MHD-Rockland Inc. v. Aerospace Distribs. Inc.

• Decision Date: 03 January 2014
• Docket Number: Civil No. CCB-13-2442
• Parties: MHD-ROCKLAND INC. v. AEROSPACE DISTRIBUTORS INC., et al.
• Court: U.S. District Court — District of Maryland

MHD-ROCKLAND INC. v. AEROSPACE DISTRIBUTORS INC., et al.

Civil No. CCB-13-2442

UNITED STATES DISTRICT COURT FOR THE DISTRICT OF MARYLAND

Dated: January 3, 2014

MEMORANDUM

Plaintiff MHD-Rockland Inc. ("Rockland") brings this suit against defendants, Aerospace Distributors Inc. ("ADI") and Aerospace Precision Inc. ("API"), in connection with ADI's alleged breach of an agreement to deliver overhauled airplane wheel assemblies to Rockland, and API's certifications that the wheel assemblies were not defective. ADI and API removed the case from the Circuit Court for Anne Arundel County and then moved to dismiss most of Rockland's claims; Rockland responded by submitting an amended complaint. In reply, ADI and API have argued that the amended complaint contains the same defects as the original complaint, and therefore should be dismissed for the reasons stated in the pending motion to dismiss. The parties have fully briefed the issues, and no oral argument is necessary. See Local R. 105.6. For the following reasons, the motion will be granted.

BACKGROUND

According to the amended complaint, Rockland is a Maryland company, and ADI and API are Delaware companies with offices in the states of Florida and Washington. In September 2009, Rockland ordered four airplane wheel assemblies from ADI for the price of $40,700 ($10,175 for each wheel assembly). Rockland's purchase order specified that it required thewheel assemblies to be in "OH," or overhauled, condition. (ECF No. 20-1 at 1.) After receiving Rockland's order, ADI sent four wheel assemblies and an acknowledgement form representing that the wheel assemblies were in OH condition. ADI's acknowledgment form further stated it was "subject to" the Conditions of Sale printed on the reverse side of the form. (ECF No. 20-1 at 5.) Among other things, these conditions purported to limit ADI's liability for any consequential damages suffered by Rockland and to disclaim any express and implied warranties with respect to the wheel assemblies.

Upon receiving the wheel assemblies, Rockland allegedly discovered that two of the wheel assemblies were not in OH condition and were, therefore, defective. Rockland returned the allegedly defective wheel assemblies to ADI. In 2011 it agreed to accept two replacement wheel assemblies. Soon thereafter, API certified for ADI that after inspecting and testing the two replacement wheel assemblies, it discovered no defects. (ECF No. 20-1 at 14-17.) But according to Rockland, these replacement wheel assemblies were also defective. Consequently, Rockland demanded additional replacement wheel assemblies or a refund of the purchase price of the two defective wheel assemblies. ADI allegedly disputed that the wheel assemblies were defective and refused the demand for additional replacements or a refund.

On July 3, 2013, Rockland filed this lawsuit in Maryland state court. Defendants removed the case to this court on August 21, 2013, asserting diversity jurisdiction. See 28 U.S.C. § 1332. The original complaint included four counts: breach of contract, misrepresentation, and two unnamed causes of action for money paid by Rockland and received by defendants. Rockland sought damages of $46,210 for the breach of contract claim and $150,000 for the misrepresentation claim (including $100,000 in punitive damages). The complaint did not specify a damages amount for the unnamed counts. Defendants filed a motionto dismiss all but the actual contract damages claim for $20,350 on August 28, 2013.¹ In response, Rockland opposed the motion and amended its complaint. The amended complaint contains only three counts: breach of contract, negligent misrepresentation, and unjust enrichment. Additionally, the amended complaint reduces the total damages sought to $73,500.²

