The Hellenic Ministry of National Defense et al v. Eagle Van Lines, Inc.

Filing 74

MEMORANDUM OPINION. Signed by Judge Deborah K. Chasanow on 7/14/2015. (sat, Chambers)

IN THE UNITED STATES DISTRICT COURT
FOR THE DISTRICT OF MARYLAND
:
THE HELLENIC MINISTRY OF NATIONAL
DEFENSE, et al.
:
v.

:

Civil Action No. DKC 13-0828

:
EAGLE VAN LINES, INC.
:
MEMORANDUM OPINION
In order to resolve this five year dispute between units of
the

Greek

government

and

a

Maryland-based

freight

forwarding

company concerning the shipment of military equipment, a bench
trial

was

held

from

April

16

to

April

24,

2015.

Upon

consideration of the evidence adduced at trial, and the parties’
arguments with respect thereto, the court now issues findings of
fact and conclusions of law pursuant to Federal Rule of Civil
Procedure 52(a).1

1

Rule 52(a) provides, in relevant part, that “[i]n an
action tried on the facts without a jury . . . , the court must
find the facts specially and state its conclusions of law
separately. The findings and conclusions . . . may appear in an
opinion or a memorandum of decision filed by the court.”
To
comply with this rule, the court “need only make brief,
definite, pertinent findings and conclusions upon the contested
matters, as there is no need for over-elaboration of detail or
particularization of facts.” Wooten v. Lightburn, 579 F.Supp.2d
769, 772 (W.D.Va. 2008) (citing Notes of Advisory Committee on
1946 Amendments).
As stated by Judge Nickerson in SherwinWilliams Co. v. Coach Works Auto Collision Repair Center Inc.,
Civ. Action No. WMN-07-2918, 2012 WL 2343235, at *5 (D.Md. June
19, 2012): “Rule 52(a) ‘does not require the court to make
findings on all facts presented or to make detailed evidentiary

I.

Background
Plaintiffs and Counter-Defendants the Hellenic Ministry of

National Defense, the Hellenic Armed Forces, and the Hellenic
Air

Force

Procurement

Service

(collectively,

“HAF”

or

“Plaintiffs”) are military units within the Greek government.
Plaintiffs brought this action against freight forwarder Eagle
Van Lines (“EVL” or “Defendant”) on March 18, 2013, seeking the
release of items belonging to HAF held in EVL facilities and
damages for their alleged unlawful retention.
Plaintiffs

filed

a

first

amended

On June 14, 2013,

complaint

asserting

the

following causes of action: (1) conversion (count I); and (2)
breach of contract (count II).

Plaintiffs sought declaratory

judgment and injunctive relief, which they designated as counts
III and IV of the amended complaint.

(ECF No. 3).

The court

granted Plaintiffs leave to file a second amended complaint,
which contained an additional count for replevin and/or detinue,
but otherwise remained identical to the prior complaints.

(ECF

No. 57, second amended complaint).
Defendant counterclaimed against Plaintiffs for breach of
contract (ECF No. 8).

Defendant requested declaratory judgment

findings; if the findings are sufficient to support the ultimate
conclusion of the court they are sufficient.’
Darter v.
th
Greenville Comm. Hotel Corp., 301 F.2d 70, 75 (4
Cir. 1962)
(quoting Carr v. Yokohama Specie Bank, Ltd., 200 F.2d 251, 255
(9th Cir. 1952)).”
2

and

punitive

damages,

causes of action.

which

relief

it

included

as

separate

(ECF No. 8, at 5-6).

The parties’ contractual relationship began in 2005 when
EVL

first

relevant

became
to

the

the

freight

current

forwarder

dispute,

the

for

Plaintiffs.

parties

entered

As
into

Contract No. 100/09, which covered EVL’s provision of freightforwarding
2009.

services

from

March

1,

2009

through

November

30,

Plaintiffs were not able to enter into another contract

with a freight forwarder for the period beginning December 1,
2009 because of a bidding dispute, so, in early January 2010,
the parties discussed the terms of an interim contract – draft
No. 47/10 - designed to cover the time between the expiration of
the earlier contract and the resolution of the bid dispute.
On

February

12,

2010,

the

Minister

of

National

Defense

issued a decision discontinuing EVL’s services as a freightforwarder.

HAF’s materials continued to be shipped to EVL after

the termination of its freight-forwarding services.
II.

Findings of Fact and Conclusions of Law2
Following

the

court’s

ruling

on

post-discovery

cross-

motions for partial summary judgment (ECF Nos. 40 & 41), the
materials received by EVL up to February 24, 2010 were released
2

The designation “PTX” refers to exhibits offered by
Plaintiffs; and “DTX” refers to exhibits offered by Defendant
EVL.
References to trial testimony are designated by “T.”
followed by the date of the testimony.
3

to

HAF

on

April

6,

2015.3

(DTX

4).

The

following

issues

remained for trial: (1) as to Plaintiffs’ complaint, whether
Defendant is liable for conversion for accepting and retaining
goods

received

after

February

24,

2010

damages;

and

(2)

appropriate

award

of

counterclaim

for

breach

of

contract,

and,
as

whether

liable and if so, the appropriate damage award.

if

to

so,

the

Defendant’s

Plaintiffs

are

Plaintiffs seek

the return of all materials belonging to HAF remaining in EVL’s
warehouse and compensatory damages for their unlawful retention
in

the

form

of

damages

for

lost

materials,

lost

technical

documentation, expired materials, cost of human working hours to
move spare parts, depreciation, and punitive damages.
seeks

payment

of

seventy-eight

(78)

outstanding

Defendant

invoices

and

pre-judgment interest.4
A.

Plaintiffs’ Complaint

1.

Conversion

As explained in the prior opinion, in Maryland the common
law tort of conversion contains two elements.

3

Defendant’s Exhibit 4 is a list of inventory picked up on
April 6, 2015, and reflects that over 800 items were released to
HAF. (DTX 4).
4

Although much of the dispute between the parties concerned
EVL’s repeated requests for storage fees, during closing
argument defense counsel indicated that EVL does not seek
reimbursement for any charges incurred by EVL for goods received
after February 24, 2010 or for storage fees.
4

First,
the
plaintiff
must
prove
the
defendant exerted “any distinct ownership or
dominion . . . over the personal property of
another
in
denial
of
his
right
or
inconsistent with it.”
Darcars Motors of
Silver Spring, Inc. v. Borzym, 379 Md. 249,
260 (2004) (quotation omitted).
“This act
of ownership for conversion can occur either
by initially acquiring the property or by
retaining
it
longer
than
the
rightful
possessor permits.”
Id.
Second, the
defendant must have “an intent to exercise
dominion or control over the goods which is
in fact inconsistent with the plaintiff’s
rights.” Id. at 836.
Sprint Nextel Corp. v. Simple Cell, Inc., Civ. No. CCB-13-617,
2013 WL 3776933, at *8 (D.Md. July 17, 2013).

“The defendant

may have the requisite intent even though he or she acted in
good faith and lacked any consciousness of wrongdoing, as long
as there was an intent to exert control over the property.”
Darcars, 379 Md. at 262.
circumstances.

A

Conversion may occur in a variety of

consignee

who

fails

to

return

consigned goods may be held liable for conversion.

or

pay

for

See, e.g.,

Bacon & Assocs., Inc. v. Rolly Tasker Sails (Thailand) Co., 154
Md.App. 617, 632 (2004).
All of the materials that EVL received before February 24,
2010 have been released, thus the only remaining question is
whether
2010.

EVL

converted

EVL

warehouseman’s

the

previously
statutory

items
relied
lien

received
on
as

the
a

after

February

existence
justification

of

24,
a
for

conditioning the release of materials received after February
5

24,

2010

on

payment

explained

in

the

motions

for

of

outstanding

memorandum

partial

opinion

summary

invoices

by

adjudicating

judgment,

in

HAF.
the

As
cross-

Maryland,

a

warehouseman’s statutory lien is conferred by Md. Code Ann.,
Com. Law § 7-209.

Section 7-209(a) states, in relevant part:

A warehouse has a lien against the bailor on
the goods covered by a warehouse receipt or
storage agreement or on the proceeds thereof
in its possession for charges for storage or
transportation,
including
demurrage
and
terminal charges, insurance, labor, or other
charges, present or future, in relation to
the goods, and for expenses necessary for
preservation of the goods or reasonably
incurred in their sale pursuant to law.
(emphasis added).

Thus, the existence of a warehouseman’s lien

hinges on whether EVL issued warehouse receipts for the items it
retained after February 24, 2010 because no storage agreement
existed between the parties at any time.
did

not

produce

any

warehouseman’s

At trial, Defendant

receipts

abandoned its warehouseman’s lien defense.

and

essentially

EVL also stipulated

that it did not submit any invoices for items received after
February 24, 2010.

(ECF No. 52, at 12, amended joint pretrial

order).
EVL also stated that it continued to receive goods because
it was listed as a freight-forwarder for HAF on the Military
Assistance Program Address Directory (“MAPAD”).

EVL was removed

from MAPAD as a freight forwarder by March 15, 2010, however.

6

(See PTX 82).

Goods continued to be misdirected to EVL for some

time after that period, (T. Georgakopoulos, 04/22/15),5 but even
if EVL believed it had to accept shipments, it did not have any
legal

justification

years.

for

retaining

the

goods

for

nearly

five

George Georgakopoulos testified that EVL housed three

classified items in its warehouse that it was not authorized to
ship

to

Stellar

Maritime,

the

freight-forwarding

which HAF requested that EVL forward materials.

company

to

(T. 04/20/15).

HAF requested that all unclassified materials be forwarded to
Stellar

Maritime,

Georgakopoulos

however.

acknowledged

(PTX

24,

that

only

HAF

000524).

Mr.

out

the

three

of

approximately 2,000 items were classified.
Based

on

the

foregoing,

EVL

has

committed

the

tort

of

conversion.
2.

Detinue

Pursuant to Md. Rule 12-601(h), “[a]fter the issue of the
right to possession before judgment is determined, the action
shall

proceed

as

an

action

judgment under Rule 12-602.”

for

recovery

of

property

after

See Wallander v. Barnes, 341 Md.

553, 572 (1996) (“Modern replevin in Maryland is a pre-judgment,
but post-probable cause determination, seizure.”).
entitled

“Recovery

of

Property

5

or

Value

after

Rule 12-602,
Judgment

–

Neither party has produced specific evidence of when EVL
stopped receiving materials on behalf of HAF.
7

Detinue,”

provides,

in

turn,

that

“[a]

judgment

for

the

plaintiff shall award possession of the property or, in the
alternative,
Such

payment

judgment

must

of

its

value.”

“separately

set

Md.

Rule

forth

the

12-602(d)(1).
value

of

the

property and any amount awarded for damage to or detention of
the property.”

Id.

Pursuant to Md. Code Ann., Cts. & Jud.

Proc. § 11-104(a), “[i]n an action of detinue a plaintiff may
recover

the

personal

property

and

damages

for

the

wrongful

detention of the property.”
It is uncontested that HAF has a right to possession of the
withheld materials that were received by EVL after February 24,
2010 and for the reasons explained, EVL has offered no legal
justification for conditioning their release.

Accordingly, EVL

will be ordered to release to HAF the items received by EVL
after February 24, 2010.
3.

Damages

A court sitting in diversity must apply state law governing
the threshold of proof necessary for a damages award and the
amount of that award.

See Defender Indus., Inc. v. Nw. Mut.

Life Ins. Co., 938 F.2d 502, 504-05 (4th Cir. 1991) (en banc).
“The measure of damages for the conversion of a chattel is the
market value of the chattel at the time and place of conversion
plus interest to the date of judgment.”
Md.App. 141, 145 (1977).

Staub v. Staub, 37

Here, the actual items have been or
8

will be returned to Plaintiffs.

There is no evidence that, for

most of the items, their market value was diminished due to the
detention.

Nor have Plaintiffs provided any evidence of the

monetary value of any particular item or sought interest.

The

exception is the expired items which lost their entire value due
to the detention.

EVL has not contested that assessment and

$67,768.59 will be awarded as damages to Plaintiffs for the
expired items.
Plaintiffs do seek additional damages, however.

“As in

other tort actions, additional damages adequate to compensate an
owner for other injurious consequences which result in a loss
greater than the diminished or market value of the chattel at
the time of the trespass or conversion may be allowed unless
such claimed damages are so speculative as to create a danger of
injustice

to

the

opposite

party.”

