Perricci v. Systems Assessment & Research, Inc.
Filing
16
MEMORANDUM OPINION. Signed by Chief Judge Deborah K. Chasanow on 11/28/11. (sat, Chambers)
IN THE UNITED STATES DISTRICT COURT
FOR THE DISTRICT OF MARYLAND
:
ELLEN PERRICCI
:
v.
:
Civil Action No. DKC 11-0083
:
SYSTEMS ASSESSMENT & RESEARCH,
INC.
:
MEMORANDUM OPINION
Presently pending and ready for review in this breach of
employment
contract
alternative,
Assessment
for
and
case
summary
Research,
is
a
motion
judgment
Inc.
to
filed
(“SAR”).
dismiss
by
or,
Defendant
(ECF
No.
in
the
Systems
10).
The
issues have been fully briefed, and the court now rules, no
hearing deemed necessary.
Local Rule 105.6.
For the following
reasons, the motion will be granted in part and denied in part.
I.
Background
The
taken
in
following
the
light
facts
most
are
either
favorable
alleged
to
by
her.
Plaintiff
Plaintiff
or
Ellen
Perricci, M.D., a resident of Virginia, is a licensed medical
doctor specializing in psychiatry.
Defendant SAR is a Maryland
corporation
staffing
that
governmental
service.
provides
entities
for
medical
the
purpose
of
to
corporate
providing
and
medical
On February 1, 2010, Dr. Perricci signed an offer
letter for employment with SAR (“the letter agreement”) whereby
Dr. Perricci would serve as an “Adult Psychiatrist” at one of
SAR’s
federal
government
client
sites,
the
Department
of
Psychiatry at Walter Reed Army Medical Center (“Walter Reed”) in
Washington,
D.C.1
The
letter
agreement
was
produced
on
SAR
letterhead and was signed only by Dr. Perricci, though the name
of
the
President
and
CEO
of
SAR,
Maria
appeared in print at the end as well.
J.
Hankerson,
Ph.D,
Pursuant to the letter
agreement, Dr. Perricci’s employment commenced on March 8, 2010.2
The letter agreement included the following provision:
You may not terminate your employment with
SAR
Corp
during
your
first
year,
or
thereafter on less than thirty (30)-working
day’s prior notice to the other, except that
SAR Corp may terminate your services at any
time without notice for cause, and you may
terminate your services at any time with
notice after year one (1).
(ECF No. 1-1, at 1).
1
The letter agreement went on to provide:
Specifically, the letter agreement read:
You will serve as a[n] Adult psychiatrist at
SAR
Corp’s
client
site
and
will
be
responsible for the duties listed on the Job
Description.
This position is located in
the Department of Psychiatry at Walter Reed
Army Medical Center, Washington, DC.
(ECF No. 1-1, at 1).
2
In a sworn affidavit, Dr. Perricci states that she began
working on March 18, 2010. (ECF No. 13-1 ¶ 10). This appears
to be an error, however, in light of both parties’ otherwise
consistent allegations and evidence that Dr. Perricci’s start
date was March 8, 2010.
2
You will abide by SAR Corp’s standard rules
and regulations and will acknowledge in
writing that you have read SAR Corp’s
Employee Handbook (once it has been made
available to you).
As a condition of
employment, you will sign and comply with a
Confidentiality, Non-Competition Inventions
Agreement, a copy of which is attached
hereto as Exhibit A, which, among other
things, prohibits certain employment by you
within a year following the termination of
your position with SAR Corp and bars the
unauthorized use or disclosure by you of
Company proprietary information.
(Id. at 2).
contract
The Employee Handbook referred to in the employment
included
the
following
terms
“Receipt/Acknowledgement Page”:
I have received a copy of SAR Corp’s
Employee
Handbook
and
have
read
and
understood
its
contents,
specifically
including the statements in the foreword
describing the purpose and effect of the
Handbook. I understand that SAR Corp is an
“at will” employer and as such employment
with SAR Corp is not for a fixed term or
definite period and may be terminated at the
will of either party, with or without cause,
with
prior
notice.
In
addition,
I
understand that this Handbook states SAR
Corp’s policies and practices in effect as
of the date of publication.
I understand
that nothing contained in the Handbook may
be construed as creating a promise of future
benefits or a binding contract with SAR Corp
for benefits or for any other purpose.
I
also understand that these policies and
procedures are continually evaluated and may
be amended, modified or terminated at any
time.
3
on
its
(ECF No. 10-3, at 1).3
Walter Reed had been a client of SAR’s since August 21,
1998, based on a contract (“the Walter Reed contract”) that had
been extended repeatedly over the years.
On August 15, 2010,
SAR
going
learned
Walter
that
Reed
the
government
contract.
On
was
August
not
27,
2010,
to
SAR
renew
the
officially
informed Dr. Perricci that the Walter Reed contract was due to
end on September 30, 2010.
the
basis
of
Dr.
Because the Walter Reed contract was
Perricci’s
employment,
Perricci’s employment on September 30th.4
SAR
terminated
Dr.
At no point during the
negotiation process for Dr. Perricci’s employment did SAR inform
Dr. Perricci about the possibility of the Walter Reed contract
expiring on that date.