STANDARD

When ruling on a motion brought under Rule 12(b)(6), the court must "accept the well-pled allegations of the complaint as true," and "construe the facts and reasonable inferences derived therefrom in the light most favorable to the plaintiff." Ibarra v. United States, 120 F.3d 472, 474 (4th Cir. 1997). "Even though the requirements for pleading a proper complaint are substantially aimed at assuring that the defendant be given adequate notice of the nature of a claim being made against him, they also provide criteria for defining issues for trial and for early disposition of inappropriate complaints." Francis v. Giacomelli, 588 F.3d 186, 192 (4th Cir. 2009). "The mere recital of elements of a cause of action, supported only by conclusory statements, is not sufficient to survive a motion made pursuant to Rule 12(b)(6)." Walters v. McMahen, 684 F.3d 435, 439 (4th Cir. 2012) (citing Ashcroft v. Iqbal, 556 U.S. 662, 678 (2009)). To survive a motion to dismiss, the factual allegations of a complaint "must be enough to raise a right to relief above the speculative level . . . on the assumption that all the allegations in the complaint are true (even if doubtful in fact)." Bell Atl. Corp. v. Twombly, 550 U.S. 544, 555 (2007) (internal citations and alterations omitted). "To satisfy this standard, a plaintiff need not 'forecast' evidence sufficient to prove the elements of the claim . . . . However, the complaint must allege sufficient facts to establish those elements." Walters, 684 F.3d at 439(internal citations and quotation marks omitted). "Thus, while a plaintiff does not need to demonstrate in a complaint that the right to relief is 'probable,' the complaint must advance the plaintiff's claim 'across the line from conceivable to plausible.'" Id. (quoting Twombly, 550 U.S. at 570). In deciding whether to grant a motion to dismiss, the court may also consider documents attached to the complaint as well as documents attached to the motion to dismiss, provided that they are "integral to the complaint and authentic." See Sec'y for State for Defence v. Trimble Navigation Ltd., 484 F.3d 700, 705 (4th Cir. 2007).

ANALYSIS

I. Amended Complaint

Federal Rule of Civil Procedure 15(a) entitles a plaintiff to amend its complaint as a matter of course within twenty-one days after service of a motion to dismiss brought under Rule 12(b). Here, Rockland submitted its amended complaint within twenty-one days after defendants submitted their motion to dismiss in accordance with Rule 15(a). But even though Rockland was permitted to amend its complaint, the amended complaint does not render defendants' original motion to dismiss moot if the amended complaint suffers from some of the same defects as the original complaint. See 6 Charles Alan Wright, Arthur R. Miller, & Mary Kay Kane, Federal Practice and Procedure § 1476, at 638 (3d ed. 2010)). In this case, the amended complaint suffers from the same defects addressed by defendants in their original motion to dismiss, so the court will treat the motion to dismiss as addressing the amended complaint.

II. Negligent Misrepresentation

Turning to the motion to dismiss, defendants first argue that Rockland's negligent misrepresentation claim should be dismissed. To establish a claim for negligent misrepresentation, a plaintiff must establish the following five elements:

(1) the defendant, owing a duty of care to the plaintiff, negligently asserts a false statement;

(2) the defendant intends that his statement will be acted upon by the plaintiff;

(3) the defendant has knowledge that the plaintiff will probably rely on the statement, which, if erroneous, will cause loss or injury;

(4) the plaintiff, justifiably, takes action in reliance on the statement; and

(5) the plaintiff suffers damage proximately caused by the defendant's negligence.

Weisman v. Connors, 540 A.2d 783, 791 (Md. 1988) (quoting Martens Chevrolet v. Seney, 439 A.2d 534, 539 (Md. 1982)).

Defendants' primary contention is that Rockland has not alleged sufficient facts to establish the first element of a negligent misrepresentation claim—the existence of a duty of care owed by either defendant to Rockland. Under Maryland law, the two primary considerations in determining whether a tort duty exists "are the nature of the harm likely to result from a failure to exercise due care, and the relationship that exists between the parties." Weisman, 540 A.2d at 791 (citing Jacques v. First Nat'l Bank of Md., 515 A.2d 756, 759 (Md. 1986)). In economic loss cases, there must be an "intimate nexus between the parties" in order to impose a tort duty of care. Jacques, 515 A.2d at 759-60. But when the relationship between the parties is contractual, any duty owed by the defendant "giving rise to the tort cause of action must be independent of the contractual obligation." Wilmington Trust Co. v. Clark, 424 A.2d 744, 754 (Md. 1981). "The mere negligent breach of a contract, absent a duty or obligation imposed by law independent of that arising out of the contract itself, is not enough to sustain an action sounding in tort." Jacques, 515 A.2d at 759 (quoting Heckrotte v. Riddle, 168 A.2d 879, 882 (Md. 1961)). Although this rule applies when the contracting parties are equally sophisticated, there is an exception when the contractual relationship involves a "vulnerable party." See Lawyers TitleIns. Corp. v. Rex Title Corp., 282 F.3d 292, 293-94 (4th Cir. 2002) (citing Jacques, 515 A.2d at 759).

Here, the relationship between Rockland and ADI is distinct from the relationship between Rockland and API, so the court will address Rockland's claims against each defendant separately. First, ADI did not owe Rockland a duty of care independent of the contractual obligation to deliver wheel assemblies in OH condition. Rockland simply claims ADI promised to deliver wheel assemblies meeting Rockland's specifications, but the wheel assemblies in fact failed to meet those specifications. Thus, Rockland's negligence cause of action actually sounds in contract law. Moreover, Rockland has not alleged facts showing it was a vulnerable party in this transaction, cf. Jacques, 515 A.2d at 762-65 (holding that a bank owed a duty of care to vulnerable loan...