Id.

at

145-46

(emphasis

added); United States v. Arora, 860 F.Supp. 1091, 1100 (D.Md.
1994)

(acknowledging

the

caveat

from

Staub

that

compensatory

damages may not be so speculative as to create a danger of
injustice).

Pursuant to Md. Code Ann., Cts. & Jud. Proc. § 11-

104(a), “[i]n an action of detinue a plaintiff may recover the
personal property and damages for the wrongful detention of the
property.”

To

be

recoverable,

damages

must

be

“reasonably

certain” and not “based on speculative, remote, or uncertain”
figures.

Dierker v. Eagle Nat. Bank, 888 F.Supp.2d 645, 658
9

(D.Md. 2012); Hoang v. Hewitt Ave Assocs., LLC, 177 Md.App. 562
(2007).

Under Maryland law, “[i]f the fact of damage is proven

with certainty, the extent or the amount thereof may be left to
reasonable inference.”

David Sloane, Inc. v. Stanley G. House &

Assocs. Inc., 311 Md. 36, 41 (Md. 1987) (internal quotation
marks omitted).
a.

July 2014 Damage Report

Captain
regarding

Konstantinos

Plaintiffs’

Katirtzidis

damages

and

provided

prepared

a

testimony

damage

report.

Captain Katirtzidis joined the military in 2000 as a military
student, obtaining a bachelor’s degree in 2004.

(T. 04/16/15).

He studied economic theory and policy during his undergraduate
studies.

He then obtained a master’s degree in Philosophy of

Economics.

(T. 04/16/15 & 04/17/15).

He began a PhD program in

May 2007 and finished his dissertation on macroeconomics and
economic policy in December 2012.
until

2009,

he

served

in

the

(T. 04/17/15).
procurement

From 2006

agency

with

the

Hellenic Air Force where he was involved with procurement bids,
appropriation,
promoted

to

and

be

a

negotiations.
member

of

the

In

November

Directorate

2009,
of

he

was

Finance

for

Economics within the General Staff, where he issued directives
to

units

issues.

of

the

Hellenic

Air

Force

concerning

procurement

He remained there for five years, after which point he

10

was

transferred

department.

to

serve

as

a

supervisor

in

an

accounting

(T. 04/16/15).

As will be explained in more detail below, in preparing his
damage

report,

Captain

Katirtzidis

obtained

data

appropriate units within the Hellenic Armed Forces.

from

the

He prepared

a damage report in January 2014 with appendices quantifying each
damage category sought by Plaintiffs.

After the January 2014

damage report, Captain Katirtzidis ordered another review by the
logistics department to verify damages for lost items, which
resulted in the amended July 2014 damage report.

The July 2014

damage report removes from the damage calculation some of the
compensation
104).

originally

sought

in

the

January

report.

(PTX

Captain Katirtzidis did not personally review all of the

primary information supporting the damages calculations; rather,
he compiled the data provided to him by other offices and in
some instances, reviewed representative samples of the primary
documentation.

At least some primary documents were included in

two

(one

envelopes

envelope

with

supporting

documentation

regarding depreciation that accompanied the January 2014 damage
report, and another envelope supporting damages for lost items
that

accompanied

the

June

2014

damage

report),

but

these

envelopes were not provided to defense counsel during discovery.
Captain

Katirtzidis

submitted

to

the

stated

that

appropriate

his

final

branches
11

of

damage
the

report

Hellenic

was

Armed

Forces

for

approval,

and

was

approved

by

his

command.

(T.

04/20/15).
Plaintiffs’ counsel attempted to qualify Mr. Katirtzidis as
a “damages” expert.
throughout

trial,

However, as the court explained to counsel
Captain

Katirtzidis

is

a

fact

and

summary

witness, much like Stephanie Bo and Ngai Siu who testified on
behalf of the defense.

Captain Katirtzidis’s “expertise” is

only in compiling economic information or data and presenting it
in a way that quantifies damages.

He certainly is not an

independent witness, given his position within HAF and the fact
that his “expert report” had to be approved by his command.
This limited view of his purported expertise is exemplified
by a recent opinion issued by the United States Court of Appeals
for the Fourth Circuit:
Rule 702 of the Federal Rules of
Evidence permits expert witnesses to testify
if their “scientific, technical, or other
special knowledge will help the trier of
fact to understand the evidence or to
determine a fact in issue,” such as the
amount of damages due.
Fed.R.Evid. 702.
The question of whether a witness is
qualified to testify is context-driven and
“can only be determined by the nature of the
opinion he offers.” Gladhill v. Gen. Motors
Corp., 743 F.2d 1049, 1052 (4th Cir. 1984).
Because our general preference is to admit
evidence that will aid the trier of fact,
the
expert
need
only
have
“sufficient
specialized knowledge to assist jurors in
deciding the particular issues in the case.”
Belk, Inc. v. Meyer Corp., U.S., 679 F.3d
146, 162 (4th Cir. 2012) (internal quotation
12

marks omitted); see Westberry v. Gislaved
Gummi AB, 178 F.3d 257, 261 (4th Cir. 1999)
(“Rule 702 was intended to liberalize the
introduction of relevant expert evidence.”);
Thomas J. Kline, Inc. v. Lorillard, Inc.,
878
F.2d
791,
799
(4th
Cir.
1989)
(“Generally, the test for exclusion is a
strict one, and the purported expert must
have neither satisfactory knowledge, skill,
experience, training nor education on the
issue for which the opinion is offered.”).
In order to offer an opinion, “one . . .
need not be precisely informed about all
details of the issues raised” or even have
prior experience with the particular subject
the testimony concerns. Lorillard, 878 F.3d
at 799; see Fed.R.Evid. 703 (providing that
“[a]n expert may base an opinion on facts or
data in the case that the expert has been
made aware of [at trial] or personally
observed.”).
In this case, Appellant “reads this
[qualification]
requirement
far
too
narrowly.” Belk, 679 F.3d at 162. Although
Cohen had no prior experience with maritime
contracts, his opinion did not call for such
expertise.
Rather, his function was to
calculate Appellee’s damages.
Cohen has an
MBA in economics.
He created mathematical
formulas for this case after reviewing
information that he obtained before trial by
personally interviewing Appellee’s employees
and reading their deposition testimony.
Cohen then formed his opinion on the extent
of
Appellee’s
losses
by
applying
his
formulas.
. . . Although Cohen relied on information
provided by other witnesses at trial to
devise his formula, the Federal Rules of
Evidence specifically authorized him to do
so.
See Fed.R.Evid. 703. . . . Thus, we
conclude that the district court did not
abuse its discretion by permitting Cohen to
offer expert testimony as to his calculation

13

of Appellee’s damages for
changes in commercial terms.

demurrage

and

RG Steel Sparrows Point, LLC, f/k/a Severstal Sparrows Point,
LLC v. Kinder Morgan Bulk Terminals, Inc., d/b/a Kinder Morgan
Chesapeake Bulk Stevedores, ---F.App’x----, 2015 WL 1905884, at
*6

(4th

Cir.

Apr.

28,

2015)

(unpublished

opinion)

(emphases

added).
To the extent that calculation of damages is useful, the
July 2014 damage report will be considered.
calculation
financial

is

and

another
logistic

matter.
information

The

The basis for any

witness

provided

to

accumulated

him

by

other

departments and synthesized it for the court in the appendices
to the July 2014 damage report.6

To that extent, his efforts

were anything but independent and, to be credited, would have to
be supported by other evidence.
b.

Lost Items

Plaintiffs

seek

$2,370,653.39

as

compensation

for

items

that they believe EVL lost and an additional $4,447 in damages
for “lost technical documentation.”

(PTX 104, Tables 3 & 7 to

Appendix A to the July 2014 damage report).

6

As Captain Katirtzidis himself acknowledged at trial, he
is not a logistics expert and is not an expert in reading the
database which contained some of the information he used as a
basis for computing damages.
(T. 04/17/15 regarding PTX 106,
two-page printout from SAMIS database).
14

Colonel Konstantinos Vlassis7 provided testimony regarding
how the underlying information that formed the basis of Colonel
Katirtzidis’s damage report – including damages for lost items was obtained and verified.
March

20,

2010,

Nikolaos

Colonel Vlassis testified that on
Klothakis,

an

Air

Force

officer

resident at EVL’s warehouse who served as a liaison between the
Hellenic Armed Forces and EVL,8 sent via email to the Hellenic
Air

Force

a

list

04/20/15; PTX 43).

of

items

purportedly

held

by

EVL.

(T.

The cover letter of this email is written in

7

Colonel Vlassis first joined the Hellenic Air Force in
1981 as an officer in Andravida Air Base, providing supply
support for aircraft, where he remained until approximately
1989. After a series of logistics-related assignments in Greece
and abroad in Paris, Colonel Vlassis returned to Greece in 2006,
where he was assigned to be chief of a unit of the Air Force
General Staff, supervising supply support of ammunition and fuel
of the Hellenic Air Force.
In 2009, Colonel Vlassis became
commander of a supply squadron, 112 combat wing. (T. 04/20/15).
In 2012, Colonel Vlassis became the Director of Logistics in the
Hellenic Air Force General Staff, tasked with providing
personnel and weapon systems to the Hellenic Air Force as
needed.
(Id.).
When asked about the operations of the
logistics directorate, Colonel Vlassis stated that D7 is supply
depot, which is a central unit of supply support of the Air
Force.
This unit provides spare parts, fuel, ammunition, and
the like to the Hellenic Air Force.
Colonel Vlassis considers
himself a logistician, particularly concerning supply support,
technical support, and in providing necessities for weapon
systems.
8

George Georgakopoulos, President of EVL, testified that
Contract No. 100/09 required that a liaison remain in EVL’s
office. According to Mr. Georgakopoulos, Mr. Klothakis approved
any hazmat or oversized material and submitted paperwork to the
Greek embassy regarding payment of invoices. (T. 04/21/15). He
further stated that the liaison was required to oversee the
entire contract on behalf of the Hellenic Air Force.
15

Greek and Plaintiffs have not translated the email.9

Colonel

Vlassis testified that the email from Mr. Klothakis with an
attached list showing 1,642 items purportedly housed in EVL’s
facilities, (PTX 43, HAF 000271-000301), responded to an order
from the Hellenic General Staff that he send this report.
04/20/15).

(T.

Colonel Vlassis stated that supply depot maintains

its own database comprised of information obtained from: Foreign
Military Sales (“FMS”) information systems; Security Assistance
Management Manual (“SAMM”); Air Force Security Assistance Center
(“AFSAC”); and information from invoices or packing lists from
vendors.
from

(Id.).

Mr.

He stated that the list provided in the email

Klothakis

was

cross

checked

with

supply

depot’s

database in 2010 and that the supply depot database subsequently
was updated after the cross check to include information from
the list provided by Mr. Klothakis.
Three additional exhibits purport to show materials that
Plaintiffs
Plaintiffs’

at

some

Exhibits

point
90

and

believed
105

and

were

retained

Defendant’s

by

EVL:

Exhibit

2.

Defendant’s Exhibit 2 and Plaintiffs’ Exhibit 105 appear to be
identical.

Colonel Vlassis testified that Defendant’s Exhibit 2

is a better-formatted version of Plaintiffs’ Exhibit 90.
9

(T.

Although Colonel Vlassis testified that the email was sent
on March 20, 2010, Plaintiffs’ counsel represented during
closing argument that the court can take judicial notice based
on a line in the email that the email from Mr. Klothakis
actually was sent in May 2010.
16

04/20/15).

All

three

exhibits

appear

to

reflect

the

same

information.

Colonel Vlassis stated that Plaintiffs’ Exhibit 90

is an earlier version of supply depot’s database reflecting what
supply
Colonel

depot

understood

Vlassis

mirrors

the

EVL

testified

information

was

that
in

holding

Plaintiffs’
Plaintiffs’

in

2012

and
90

Exhibit
Exhibit

2013.
(which

105

and

Defendant’s Exhibit 2) reflects information that supply depot
received from FMS, invoices of vendors, and information provided
by Mr. Klothakis in May 2010.

(Id.).

Then, from October 15 through October 18, 2013, Colonel
Vlassis led a Committee comprised of two other individuals (Wing
Commander

Konstantinos

Papathanasiou

and

Flight

Lieutenant

Leonidas Kantzidis),10 in conducting an inventory or inspection
of HAF materials in EVL’s warehouse in Temple Hills, Maryland.
(T. 04/20/15).
(PTX 96).