On January 11, 2011, Dr. Perricci filed a complaint against
SAR in this court.
(ECF No. 1).
The complaint contains four
counts:
breach
contract;
(1)
misrepresentation;
respondeat superior.
(3)
of
fraud
in
the
(2)
inducement;
negligent
and
(4)
On June 10, 2011, SAR filed the pending
motion to dismiss or, in the alternative, for summary judgment.
3
The Employee Handbook was signed on March 8, 2010, by Dr.
Perricci and Tracy Turner, a representative for SAR.
4
During the course of Dr. Perricci’s employment, she was
paid $81,964.81 of the $170,000.00 annual salary provided for by
the letter agreement.
4
(ECF No. 10).
2011.
Dr. Perricci filed opposition papers on July 11,
(ECF No. 13).
SAR replied on July 28, 2011.
(ECF No.
15).
II.
Standard of Review
SAR
has
moved
to
dismiss
or,
in
the
alternative,
for
summary judgment, although it argues that this motion need not
be converted to one for summary judgment.
Because both parties
rely on matters outside the pleadings for some but not all of
SAR’s arguments, the motion will be treated as a motion for
summary judgment for certain claims.
F.3d
315,
319
n.2
(4th
Cir.
2005);
See Walker v. True, 399
Offen
v.
Brenner,
553
F.Supp.2d 565, 568 (D.Md. 2008).
Otherwise, the motion will be
treated as a motion to dismiss.
The court will determine on a
claim-by-claim basis which standard to apply.
A.
Standard of Review for Motion to Dismiss for Failure
to State a Claim
The purpose of a motion to dismiss pursuant to Fed.R.Civ.P.
12(b)(6) is to test the sufficiency of the complaint.
Presley
v. City of Charlottesville, 464 F.3d 480, 483 (4th Cir. 2006).
A
plaintiff’s complaint need only satisfy the standard of Rule
8(a), which requires a “short and plain statement of the claim
showing that the pleader is entitled to relief.”
Fed.R.Civ.P.
8(a)(2).
requires
Nevertheless,
“Rule
8(a)(2)
still
a
‘showing,’ rather than a blanket assertion, of entitlement to
5
relief.”
Bell Atl. Corp. v. Twombly, 550 U.S. 544, 555 n.3
(2007).
That showing must consist of more than “a formulaic
recitation
of
the
elements
of
a
cause
of
action”
or
assertion[s] devoid of further factual enhancement.”
v.
Iqbal,
129
S.Ct.
1937,
1949
(2009)
(internal
“naked
Ashcroft
citations
omitted).
At this stage, the court must consider all well-pleaded
allegations in a complaint as true, Albright v. Oliver, 510 U.S.
266, 268 (1994), and must construe all factual allegations in
the
light
most
favorable
to
the
plaintiff,
see
Harrison
v.
Westinghouse Savannah River Co., 176 F.3d 776, 783 (4th Cir.
1999) (citing Mylan Labs., Inc. v. Matkari, 7 F.3d 1130, 1134
(4th Cir. 1993)).
In evaluating the complaint, the court need
not accept unsupported legal allegations.
Revene v. Charles
Cnty. Comm’rs, 882 F.2d 870, 873 (4th Cir. 1989).
Nor must it
agree
allegations,
with
legal
conclusions
couched
as
factual
Ashcroft v. Iqbal, 129 S.Ct. 1937, 1950 (2009), or conclusory
factual allegations devoid of any reference to actual events,
United Black Firefighters v. Hirst, 604 F.2d 844, 847 (4th Cir.
1979); see also Francis v. Giacomelli, 588 F.3d 186, 193 (4th
Cir. 2009).
“[W]here the well-pleaded facts do not permit the
court to infer more than the mere possibility of misconduct, the
complaint has alleged, but it has not ‘show[n] . . . that the
pleader
is
entitled
to
relief.’”
6
Iqbal,
129
S.Ct.
at
1950
(quoting Fed.R.Civ.P. 8(a)(2)).
Thus, “[d]etermining whether a
complaint states a plausible claim for relief will . . . be a
context-specific task that requires the reviewing court to draw
on its judicial experience and common sense.”
B.
Id.
Standard of Review for Motion for Summary Judgment
A court may enter summary judgment only if there is no
genuine issue as to any material fact and the moving party is
entitled
56(a);
to
judgment
Celotex
Corp.
as
a
matter
v.
Catrett,
of
477
law.
U.S.
See
317,
Fed.R.Civ.P.
322
Emmett v. Johnson, 532 F.3d 291, 297 (4th Cir. 2008).
(1986);
Summary
judgment is inappropriate if any material factual issue “may
reasonably be resolved in favor of either party.”
Anderson v.
Liberty Lobby, Inc., 477 U.S. 242, 250 (1986); JKC Holding Co.
LLC v. Wash. Sports Ventures, Inc., 264 F.3d 459, 465 (4th Cir.
2001).
“A party opposing a properly supported motion for summary
judgment ‘may not rest upon the mere allegations or denials of
[his]
pleadings,’
but
rather
must
‘set
forth
specific
showing that there is a genuine issue for trial.’”
facts
Bouchat v.
