SumCo Eco-Contracting, LLC v. Ellicott Dredges, LLC
| Decision Date | 28 June 2021 |
| Docket Number | Civil Action No. ELH-20-2930 |
| Parties | SUMCO ECO-CONTRACTING, LLC, Plaintiff, v. ELLICOTT DREDGES, LLC, Defendants. |
| Court | U.S. District Court — District of Maryland |
In this business dispute, plaintiff SumCo Eco-Contracting, LLC ("SumCo") has sued defendant Ellicott Dredges, LLC ("Ellicott"), with regard to allegedly defective construction equipment purchased by plaintiff from defendant. ECF 1 (the "Complaint"). SumCo, a Massachusetts company that specializes in "ecological construction," contracted with Ellicott, a Maryland-based manufacturer of industrial dredges, to purchase a $3.1 million dredge. Id. ¶ 7; see id. ¶¶ 9-14. According to the Complaint, assembly of the dredge took longer than anticipated and, once assembled, it proved defective. See id. ¶¶ 16-20.
Jurisdiction is founded on diversity, pursuant to 28 U.S.C. § 1332. Id. ¶ 4. The Complaint contains four counts: breach of contract (Count I); breach of express warranty (Count II); negligent misrepresentation (Count III); and intentional misrepresentation (Count IV). Id. at 5-8. SumCo seeks damages as well as attorney's fees and costs. Id. at 9.
Ellicott has moved to dismiss the suit, pursuant to Fed. R. Civ. P. 12(b)(6) and Fed. R. Civ. P. 9(b) (ECF 7), supported by a memorandum of law. ECF 7-1 (collectively, the "Motion"). Defendant has also submitted exhibits, including a copy of the written contract executed by the parties. ECF 7-2 (the "Contract"). SumCo opposes the Motion. ECF 10. Ellicott replied. ECF 13.
No hearing is necessary to resolve the Motion. For the reasons that follow, I shall grant the Motion in part and deny it in part.
During the summer of 2019, SumCo and Ellicott initiated discussions about plaintiff's purchase of an industrial dredge. ECF 1, ¶ 9. On September 18, 2019, SumCo wired a down payment of $500,000 to Ellicott for the purchase of an "Ellicott 'DRAGON' Series Cutter Suction Dredge." Id. ¶ 10; see id. ¶¶ 12, 15. The Contract for the sale was executed on October 10, 2019, with a purchase price of $3,141,149.00. Id. ¶¶ 10, 14; see ECF 7-2 at 4. The purchase price included $95,000 for delivery of the unassembled components of the dredge from Wisconsin to Pennsylvania (ECF 7-2 at 3), where they were to be received by SumCo and assembled at a dry dock. ECF 1, ¶ 12.
Of relevance here, the Contract specified that SumCo "shall supply at its expense (unless otherwise agreed in writing) all labor, material, equipment, tools, cranes, rigging, and facilities as required to perform the physical work of assembling or commissioning the [dredge]." ECF 7-2 at 5; see id. at 8. However, the total purchase price included fifteen days' worth of "[t]echnical support for supervision of assembly, start-up, and crew training" provided by Ellicott after delivery. Id. at 3.
The Contract included "General Terms And Conditions Of Sale" (the "Terms"), which contain multiple provisions pertinent to this dispute. ECF 7-2 at 6. The Terms refer to Ellicott as "Seller"; the dredge and its components as the "Equipment"; and the "provision of training, installation, maintenance and/or repair services" by Ellicott as the "Services." See id. According to ¶ 14 of the Terms, any dispute concerning the Contract shall be adjudicated under Maryland law by a state or federal court in Maryland. Id. at 7. And, the Contract permits the recovery of "reasonable attorneys' fees, costs and expenses" by the prevailing party in any legal dispute initiated to enforce the Contract. Id. at 7.
The Terms establish various limitations on liability and remedies available under the Contract. In particular, ¶ 6 addresses "Warranties." Id. It provides, in pertinent part, id. at 6-7 (capitalization in original):
Seller warrants only that (i) the Equipment manufactured by Seller will conform to the description on the invoice issued by Seller . . . and (iii) the Equipment will be free from defects in material and workmanship for a period ending on the earlier of 4 months from startup or 5 months after date of shipment. . . . As to Services, Seller warrants only that Service will be performed in a professional and workmanlike manner. No agent, employee or representative of Seller has any authority to bind Seller to any affirmation, representation or warranty concerning the Equipment or Services. Any affirmation, representation or warranty made by an agent, employee or representative of Seller which is not expressly set forth in these Terms shall not in any way be enforceable against Seller. EXCEPT FOR THE WARRANTY SET FORTH IN THIS SECTION 6, SELLER MAKES NO WARRANTY WHATSOEVER REGARDING EQUIPMENT OR ANY SERVICES, WHETHER EXPRESS OR IMPLIED BY LAW, COURSE OF DEALING, OR PERFORMANCE, USAGE OF TRADE OR OTHERWISE, INCLUDING, WITHOUT LIMITATION, WARRANTY (I) OF MERCHANTABILITY; (II) OF FITNESS FOR A PARTICULAR PURPOSE . . . .