Following the inventory, he prepared a report.

Importantly, the report states, inter alia:
(3) The inventory process was agreed upon by
the attorneys Mr. Max Maccoby (of the law
firm “Butzel Long, PC” who represents the
Hellenic Republic) and Mr. George Petros,
and was conducted as follows:
(a)
EVL
company
forwarded
initially
–
through e-mail – the Committee and the law
firm “Butzel Long, PC” the total list of the
retained materials which – according to the
opposing party – were stored in this
specific place.

10

Colonel Katirtzidis stated that he was present during the
inventory in October 2013 as well. (T. 04/17/15).
17

(b) The total list of the materials – all
documents (electronic and printed) were
inspected and identified on the evidence of
identification (STNR or P/N) or the document
number
(DCN)
that
were
found
on
the
accompanying documents on the boxes, in
comparison each time as regard the rest of
the
quantitative
data
(quantity,
description) with the ones on the list which
was given to the Committee by the opposing
party on Tuesday, October 15, 2013, before
the inspection.
(PTX 96, HAF 001453) (emphases added).11
The report prepared by the Committee after the October 2013
inventory, (PTX 96), includes appendices, which reflect, inter
alia:

(1)

1,815

items

that

were

found

during

the

inventory

(Appendix A); (2) 52 items that were found that have expired
(Appendix B); (3) “the materials that were included on the first
list given by [EVL] to the Committee for the inventory, but they
were

never

found”

(Appendix

C);

(4)

“the

bibliography

requisitions [technical documentation] that were on the first
list given by [EVL] to the Committee for the inventory, but they
were never found” (Appendix D); (5) “the materials that were
found during the inventory but they were not on the first list
given

by

the

company

(Appendix

E).

(See

to
PTX

the
96,

Committee
HAF

for

001455

the
&

inventory”
accompanying

appendices).

11

Many of the exhibits provided by Plaintiffs at trial were
translated from Greek.
18

Plaintiffs did not clarify at trial whether the reference
to the “first list” provided by EVL in the Committee report
refers to the email list sent prior to the inventory in October
2013 or the list provided by EVL on October 15, 2013, the first
day of the inventory conducted by HAF.

What is evident from

Colonel Vlassis’s testimony is that in conducting the inventory
in

October

purporting

2013,
to

HAF

show

relied
what

on

was

some

list

stored

in

provided
EVL’s

by

EVL

warehouse.

Testimony from Stephanie Bo, previously employed with EVL from
November 2010 until July 2014,12

provides additional context.

Ms.

instant

Bo

became

involved

in

the

dispute

sometime

in

February 2013, when she conducted a complete inventory of all
foreign military goods belonging to HAF that were housed with
EVL.

(T. 04/23/15).

Ms. Bo testified that sometime in February

2013, she examined EVL’s inventory box-by-box, piece-by-piece,
and

recorded

all

of

the

details

she

could

documentation regarding the materials on hand.

find

on

the

Where the boxes

contained missing information about an item, Ms. Bo consulted
EVL’s records.13

Ms. Bo also testified that she was provided a

12

Ms. Bo worked as an international coordinator with EVL
until the beginning of 2011, assisting with foreign military
sales (“FMS”) transactions involving inventory and import of
such items. (T. 04/23/15).
13

Ms. Bo testified that the “records” she consulted
essentially were EVL spreadsheets; she did not know who created
19

list from HAF – Plaintiffs’ Exhibit 105 – which she compared
against what she actually found in EVL’s warehouse when she
conducted
stated

the

that

physical
she

inventory

provided

her

in

February

February

2013.

2013

Ms.

Bo

inventory

to

Plaintiffs, which is the list they used during the October 2013
inventory.

(T. 04/23/15).

After HAF’s inventory in October

2013, Ms. Bo created Defendant’s Exhibit 3 sometime in October
or November 2013, which she testified reflects a combination of
what

HAF

provided

in

Plaintiffs’

actually found in October 2013.

Exhibit

105

and

what

they

(T. 04/23/15; DTX 3).

On HAF’s end, after the October 2013 inspection, Colonel
Vlassis

sent

the

Committee’s

inventory

report

with

the

appendices, (PTX 96), to the General Staff and supply depot of
each branch of the Hellenic Armed Forces for cross checking.
(T. 04/20/15).

Colonel Vlassis stated that he supervised the

cross-checking process and that the supply depot database was
used for this purpose.

(T. 04/20/15).

Captain Katirtzidis also

testified that he ordered supply depot to conduct the cross
checking
report

procedure
prepared

inventory.

(T.

by

between

their

the

Committee

04/17/15

&

database
after

04/20/15).

and
the
In

the

inventory

October

order

to

2013
assure

himself of the credibility of the underlying data regarding lost

the spreadsheets or when, and how they were maintained.
04/23/15).
20

(T.

items, Captain Katirtzidis reviewed representative samples of
the

primary

documents

Directorate.

provided

(Id.).

He

by

teams

from

that

the

stated

procedure was conducted in two phases.

the

Logistics

cross-checking

First, the logistics

directorate cross checked the inventory report with the supply
depot database and then Captain Katirtzidis prepared the first
damage

report

001539).
requested

in

In

January

the

2014.

January

$7,406,601.59

in

(See

2014
damages

PTX

damage
for

104,

HAF

report,

lost

items.

001534-

Plaintiffs
Captain

Katirtzidis believed that the first cross checking procedure may
have

resulted

in

some

duplicate

entries

and

excessive

lost

items, thus he ordered the teams to conduct a second crosschecking procedure to collect updated data and compose a second
version of the damage report.

(T. 04/20/15).

The second cross-

checking process was completed in June 2014, and resulted in the
amended July 2014 damage report, in which the lost items damage
figure was reduced to $2,370,653.39.
As

is

readily

apparent

(Id.).

from

this

recitation,

the

reliability and accuracy of any information maintained by the
Hellenic Armed Forces regarding what materials were purchased,
if such materials were sent to EVL, if EVL received them, and
when, is impossible to ascertain with any degree of certainty.
Plaintiffs have not offered any evidence as to any reliable and
complete starting point that shows all materials purchased by
21

the Hellenic Armed Forces (encompassing the Navy, Army, and Air
Force), when such materials were purchased, when they were sent
to EVL, and when EVL purportedly received them.
closing

argument,

Plaintiffs’

counsel

was

Indeed, during

asked

to

identify

where the record contains reliable evidence of what was received
by EVL and when.

Plaintiffs’ counsel indicated that he would

address this point later in his argument, but he never did,
leading to the conclusion that no such evidence exists or at the
very least that no such evidence was presented at trial.

The

picture of the bureaucratic morass within HAF portrayed at trial
supports the conclusion that no such reliable evidence exists.
Colonel Vlassis testified that the logistics team used the
appendices

from

the

October

2013

inventory

report

and

cross

checked them with requisitions for purchased items which were in
the supply depot’s database to identify whether anything was
“lost” by EVL.

(T. 04/20/15).

He stated that the requisition

information was obtained from FMS information system and from
vendors.

When Plaintiffs conducted the inventory in October

2013, however, they relied on a list provided by EVL, and not on
their own complete list reflecting what materials they thought
should have been in EVL’s warehouse.

A notation to Table 3 to

Appendix A of the July 2014 damage report indicates that “[t]he
additional non-identified materials during inventory inspection,
dated Oct[ober] 2013, based on the inventory list given to the
22

HAF Committee by the defendant, are listed in the Appendix ‘K.’”
(PTX 104, HAF 002404 n.3 & Appendix K) (emphasis added).

Among

the items included in Appendix K – which is based on EVL’s list
and not on HAF’s own records – is a $400,000 digital flight
control

computer,

which

Plaintiffs

apparently

about prior to receiving a list from EVL.

never

inquired

Captain Katirtzidis

stated that the items appearing in Appendix K which were not
found during the inventory in October 2013 were sent to supply
depot,

which

04/17/15).

verified

that

the

items

were

purchased.

(T.

Plaintiffs have provided no proof, however, that the

items actually were purchased by HAF and, more importantly, have
not verified if and when such items were expected to be shipped
to and/or received by EVL.
Moreover,

according

to

Colonel

Vlassis’

testimony,

the

supply depot database was updated in 2010 to include information
provided by Mr. Klothakis in May 2010 purporting to show items
held

by

EVL.

EVL

disputes

that

the

list

provided

by

Mr.

Klothakis to the Hellenic Air Force in May 2010 reflects the
items

held

by

EVL,

however.

Plaintiffs

made

no

effort

to

translate from Greek to English the cover email by Mr. Klothakis
sent with this list, nor was Mr. Klothakis called to testify.
Furthermore,

on

cross-examination,

Colonel

Vlassis

himself

admitted that he did not know how or when Mr. Klothakis compiled
the

information

on

the

list

sent
23

to

the

Air

Force.

(T.

04/20/15).

Colonel Vlassis further conceded that nothing in the

email indicated that Mr. Klothakis asked EVL to prepare its own
inventory list.

(Id.).

George Georgakopoulos, President of

EVL, testified that Mr. Klothakis was not given access to any
inventory list from EVL, and that Mr. Klothakis kept his own
list.

(T. 04/21/15).

Plaintiffs have not persuaded the court

that their Exhibit 43 – which purports to be a list from Mr.
Klothakis

with

items

held

materials received by EVL.

by

EVL

–

accurately

reflects

HAF

This list does not even include a

date on which the items either were sent to or received by EVL,
which undermines the reliability of this document.

The fact

that Mr. Klothakis sent an email purporting to show materials
retained by EVL which cannot be verified taints the reliability
of the supply depot database which then incorporated the data
from Mr. Klothakis’s list.
Colonel

Vlassis

testified

that

Plaintiffs’

Exhibit

90

(which reflects the same information as Plaintiffs’ Exhibit 105
and Defendant’s Exhibit 2) is an early version of supply depot’s
database reflecting what supply depot understood EVL was holding
in 2012 and 2013.
Defendant’s

(T. 04/20/15).

Exhibit

3

–

Stephanie Bo’s final report –

specifically

attempts

to

reconcile

Plaintiffs’ Exhibit 105 with what she found in EVL’s warehouse
when she conducted the physical inventory in February 2013.
some

instances,

Ms.

Bo

actually
24

found

more

items

in

In

EVL’s

inventory than what was reflected on Plaintiffs’ list.
e.g., DTX 3, referencing HAF 001730 to 001732).

(See,

Stephanie Bo

also testified that at least one of the items that HAF asserted
EVL

lost

is

$170,000.
HAF

EVL

measuring

unit

that

HAF

valued

at

$170,000

inertial

measuring

unit

dated

Oct.

21,

According to HAF’s records, this item was received by

on

October

Moreover,
inertial

inertial

(See PTX 104, Appendix G to July 2014 damage report,

002496,

2008).

an

21,

Stephanie
measuring

2008,

Bo
unit

predating

testified
that

HAF

Contract

that

although

believes

EVL

No.
the
lost

100/09.
specific
was

not

received by EVL, it received the same product throughout 2006,
2007, and 2008, and shipped the item.
referencing HAF 001724).

(T. 04/23/15; DTX 3,

Stephanie Bo’s notes also reflect that

the repeated value of the same item was $45,000, not $170,000.
Ms. Bo even tracked some items with UPS, but UPS had no record
of the items having been received by EVL.
(referencing thirteen items with UPS)).

(T. 04/23/15; DTX 3

Plaintiffs question the

reliability of EVL’s records, but the burden is on Plaintiffs to
prove damages with a reasonable certainty.
During closing argument, Plaintiffs’ counsel indicated that
HAF

is

snapshot

not
of

offering
the

Exhibit

information

105

–

which

contained

in

purports
the

to

supply

be

a

depot

database - for any purpose other than briefly to describe a
process that took place before the cross checking procedure.
25

The reliability of the cross checking procedure, however, hinges
on the accuracy of the information contained in the supply depot
database, the contents of which Plaintiffs have not produced to
defense counsel or at trial.14

Only a limited sample of the

underlying primary documents to support lost items damages were
produced to defense counsel and at trial.15

(See

PTX 106).

During closing argument, Plaintiffs’ counsel asked the court to
credit the fact that the lost damages appendices to the July
2014

damage

report

resulted

from

two

time-consuming

cross-

checking procedures implemented by HAF to ensure the credibility
of the data.