Baltimore Ravens Football Club, Inc., 346 F.3d 514, 522 (4th Cir.
2003) (quoting former Fed.R.Civ.P. 56(e)).
proof
.
.
.
will
not
suffice
to
prevent
“A mere scintilla of
summary
Peters v. Jenney, 327 F.3d 307, 314 (4th Cir. 2003).
judgment.”
“If the
evidence is merely colorable, or is not significantly probative,
7
summary judgment may be granted.”
249–50 (citations omitted).
construe
the
favorable
to
facts
the
that
party
Liberty Lobby, 477 U.S. at
At the same time, the court must
are
presented
opposing
the
in
the
motion.
light
See
most
Scott
v.
Harris, 550 U.S. 372, 378 (2007); Emmett, 532 F.3d at 297.
III. Analysis5
A.
Count One:
Breach of Contract
SAR contends that Dr. Perricci was an at-will employee who
could be terminated at any time without cause, and thus she has
no
breach
of
contract
claim.
Dr.
Perricci
responds
that
according to the letter agreement, she was guaranteed at least
one year of employment, thus any termination prior to that point
had to be for cause.
The parties appear to agree that the
September 30th termination of Dr. Perricci was without cause.
Employment in Maryland is presumptively at-will.
Univ. v. Conte, 384 Md. 68, 79 (2004).
5
Towson
An employment contract
Neither party discusses which state law should apply.
Regarding the breach of contract claim, the letter agreement
specifically provides that Maryland law applies. (ECF No. 1-1,
at 2).
Regarding the fraud and negligent misrepresentation
claims, when choosing the applicable state substantive law while
exercising diversity jurisdiction, a federal district court
applies the choice of law rules of the forum state. See Klaxon
Co. v. Stentor Electric Mfg. Co., 313 U.S. 487, 496 (1941). For
tort claims, Maryland generally adheres to the lex loci delecti
commissi, or place of harm, principle to determine the
applicable state’s substantive law.
Hauch v. Connor, 295 Md.
120, 123-24 (1983). Here, the parties appear to agree that both
the alleged fraud and negligent misrepresentation occurred in
Maryland, so Maryland law should apply.
8
of indefinite duration gives rise to at-will employment, which
“can be legally terminated at the pleasure of either party at
any time.”
(internal
Parks v. Alpharma, Inc., 421 Md. 59, 73 (2011)
quotations
omitted).
Despite
this
presumption,
parties may
create an employment relationship whereby
the employee may be terminated only for just
cause.
While the language of the contract
itself may express a just cause requirement,
a contractual delineation of the length of
the employment period will also create a
just cause employment relationship because
by
specifying
the
length
or
term
of
employment,
the
employer
usually
is
considered to have surrendered its ability
to terminate the employee at its discretion.
Towson Univ., 384 Md. at 79-80 (internal citations omitted).
general,
when
construing
a
contract,
Maryland
follows
In
the
“objective law of contracts”:
[W]hen the language of the contract is plain
and unambiguous there is no room for
construction, and a court must presume that
the parties meant what they expressed.
In
these circumstances, the true test of what
is meant is not what the parties to the
contract intended it to mean, but what a
reasonable person in the position of the
parties
would
have
thought
it
meant.
Consequently, the clear and unambiguous
language of an agreement will not give away
to what the parties thought that the
agreement meant or intended it to mean.
Gen.
Motors
Acceptance
Corp.
v.
(1985).
9
Daniels,
303
Md.
254,
261
Here, the letter agreement states that Dr. Perricci “may
not terminate [her] employment with SAR Corp during [her] first
year.”
(ECF No. 1-1, at 1).6
SAR admits as much in its reply.
(See ECF No. 15, at 2 (“The offer letter does provide that
[Defendant] can seek reimbursement of its staffing costs from
[Plaintiff] if she leaves her employment within the first year .
. . .”)).
Because Dr. Perricci was not free to terminate the
letter agreement for one year, the letter agreement could be
construed as not creating at-will employment — at least for the
first year of the contract.
For an employment agreement to be
at-will, the parties must be free to terminate the agreement at
any time for almost any reason.
Thus,
even
though
the
letter
See Parks, 421 Md. at 73.
agreement
on
its
face
only
restricted Dr. Perricci’s ability to terminate the relationship,
it
is
arguable
that
it
sufficiently
evidenced
an
intent
on
behalf of the parties to be bound to a fixed term of employment
of at least one year.
See Towson Univ., 384 Md. at 79-80; see
also 1-3 Stanley Mazaroff & Todd Horn, Maryland Employment Law §
3.02 (2011) (“In order to overcome the presumption in Maryland
that
employment
continues
only
6
at
the
will
of
the
parties,
In this respect, SAR’s reliance on Gill v. Computer
Equipment Corp., 266 Md. 170 (1972), to discount Dr. Perricci’s
subjective belief about the term of the letter agreement is of
no consequence.
The unambiguous language of the letter
agreement resolves the contract interpretation issue here.
10
either the contract must expressly provide that it is for a
fixed period of time, or there must be clear and substantial
circumstantial evidence showing that the parties intended their
relationship to continue for a definite period.”).
