Fort Myer Constr. Corp. v. Banneker Ventures LLC, 1002-2019
| Decision Date | 10 November 2021 |
| Docket Number | 1002-2019 |
| Parties | FORT MYER CONSTRUCTION CORPORATION, ET AL. v. BANNEKER VENTURES LLC, ET AL. |
| Court | Court of Special Appeals of Maryland |
Circuit Court for Montgomery County Case No. 388040V
Graeff, Leahy, Salmon, James P., (Senior Judge, Specially Assigned), JJ.
This is the second appeal involving the same parties and their disputes arising out of a construction project administered by the Montgomery County Department of Transportation ("MCDOT") to upgrade infrastructure over a stretch of Dale Drive in Silver Spring, Maryland (the "Project"). Appellee Banneker Ventures, LLC ("Banneker"), as general contractor on the Project entered into a subcontract with appellant Fort Myer Construction Corporation ("Fort Myer") on August 16, 2012, in which Fort Myer agreed to perform much of the work on the Project.
Problems arose shortly following Fort Myer's commencement of work. Banneker complained that Fort Myer was behind schedule and sent two notices of default. The parties traded accusations blaming each other for delays and unforeseen site conditions. Representatives from Fort Myer and Banneker then agreed to meet on October 24, 2012. The parties' accounts of that meeting differed. According to Banneker, the parties discussed issues with Fort Myer's performance and agreed to consider a proposal to modify pricing on the Project but did not discuss modifying or rescinding the subcontract.
According to Fort Myer, Banneker agreed to pay Fort Myer for completed work. When Banneker did not pay Fort Myer's subsequent invoices, Fort Myer sued Banneker and its surety, Travelers Casualty and Surety Company of America ("Travelers"), for breach of contract and quantum meruit in the Circuit Court for Montgomery County. Fort Myer also asserted a claim against Travelers under the payment bond. Banneker then filed a counterclaim against Fort Myer for breach of contract, and a cross claim against Fort Myer's surety, Western Surety Company ("WSC"), [1] under the performance bond.
The case proceeded to a bench trial. At the close of Fort Myer's case-in-chief, the court granted Banneker's motion for judgment on two of Fort Myer's three claims-breach of contract and the quantum meruit count. [2] The court also determined that Fort Myer breached the subcontract, even though Banneker had not presented any evidence on its counterclaim. The court then heard testimony on Banneker's damages. Following the close of evidence, the court granted judgment in Banneker and Travelers's favor and awarded damages in the amount of $1, 754, 441.19. Fort Myer appealed.
In the first appeal, we affirmed the court's grant of the motion for judgment to dismiss Fort Myer's complaint but vacated the court's judgment that Fort Myer materially breached the subcontract. We determined that the circuit court's factual finding that Fort Myer breached the subcontract was clearly erroneous because Fort Myer's October 24, 2012 letter stood uncontroverted as the only evidence of what occurred during that meeting, without countervailing evidence from Banneker. Accordingly, we remanded the case for a new trial on Banneker's counterclaim and cross-claim.
After a second bench trial, the circuit court granted judgment in favor of Banneker and awarded damages in the amount of $1, 996, 731.87, including $655, 458.27 in attorney's fees. The court concluded, among other things, that Fort Myer materially breached the contract and rejected Fort Myer's argument that the parties mutually rescinded the subcontract. Regarding the subcontract's notice requirement, the court concluded that Banneker had the right, but not the obligation, to provide notice in the event of breach before reprocuring the subcontract. The court also determined that Banneker was entitled to recover excess completion costs that arose from Fort Myer's breach, including costs incurred from the default of an intermediary replacement subcontractor.