Plaintiffs essentially ask the court to place

14

It is not even clear how many databases were cross
checked: Captain Katirtzidis testified that the supply depot
departments of each branch of the Hellenic Armed Forces were
ordered to perform a cross check to identify missing items.
15

Moreover, closing argument revealed that Plaintiffs’
Exhibit 105 – which Colonel Vlassis testified captures at least
some of the information from the supply depot database from some
point in 2012 or 2013 - only reflects information regarding
materials of the Air Force, and not the Navy or Army. Captain
Katirtzidis created appendices to his July 2014 damage report
showing lost items of the Air Force, along with lost items of
the Hellenic Army and Navy, but the appendices are merely
compilations of information he received elsewhere.
(See PTX
104, Appendices E through G & K to July 2014 damage report).
Nothing on the record shows where Captain Katirtzidis obtained
the underlying information regarding lost items of the Navy and
Army (other than that he entrusted supply depot of each branch
of the Hellenic Armed Forces to cross check their records and
reviewed a representative sample of some documentation), and his
attestations alone that he verified the credibility of the data
he included in the appendices and that each branch of the
Hellenic Armed Forces cross checked its own supply depot
database are not persuasive.
26

great confidence in the cross checking efforts of the logistics
teams within the Hellenic Armed Forces and the credibility of
the inventory database(s) against which they conducted the cross
checking.
procedure

The
was

court

accepts

conducted

and

that
that

a

second

HAF

cross

believes

checking
that

the

appendices to the July 2014 damage report reflect items that EVL
lost.16

The fact that a second cross checking procedure was

implemented, however, does not persuade the court that EVL lost
the items that Plaintiffs attribute to it as having received.
Stephanie Bo provided credible testimony that when EVL records
showed an item was received, it was found.
Also

worth

noting

is

the

(T. 04/23/15).

additional

argument

made

by

Plaintiffs’ counsel regarding the $5 million difference in the
lost materials damages calculation from the January to June 2014
damage report.

The fact that a second cross checking procedure

resulted

considerably

in

a

smaller

16

damages

calculation

does

Ironically, during closing argument, Plaintiffs’ counsel
took the position that an exhibit prepared by Ngai Siu, an
accounting manager with EVL, (DTX 10), reflecting the payment
difference between applying the pricing terms under Contract No.
47/10 as opposed to Contract No. 100/09 to the fifty one
disputed invoices (discussed below) was unreliable because
Plaintiffs have no way of knowing whether the figures applied by
Ms. Siu are accurate.
Plaintiffs’ counsel characterized the
evidence regarding the fifty-one (51) invoices as a “conclusory
exhibit” because it contained only a summary of Ms. Siu’s
findings in terms of the amounts that would be owed under
Contract No. 100/09 as compared to draft No. 47/10.
The
appendices to the July 2014 damage report which Plaintiffs offer
as evidence to support lost damages are also summary exhibits.
27

nothing to increase the court’s confidence in the information
contained in the supply depot’s database.

Plaintiffs did not

even provide evidence as to how the database was maintained or
updated,

how

often,

and

by

whom.

Although

Colonel

Vlassis

testified that the information in the database came from FMS
records, commercial requests, and vendors, he also stated that
the

database

incorporated

information

from

Mr.

Klothakis’s

email, the accuracy of which has not been established.
Plaintiffs also seek $4,447 in damages for “lost technical
documentation.”
report).

(PTX

104,

Appendix

L

to

July

2014

damage

The July 2014 report states:
(a) The technical documentation of Hellenic
Armed Forces, listed in EVL’s inventory
report produced to HAF Committee during
inspection, dated Oct[ober] 2013, which was
not identified however by our personnel, is
provided
in
Appendix
“L”
and
costs
4,447.00$.
(b) The documentation, which was identified
during inspection and is expected to be
released
from
EVL’s
facilities
by
the
Judge’s order is not included in Appendix
“L.”

(emphasis

added).

Most

of

the

“technical

documentation”

identified in Appendix L reflects a twenty dollar cost.

Captain

Katirtzidis testified that he received data from the logistics
branch

which

showed

technical

manuals

purchases

technical

an

average

because

the

value

Hellenic

documentation.
28

of

twenty
Air

Although

dollars

Force
the

for

regularly
“technical

documentation” reflected in Appendix L predominantly reflects a
cost

of

twenty

dollars,

it

also

identifies

publications valued at a higher price.
Appendix

L

to

publication).

July

2014

Captain

damage

lost

(See, e.g., PTX 104,

report,

Katirtzidis

purportedly

HAF

testified

002535,

that

the

$85

higher

figures reflect specific costs of technical documentation from
supply depot data for other versions of the same document.
Awarding
presents

damages

the

same

materials damages.

for

problem

“lost

technical

discussed

above

documentation”
regarding

lost

Plaintiffs have not pointed to any reliable

evidence showing that the specific technical documentation they
claim EVL lost actually was purchased by Plaintiffs, the date of
such purchase, that the specific lost technical documentation
was sent to and received by EVL, and what materials the manuals
pertain to.

Appendix L to the July 2014 damage report does not

even include a column for date of purchase or the date that HAF
believes specific technical documentation was sent to or should
have

been

received

by

EVL.

Moreover,

although

Captain

Katirtzidis generally averred that technical documentation cost
twenty

dollars

on

average,

Plaintiffs

have

not

provided

any

proof of the price paid for the specific technical manuals they
believe were sent to EVL but now are missing.

According to the

report prepared by Colonel Vlassis following the October 2013
inventory, EVL “forwarded initially – through e-mail – to the
29

Committee and the law firm ‘Butzel Long, PC’ the total list of
the retained materials which – according to the opposing party –
were stored in this specific place.”
The

Committee

also

apparently

(PTX 96, HAF 001453).

received

a

list

of

items

purportedly held in EVL’s warehouse on October 15, 2013, the
first day of the inspection.
inventory

report

identified

prepared

“the

(Id.).

by

bibliography

In Appendix D to the post-

Colonel

Vlassis,

requisitions,”

(PTX

96),

HAF

which

is

the

technical documentation Plaintiffs believe EVL lost, “that were
on

the

first

list

given

by

[EVL]

to

inventory, but they were never found.”
HAF 001702-1707).

the

Committee

for

the

(Id. HAF 001455; PTX 96,

No evidence has been presented as to the

reliability of this “first list” purportedly emailed by EVL to
HAF

before

created,

by

the

October

whom,

or

2013

how.

inventory,
Moreover,

when

such

according

list

to

was

Colonel

Vlassis’s report, some items that were found by HAF during the
October 2013 inventory were not identified on this first list,
further undermining the reliability of this list.
HAF

1455

(“5/in

Appendix

“E”

the

materials

that

(See PTX 96,
were

found

during the inventory but they were not on the first list given
by [EVL] to the Committee for the inventory.”)).

Without any

reliable evidence as a basis for concluding that EVL actually
received the technical documentation and when, any damage award

30

for “lost technical documentation” would be entirely speculative
and, as such, will not be ordered.
Based on the foregoing, Plaintiffs have not convinced the
court that they kept a complete and accurate record of when
items were shipped to EVL (or should have been received by EVL),
given that at least some of the items they now claim have been
lost by EVL predate Contract No. 100/09 according to HAF’s own
records and Plaintiffs produced no evidence that they previously
inquired about these items.

Accordingly, no damages for lost

items will be awarded.
c.

Expired Materials

According

to

the

damage

report

prepared

by

Captain

Katirtzidis, a subset of retained materials by EVL had a life
limit and have since expired.

(PTX 104, Katirtzidis July 2014

damage report, HAF 002396; see also Table 4 to Appendix A in PTX
104).

The

expired

materials

are

contained

in

Appendices

H

through J to Captain Katirtzidis’s July 2014 damage report in
Plaintiffs’ Exhibit 104.17

Plaintiffs seek a total of $67,768.59

17

Appendix H to the July 2014 damage report contains
expired materials belonging to the Hellenic Army; Appendix I
contains expired materials belonging to the Hellenic Navy; and
Appendix J contains expired materials belonging to the Hellenic
Air Force. (PTX 104).
31

as

damages

for

expired

items

for

all

three

branches

of

the

Hellenic Armed Forces.18
Captain Katirtzidis testified that when the Hellenic Armed
Forces

conducted

an

inventory

in

EVL’s

warehouse

in

October

2013, specific items were identified that had expired, such as
oils

for

aircraft.

packages

(T.

contained

in

4/17/15).
EVL’s

He

warehouse

indicated

that

reflected

a

the
life

expiration date and from that information, the Hellenic Armed
Forces determined items that have become useless and can no
longer be used operationally by HAF.

Plaintiffs calculated the

damages for expired items by reviewing the purchase price of the
respective

expired

items.

Defense

counsel

indicated

during

closing argument that EVL does not directly contest the claim
for damages for expired goods.

Accordingly, Plaintiffs will be

awarded damages in the amount of $67,768.59 for the expired
items.
d.

Depreciation

Plaintiffs

seek

$17,366,533.50

in

depreciation

damages

caused by the alleged inactivity or grounding of Hellenic Armed
Forces’

aircraft

retained by EVL.

and

helicopters

as

a

result

of

material

(PTX 104, Table 5 to July 2014 damage report,

18

Although Plaintiffs initially sought to add a ten percent
penalty to all of their damage figures pursuant to Contract No.
100/09, Plaintiffs’ counsel indicated at trial that HAF is not
seeking penalty damages.
32

HAF 002406).

The July 2014 damage report prepared by Captain

Katirtzidis states that “[m]any aircraft[] and helicopters of
the Hellenic Armed Forces have been grounded, i.e., remained in
mission

inactivity,

due

to

the

disruption

the

generated to their regular logistics support.”
002396).

Plaintiffs

argue

that

items

or

defendant

(PTX 104, HAF

parts

held

by

EVL

contributed to grounding of one hundred (100) aircraft and six
(6) helicopters.

(PTX 104, Table 5 to Appendix A & Appendices B

& C to July 2014 damage report, HAF 001518-001525).
As intimated during trial, the attempt to quantify damages
due

to

Captain

“depreciation”
Katirtzidis

of

aircraft

testified

that

and

helicopters

fails.

he

calculated

annual

depreciation by dividing the purchase price of each aircraft and
helicopter

by

internationally
depreciation.19

its

life

accepted

span,

which

methodology

(T. 04/17/15).

he
used

stated
to

is

an

calculate

On recall, he explained that the

Aircrafts Engineering Directorate provided a formula to him to

19

Captain Katirtzidis stated that although he calculated
depreciation on an annual basis, the same methodology is applied
to calculate quarterly or monthly depreciation. (T. 04/17/15).
He further stated that he did not personally review the purchase
price of each aircraft and helicopter and similarly was not
aware of their life spans, but received this information from
other units within the Hellenic Armed Forces, such as the
Directorate of Mechanics and Directorate of Economics.
33

calculate the life span of grounded aircraft and helicopters.20
He testified that the information he received from the Aircraft
Engineering Directorate indicated that the formula for life span
is a ratio of maximum operational hours of aircraft to the hours
each

aircraft

operates

every

year.

In

other

words,

the

numerator is measured by maximum flying hours delineated by the
manufacturer,

and

the

denominator

flying

of

the

aircraft

hours

by

is

measured

by

the

actual

year.

(T.

Katirtzidis,

utilized

for

determining

04/20/15).
The

methodology

depreciation

Plaintiffs

undermines

their

theory

that

the

aircraft

and

helicopters declined in value as a result of the withholding of
parts by EVL.
on

two

Captain Katirtzidis’s depreciation model relies

variables:

purchase

price

and

life

span.

The

very

formula or premise underlying the calculation of an aircraft’s
or helicopter’s life span assumes the aircraft’s use.

Here, the

aircraft and helicopters were not utilizing any flying hours
because,

according

to

Plaintiffs,

they

were

grounded.

Plaintiffs provided no evidence that any aircraft or helicopter
that

was

not

flown

because

of

20

a

missing

part

diminished

in

Captain Katirtzidis stated that the life span formula was
contained in a report which HAF included in an envelope
attachment to the January 2014 damage report. (T. 04/20/15; PTX
104, HAF 001538).
This report was not provided to Defendant
until trial.
(Court’s Exh. 1).
The produced document is
primarily written in Greek, but Plaintiffs represent that the
report identifies the formula for calculating life span.
34

value, but the methodology for calculating life span assumes the
use

of

operational

operating

the

hours.

aircraft

Plaintiffs

now,

would decrease its value.

as

have

opposed

to

not

shown

sometime

why

earlier,

Plaintiffs did not produce a single

witness or document to explain why the aircraft or helicopters
would

depreciate

when

not

in

use.