Moreover, the letter agreement stated that “SAR Corp may
terminate your services at any time without notice for cause.”
(ECF No. 1-1, at 1).
Had SAR intended that Dr. Perricci’s
employment be at-will, there would not have been any need to
include such a statement.
be
terminated
at
any
At-will employees, by definition, can
time
with
or
without
cause.
Because
contract provisions should be construed to avoid rendering any
provisions meaningless, Nat’l Union Fire Ins. Co. v. David A.
Bramble, Inc., 388 Md. 195, 209 (2005), the inclusion of this
phrase is further evidence that the parties intended that Dr.
Perricci be employed at least one year.
SAR contends that reading a definite term of employment
into the letter agreement “conflicts with the at-will provision
of the employee handbook that is incorporated by reference.”
(ECF No. 15, at 3).
SAR then points to the acknowledgement page
of the Employee Handbook signed by Dr. Perricci as evidence that
it
intended
Dr.
Perricci
to
be
7
an
at-will
employee.7
The
SAR attached the acknowledgement page and other parts of
the Employee Handbook to its motion. Because SAR relies on this
outside material here, and Dr. Perricci refers to it as well,
11
acknowledgement page reads, in part:
“I understand that SAR
Corp is an ‘at will’ employer and as such employment with SAR
Corp is not for a fixed term or definite period and may be
terminated at the will of either party, with or without cause,
with prior notice.”
(ECF No. 10-3, at 1).
As a threshold
matter, however, it is not entirely clear that the Employee
Handbook is, in fact, “incorporated by reference,” at least as a
source of binding obligations on the parties.
incorporation provision according to SAR reads:
by
SAR
Corp’s
standard
rules
and
The putative
“You will abide
regulations
and
will
acknowledge in writing that you have read SAR Corp’s Employee
Handbook (once it has been made available to you).”
1, at 2) (emphasis added).8
provision
only
Handbook.
It
requires
does
Although SAR argues otherwise, this
that
not
(ECF No. 1-
Dr.
Perricci
definitively
read
establish
the
Employee
that
SAR’s
the motion will be treated as one for summary judgment as to
this count. Contrary to SAR’s assertions, the facts referred to
in this extra material were not in the complaint or the exhibits
attached to the complaint.
8
The Employee Handbook is referred to a second time in the
letter agreement:
“For purposes of this letter agreement,
‘cause’ shall include your failure to substantially perform your
duties for SAR Corp for any reason, including disability as well
as the grounds for termination set forth in the Employee
Handbook.”
(ECF No. 1-1, at 1).
If anything, as explained
earlier, this sort of explicit discussion of what constitutes
“cause” bolsters the notion that Dr. Perricci was not hired as
an at-will employee.
12
“standard
rules
and
regulations”
(which
Dr.
Perricci
must
follow) and the Employee Handbook are one and the same.
Though
employee
not
incorporated
handbook
may
in
in
any
certain
written
agreement,
circumstances
contours of an employment relationship.
alter
an
the
See, e.g., Staggs v.
Blue Cross of Md., Inc., 61 Md.App. 381, 392 (1985) (holding
that
provisions
in
an
employee
handbook
could
“limit
the
employer’s discretion to terminate an indefinite employment or .
.
.
set
forth
employment”).
a
required
procedure
for
termination
of
such
Where an employee handbook or personnel policy
“expressly stated that [it] should not be treated as a contract
in any way” or “reserved the right to change any of the terms of
the [h]andbook at any time,” however, that handbook or policy
does not create enforceable contractual rights.
See Bagwell v.
Peninsula Reg’l Med. Ctr., 106 Md.App. 470, 492-94 (1995); see
also Cheek v. United Healthcare of the Mid-Atl., Inc., 378 Md.
139, 150, 161 (2003) (holding an arbitration provision in an
employee
handbook
unenforceable,
in
part,
where
the
employer
could “alter, amend, modify, or revoke the [p]olicy at its sole
and absolute discretion at any time with or without notice”);
Castiglione
(1986)
v.
(holding
Johns
that
Hopkins
an
Hosp.,
employer
may
69
Md.App.
disclaim
325,
any
putative
contractual rights arising out of an employee handbook).
disclaimer must be “clear and unequivocal.”
13
340-41
This
Elliott v. Bd. of
Trs., 104 Md.App. 93, 102 (1995); accord Castiglione, 69 Md.App.
at 340.
In this case, the acknowledgement page of the Employee
Handbook, which SAR itself offered into evidence, reads more
fully:
I have received a copy of SAR Corp’s
Employee
Handbook
and
have
read
and
understood
its
contents,
specifically
including the statements in the foreword
describing the purpose and effect of the
Handbook. I understand that SAR Corp is an
“at will” employer and as such employment
with SAR Corp is not for a fixed term of
definite period and may be terminated at the
will of either party, with or without cause,
with
prior
notice.
In
addition,
I
understand that this Handbook states SAR
Corp’s policies and practices in effect as
of the date of publication.
I understand
that nothing contained in the Handbook may
be construed as creating a promise of future
benefits or a binding contract with SAR Corp
for benefits or for any other purpose.
