract.‘‖ K & K
Mgmt., Inc. v. Lee, 316 Md. 137, 156, 557 A.2d 965, 974 (1989) (quoting Wilmington Trust Co.
v. Clark, 289 Md. 313, 329, 424 A.2d 744, 754 (1981)). Logically, an injured party‘s legal
remedy in such a situation is an action for breach of contract, not an action for tortious
interference with contract. Id. at 155-66, 557 A.2d at 974. Thus, ―there is no cause of action for
- 23 -
interference with a contract when suit is brought against a party to the contract.‖ Wilmington
Trust Co., 289 Md. at 329, 424 A.2d at 754.
But, the same is not true in cases where the plaintiff alleges tortious interference with
contract and the defendant is a party to the underlying economic relationship but not to the
contract at issue. Rather, the opposite is true. Because the injured party could not bring a breach
of contract claim against the defendant, the tort creates a claim for liability based on the
defendant‘s inducement of a third party‘s breach. See, e.g., Blondell, 413 Md. at 125, 991 A.2d
at 97 (quoting Kaser, 376 Md. at 630-31, 831 A.2d at 54).
In such cases, the third party‘s liability does not depend on the economic relationship
between the parties, per se. It depends upon the third party‘s intent and the nature of the acts that
induced the breach, i.e. whether the acts were wrongful, or whether, to the contrary, they were
somehow privileged or justified. See Blondell, 413 Md. at 125, 991 A.2d at 97; United Rental
Equipment Co, 231 Md. at 560, 191 A.2d at 574. The economic relationship between the parties
is, of course, relevant to the question of whether the third party‘s acts were wrongful or justified.
See, e.g., Restatement (Second) of Torts § 767 (―Factors in Determining Whether Interference is
Faddis has not alleged that Brawner‘s failure to pass through the claim was calculated to
harm Faddis, or done with an unlawful purpose, and without justifiable cause. At best, Faddis
has alleged that Brawner declined to pursue plaintiff‘s claims against SHA for its own material
gain. As for Brawner‘s purported assumption of liability for damages (ECF 1 at ¶ 65), Faddis
has offered no factual support for this legal conclusion.
Accordingly, Faddis has failed to state a claim on which relief can be granted in Count
III. I shall grant Brawner‘s Motion with respect to this count.
- 24 -
4. Count IV: Unjust Enrichment; Imposition of Constructive Trust
Faddis alleges that, as a result of Brawner‘s decision not to pass through Faddis‘s claims
against SHA, Brawner was unjustly enriched. ECF 1, ¶¶ 67-69. Brawner moves to dismiss the
claim on the basis that ―a party cannot assert a claim for unjust enrichment regarding the subject
matter of an express contract.‖ ECF 67 at 14.
In Maryland, a claim of unjust enrichment is not based on contract. Rather, it is based on
quasi-contract. Alternatives Unlimited, Inc. v. New Baltimore City Board of School Commr’s,
155 Md. App. 415, 472, 843 A.2d 252, 286 (2004). A claim of unjust enrichment is established
when: ―(1) the plaintiff confers a benefit upon the defendant; (2) the defendant knows or
appreciates the benefit; and (3) the defendant‘s acceptance or retention of the benefit under the
circumstances is such that it would be inequitable to allow the defendant to retain the benefit
without the paying of value in return.‖ Benson v. State, 389 Md. 615, 651-52, 887 A.2d 525, 546
(2005) (citation omitted); see also Hill v. Cross Country Settlements, LLC, 402 Md. 281, 295,
936 A.2d 343, 351 (2007); Cnty. Comm’rs of Caroline Cnty v. Roland Dashiell & Sons, Inc., 358
Md. 83, 95 n.7, 747 A.2d 600, 607 n.7 (2000); Jackson v. 2109 Brandywine, LLC, 180 Md. App.
535, 574, 952 A.2d 304, 327, cert. denied, 406 Md. 444, 959 A.2d 793 (2008); Swedish Civil
Aviation Admin., 190 F. Supp. 2d at 792-93.