The

argument

made

by

Plaintiffs’ counsel, Mr. Gordin, during a bench conference on
April 20, 2015 and at closing argument that if an aircraft is
grounded for a certain period of time there is no way to tell
how

it

will

operate

in

the

future

proves

that

awarding

depreciation damages based on the evidence presented would be
far too speculative.
Moreover, the argument that HAF had to use other aircraft
for

more

aircraft

hours

than

were

unavailable

operational

hours

would

will

even

otherwise
is

be

similarly

out

over

needed

because

illogical.

time.

Now

some
The

that

all

necessary spare parts will be released, HAF can use the formerly
unavailable aircraft, and not those overused over the past five
years, to perform necessary duties.
not

proven

that

the

absence

of

In short, Plaintiffs have

spare

parts

resulted

in

any

measurable depreciation damages.
One additional point is worth noting.

Appendix B reflects

that for all but thirty-one (31) of the aircraft, Plaintiffs
believe the grounding was due to additional missing parts and
35

not

only

those

thirty-one

withheld

(31)

out

by

of

EVL.

the

one

In

other

hundred

words,

(100)

for

only

aircraft

do

Plaintiffs attribute grounding or inactivity solely due to EVL’s
withholding of necessary spare parts.

(PTX 104, Appendix B to

the July 2014 damage report, HAF 001518-001519).
pointed

out

during

trial,

the

fact

that

all

As the court
but

thirty-one

aircraft were grounded at least in part due to missing parts not
attributed

to

EVL

creates

a

causation

problem

because

those

sixty-nine aircraft would have remained grounded irrespective of
whether

EVL

Plaintiffs’

released
counsel

the
cited

parts.

During

Eagle-Picher

closing

Industries,

argument,
Inc.

v.

Balbos, 326 Md. 179 (1992), involving asbestos, on the issue of
causation.

Cases discussing causation in the asbestos context

are inapplicable here.
Eagle-Pitcher,

Even if they were, however, unlike in

Plaintiffs

have

offered

no

evidence

that

the

withholding of spare parts by EVL was a substantial factor in
their grounding.
e.

Cost of Human Working Hours

Plaintiffs seek $7,572.50 in damages consisting of “[c]ost
of consumed human working hours of Hellenic Army personnel for
restorations.”

(PTX 104, July 2014 damage report, HAF 002397).

Captain Katirtzidis testified that this figure represents wages
paid to personnel of the Hellenic Armed Forces to extract parts
from

some

assets

to

other

ones.
36

According

to

Captain

Katirtzidis’s testimony and Table 6 to Appendix A of the June
2014 damages report prepared by him, (PTX 104, HAF 002407), Army
personnel expended approximately 218 hours in moving parts from
certain assets to aircraft and/or helicopters.

(T. 4/17/15).

Captain Katirtzidis testified that only the Hellenic Army – and
not

the

Navy

and

Air

Force

–

possessed

documentation

to

substantiate cost of human working hours in moving parts from
aircraft.

(Id.).

He stated that logistics staff verified the

accuracy of the figures in terms of expended hours and cost.
Defense

counsel

did

closing

argument.

not

object

The

court

to

this

credits

damage
Captain

award

during

Katirtzidis’s

testimony and Table 6 to Appendix A of the June 2014 damage
report, and will award Plaintiffs $7,572.50 in damages.
f.

Punitive Damages

Plaintiffs also seek punitive damages.

“[A] plaintiff has

no right or entitlement to punitive damages under Maryland law.”
Bowden v. Caldor, Inc., 350 Md. 4, 25 (1998).

In Darcars Motors

of Silver Spring, Inc. v. Borzym, 379 Md. 249 (2004),21 the Court
of Appeals of Maryland provided the following analysis regarding
an award of punitive damages for conversion:
In recent years, the law of punitive damages
has undergone significant development. See,
21

During closing argument, Plaintiffs’ counsel cited the
opinion from the Court of Special Appeals of Maryland, 150
Md.App. 18 (2003), but the analysis from the decision of the
Court of Appeals controls.
37

e.g., Montgomery Ward [v. Wilson], 339 Md.
[701], 241 [(1995)]; . . . The leading case
in this effort is Owens-Illinois v. Zenobia,
in which Judge Eldridge, writing for the
Court, made it clear that a jury may award
punitive damages only when a plaintiff has
demonstrated
by
clear
and
convincing
evidence that the defendant acted with
“actual malice.” 325 Md. [420,] 460 [1992].
. . .
Like in the context of products liability,
fraud,
and
malicious
prosecution,
the
availability of punitive damages for the
tort of conversion depends on the intent of
the tortfeasor.
While a plaintiff may
obtain
a
compensatory
damage
award
by
proving merely that the defendant, without
bad
faith,
intended
to
exert
unlawful
dominion over the plaintiff’s property,
punitive damages may be awarded only if the
defendant demonstrated “actual malice” in
carrying out the conversion.
The term
“actual malice” in the context of conversion
requires
little
explanation
beyond
the
definition
we
have
established
in
our
previous
cases:
consciousness
of
the
wrongdoing or “conduct of the defendant
characterized by evil motive, intent to
injure, ill will, or fraud.”
Zenobia, 325
Md. at 460. . . .
Where the defendant
converts property with a consciousness of
the wrongfulness of that conversion, he or
she possesses the requisite improper motive
to
justify
the
imposition
of
punitive
damages.
Id. at 264-266.

“[T]he trier of fact has discretion to deny

punitive damages even where the record otherwise would support
their award.”

Adams v. Coates, 331 Md. 1, 15 (1993).

Plaintiffs have not proven by clear and convincing evidence
that EVL acted with actual malice.
38

Plaintiffs argue that the

court

should

infer

justifications
refusing

to

ill

for

will

by

continuing

forward

them,

examining

EVL’s

conduct

and

to

accept

the

materials

and

by

purportedly

misleading

the

and

Armed Forces.
It is uncontested that EVL continued to receive shipments
following the termination of its freight forwarding services.
Mr. Georgakopoulos and Stephanie Bo both testified that HAF was
responsible

pursuant

to

the

Security

Assistance

Management

Manual (“SAMM”) to change the MAPAD listing to reflect that EVL
was no longer the freight forwarder for the Greek government.
(T. 04/21/15 & 04/23/15).

Chapter C7.7.3 of SAMM supports this

point:
Correct MAPAD addresses are essential for
accurate routing of cargo and documentation
and will also ensure the FMS purchasers are
charged the correct transportation rate. . .
.
If there is a change in FMS freight
forwarder, the purchaser is responsible for
adjusting its MAPAD listing through the IA
focal
point
and
reconciling
shipments
received
by
its
former
FMS
freight
forwarder.
(PTX 118) (emphasis added).
freight

forwarder

by

EVL was removed from MAPAD as a

March

15,

2010.

(See

PTX

82;

T.

Georgakopoulos 04/21/15).

EVL continued to receive shipments

after

and

clear.

that

date,

however,

the

reasons

are

not

entirely

Mr. Georgakopoulos testified that the United States Army

misdirected

certain

Greek

military

39

items

to

EVL

sometime

in

2011, and the dispute was resolved in 2012, with EVL shipping
the

items

included

to

a

Stellar

nominal

Maritime

figure

and

for

receiving

storage

fees.

payment
(See

which

DTX

26).

Plaintiffs did not present any additional evidence identifying
what other materials EVL received after the MAPAD listing was
changed

and

why.

Mr.

Georgakopoulous

testified

that

in

connection with repaired items, EVL was listed as an importer,
thus it had to be the exporter and had to accept those items.
(T. 04/21/15).

EVL provided no legal support or other evidence

confirming this point, but the burden is on Plaintiffs to prove
by clear and convincing evidence that EVL acted with actual
malice.
Plaintiffs also rely on an email from Elizabeth Donato, the
central

case

manager

for

Greek

Army

programs,

to

George

Georgakopoulos, dated March 16, 2011, in which she requested
that “EVL no longer accept GoG shipments that were inadvertently
shipped in error to EVL.”

(PTX 76).

Plaintiffs reference this

correspondence as evidence that EVL should have refused further
shipments after this point and failure to do so constitutes ill
will.

Plaintiffs have not even established, however, that EVL

continued

to

receive

and

accept

correspondence from Ms. Donato.
that

EVL

warehouse

received

the

before

April

majority
17,

after

the

Mr. Georgakopoulos testified
of

2010
40

materials

the
and,

items
as

housed

explained

in

its

above,

Plaintiffs could not identify a reliable and complete source on
the record indicating exactly what was received and when.
04/21/15).

(T.

In her deposition, excerpts of which Plaintiffs have

designated for trial, Ms. Donato testified that she did not
believe that she authored any similar correspondence or e-mail
instruction directing EVL not to accept GoG shipments before her
email of March 16, 2011.

(PTX 112, at 9).

Plaintiffs’ counsel

argued that as an experienced freight forwarder, EVL should have
known not to accept the materials coming in after its freight
forwarding services were terminated in February 2010 or should
have

contacted

obligations

United

concerning

Georgakopoulos’s
priority

to

States
acceptance

testimony

have

the

authorities
of

confirms

Hellenic

Armed

to

confirm
items.

misdirected
that

it

Forces

its
Mr.

was
pay

EVL’s

top

outstanding

invoices before materials were released because as he stated,
EVL often had to wait considerable periods of time to receive
payment for shipped items and oftentimes the invoices were not
paid fully.
after

(See DTX 16).

November

30,

payments to EVL.

2009

Captain Nikomanis testified that

until

(T. 04/17/15).

July

2010,

HAF

made

monthly

These payments were made for

items that were delivered much earlier, however, and invoices
remained outstanding.
Georgakopoulos

stated,

(T. Georgakopoulos, 04/21/15).
the

primary

reason

for

As Mr.

continuing

relations with the Greek government from EVL’s perspective was
41

not for monetary purposes, but to gain leverage in attracting
other business.

(Id.).

more

in

proactive

exceedingly

Undoubtedly, EVL should have been much

determining

imprudent

for

its

EVL

to

obligations
condition

and

the

it

release

was
of

materials on payment of outstanding invoices and storage fees.
Nor did EVL have a legal basis for refusing to release retained
materials

until

HAF

paid

outstanding

invoices,

believed it could assert a statutory lien.

although

EVL

Nevertheless, EVL’s

conduct does not rise to the level of evil motive, intent to
injure, ill will, or fraud, to warrant punitive damages.22
Based

on

the

foregoing,

punitive

damages

will

not

be

awarded.
B.

Defendant’s Counterclaim

Defendant’s breach of contract counterclaim is premised on
Plaintiffs’

refusal

to

pay

four

22

categories

of

invoices:

(1)

As further evidence of ill will, Plaintiffs rely on
correspondence from the Hellenic Armed Forces informing EVL that
the retention of materials was inhibiting Greece’s operational
readiness.
(PTX 47 & 50).
Even after the termination of its
freight forwarding services, however, EVL continued to ship some
items that were deemed crucial. (T. Georgakopoulos, 04/21/15).
In any event, as defense counsel pointed out, Plaintiffs
initiated this action in this court in March 2013, but did not
move for a preliminary injunction or seek replevin to obtain
immediate release of their materials.
42

invoices 1-51; (2) invoices 52-64; (3) invoices 65-67; and (4)
invoices 68-78.23

Article 8.3 of Contract No. 100/09 states:

The
Military
Attaches
will
repay
the
CONTRACTOR [EVL] in U.S. dollars for the
services rendered by the contractor, within
two (2) months at the latest from the date
they
received
the
required
supporting
documents, as the case may be, which the
competent Services will receive in Greece,
provided
that
a
relevant
inspection
determines that they are appropriate.
(DTX 1) (emphasis added).
testimony

on

behalf

of

Captain Andreas Nikomanis provided
HAF

regarding

payment

of

invoices.

Captain Nikomanis worked in the 112th combat wing of the Hellenic
Air

Force

from

2005

to

2008,

and

was

transferred

to

the

transportation division in 2008, where he was responsible for
payments for transportation materials of the Hellenic Air Force.
(T. 04/17/15).
EVL’s

invoices

He testified that his procedure for reviewing
involved

determining

whether

the

charges

were

consistent with Contract No. 100/09 and Greek legislation and
whether all appropriate documentation was included to justify
the respective charges.
1.

(Id.).