I
also understand that these policies and
procedures are continually evaluated and may
be amended, modified or terminated at any
time.
(ECF
No.
10-3,
at
1)
(emphasis
added).
Not
only
does
the
Employee Handbook clearly and unequivocally disclaim itself as a
binding contract “for any . . . purpose,” it further distances
itself
from
enforceability
by
reserving
the
“amended, modified or terminated at any time.”
right
(Id.).
to
be
Either
one of these reasons is sufficient to hold all provisions in the
Employee Handbook unenforceable with respect to the employment
relationship between SAR and Dr. Perricci.
14
See Bagwell, 106
Md.App. at 492-94.9
Handbook
to
show
Therefore, SAR cannot rely on the Employee
that
Dr.
Perricci
was
an
at-will
employee
during her first year.
Even if the letter agreement specifically incorporates the
Employee
Handbook,
summary
judgment
is
not
warranted
because
there would be an ambiguity in the documents regarding SAR’s
intent in hiring Dr. Perricci.
more
than
one
document,
Where a contract consists of
“the
writings
are
to
construed together as if they were one instrument.”
Glazer
&
Glazer,
Inc.,
316
Md.
405,
415
be
read
and
Bachmann v.
(1989).
“[T]he
intention of the parties should be identified ‘from all the
documents comprising the transaction.’”
Ecology Servs., Inc. v.
GranTurk
756,
Equip.,
Inc.,
443
F.Supp.2d
771
(D.Md.
2006)
(quoting DWS Holdings, Inc. v. Hyde Park Assocs., 33 Md.App.
667, 675 (1976)).
Here, although the acknowledgement page of
the Employee Handbook indicates that SAR is generally an at-will
employer (ECF No. 10-3, at 1), the letter agreement as discussed
above
suggests
otherwise.
To
9
resolve
this
ambiguity,
SAR
Even if SAR had not included these disclaimers in the
Employee Handbook, it is not clear that a handbook that enlarges
the employer’s rights like the one here would be enforceable.
Cf. Staggs, 61 Md.App. at 392 (“[W]e hold that provisions in
such policy statements that limit the employer’s discretion to
terminate an indefinite employment or that set forth a required
procedure for termination of such employment may, if properly
expressed and communicated to the employee, become contractual
undertakings by the employer that are enforceable by the
employee.” (emphasis added)).
15
provides no support for the proposition that the general terms
in
the
acknowledgement
presumably
was
page
of
the
Employee
to
all
SAR
employees)
provided
Handbook
should
(which
wholly
trump the terms of the letter agreement (which presumably was
specific
to
Dr.
Perricci)
Perricci’s employment.
case.
regarding
the
duration
of
Dr.
In fact, the reverse is more likely the
See Fed. Ins. Co. v. Allstate Ins. Co., 275 Md. 460, 472
(1975) (“Where two clauses or parts of a written agreement are
apparently in conflict, and one is general in character and the
other is specific, the specific stipulation will take precedence
over
the
general,
and
control
it.”);
accord
Acciai
Speciali
Terni USA, Inc. v. M/V Berane, 182 F.Supp.2d 503, 508-09 (D.Md.
2002).
Further
suggesting
acknowledgement
page
is
that
merely
the
a
at-will
general
term
term
in
subject
the
to
modification is the section titled “Termination of Employment”
in the Employee Handbook.
That section contemplates that SAR
occasionally hires employees who are not at-will:
Unless you are given a written contract
signed
by
the
President
specifying
an
employment term, your employment is ‘at
will.’
. . . Nothing in this Handbook, or
any oral or written representation by any
employee, official, manager, or supervisor
of this Company, shall be construed as a
contract of employment, unless the President
signs a written contract of employment.
16
(ECF No. 10-4, at 1).
Thus, SAR cannot rely on the Employee
Handbook, especially when read as a whole, for the proposition
that every new employee like Dr. Perricci is hired on an at-will
basis.
Although the letter agreement is not technically signed
by the President of SAR, Maria J. Hankerson, it does include her
printed name and title, and it was printed on SAR letterhead.
Viewed in the light most favorable to Dr. Perricci, there are
enough
indicia
in
the
documents
dictating
the
terms
of
the
employment relationship between SAR and Dr. Perricci from which
it can be reasonably inferred that SAR intended to hire Dr.
Perricci as more than an at-will employee.
Finally, SAR contends that if a definite term is read into
the letter agreement, that term would violate the Statute of
Frauds, thus rendering the letter agreement unenforceable.
No. 10-1, at 6-7).
contract
that
cannot
(ECF
“Under the Maryland statute of frauds, a
be
performed
within
one
year
is
not
enforceable unless the agreement ‘or some memorandum or note of
it, is in writing and signed by the party to be charged.’”
Salisbury Bldg. Supply Co. v. Krause Marine Towing Corp., 162
Md.App. 154, 160 (2005) (citing Md. Code Ann., Cts. & Jud. Proc.
§ 5-901(3)).
When determining whether an employment contract
can be “performed within one year,” a covenant not-to-compete
for
a
specific
period
of
time
17
after
employment
should
be
considered
along
with
the
term
of
employment
itself.