Paragraph 7 is titled "Limitation On Remedies." Id. at 7. It states, in part, id. (emphasis added):
Should the Equipment prove defective or if Services provided are not reasonably satisfactory, Purchaser's exclusive and sole remedy for any claim regarding the Equipment or Services shall be, in Seller's sole discretion, the repair or replacement of Equipment Ex-works Seller's plant if Seller is given prompt written notice ofany claimed defect within the warranty period and the Equipment is returned to Seller's plant for examination, charges prepaid, or, as to Services, the re-performance of Services.
Paragraph 8 is titled "Indemnification; Limitation On Liability." Id. It provides, in relevant part, id. (capitalization in original):
SELLER SHALL ONLY BE LIABLE FOR ITS OWN GROSS NEGLIGENCE OR INTENTIONAL MISCONDUCT. PURCHASER'S SOLE REMEDY FOR ANY LIABILITY OF SELLER OF ANY KIND SHALL BE LIMITED TO THE REMEDY SET FORTH IN SECTION 7 ABOVE. . . . NO ACTION MAY BE BROUGHT FOR ANY ALLEGED BREACH BY SELLER OF THESE TERMS, AN ORDER OR ANY CONTRACT BETWEEN PURCHASER AND SELLER REGARDING AN ORDER . . . MORE THAN 1 YEAR AFTER THE PURCHASE OF EQUIPMENT OR RENDERING OF SERVICE OCCURS.
Neither side discusses ¶ 12, which is titled "Waiver." Id. It states: "Any waiver by either Purchaser or Seller of a breach by the other of any provision of these Terms or any Contract shall not be deemed a waiver of future compliance therewith, and all provisions shall remain in full force and effect." Id.
Ellicott "represented" in "multiple correspondence [sic] and discussions" that "assembly of the dredge, after delivery to the dry-dock, would take five (5) days in a 'worst case' scenario." ECF 1, ¶ 16. Accordingly, "SumCo understood that five days was the maximum time required for assembly of the dredge." Id. SumCo's Complaint does not contain additional details regarding the timing or content of these alleged exchanges.
The dredge was delivered to SumCo at a dry-dock in Pennsylvania on November 21, 2019. Id. ¶ 17. Construing the Complaint liberally, it is reasonable to infer that Ellicott personnel were on site for the assembly, as required by the Contract. See id. ¶¶ 10, 35; ECF 10 at 7 (); ECF 13 at 7-8 (). Despite Ellicott's prior representation that assembly would require no more than five days, it lasted thirteen days, ending on December 3, 2019. Id.¶ 18. "As a result of the extended assembly period, SumCo incurred additional over-run costs exceeding $35,000, including additional dry-dock fees and labor costs." Id. ¶ 19.
After assembly was complete, "the dredge experienced a series of mechanical failures." Id. ¶ 20. To address these problems, over the "next few months" following assembly, SumCo "incurred over $490,000 in additional costs, including additional materials, dry-dock fees and labor costs." Id. ¶ 22. Plaintiff alleges that during this general time period, it "notified Ellicott through written communication that SumCo was incurring costs related to the mechanical failures." Id. ¶ 23.
On February 6, 2020, "SumCo submitted a Commissioning Delays Claim to Ellicott seeking reimbursement for the additional costs Sumco incurred as a result of" the extended assembly and the dredge's mechanical failures. Id. ¶ 24. Ellicott "did not dispute the factual basis of SumCo's claim," but nevertheless "denied" it on the ground that SumCo was seeking "'consequential damages,'" which Ellicott asserted were barred under the Contract. Id. Neither side discusses the Commissioning Delays Claim in the submissions.
This suit followed, on October 9, 2020. ECF 1.
A defendant may test the legal sufficiency of a complaint by way of a motion to dismiss under Rule 12(b)(6). Paradise Wire & Cable Defined Benefit Pension Plan v. Weil, 918 F.3d 312, 317 (4th Cir. 2019); In re Birmingham, 846 F.3d 88, 92 (4th Cir. 2017); Goines v. Valley Cmty. Servs. Bd., 822 F.3d 159, 165-66 (4th Cir. 2016); McBurney v. Cuccinelli, 616 F.3d 393, 408 (4th Cir. 2010), aff'd sub nom., McBurney v. Young, 569 U.S. 221 (2013). A Rule 12(b)(6) motion constitutes an assertion by a defendant that, even if the facts alleged by a plaintiff are true, thecomplaint fails as a matter of law "to state a claim upon which relief can be granted." Fed. R. Civ. P. 12(b)(6).
Whether a complaint states a claim for relief is assessed by reference to the pleading requirements of Fed. R. Civ. P. 8(a)(2). That rule provides that a complaint must contain a "short and plain statement of the claim showing that the pleader is entitled to relief." The purpose of the rule is to provide the defendants with "fair notice" of the claims and the "grounds" for entitlement to relief. Bell Atl. Corp. v. Twombly, 550 U.S. 544, 555-56 (2007).
To survive a motion under Rule 12(b)(6), a complaint must contain facts sufficient to "state a claim to relief that is plausible on its face." Twombly, 550 U.S. at 570; see Ashcroft v. Iqbal, 556 U.S. 662, 684 (2009) ...
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