Unjust enrichment is a remedy ‗―to provide relief for a plaintiff when an enforceable
contract does not exist but fairness dictates that the plaintiff receive compensation for services
provided.‘‖ Dashiell, 358 Md. at 96-97, 747 A.2d at 607 (quoting Dunnaville v. McCormick &
Co., 21 F. Supp. 2d 527, 535 (1998)). ―The general rule is that no quasi-contractual claim can
arise when a contract exists between the parties concerning the same subject matter on which the
quasi-contractual claim rests.‖ Id. at 96, 747 A.2d at 607; see Janusz v. Gilliam, 404 Md. 524,
- 25 -
537, 947 A.2d 560, 567 (2008) (―In Maryland, a claim of unjust enrichment, which is a quasicontract claim, may not be brought where the subject matter of the claim is covered by an
express contract between the parties.‖) (internal quotation marks omitted); see also FLF, Inc. v.
World Publications, Inc., 999 F. Supp. 640, 642 (D. Md. 1998) (―It is settled law in Maryland,
and elsewhere, that a claim for unjust enrichment may not be brought where the subject matter of
the claim is covered by an express contract between the parties.‖).
Although a plaintiff ―may not recover under both contract and quasi-contract theories,
[he] is not barred from pleading these theories in the alternative . . . .‖ Swedish Civil Aviation
Admin. 190 F. Supp. 2d at 792. Faddis‘s claim for unjust enrichment is a claim in the alternative
to its contract claim.
―A successful unjust enrichment claim serves to ‗deprive the defendant of benefits that in
equity and good conscience he ought not to keep, even though he may have received those
benefits quite honestly in the first instance, and even though the plaintiff may have suffered no
demonstrable losses.‘‖ Hill, 402 Md. at 295-96, 936 A.2d at 352 (citation omitted); see also
Berry & Gould, P.A. v. Berry, 360 Md. 142, 151, 757 A.2d 108, 113 (2000). But, ―[g]enerally,
courts are hesitant to deviate from the principle of the rule and allow unjust enrichment claims
only 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.‖ Dashiell, 358 Md. at 100, 747 A.2d at 608-09.
Faddis alleges that (1) Brawner was aware of the damage to Faddis (presumably that
allegedly inflicted by SHA) and did not pursue a claim against SHA (ECF 1, ¶ 67); and (2)
Brawner received ―concessions and consideration‖ from SHA in return for not pursuing Faddis‘s
claims. Id. ¶ 68. Although Faddis arguably alleges facts sufficient to find that Brawner was
- 26 -
enriched, Faddis has failed to plead the first and third elements of unjust enrichment: that the
benefit was conferred by the plaintiff upon the defendant, and that it would be inequitable for the
defendant to retain the benefit.
As to the first element, Faddis alleges that Brawner received concessions and
consideration from SHA in exchange for not pressing Faddis‘s claims. Id. ¶ 68. In a sense,
plaintiff baldly suggests that SHA knew of Faddis‘s request to Brawner to pass through a claim
against SHA, and SHA made a side deal of sorts with Brawner to compensate Brawner for not
processing plaintiff‘s claims against SHA.
Maryland courts ―have not required always that a benefit conferred in an unjust
enrichment action come necessarily and directly to the defendant from the plaintiff‘s own
resources.‖ Hill, 402 Md. at 298, 936 A.2d at 353. ―‗It is immaterial how the money may have
come into the defendant‘s hands, and the fact that it was received from a third person will not
affect his liability, if, in equity and good conscience, he is not entitled to hold it against the true
owner.‘‖ Plitt v. Greenberg, 242 Md. 359, 364, 219 A.2d 237, 241 (1966) (quoting Empire Oil
Co. v. Lynch, 106 Ga. App. 42, 126 S.E.2d 478, 479 (1963)). However, Faddis has not alleged
that any of the purported ―concessions and consideration‖ that Brawner received from SHA
rightfully belong to Faddis. See Smith v. Alacrity Servs., LLC, 778 F. Supp. 2d 606, 610 (D. Md.
2011) (―Although it is undisputed that [defendant] was paid by [the insurer] . . . [plaintiff] has
not established that this payment infringed any interest of [plaintiff‘s].‖)
In its surreply, plaintiff implies that its unjust enrichment claim concerns not only
defendant‘s failure to pass through its claims against SHA, but also its failure to pay the amount
owed under the original Subcontract. ECF 74-1 at 12-13.