See
Collection & Investigation Bureau of Md., Inc. v. Linsley, 37
Md.App. 66, 73 (1977).
In this case, SAR argues the letter
agreement contained a one year covenant not-to-compete, which
when added to a one-year term of employment would violate the
statute of frauds.
To that end, SAR notes that as the party to
be charged, the letter agreement was not signed by one of their
authorized agents.
SAR’s
regarding
argument
the
fails
validity
on
of
at
a
least
two
signature:
fronts.
“It
is
First,
.
.
.
a
sufficient signing, if the name be in print, and in any part of
the
instrument,
provided
that
the
name
appropriated by the party to be his.”
is
recognized
and
Dubrowin v. Schremp, 248
Md. 166, 172 (1967) (citing Drury v. Young, 58 Md. 546, 554
(1882)).
Here, the printed name and title of SAR’s President
and CEO, Maria J. Hankerson, appears at the end of the letter
agreement,
letter
which
was
printed
agreement
was
signed
on
by
SAR
the
purposes of the Statute of Frauds.
letterhead.
party
to
be
Thus,
the
charged
for
See Drury, 58 Md. at 554.10
Second, part performance can be a “means to estop the defendant
from asserting the [statute of frauds] as a defense,” including
10
Moreover, SAR does not contest the authenticity of the
letter agreement and, in fact, refers to specific provisions
within it throughout its motion.
(See, e.g., ECF No. 10-1, at
2).
18
in
the
employment
context.
Friedman
&
Fuller,
P.C.
v.
Funkhouser, 107 Md.App. 91, 108 (1995), disapproved of on other
grounds by Pavel Enters., Inc. v. A.S. Johnson Co., 342 Md. 143,
166 (1996).
The part performance “must furnish evidence of the
identity
of
the
evidence
of
some
contract;
and
agreement,
it
but
is
not
that
must
it
enough
relate
to
unequivocal evidence of the particular agreement.”
(internal quotations omitted).
Perricci
worked
until
it
is
and
be
Id. at 108
Here, it is undisputed that Dr.
September
$81,964.81 through that date.
30,
2010,
and
was
paid
It is also undisputed that the
parties’ respective part-performances are attributable only to
the
specific
Accordingly,
letter
SAR
agreement
cannot
now
at
evade
issue
the
in
terms
this
of
case.
the
letter
agreement via the statute of frauds.
Having
evidence
thus
that
employment
determined
the
for
at
parties
least
one
that
Dr.
contracted
year,
Dr.
Perricci
for
a
has
produced
fixed-term
Perricci’s
of
employment
could have been terminated only for just cause on September 30,
2010.
As neither party disputes that this was not the case
here, SAR’s motion for summary judgment will be denied as to
Count One of the complaint.
B.
In
Count Two:
the
second
Negligent Misrepresentation
count
of
the
complaint,
Dr.
Perricci
contends, as an alternative to the breach of contract claim,
19
that SAR owed her a duty, which it breached, to disclose that
her employment was contingent upon the continued operation of
the Walter Reed contract and that the Walter Reed contract was
due to expire during the first year of her employment.
To begin, contrary to Dr. Perricci’s allegations, SAR may
have sufficiently disclosed to Dr. Perricci that her employment
was contingent upon the Walter Reed contract.
In the letter
agreement, SAR stated:
You will serve as a[n] Adult psychiatrist at
SAR
Corp’s
client
site
and
will
be
responsible for the duties listed on the Job
Description.
This position is located in
the Department of Psychiatry at Walter Reed
Army Medical Center, Washington, DC.
(ECF
No.
1-1,
at
1)
(emphases
added).
Thus,
by
the
plain
language of the letter agreement, SAR promised Dr. Perricci only
that she would have a position at Walter Reed; SAR did not
promise her a general position as a contract psychiatrist.
Perricci’s
claim
for
negligent
misrepresentation
Dr.
therefore
actually turns on the extent to which SAR allegedly failed to
disclose that the Walter Reed contract could expire.11
In
general,
to
establish
liability
for
negligent
misrepresentation in Maryland, a plaintiff must prove that:
11
(1)
In some sense, the distinction between the alleged
nondisclosures is illusory.
The fact that Dr. Perricci’s
employment was contingent upon the Walter Reed contract is
material only if the Walter Reed contract had the potential for
lapsing, and vice versa.
20
the
defendant,
owing
a
duty
of
care
to
the
plaintiff,
negligently asserts a false statement; (2) the defendant intends
that his statement will be acted upon by the plaintiff; (3) the
defendant has knowledge that the plaintiff will probably rely on
the statement, which if erroneous, will cause loss or injury;
(4) the plaintiff, justifiably, takes action in reliance on the
statement;
and
(5)
the
plaintiff
suffers
caused by the defendant’s negligence.
Corp., 397 Md. 108, 135–36 (2007).
cause
of
failure
action
to
for
disclose.
negligent
See
Md.App. 312, 340 (1996).
damage
Lloyd v. Gen. Motors
Maryland also recognizes a
misrepresentation
Lubore
proximately
v.