Fort Myer timely noted an appeal and presents the following questions for our review, which we have reordered:
We affirm the judgment of the circuit court. First, we conclude that the trial court was not clearly erroneous in concluding that there was no mutual rescission of the subcontract. Second, we hold that trial court did not err in determining that Article XVII of the subcontract was not exclusive and did not prevent Banneker from exercising its common law remedies for breach of contract. Far from purporting to be exclusive, Article XVII expressly preserves Banneker's right to pursue alternative remedies provided under the contract or under the common law. Third, we conclude that the court did not err or abuse its discretion in calculating the damages resulting from Fort Myer's breach. Finally, we hold that the judge did not abuse his discretion in denying Fort Myer's two motions to recuse because a reasonable member of the public, under these circumstances, would not doubt the judge's impartiality.
Much of the background to this appeal was set out in our unreported opinion, affirming, in part, and reversing, in part, the 2015 judgment of Circuit Court for Montgomery County in Fort Myer Constr. Corp. v. Banneker Ventures, LLC ("Fort Myer I"), No. 1916, September Term 2016 (filed October 10, 2017). Before we focus on testimony and evidence from the parties' second trial, we review the contours of the underlying contracts and initial disputes as summarized in our prior opinion:
A. The Project
Banneker entered into the prime contract with the MCDOT, worth $4, 258, 602.19, on June 9, 2012. The prime contract was a "unit-price contract," which, according to the trial testimony of Pete Patel, Fort Myer's Senior Project Manager, is a contract "where the quantities are estimated . . . by the owner, and the unit price is the price [the contractor] will be compensated for." The prime contract had 139 line items of unit-priced work activities for which Banneker was responsible.
Relevant in this case, is the prime contract's price schedule for the following four units:
On May 16, 2012, Banneker secured from Travelers a labor and materials bond and a performance bond for the Project, both in the amount of $4, 045, 672.08.
Under the subcontract with Banneker, Fort Myer agreed to perform 93 of the 139 unit items of the work for the Project. The total value of the subcontract was $2, 305, 000.00. On July 25, 2012, Fort Myer secured a bond from WSC for its work on the Project, in the amount of $2, 305, 000.00. The subcontract priced the above-mentioned units differently:
These four unit prices total $739, 254.00, which is $421, 920.81 more than the corresponding prices under the prime contract. According to the trial testimony of Chris Kerns, Esq., Senior General Counsel and Vice President for Fort Myer, his client was not aware of the pricing Banneker had agreed to under the prime agreement until the October 24, 2012 meeting between the parties.
In Article XVII under the heading "Failure to Prosecute, Etc.", the subcontract provided that in the event Fort Myer defaulted on its obligations, Banneker would have the right, after three days written notice, to perform the work itself and deduct the costs from what it owed Fort Myer, or to terminate Fort Myer.
Notably, the subcontract provided that Fort Myer had 365 calendar days, from August 13, 2012, to complete its work.
Problems started within several days of the 365 day relationship. Fort Myer began work on the Project on August 23, 2012. Four days later, Banneker began sending Fort Myer letters and emails, generally labeled as "notices of delay" or "notices of deficiency." According to the trial testimony of Mr. Kerns, Fort Myer immediately "ran into concrete slabs that had apparently been placed there by [Montgomery] County some years before that because the soil was so unstable that it couldn't support these utilities." Fort Myer also found "voids," which [it] then had to fill in before continuing work. Thus, according to Kerns, the discovery of rock and voids delayed Fort Myer's performance on the Project.
On September 18, 2012, Billy Tose, Banneker's project manager, sent via email to Fort Myer's Senior Project Manager, Pete Patel, a "72 Hour Cure Notice," notifying Fort Myer of its "inability to furnish proper material submittals in a complete and timely manner." According to the notice, Montgomery County would not pay for any contract line item without approved submittals. The notice further stated that Fort Myer had three days to submit all line items, and that "[i]f Banneker d[id] not receive all these line items complete and in its entirety [sic], then Banneker reserve[d] the right to obtain the remaining submittals using its own personnel with all related costs being charged to [Fort Myer]." Three days...
To continue reading
Request your trial