Macsherry v. Sparrows Point, LLC

• Decision Date: 03 August 2017
• Docket Number: Civil Action No. ELH-15-22
• Parties: JOHN H. MACSHERRY, JR., Plaintiff, v. SPARROWS POINT, LLC, et al. Defendants.
• Court: U.S. District Court — District of Maryland

JOHN H. MACSHERRY, JR., Plaintiff, v. SPARROWS POINT, LLC, et al. Defendants.

Civil Action No. ELH-15-22

UNITED STATES DISTRICT COURT FOR THE DISTRICT OF MARYLAND

August 3, 2017

MEMORANDUM OPINION

John Macsherry, Jr., plaintiff, filed suit against defendants Sparrows Point, LLC ("SPLLC"); Commercial Development Company, Inc. ("CDC"); and Michael Roberts ("Roberts"), to recover a commission of $825,000 allegedly owed to him in connection with the sale of commercial property for $110,000,000. See ECF 2.¹ In his Amended Complaint (ECF 26), plaintiff seeks relief from all defendants under the Maryland Wage Payment and Collection Law ("MWPCL"), Maryland Code (2016 Repl. Vol.), §§ 3-501 et seq. of the Labor and Employment Article ("L.E."). As to SPLLC and CDC, he also asserts claims for breach of contract (Count II); promissory estoppel/detrimental reliance (Count III); and quantum meruit/unjust enrichment (Count IV). See ECF 26.²

Defendants have moved for summary judgment (ECF 59), supported by a memorandum of law (ECF 59-1) (collectively, "Motion") and many exhibits. See ECF 59-3 through ECF 59-19. Macsherry has filed a combined opposition and cross-motion for partial summary judgment (ECF 64), which is supported by a memorandum of law (ECF 64-1) (collectively, "Cross Motion") and numerous exhibits. See ECF 64-3 through ECF 64-20. In his Cross Motion, Macsherry seeks summary judgment only as to his claim that Roberts was an "employer" as defined by the MWPCL. See ECF 64. In a combined reply, defendants responded to Macsherry's opposition and opposed his Cross Motion (ECF 67), with exhibits. See ECF 67-2 through ECF 67-5. Macsherry replied (ECF 70), supported by two exhibits. ECF 70-1; ECF 70-2.

The Motion and the Cross Motion are fully briefed and no hearing is necessary to resolve them. See Local Rule 105.6. For the reasons that follow, I shall deny both motions.

Table of Contents

I. Factual Background ................................................................................................................ 3

II. Standard of Review ............................................................................................................... 15

III. Choice of Law .................................................................................................................... 17

A. Count I ............................................................................................................................ 18

B. Counts II-IV ................................................................................................................... 19

1. Maryland Law - First Restatement Approach ............................................................ 19

2. Missouri Law - Second Restatement Approach ......................................................... 23

3. Maryland Law - Renvoi ............................................................................................. 30

IV. Discussion .......................................................................................................................... 33

A. Breach of Contract (Count II) ........................................................................................ 33

1. Maryland Contract Law .............................................................................................. 33

2. Analysis ...................................................................................................................... 40

3. Statute of Frauds ......................................................................................................... 46

B. Promissory Estoppel (Count III) .................................................................................... 48

C. Quantum Meruit (Count IV) .......................................................................................... 51

1. Unjust Enrichment ...................................................................................................... 53

2. Implied-in-Fact Contract ............................................................................................ 56

D. MWPCL ......................................................................................................................... 58

1. Defendants' Motion - MWPCL Claim ...................................................................... 61

2. Defendants' Motion - Bona Fide Dispute .................................................................. 62

3. Plaintiff's Cross-Motion ............................................................................................. 64

V. Conclusion ............................................................................................................................ 72

I. Factual Background

CDC is a real estate acquisition and development firm with its headquarters in St. Louis, Missouri. ECF 59-3 (Roberts Affidavit), ¶ 3. CDC and an affiliate company, Environmental Liability Transfer, Inc. ("ELT"), "specialize in acquiring, remediating, and repositioning environmentally challenged brownfield sites." Id. ¶ 4.³ SPLLC was formed as a single purpose Missouri limited liability company to "acquire 3,100 acres of real property located at the Sparrows Point peninsula in Baltimore County, formerly the site of the industrial complex owned by Bethlehem Steel . . . ." Id. ¶ 6 (the "Property"). Roberts and his brother, Tom Roberts ("T.Roberts"), are the co-owners, co-managers, and authorized representatives of CDC, ELT, and SPLLC. Id. ¶ 7.