RPM
based
Assocs.,
on
Inc.,
a
109
SAR focuses on the fourth element,
arguing that Dr. Perricci’s reliance on its silence as to the
Walter Reed contract was not reasonable and moves to dismiss
solely on this ground.
To this end, however, SAR relies in part
on the Declaration of Maria Hankerson.
Decl.).
(ECF No. 10-2, Hankerson
Also, relevant to this count, Dr. Perricci herself
submitted an affidavit.
(ECF No. 13-1, Perricci Aff., at 1-5).
Because these materials are considered in resolving this claim,
SAR’s motion will be construed as a motion for summary judgment
as to this count.
Justifiable
representations]
reliance
were
“turns
more
judgment or expectation.’”
than
a
on
whether
‘statement
of
[the
opinion,
Goldstein v. Miles, 159 Md.App. 403,
21
436 (2004) (quoting Buschman v. Codd, 52 Md. 202, 207 (1879)).
In
other
words,
where
representations
are
“statements
of
expectation, prediction, or future intention,” it is generally
not reasonable to rely upon them, and where representations are
“statements of present intention,” it is generally reasonable to
rely upon them.
See Weisman v. Connors, 312 Md. 428, 454-55
(1988); see also Griesi v. Atl. Gen. Hosp. Corp., 360 Md. 1, 2021
(2000)
(noting
that
statements
regarding
past
or
present
facts may be justifiably relied upon while predictive statements
may not).
Here, in response to SAR’s motion, Dr. Perricci has offered
evidence that “at no time before [she] started working at Walter
Reed” was she ever informed that the Walter Reed contract would
expire
on
September
implication
being
30,
that
2010
SAR
(ECF
was
No.
aware
13-1,
of
the
at
2-3)
September
—
the
30th
expiration date during the pre-employment negotiations with Dr.
Perricci
and
should
have
informed
her
of
that
provides no evidence countering this inference.
fact.
SAR
SAR’s proffered
evidence, in the form of the Hankerson Declaration, actually
further supports the probability that it knew the Walter Reed
contract might expire on September 30th when it negotiated Dr.
Perricci’s employment, especially when viewed in the light most
22
favorable to Dr. Perricci.
(See ECF No. 10-2 ¶¶ 3-4).12
As SAR
asserts, it “had the Walter Reed contract for 12 years, and had
no reason to believe that it would not be renewed.”
15, at 3).
(ECF No.
Whether SAR thought the Walter Reed contract would
ultimately be renewed by the government is beside the point; the
evidence
suggests
that
SAR
was
contract was due to be renewed.
aware
that
the
Walter
Reed
It is this present fact that
SAR allegedly failed to disclose and the omission of which, as a
matter of law, Dr. Perricci could justifiably rely upon.
See
Griesi, 360 Md. at 20-21 (holding that a potential employee
could justifiably rely on a company’s promise of a position).13
12
The Hankerson Declaration states “SAR Corp’s Walter Reed
Psychiatrist contract initially commenced on August 21, 1998.”
(Id. ¶ 3).
It further states “[t]he Walter Reed contract was
extended repeatedly over the next twelve years.” (Id. ¶ 4).
13
SAR’s reliance on Miller v. Fairchild Industries, 97
Md.App. 324 (1993), for the proposition that a company’s
“optimistic
representations
about
future
business”
cannot
sustain
a
negligent
misrepresentation
claim
is
easily
distinguishable. (See ECF No. 15, at 3). Unlike Miller, SAR’s
omission here concerned a present fact about its knowledge of
the Walter Reed contract.
In addition, though not relevant to
the grounds upon which Miller was decided, it is worth pointing
out that the plaintiffs in Miller were already employees of the
company at the time of the representations. Miller, 97 Md.App.
at 328. Here, Dr. Perricci was not yet an employee of SAR when
the alleged omission occurred. As the line of cases culminating
in Griesi notes, pre-contractual employment negotiations are
fraught with the potential for negligent misrepresentation due
to the duty of care that the relationship between a potential
employee and employer entails.
See Griesi, 360 Md. at 16;
Weisman, 312 Md. at 448-49; Lubore, 109 Md.App. at 337.
23
Because
Dr.
Perricci
has
set
forth
sufficient
facts
supporting that at the time of her pre-employment negotiations
with SAR, SAR was aware that the Walter Reed contract was due to
be renewed, and because SAR advances no other basis for judgment
in
its
favor
regarding
Dr.
Perricci’s
negligent
misrepresentation claim, SAR’s motion will be denied as to this
count.
C.
Count Three:
Fraud in the Inducement
Like Count Two of the complaint, Count Three is also pled
in
the
alternative.
Dr.
Perricci’s
specific
contentions
in
Count Three are similar to those in Count Two, except she adds
the allegation that SAR intentionally deceived her.
The elements of fraud in Maryland are:
(1)
that
the
defendant
made
a
false
representation to the plaintiff, (2) that
its
falsity
was
either
known
to
the
defendant or that the representation was
made with reckless indifference as to its
truth, (3) that the misrepresentation was
made for the purpose of defrauding the
plaintiff, (4) that the plaintiff relied on
the misrepresentation and had the right to
rely on it, and (5) that the plaintiff
suffered compensable injury resulting from
the misrepresentation.