Invoices 1-51

Captain

Nikomanis

stated

that

after

the

expiration

of

Contract No. 100/09, he received instruction from the General
23

At summary judgment, Plaintiffs argued that Defendant is
precluded from collecting payment on certain invoices because of
the three-year statute of limitations. During closing argument,
Plaintiffs’ counsel indicated that HAF no longer asserts the
statute of limitations affirmative defense.
43

Staff

that

draft

Contract

No.

47/10

was

commonly

agreed

to

between EVL and the Air Force and that the respective invoices
should be reviewed according to that contract.

Between May and

July 2010, a time period post-dating the termination of EVL’s
freight-forwarding services, EVL submitted these fifty-one (51)
invoices seeking payment for services performed between December
1, 2009 and February 24, 2010.
stated

that

these

(See DTX 10).

fifty-one

(51)

Captain Nikomanis

invoices

were

properly

documented under Contract No. 100/09 but were not paid by HAF
solely because, according to HAF, they were improperly billed
using

the

Contract

pricing
No.

terms

47/10.

of

(T.

Contract
04/17/15).

No.

100/09

instead

Plaintiffs

take

of
the

position that from December 1, 2009 until February 24, 2010, the
parties were governed by Contract No. 47/10.24
It is undisputed that Contract No. 100/09 covered freightforwarding services by EVL and payment from the Hellenic Armed
Forces from March 1, 2009 until November 30, 2009.

(DTX 1).

The

parties’

only

dispute

concerns

what

terms

governed

the

relationship from December 1, 2009 until February 24, 2010, when
EVL received official written notice from Mr. Klothakis that the
Minister of Defense terminated its freight-forwarding services.
(T. Georgakopoulos, 04/21/15).

Captain Katirtzidis testified

24

The parties agree that whether Contract No. 100/09 or
draft No. 47/10 applies is relevant only as to payment of these
fifty-one (51) invoices.
44

that

in

2009,

Stellar

three

Maritime,

companies,

Imperio-Argo

participated

in

a

Group,

procurement

EVL,

bid

and

for

a

freight forwarding contract after the expiration of Contract No.
100/09.

(T. 04/16/15).

On August 18, 2009, the Minister of

Defense reached a decision to award the new freight forwarding
contract to Imperio-Argo Group, and EVL formally protested that
decision under Greek law.

(Id.; T. Georgakopoulos 04/21/15).

After November 30, 2009, the parties began discussing the terms
of an interim contract - draft No. 47/10 – which would govern
from December 1, 2009 until the resolution of EVL’s protest of
the

new

contract

award

to

Imperio-Argo

Group.

The

parties

disagree on whether the terms of the negotiated contract ever
became binding on the parties.

Under draft No. 47/10, payment

for EVL’s services would be based on the destination of the
materials

and

different

rates

would

apply

“zones” identified in draft No. 47/10.
HAF 001345-001347).

depending

on

the

(PTX 18, draft 47/10,

Specifically, pricing under draft No. 47/10

would be determined based on the weight of the item and the zone
under which it falls depending on where it would be transported.
(Id.).

Under Contract No. 100/09, however, zone and item weight

did not affect pricing.
Plaintiffs

have

not

proven

that

the

parties

who

participated in negotiations in January 2010 had the authority
to bind either party to the terms of draft No. 47/10.
45

During

direct

examination,

Mr.

Georgakopoulos,

who

served

as

the

President of EVL beginning in July 2009, was shown a Greek and
English-translated version of Contract No. 47/10 from January
12, 2010 containing initials on every page; Mr. Georgakopoulos
stated that the initials were not his and that EVL’s attorney in
Greece signed the document in January 2010 and faxed it to EVL.
(T. 04/21/15; see also PTX 18, January 2010 draft of 47/10).
Mr.

Georgakopoulos

standard

protocol

testified
used

by

that

foreign

initialing
governments

documents
for

documents for purposes of negotiation or review.

is

submitting
The Greek

version of the January 2010 draft of 47/10 contains the words
“Draft Only For Negotiations” on every page.

(PTX 18).

Mr.

Georgakopoulos stated that he never received a copy of 47/10
without the words “draft only.”

He further testified that when

a contract is finally agreed to by both parties, it bears the
stamp

of

the

Greek

government

and

is

signed

and

sealed,

as

reflected on the last page of the Greek version of Contract No.
100/09 which was formally executed.

(See DTX 1).

He stated

that he never saw a copy of draft No. 47/10 that contained a
signature and stamp of the Greek government.
Captain

Katirtzidis

provided

similar

(T. 04/21/15).
testimony.

He

testified that he supervised the progress of negotiating the
interim

contract

in

January

2010,

participate in the January negotiation.
46

although

he

(T. 04/16/15).

did

not

He also

stated that the January 2010 version of draft No. 47/10 was not
signed formally, but was signed or initialed only within the
context of negotiations, showing that two parties mutually agree
to the draft contract during negotiations.
Katirtzidis’s

testimony,

however,

in

According to Captain

order

for

the

Greek

government to be bound by the terms of any contract, it must be
approved

by

the

Minister

of

Defense,

after

which

would be invited to sign the contract formally.
not

until

May

3,

2010,

nearly

three

months

candidates

(Id.).

It was

after

Greece

terminated EVL’s freight forwarding services, that the Minister
of Defense sent a fax message to George Voultsis, EVL’s attorney
at the time, inviting EVL to sign draft No. 47/10.

(PTX 39).

What followed were a series of communications back and forth
between HAF and EVL, with each side expressing its objection to
varying demands by the other, and with HAF urging EVL formally
to sign draft No. 47/10.
54).
2010

(See PTX 40, 42, 47, 48, 50, 52, 53,

Representatives from EVL and HAF met in Greece in June
to

discuss

further

the

terms

of

47/10,

but

those

discussions also led to two counterproposals as to the terms of
the interim contract and the parties’ respective obligations.
(See PTX 53, 54, 55).
Plaintiffs’ counsel argued that Contract No. 47/10 became
binding

on

the

parties,

despite

the

disagreements

and

counterproposals mentioned above, and there was a meeting of the
47

minds, apparently in January 2010, that the pricing terms of
draft No. 47/10 would apply to freight-forwarding services from
December 1, 2009 until the termination of EVL’s services.
arguments are misplaced.

These

Even if EVL agreed to the pricing

terms in draft No. 47/10 during the discussion in January 2010,
the negotiation participants did not have authority to execute a
final,

binding

contract

as

explained

by

Plaintiffs’ own witness, Captain Katirtzidis.
at

the

very

agreement

least

would

be

on

Plaintiffs’

created

until

end,
the

testimony

from

The clear intent,

was

that

Minister

no

binding

of

Defense

approved the draft version of 47/10 which the parties discussed
in January 2010.25

See, e.g., Phoenix Mut. Life Ins. Co. v.

Shady Grove Plaza Ltd P’Ship, 734 F.Supp. 1181, 1188 (D.Md.
1990)

(“[T]here

is

a

strong

presumption

against

finding

a

binding agreement when the parties expressly contemplated the
future preparation of and the execution of a formal contract
25

Captain Katirtzidis testified that even if the Minister
of Defense declined to approve draft No. 47/10, the parties
would still be bound by their commitments in the negotiated
draft.
(T. 04/16/15).
Even assuming that were the case under
Greek law, such is not the case in Maryland, where a meeting of
the minds as to all essential terms is required to create a
binding obligation.
See, e.g., Phoenix Mut. Life Ins. Co. v.
Shady Grove Plaza Ltd. P’ship, 734 F.Supp. 1181, 1188-89 (D.Md.
1990), aff’d, 937 F.2d 603 (4th Cir. 1991) (“In sum, plaintiff
would have this Court conclude that the negotiating events
themselves resulted in a binding contract. . . . Parties engage
in negotiations not because they intend that the process itself
will constitute the agreement, but because they desire and
intend an eventual writing that will set forth the final terms
satisfactory to both sides in every respect.”).
48

document.”); TecArt Industries, Inc. v. National Graphics, Inc.,
181 F.Supp.2d 451, 456 (D.Md. 2002) (“[T]he decision in a case
like this one must be based on the particular facts before the
Court.
be

Whether the parties negotiating a contract intended to

bound

.

.

.

must

be

determined

from

the

facts

and

circumstances in each particular case.”).
At most, participants in the January 2010 discussion had
authority to negotiate the terms of an interim contract that
would govern until the resolution of EVL’s protest of the new
contract

award

to

Imperio-Argo

Group.

George

Georgakopoulos

stated that the initials on the January 2010 draft of 47/10 are
not his, but those of the attorney representing EVL at the time,
and that the draft then was sent to EVL for review.

See, e.g.,

Auvil v. Grafton Homes, Inc., 92 F.3d 226, 230 (4th Cir. 1996)
(“The

authority

to

negotiate

[]

is

far

different

from

the

authority to agree to a specific settlement. . . . At most,
Auvil’s manifestations evince Snyder’s [his attorney’s] actual
authority

to

conduct

settlement

negotiations.”);

Schafer

v.

Barrier Island Station, Inc., 946 F.2d 1075, 1079 (4th Cir. 1991)
(“[W]hen a client retains an attorney to represent the client in
a transaction, the attorney has implied authority to negotiate
the terms of an agreement or operative papers to their final
form.

But

custom

of

the

relationship

does

not

imply

an

authority for the attorney to execute the documents on behalf of
49

the

client.”).

Because

the

parties

never

formalized

their

agreement to change the pricing terms – because it had yet to be
approved finally by the Minister of Defense and EVL – there
could

not

have

been

a

meeting

of

the

minds

regarding

the

essential terms of draft No. 47/10 by anyone with authority to
bind the parties.
regarding

the

Consequently, EVL was free to change its mind

pricing

terms

which

may

have

been

tentatively

agreed to (but not made binding) during negotiations.
Moreover, if the parties entered into a binding contract
based

on

January

the

negotiated

2010,

and

the

and

initialed

pricing

rates

draft

of

47/10

included

in

from

that

draft

applied, there would have been no need for HAF to press EVL
formally to sign the draft version in May and June 2010.
e.g.,

International

Management,

Inc.,

Waste
988

Indus.

Corp.

F.Supp.2d

v.

542,

Cape
552

See,

Environmental
(D.Md.

2013)

(“Regardless of any signatures on that document, it is clear
from

IWI’s

own

communications

that

further

negotiations

were

necessary before a binding, comprehensive contract existed.”);
Waterfall Farm Sys., Inc. v. Craig, 914 F.Supp. 1213, 1221-24
(D.Md. 1995) (holding that signed Letter of Agreement was no
more than a non-binding letter of intent because the parties
intended
agreed

that
upon

several
and

additional

executed

before

50

documents
a

would

binding

and

have

to

be

enforceable

contract

existed

and

because

there

were

extensive

subsequent

negotiations over undecided material terms).
During closing argument, Plaintiffs’ counsel argued that
EVL performed under draft No. 47/10 after its attorney initialed
or signed the document in January 2010.

The problem with this

argument, however, is that it ignores that performance under No.
47/10

only

differed

in

terms

of

payment

of

concerns Plaintiffs’ obligations, not EVL’s.

invoices,

which

If EVL’s conduct

during this time period had been consistent with the terms of
draft No. 47/10 – and not with Contract No. 100/09 – that could
have served as evidence of the parties’ intentions during this
time period.

EVL did not do anything consistent with draft

47/10 and inconsistent with Contract No. 100/09, however.
on

the

foregoing,

regardless

of

what

the

Based

parties’

representatives agreed to in January 2010, draft No. 47/10 never
became a final binding contract.
Because

draft

No.

47/10

never

became

a

final

binding

contract, the question remains as to what pricing terms apply to
EVL’s provision of freight forwarding services from December 1,
2009 until February 24, 2010.

EVL’s position is that if draft

No. 47/10 never materialized into a final contract, then the
terms of Contract No. 100/09 were extended until February 24,
2010 based on the parties’ continued dealings during this time
period.

At

the

beginning

of
51

closing

argument,

Plaintiffs’

counsel

was

asked

to

articulate

HAF’s

position

as

to

what

governed the parties’ obligations during the time period from
December 1, 2009 until February 24, 2010 if the court concludes
that

draft

No.

Maryland law.

47/10

was

not

a

contract

under

applicable

Somewhat circuitously, Plaintiffs’ counsel stated

that whether Contract No. 100/09 or “something else” applies
turns on the nature of the parties’ performance.
Plaintiffs’

counsel

indicated

that

if

the

Specifically,
acts

following

November 30, 2009 were that EVL receives and transfers goods and
is paid for such services, the court could find that Contract
No.