To the extent that Faddis is in fact
alleging that Brawner was unjustly enriched because ―it owes Faddis for contract balance
- 27 -
amounts and extra trucking costs that benefitted Brawner and Brawner expected to pay, yet did
not pay‖ (id. at 13), Faddis could satisfy the prima facie elements of the claim, in that (1) Faddis
conferred a benefit on Brawner (provision of the concrete panels for the Project), (2) Brawner
knew of the benefit, and (3) Brawner‘s acceptance of the benefit without paying Faddis would be
However, Faddis did not make this claim in its Complaint. Count IV of the Complaint,
as noted, discusses the damages inflicted by SHA and the consideration Brawner received from
SHA for not pressing Faddis‘s claims, but does not mention any direct harm caused by Brawner.
ECF 1, ¶¶ 67-69. Faddis also ―incorporate[d] by reference . . . All averments of this complaint as
though more fully set forth herein again at length.‖ Id. ¶ 66. But, this general incorporation does
not rectify Faddis‘s failure to plead with particularity that its unjust enrichment claim is based on
the unpaid contract balance. Faddis may not—only in its surreply and for the first time—
vaguely hint at the facts underlying its claim and assume that it has ―‗give[n] the defendant fair
notice of what the . . . claim is and the grounds upon which it rests.‘‖
Bell Atl. Corp. v.
Twombly, 550 U.S. 544, 555 (2007) (quoting Conley v. Gibson, 355 U.S. 41, 47 (1957)).
Faddis also proposes that this ―Court should impose a constructive trust on Brawner‘s
SHA Contract proceeds and award such relief as is necessary to secure such assets and proceeds
for the benefit of Faddis.‖
ECF 1, ¶ 70.
As Brawner correctly points out, ―there is no
independent cause of action in Maryland for a ‗constructive trust.‘‖ ECF 73, at 13. See Lyon v.
Campbell, 33 F. App‘x 659, 663 (4th Cir. 2002) (applying Maryland law and stating: ―A
constructive trust is an equitable remedy, not a cause of action in and of itself.‖); see also
Stewart Title Guar. Co. v. Sanford Title Servs., LLC, Civ. No. ELH-11-260, 2011 WL 2681196,
at *4 (D. Md. July 8, 2011). In Washington Suburban Sanitary Commission v. Utilities, Inc., 365
- 28 -
Md. 1, 39, 775 A.2d 1178, 1200 (2001) (citation omitted), the Maryland Court of Appeals
explained that the ―‗constructive trust, like its counterpart remedies ―at law,‖ is a remedy for
In other words, a constructive trust is a ―remedial request that depend[s] upon [the]
plaintiff‘s substantive causes of action,‖ such as unjust enrichment. Stewart Title, 2011 WL
2681196, at *5; see also Alternatives Unlimited, 155 Md. App. at 460, 843 A.2d at 279. Given
that Faddis has failed to state a claim for unjust enrichment, there is no basis for the imposition
of a constructive trust at this time.
For these reasons, I shall grant defendant‘s motion with respect to Count IV of the
Assuming, arguendo, the truth of the allegations in Faddis‘s Complaint, they evince
disturbing conduct by SHA. From these facts Faddis had—and may still have—a colorable tort
claim against SHA. Indeed, SHA appears to have invited such a claim in its correspondence
with plaintiff in June 2014. See ECF 71-1 at 26. But, SHA is not a defendant in this case, and
even a sympathetic plaintiff cannot recover damages from the wrong party. Faddis cannot create
from the facts of this case a basis to sue Brawner for failing to pursue for Faddis the alleged
wrongs of SHA.
For the reasons stated above, I shall DENY defendant‘s Motion for Judgment on the
Pleadings with respect to Count I, and GRANT the Motion with respect to Counts II, III, and IV,
without prejudice. However, If Faddis has uncovered in discovery facts sufficient to support a
valid claim against Brawner for unjust enrichment or tortious interference, consistent with the
- 29 -
principles outlined above, it may seek leave to amend its Complaint within 17 days of the Order
accompanying this Memorandum Opinion.
An Order follows, consistent with this Memorandum Opinion.
Date: September 15, 2017
Ellen L. Hollander
United States District Judge
- 30 -
Disclaimer: Justia Dockets & Filings provides public litigation records from the federal appellate and district courts. These filings and docket sheets should not be considered findings of fact or liability, nor do they necessarily reflect the view of Justia.
Why Is My Information Online?