Macsherry resides in Maryland. ECF 64-3 (Macsherry Affidavit), ¶ 2.⁴ He became a licensed real estate "associate broker" in 1983. ECF 59-6 (Macsherry Deposition) at 17.⁵ In 2012, he was "laid off" as the head of Duke Realty's Baltimore office, which closed that year. ECF 59-6 at 37-38. Macsherry subsequently did "some consulting" for KLNB, another commercial real estate firm. Id. at 39. In particular, he worked on a project for Lafarge concerning Lafarge's lease at Sparrows Point. Id.

Around 2012, Dan Gundersen, the Director of Economic Development for Baltimore County, approached Macsherry about serving on the County's "Sparrows Point Partnership" ("Partnership"). ECF 64-4 (Macsherry Deposition) at 44-45. The Partnership was a task force established by Baltimore County Executive Kevin Kamenetz to "look at what potentials could be at Sparrows Point and try to come up with a proactive approach of . . . what could happen with the property from an economic development perspective." Id. at 44. Kamenetz subsequently appointed Macsherry to the Partnership. Id. at 45.

In September 2012, SPLLC and entities formed by "Hilco Global" purchased the Property out of the bankruptcy of "RG Steel." ECF 59-3, ¶ 8. Roberts avers, id.: "SPLLC acquired the real estate and assumed certain environmental liabilities, while Hilco generally acquired title to all improvements, including buildings, equipment, fixtures, and raw materials." Roberts maintains that he took primary responsibility for CDC's work on the Property. Id. ¶ 10.T. Roberts testified at his deposition that the Property was the largest single parcel that CDC had ever acquired, by a factor of five. ECF 64-8 (T. Roberts Deposition) at 46.

As indicated, the Property was the site of the industrial complex previously owned by Bethlehem Steel. ECF 59-3, ¶ 6; ECF 64-4 (Macsherry Deposition) at 41. The Property consists of 3,100 acres and includes buildings, equipment relating to the manufacture of steel, plants still containing equipment, administration buildings, security buildings, rail, and a port. ECF 64-4 at 41-43.

Shortly after SPLLC acquired the Property, Roberts authorized CDC's Vice President of Asset Management, Robert Schoelch, "to search for a 'boots on the ground' employee to represent SPLLC's interest locally", because of the Property's "size and political dynamics . . . and the distance between Baltimore and St. Louis." ECF 59-3 (Roberts Affidavit), ¶¶ 6, 12; see also ECF 59-5 (Roberts Deposition) at 85-86 (explaining that Schoelch had recommended that Roberts hire "a local at the site to field calls and to work with the different community people, [and] regulators"). Roberts authorized Schoelch to "interview potential employees, discuss potential terms", and then report back. ECF 59-3, ¶ 14. But, Roberts asserts: "[N]o person other than me had the authority to hire an employee for the 'boots on the ground' position, or to approve that employee's terms of employment." ECF 59-3, ¶ 14.

During the same time frame, Macsherry learned of the acquisition of the Property and asked Gundersen for the name of a contact concerning the Property. ECF 59-6 at 45-46. Gundersen provided the name of Randall Jostes, the president of ELT. Id. at 46. Macsherry emailed Jostes on September 20, 2012, to discuss working for ELT and CDC as "the hands on local person . . . in Baltimore." ECF 59-7 (email to Jostes); see also ECF 59-6 at 46-48. Macsherry also stated, ECF 59-7: "I am a Baltimore person who has been in the real estateindustry for close to 30 years. I have excellent experience in master planning, development, Brownfield experience (can't say I am an expert) and have excellent contacts in the community. My background is very broad with hands on experience." Macsherry added, id.: "My knowledge of the Port, Sparrows Point, environmental matters, master planning, land development, building development and the relationships I have both in the government and business community should be of value to your company."

Upon Jostes's receipt of Macsherry's email on September 20, 2012, Jostes forwarded it to Roberts, T. Roberts, Schoelch, and Mark Hinds. ECF 59-7.⁶ Jostes stated that Macsherry "may be a good resource to consider for ongoing efforts at Sparrow. I'll leave it to Rob and Mark to get back to this person or let it go." Id.

During October, November, and December 2012, Macsherry interviewed with representatives of CDC and SPLLC, including "informal meetings, dinners, lunches, and telephone calls . . . ." ECF 59-8 ...