100/09

suggested

was

that

extended
the

court

by

performance.

could

find

an

Alternatively,
implied

contract

he
of

essential terms, whereby the court again could look to the terms
of Contract No. 100/09.
the

minds

payment.

occurred

in

Finally, he suggested that a meeting of
January

2010

to

change

the

nature

of

For the reasons explained above, the different pricing

terms according to zones and weight contained in the January
2010 version of draft No. 47/10 were discussed in the context of
negotiations only, but were never

finally

agreed to by

both

parties.
“Whether

parties

negotiating

a

contract

intended

to

be

bound by a prior writing or whether they did not intend to be
bound until a formal agreement was prepared and signed by them
must be determined from the facts and circumstances in each
52

case.”

Abt Associates, Inc. v. JHPIEGO Corp., 104 F.Supp.2d

523, 531 (D.Md. 2000) (citing Peoples Drug Stores v. Fenton
Realty Corp., 191 Md. 489, 493 (1948)); Tecart Industries, Inc.
v. National Graphics, Inc., 198 F.Supp.2d 719, 724 (D.Md. 2002)
(same).

Mr.

Georgakopoulos

testified

that

EVL

continued

to

provide freight forwarding services from December 1, 2009 until
its services were terminated just as it had done under Contract
No. 100/09.

(T. 04/21/15).

negotiation

took

47/10,

parties

the

course.

place

in

It is uncontested that before the
January

continued

to

2010

regarding

operate

under

draft

their

No.

normal

It is also undisputed that no agreement was entered

into to supplant or change the terms of Contract No. 100/09 for
the month of December, at the very least.
Captain Katirtzidis stated that from December 2009 until
February

12,

utilize

EVL’s

04/16/15).

2010,

the

services

Hellenic
to

Armed

forward

Forces

goods

to

continued
Greece.

to
(T.

Although the logistics directorate of the General

Staff issued a directive to reduce transportation of materials
from the United States and Greece and to use alternative means,
such as C130 aircraft, the freight forwarding needs of the Armed
Forces still needed to be satisfied by continuing to use EVL’s
services.

(Id.).

The invoices for EVL’s services from December

1, 2009 until February 24, 2010 were issued between May and July
2010, months after the provision of services.
53

EVL continued to

perform

freight-forwarding

services

after

the

expiration

of

November 30, 2009 and undoubtedly, HAF understood that EVL would
be compensated for its services.

Aside from the pricing terms

of draft No. 47/10, which do not apply for the reasons stated,
Plaintiffs have not offered any alternative pricing scheme for
evaluating the value of Defendant’s services during this time
period.

Captain Nikomanis testified that the fifty-one invoices

were properly supported if the pricing terms of Contract No.
100/09 were to apply.

(T. 04/20/15).

By continuing to perform

their obligations under Contract No. 100/09 despite the absence
of a binding agreement from December 1, 2009 until February 24,
2010,

the

Contract

parties
No.

continued

100/09.

to

See,

operate
e.g.,

under

Schalk

the
v.

terms

of

Associated

Anesthesiology Practice, 316 F.Supp.2d 244, 246 n.2 (D.Md. 2004)
(“Schalk’s 1998 contract with AAP expired on December 31, 1999.
AAP provided Schalk with a new agreement to be effective January
1, 2000, but he refused to sign it.

Thus, after the expiration

of the 1998 contract, the parties continued to operate under the
same

terms

and

conditions

of

that

contract.”).

Accordingly, HAF will be ordered to pay $208,464.24 for the
fifty-one invoices, which is the amount due under Contract No.
100/09.

(See DTX 10).

54

2.

Invoices 52-64

Plaintiffs state that they did not pay invoices 52 through
64 relating to transportation of materials by C-130 aircraft to
Greece because they were “not billed on the basis of contractual
agreements.”

(PTX 81, HAF 001367).

Captain Nikomanis testified

that under Contract No. 100/09, EVL was required to provide
third-party documentation justifying the charges.

Yet EVL only

provided its own documentation, which contained large charges
without

third-party

Nikomanis

stated

documentation

documentation.

that

from

EVL

itself

provided
(rather

reflected in Plaintiffs’ Exhibit 44.
Nikomanis

explained

that

in

order

(T.

04/17/15).

hand-written
than

Captain
supporting

third-parties),

(See PTX 44).
to

be

as

Captain

reimbursed

under

Contract No. 100/09, however, EVL should have provided invoices
or receipts of expenses from third parties.
Siu

stated

that

invoices

52

through

(T. 04/17/15).
64

involved

Ms.

inland

transports to Dover, Delaware by EVL for overseas transport by
C-130 aircraft.

(T. 04/23/15).

She stated that EVL provided

the inland freight itself, but she did not know why.

(Id.).

Article 4.3 of Contract No. 100/09 states:
The GS (General Staff) of the HAF
reserves
the
right,
when
it
deems
appropriate,
to
use
other
means
of
transportation that belongs to HAF or are
secured by it (the HAF) for the air
transportation. When other means of the HAF
are
used,
i.e.,
C-130
A/C
etc.,
the
55

transporter is obliged to provide for the
loading/unloading of the materials (at the
Air Force A/P) within the U.S.A. and to
conduct
the
relevant
customs
clearance
procedures,
issuance
of
import-export
permits, forwarding of the materials to the
final
recipients
within
the
U.S.A.,
regardless
of
the
airport
(civil
or
military) where the said A/C will land.
(DTX 1) (emphasis added).
covers payment terms.

Article 8 of Contract No. 100/09

Article 8.4.2 of Contract No. 100/09

states: “Original bills of lading and other original invoices
(e.g., customs charges) for A/L expenses paid by the contractor
and intermediary carriers (INLAND FREIGHTS) (or official copies)
duly repaid and audited for price accuracy by the contractor.”
(DTX 1).

Article 8.4.4 states: “[o]riginal expense invoices

(e.g., customs charges) and original transatlantic freight bills
of lading for A/L expenses paid by the contractor (or official
copies)

duly

contractor.”

repaid

and

audited

for

price

accuracy

by

the

(Id.).

Based on these terms in Contract No. 100/09, HAF did not
breach

the

contract

by

refusing

to

pay

invoices

52-64.

Defendant did not include supporting documentation justifying
the

considerable

charges

for

customs

clearance,

documentation preparation, or inland transportation.

import

(PTX 44).

Nothing in the contract authorized EVL to perform the work (and
then charge HAF for the expenses) as opposed to utilizing the
services of a third-party and receiving reimbursement from HAF
56

as contemplated by Contract No. 100/09.
provide

supporting

invoices,

HAF

third-party

will

not

be

Because EVL failed to

documentation

ordered

to

justifying

reimburse

EVL

these

for

the

expenses.
3.

Invoices 65-67

Defendant seeks reimbursement of $231,041.91 for invoices
sixty-five through sixty-seven concerning shipments from Greece
to the United States using GoldAir.
HAF

did

not

pay

these

three

(DTX 12; T. Siu 04/23/15).

invoices

because

they

were

supported by original documents but by photocopies.
HAF 001367; T. Nikomanis 04/17/15).

not

(PTX 81,

Captain Nikomanis stated

that according to Contract No. 100/09, Greek authorities could
not

make

payment

if

original, but a copy.
copies

–

were

the

bill

of

lading

or

invoice

was

not

He explained that only originals – not

acceptable

due

to

risk

of

forgery

or

double

payments.
HAF did not breach Contract No. 100/09 by refusing to pay
these invoices.

EVL sent a letter to the Air Force in the

summer of 2010, stating in relevant part:
It is impossible to provide the Air Force
with copy 2 of the issued bills of lading
issued corresponding to the invoices since,
as mentioned on said invoice “FOR CONSIGNEE”
this copy is in the hands of the ultimate
consignee in the U.S.A., which is sometimes
the Greek Embassy in Washington and other
times the corresponding repair house.

57

(PTX 49).

Ms. Siu testified that EVL paid GoldAir by wire

transfer.

(T. 04/23/15).

received

from

03565).

At trial, EVL also submitted additional documentation

purporting

to

GoldAir,

Defendant provided the AirWay bill

show

but

payment

it

is

from

illegible.

EVL

to

(DTX

GoldAir.

12,

As

EVL

stated

above, Article 8.4.2 of Contract No. 100/09 required original
bills

of

lading

and

original

invoices.

Captain

Nikomanis

testified that eventually HAF was prepared to pay these invoices
despite the fact that only photocopies were provided, on the
condition

that

the

airline

sign

the

copies

to

confirm

authenticity and EVL submit a declaration that if the originals
were found, it would not resubmit the charges.
Captain
request.

Nikomanis

stated

that

EVL

never

(T. 04/17/15).

responded

to

this

Contract No. 100/09 required that charges be supported

by original invoices and bills of lading.

Thus, because of

EVL’s refusal to submit verification from the airline and a
declaration not to resubmit these invoices if originals were
found, HAF will not be ordered to pay these invoices.
4.

Invoices 68-78

EVL

seeks

$241,778.05.

payment
(DTX 13).

of

invoices

68-78

in

the

amount

of

HAF asserts that these eleven (11)

invoices were not paid because they contained “unconventional
additional charges.” (PTX 81).
these

invoices

were

deemed

Although some of the charges in

appropriate
58

by

the

Hellenic

Air

Force, none of the expenses contained in these eleven invoices
were

paid

believed

to
that

EVL

for

some

two

of

principal

these

reasons:

invoices

(1)

included

Plaintiffs

charges

for

hazardous materials but after the Air Force conducted an audit
it was determined that the materials were not actually hazardous
(see DTX 13 & PTX 13 & 15); and (2) all of the invoices included
charges

for

expedited

and/or

oversized

shipments,

which

were

approved by the Air Attache but that Plaintiffs now state were
not authorized (DTX 13).

(T. Nikomanis 04/17/15 & 04/20/15).

Captain Nikomanis testified that he applied Article 7.2.2
of

Contract

No.

100/09

to

determine

whether

material

was

hazardous, and thus whether to pay the charges for hazardous
materials.

(T. 04/17/15).

He stated that he asked the General

Staff about whether the invoices showing charges for hazardous
materials, (PTX 13 & 15),26 could be paid and they agreed that
these charges could not be reimbursed.

He also explained that

the General Staff ordered an investigation into whether such
payment had been made in the past.

Mr. Klothakis – the liaison

officer in EVL’s facility – reviewed the invoices and prepared
several reports, and George Katsanis completed the investigation
after Captain Klothakis left the division.
77 & T. Nikomanis 04/17/15).

(PTX 67, 68, 72, &

Based on the investigation, HAF

26

During his testimony, Captain Nikomanis identified
Plaintiffs’ Exhibits 13 and 15 as representing invoices that
included allegedly improper charges for hazardous materials.
59

determined that some of the invoices should be rejected entirely
and that HAF previously overpaid on invoices that also included
allegedly improper charges for hazardous materials.

(DTX 15).

Ngai Siu, the accounting manager with EVL, testified that the
invoices

that

Plaintiffs

believe

involved

hazmat

shipping

charges (PTX 13 & 15) actually were not shipped hazmat, but
instead included special handling charges.

She stated that EVL

uses the same pre-printed template forms for its invoices which
automatically listed a hazmat number even where EVL did not
charge for hazmat materials.

A review of the invoices reflects

that some of the invoices (invoices 69, 70, 71, & 73 (DTX 13))
included charges under “payment for haz-mat items.”
Plaintiffs

improperly

refused

charges for hazmat materials.
100/09

states:

“Loads

with

to

pay

invoices

due

to

Article 7.2.2 of Contract No.
contents

such

as

ammunition,

explosives or flammable chemicals, are excluded from the method
of costing the transportation of materials.

Prices will be

adjusted as the case may be, with the consent of the Military
Attaches.”

(DTX 1) (emphases added).

The Air Attaches approved

all of the charges for these eleven (11) invoices.

Captain

Nikomanis testified during his cross-examination that the Air
Attache did not have authority to authorize the charges because
the materials were not hazardous.

Although Mr. Klothakis (and

later Mr. Katsanis) conducted an audit and determined that some
60

of

the

items

were

not

actually

hazardous,

the

charges

were

approved at the time by the Air Attache, who pursuant to Article
7.2.2

is

authorized

Plaintiffs’

assertion

“ammunition,

to

adjust

that

explosives

prices

hazardous

or

for

certain

material

flammable

is

materials.
limited

chemicals”

is

to

also

unavailing because of the use of the words “such as” in Article
7.2.2,

suggesting

that

other

contents

may

be

regarded

as

warranting a price adjustment with the consent of the Military
Attaches.