Md. Envtl. Trust v. Gaynor, 370 Md. 89, 97 (2002).
duty
to
disclose,
“characterized
by
active
deceptive
concealment
acts
or
of
a
Absent a
material
contrivances
fact,
intended
to
hide information, mislead, avoid suspicion, or prevent further
24
inquiry into a material matter,” may also constitute common law
fraud
because
concealment
misrepresentation.
(4th Cir. 2000).
is
analogous
to
intentional
United States v. Colton, 231 F.3d 890, 899
Separately, where a plaintiff alleges fraud
with regard to mere nondisclosure of a material fact, she must
establish
that
plaintiff.
the
Id.
defendant
owed
(“[S]ilence
a
as
duty
to
of
a
care
to
material
the
fact
(nondisclosure), without an independent disclosure duty, usually
does not give rise to an action for fraud . . . .”).
Claims
pleading
of
fraud,
standard
moreover,
under
are
subject
Fed.R.Civ.P.
to
a
9(b).
heightened
Harrison
v.
Westinghouse Savannah River Co., 176 F.3d 776, 783–84 (4th Cir.
1999).14
a
Rule 9(b) states that “in alleging a fraud or mistake,
party
must
state
with
particularity
constituting the fraud or mistake.
and
other
generally.”
conditions
Such
of
a
circumstances
Malice, intent, knowledge,
person’s
allegations
the
mind
typically
may
“include
be
the
alleged
‘time,
place and contents of the false representation, as well as the
identity of the person making the misrepresentation and what
[was] obtained thereby.’”
Superior Bank, F.S.B. v. Tandem Nat’l
14
“[L]ack
of
compliance
with
Rule
9(b)’s
pleading
requirements is treated as a failure to state a claim under Rule
12(b)(6).”
Id. at 783 n.5.
Accordingly, SAR’s motion as to
Count Three will be treated as a motion to dismiss.
25
Mortg., Inc., 197 F.Supp.2d 298, 313–14 (D.Md. 2000) (quoting
Windsor Assocs., Inc. v. Greenfeld, 564 F.Supp. 273, 280 (D.Md.
1983)).
In cases involving concealment or omissions of material
facts, however, meeting Rule 9(b)’s particularity requirement
will
likely
Williamson
take
a
Tobacco
different
Corp.,
form.
Shaw
F.Supp.
973
See
539,
552
v.
Brown
(D.Md.
&
1997)
(recognizing that an omission likely “cannot be described in
terms of the time, place, and contents of the misrepresentation
or
the
identity
of
the
person
(internal quotations omitted)).
making
the
misrepresentation”
The purposes of Rule 9(b) are
to provide the defendant with sufficient notice of the basis for
the
plaintiff’s
claim,
to
protect
the
defendant
against
frivolous suits, to eliminate fraud actions where all of the
facts are learned only after discovery, and to safeguard the
defendant’s reputation.
See Harrison, 176 F.3d at 784.
keeping with these objectives,
[a] court should hesitate to dismiss a
complaint under Rule 9(b) if the court is
satisfied (1) that the defendant has been
made aware of the particular circumstances
for which she will have to prepare a defense
at trial and (2) that [the] plaintiff has
substantial prediscovery evidence of those
facts.
Id.
In her complaint, Dr. Perricci alleges that
SAR corp., with actual malice and intent to
deceive Plaintiff did fail to disclose that
26
In
Plaintiff’s employment with Defendant was
contingent
on
the
continuation
of
Defendant’s
federal
contract,
that
the
federal contract upon which Plaintiff’s
employment was based was to lapse and expire
on September 30, 2010, did conceal that the
federal contract upon which Plaintiff’s
employment was based was to lapse and expire
on September 30, 2010, and the Defendant did
otherwise act with the intent to defraud and
deceive the Plaintiff and with the intent to
induce the Plaintiff into entering the
employment contract.
(ECF No. 1 ¶ 20).
Under the heightened pleading standard of
Rule 9(b), this allegation is insufficient.
At the very least,
Dr. Perricci fails to describe the period of time that the preemployment negotiations occurred during which SAR potentially
owed her a duty to disclose the information about the Walter
Reed
contract.
regarding
the
The
manner
complaint
of
the
generally
lacks
negotiations.
any
facts
Without
these
details, SAR does not have sufficient notice of the basis of Dr.
Perricci’s
fraud
claim.
See
Harrison,
176
F.3d
at
784.
Accordingly, her fraud claim cannot be sustained and must be
dismissed.
D.
Count Four:
Respondeat Superior
Despite her initial pleading, Dr. Perricci concedes as she
must that respondeat superior is a theory of liability and not
an independent cause of action.
See Mason v. Bd. of Educ., No.
WMN-10-3143, 2011 WL 89998, at *2 n.3 (D.Md. Jan. 11, 2011).
27
Therefore, SAR’s motion, construed as a motion to dismiss, will
be granted as to this count.
IV.
Conclusion
For the foregoing reasons, the motion to dismiss or, in the
alternative, for summary judgment filed by Defendant will be
granted in part and denied in part.
A separate order will
follow.
/s/
DEBORAH K. CHASANOW
United States District Judge
28
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