The

post-hoc

determination

that

hazmat

charges

covered items that were not actually hazardous is an end run
around Article 7.2.2, which vests authority within the Military
Attaches to adjust prices for shipment of certain materials.
Plaintiffs’ request for a setoff for previously paid invoices
that “improperly” included hazmat charges will be denied for the
same reasons.
Plaintiffs’

only

other

objection

to

these

eleven

(11)

invoices concerns charges for expedited and oversized materials.
These invoices are supported by an “oversize/expedited shipment
approval

worksheet,”

which

contain

charges

for

expedited

handling and/or oversized shipment approved by the Air Attache.
(DTX 13).
that

EVL

Plaintiffs take the position that despite the fact
was

requested

to

expedite

shipments

of

certain

materials or that some shipments included oversized items, and
the fact that the Air Attache representing the Greek government
61

in the United States approved the additional charges, EVL cannot
be reimbursed because the Air Attache actually had no authority
to approve any charges other than for hazmat materials as set
forth

in

Article

7.2.2

of

Contract

No.

100/09.

Plaintiffs

contend that discretion to authorize additional fees in Article
7.2.2 is limited to hazardous materials and does not encompass
any

additional

charges

such

as

for

expedited

or

oversized

shipments.
During closing argument, Plaintiffs’ counsel asserted that
contracts

involving

sovereign

nations

cannot

be

modified

by

conduct and actual authority is required to modify the terms of
an existing contract.

Plaintiffs’ counsel argued that the Air

Attache did not have actual authority to change the terms of the
contract, consequently the actions of the Air Attache cannot
bind the Greek government.

The analysis in Velaco v. Government

of Indonesia, 370 F.3d 392, 399-400 (4th Cir. 2004), provides
guidance on this point:
[C]ourts
have
imposed
an
affirmative
obligation
upon
a
person
transacting
business with an agent of the United States
to determine whether the agent is vested
with authority to bind the Government. See,
e.g., The Floyd Acceptances, 74 U.S. [666]
at 676 [1868] (purchaser of commercial paper
issued
by
a
government
official
which
purports to bind the government has an
affirmative obligation to determine whether
the agent has express authority to bind the
government);
Fed.
Crop
Ins.
Corp.
v.
Merrill,
332
U.S.
380,
383-84
(1947)
62

(“[A]nyone entering into an arrangement with
the Government takes the risk of having
accurately ascertained that he who purports
to act for the Government stays within the
bounds of his authority.”); Atlantic Tobacco
Co. v. United States, 249 F.Supp. 661, 663
(D.S.C.
1966)
(“In
dealing
with
the
government,
unlike
those
with
private
parties, one is charged with knowledge of
the extent of the actual authority of the
government’s contracting agent since no
agent . . . can hold out to have any
authority not sanctioned by law.”).
It is
insufficient that the person dealing with
the agent believes the agent has authority.
United States v. Vanhorn, 20 F.3d 104, 112
n.19 (4th Cir. 1994) (oral representations by
government officer cannot modify statutory
contract); Doe v. Civiletti, 635 F.2d 88, 96
(2d Cir. 1980) (“In spite of its rigor, the
actual
authority
doctrine
has
been
scrupulously followed.”).
. . .
Whether a third party reasonably perceived
that the sovereign has empowered its agent
to engage in a transaction, however, is
irrelevant if the sovereign’s constitution
or laws proscribe or do not authorize the
agent’s conduct and the third party fails to
make a proper inquiry.
We conclude that a
foreign
official’s
manifestation
of
authority
to
bind
the
sovereign
is
insufficient to bind the sovereign.
In light of the above authority, we concur
with the position of the Ninth Circuit and
hold that the commercial activity exception
may be invoked against a foreign state only
when its officials have actual authority.
The court need not determine whether the Air Attache had
actual
Contract

authority
No.

to

100/09

modify
was

not

the

contract,

modified.
63

however,

Captain

because

Katirtzidis

testified

that

for

a

contract

to

be

approved by the Minister of Defense.

binding,

it

(T. 04/16/15).

had

to

be

Nothing in

Contract No. 100/09 provides, and Plaintiffs have presented no
other evidence to prove, that only the Minister of Defense can
authorize additional charges for expedited shipments that the
Greek government itself requests.
expedited

based

on

its

own

EVL did not ship the items

volition.

George

Georgakopoulos

testified that EVL frequently received requests from the Armed
Forces

regarding

04/21/15).

He

expedited
stated

and

that

oversized
such

shipments.

shipments

were

(T.
always

preauthorized by the attache liaison, Mr. Klothakis, and all of
the paperwork was taken and authorized by the Greek embassy.
(Id.).

Mr.

Klothakis’s

report,

dated

October

12,

2010,

concerning “[d]etailed findings of the audit of EVL invoices,”
refers

to

specific

invoices

which

either

concerned

materials or required expedited shipment:
e. Invoice EVL13263/11-12-09, concerns the
urgent transfer of materials.
With the air
transportation
bill
AWB#050-5283-9542,
critical
material
O/N
08E221,
NSN
1680200042570, WATER DROP CONTROL UNIT, EA-1
were transferred./
As Addendum “5,” 12
pages of documents – records are listed
regarding invoice EVL13263/11-12-2009 and
the
expedited
transportation
of
said
literature.
f. Invoice EVL13323/31-12-09, concerns
urgent transfer of 26 materials by
transportation bill AWB#050-5283-9732.
material Blade Assy of the 075637
64

the
air
The
was

oversized

crucial and the entire cargo was transferred
expedited.
As Addendum “6,” 11 pages of
documents – records are listed regarding
invoice EVL13323/31-12-2009 as well as the
expedited transportation. . . .
g. Invoice EVL 13357/31-12-2009, concerns
the transportation of 2 materials by air
transportation bill AWB#050-5283-9883.
The
material
O/N
075979
Cylinder
Assy
was
crucial
and
the
transportation
was
expedited. . . .
(PTX 67, HAF 002214-002220) (emphases added).

Where crucial

material needed to be transported on an expedited basis, the
invoices were preapproved by the Air Attache.
Moreover, Article 22 of Contract No. 100/09 which covers
amendments, states, in relevant part:
22.1.
This Contract may be amended or
corrected only by mutual written agreement
between the CONTRACTOR and the HAF or on
their behalf by their legally authorized
representatives.
22.2.
Any amendment will be an integral
part
of
this
Contract
and
will
be
implemented by replacing the relevant pages.
. . .
22.4. If the amendment is agreed, then the
provisions
under
amendment
will
be
suspended, while the other provisions will
remain in effect.
(DTX 1) (emphasis added).

Articles 22.2 and 22.4 suggest that

an amendment requires the replacement of an existing provision
with a new term.

As explained, the conduct of the Air Attache

in approving charges for oversized or expedited shipments does
65

not

modify

however.
requests

or

change

any

provision

of

Contract

No.

100/09,

The testimony at trial confirms that EVL received
occasionally

to

ship

oversized

and/or

urgent

or

critical material; these were ad hoc requests and the approval
of

additional

charges

associated

with

such

requests

did

not

constitute a modification of the contract, which only someone
with authority to act on behalf of the Greek government can
authorize.
Approval
oversized

by

the

materials

Contract No. 100/09.

Air
is

Attache

not

of

expedited

inconsistent

with

shipments
the

and

terms

The following provisions are instructive:

4.5.1.6. The CONTRACTOR shall not issue more
than one (1) bill of lading per day for each
GS (General Staff) in Greece, in the case of
FMS materials and more than one bill of
lading every two days for Commercial Firm
materials, except for urgent transportation
of material and provided that it is not
possible to include both these categories of
materials in one bill of lading. A material
is considered “urgent” if the CONTRACTOR has
been notified as such by the competent
branch of the HAF.
4.5.2.12.
. . . “Urgent” material is the
material for which the CONTRACTOR shall be
informed by the competent branch of the HAF.
4.5.2.15. Alerts by electronic mail (e-mail
or fax) the competent services of the HAF
(DKN Service – 201 Air Force Supply Depot –
Air Force Support Command/C4 for the Air
Force, Navy Supply Depot for the Navy and
651 War Material Brigade for the Army),
within two (2) days after the date of the
bill of lading and in regards to urgent
66

of

materials, within one (1) day for the exact
date of arrival of the materials at the A/P
in Greece (El. Venizelos), with concurrent
notification of the corresponding attache.
(DTX 1) (emphases added).

These provisions reflect that EVL was

to be notified by the “competent branch of the HAF” whether
material

is

urgent.

“Competent

defined in Contract No. 100/09.

branch

of

the

HAF”

is

not

Nothing in these provisions or

others within Contract No. 100/09 suggest that only the Minister
of Defense can authorize extra charges for shipments that the
Greek government itself requested be shipped on an expedited
basis because they contained material deemed critical.
Plaintiffs’

counsel

also

argued

during

closing

argument

that Military Attaches can consent to price adjustments only as
to

ammunition,

Article 7.2.2.
The

fact

that

explosives

or

flammable

chemicals

listed

in

This reading of Article 7.2.2 is too narrow.
Article

7.2.2

authorizes

Military

Attaches

to

adjust prices regarding transportation of hazardous materials
does not suggest that those are the only costs that Military
Attaches have authority to approve.

If that were the case, it

would be stated explicitly in the contract.

Plaintiffs have not

cited, nor does there appear to be any, contractual provision

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explicitly stating that the only additional charges that the Air
Attache may authorize concern hazardous materials.27
Accordingly, Plaintiffs will be ordered to pay $241,778.05
to EVL as reimbursement for invoices sixty-eight (68) through
seventy-eight (78).
5.

Pre-Judgment Interest

EVL

also

seeks

pre-judgment

invoices from January 2011.

interest

on

the

outstanding

During trial, Defendant presented

no evidence regarding pre-judgment interest and defense counsel
requested

that

EVL

be

awarded

pre-judgment

first time during closing argument.

interest

for

the

Notably, nowhere in the

damages section in the amended pretrial order or anywhere else
in the order did EVL request pre-judgment interest.
No. 49-2, at 18).
the

contract,

(See ECF

Without relying on any specific provision in

defense

counsel

broadly

argued

during

closing

argument that Contract No. 100/09 provides for the legal rate of
interest, and that the disputed invoices were all received in
2010 and have long remained outstanding.

27

It is worth noting that Plaintiffs take inconsistent
positions concerning different aspects of this case. On the one
hand, they contend that only the Minister of Defense can bind
Greece to the terms of a contract or authorize anything they
perceive as outside the scope of a contract.
Yet they argue
that the court should accept that the initials on draft No.
47/10 by representatives of both parties during negotiations in
January 2010 obligated the parties to the terms of that
document.
68

Article 16.8 of Contract No. 100/09 states: “In the case of
any delay in the repayment of the CONTRACTOR’s entitlements, the
CONTRACTOR shall send a reminder letter.

In the case that the

said delay continues or repeats, overdue interest will be paid
to the CONTRACTOR as provided by the Greek laws.”
cited

the

contract

as

authority

for

(DTX 1).

granting

EVL

pre-judgment

interest on the outstanding invoices but under the contract,
Greek law applies to payment of interest.

Defendant has offered

no evidence regarding Greek law as to interest.

Moreover, under

Maryland law, “interest is allowable as a matter of right for a
breach

of

contract

to

pay

when

the

liquidated, ascertained, or agreed to.”

amount

due

has

been

United States v. State

of W.Va., 764 F.2d 1028, 1031 (4th Cir. 1985); Wood Prods., Inc.
v. CMI Corp., 651 F.Supp. 641, 653 (D.Md. 1986).
amounts

due

were

disputed

and

not

ascertained

Here, the
until

now.

Accordingly, no pre-judgment interest will be ordered.
III. Conclusion
For the foregoing reasons judgment will be entered in favor
of Plaintiffs on the conversion and detinue counts in the second
amended complaint.

EVL will be ordered to release the remaining

materials and compensate Plaintiffs in the amount of $75,341.09.
Judgment will be entered in favor of EVL on its breach of
contract counterclaim and Plaintiffs will be ordered to pay the

69

invoices in accordance with the foregoing memorandum opinion in
the amount of $450,242.29.

A separate order will follow.

/s/
DEBORAH K. CHASANOW
United States District Judge

70