Searching over 5,500,000 cases.

Buy This Entire Record For $7.95

Official citation and/or docket number and footnotes (if any) for this case available with purchase.

Learn more about what you receive with purchase of this case.

Essroc Cement Corp. v. CTI/D.C.


September 27, 2010


The opinion of the court was delivered by: Colleen Kollar-kotelly United States District Judge


Plaintiff Essroc Cement Corp. ("Plaintiff") brings the present action against Defendant CTI/D.C., Inc. ("Defendant") (together, the "Parties"), asserting causes of action for breach of contract, unjust enrichment, and fraud in connection with Plaintiff's extension of credit and provision of goods, materials, and services to Defendant in the spring and fall of 2008. Presently before the Court is Plaintiff's [26] Motion for Summary Judgment, which Defendant has failed to oppose or respond to in any fashion. After reviewing Plaintiff's submissions, including the attachments thereto, the relevant authorities, and the record as a whole, the Court shall GRANT-IN-PART and DENY-IN-PART Plaintiff's Motion for Summary Judgment, for the reasons set forth below.


A. Factual Background

1. The Parties and their Contractual Relationship

Plaintiff, a Pennsylvania corporation with its principal place of business within that state, is engaged in the business of producing and providing cement to clients throughout the United States, Canada, and Puerto Rico.*fn1 Pl.'s Stmt., Docket No. [26], ¶¶ 1, 3. Defendant, incorporated and operating at least in part in the District of Columbia, is in the business of providing readymix concrete to commercial and residential developers. Pl.'s Stmt. ¶¶ 2, 4; V. Answer, Docket No. [10-2], ¶¶ 2, 5.

On or about January 23, 2008, the Parties entered into an agreement, the primary purpose of which was to enable Defendant to purchase goods, materials, and services -- most notably, cement -- on credit from Plaintiff (the "Credit Agreement"). Pl.'s Stmt. ¶¶ 5-6 and Ex. A (Credit Agreement).*fn2 The terms of the Credit Agreement itself are relatively sparse, contemplating that individual sales of concrete would be governed by more specific terms and conditions to accompany such sales. Specifically, the Credit Agreement provides, in relevant part:

All sales will be subject to further Terms and Conditions as provided, as revised from time to time without notice to [Defendant], and such revised Terms and Conditions shall prevail on all shipments after the date of revision regardless of when the related orders were received.

Pl.'s Stmt. Ex. A (Credit Agreement) at 1.

Subsequently, as contemplated by the Credit Agreement, each individual delivery of cement products from Plaintiff to Defendant was followed by an invoice covering one or more deliveries, which set forth the terms and conditions of the sale (the "Terms and Conditions").*fn3 Pl.'s Stmt. ¶ 10 and Ex. C (Pl.'s Req. for Admis.) Sub-Exs. A-AA (Invoices and Bills of Lading). The Terms and Conditions accompanying each sale supplemented the Credit Agreement, and fleshed out the contours of the Parties' contractual relationship. Specifically, with respect to payment, the Terms and Conditions provided that invoices were "payable in full not later than the last day of the month following the month in which shipments were made."*fn4 Pl.'s Stmt. Ex. B (Terms and Conditions) at 1. Balances past due would be "subject to a service charge of one and one half percent (1-1/2%) per month or the highest rate permissible by law." Id. And, in the event Defendant failed to comply with the terms of payment, the Terms and Conditions reserved to Plaintiff the right to terminate deliveries and to exercise its right to recover for all unpaid accounts. Id.

2. The Deterioration of the Parties' Commercial Relationship

Beginning in April 2008, Plaintiff periodically supplied to Defendant various cement products pursuant to the Credit Agreement and the Terms and Conditions. Id. ¶¶ 12-28. From the outset, the relationship was a troubled one, as Defendant never paid any of the invoices issued by Plaintiff. Id. ¶ 43. On or about September 8, 2008, prompted by the ballooning number of invoices that remained unpaid by Defendant (at least sixteen invoices had been issued, with a total amount outstanding approaching $500,000), Plaintiff advised Defendant that, going forward, Plaintiff would be required to purchase cement on a cash-on-delivery basis.*fn5 Id. ¶¶ 13-28, 44-45.

Thus, beginning on September 8, 2008 and continuing at least through September 17, 2008, Plaintiff supplied Defendant with cement exclusively on a cash-on-delivery basis. Id. ¶¶ 29-34. Despite this arrangement, between September 11, 2008 and September 18, 2008, Defendant proceeded to issue to Plaintiff a series of bad checks.*fn6 All in all, Defendant issued a total of four checks to Plaintiff in the aggregate amount of $27,224.01, purportedly in payment of six separate invoices issued by Plaintiff. Id. ¶¶ 47, 49, 52. All four checks were returned for insufficient funds. Id. And, in all four instances, it is undisputed that Defendant knew that it held insufficient funds in its bank account to cover the amounts designated at the time the checks were issued. Id. ¶¶ 48, 50-51, 53.

3. The Defendant's Assurances and Plaintiff's Demand

On or about September 29, 2008, "[f]or purposes of inducing [Plaintiff] to supply it with additional cement," Defendant told Plaintiff that it would convert a certificate of deposit ("CD") to pay Plaintiff $240,000 towards its past-due balance. Id. ¶ 56. However, Defendant actually had no intention of converting the CD at the time these representations were made to Plaintiff. Id. ¶ 57. Plaintiff nevertheless supplied to Defendant approximately $33,153.96 worth of cement between September 30, 2008 and October 9, 2008.*fn7 Id. ¶¶ 38-39. It is undisputed that Plaintiff never received payment for these goods. Id. ¶¶ 42-43, 59; V. Answer ¶ 21.

On November 11, 2008, apparently having had its fill, Plaintiff sent to Defendant a certified letter demanding full payment of the unpaid invoices, as well as accrued service charges on past-due invoices. Pl.'s Stmt. ¶ 58. As of that date, Defendant was delinquent in its payments in the principal amount of $552,577.77 and had incurred service charges in the amount of $33,925.72, for a total of $586,503.49. Pl's Stmt. Ex. C (Pl.'s Req. for Admis.) Sub-Ex. EE (Certified Letter) at 1-2. Defendant received the letter, but failed to respond or remit payment in any amount. Pl.'s Stmt. ¶¶ 58-59. It is undisputed that Defendant has received a copy of each of the invoices underlying these figures and, prior to Plaintiff's filing of the Complaint in this action, has never disputed or questioned their validity. Id. ¶¶ 41-42. To date, Defendant has never paid any of the invoices. Id. ¶¶ 43-44, 59.

B. Procedural History

Plaintiff filed this action against Defendant on December 17, 2008, asserting three causes of action based upon Defendant's alleged failure to pay for the cement supplied by Plaintiff. See Compl., Docket No. [1]. A copy of the Summons and Complaint was served on Defendant, via its registered agent, on December 19, 2008. See Return of Serv./Aff., Docket No. [4]. Having received no response in the time allotted by the Federal Rules of Civil Procedure, Plaintiff requested an entry of default, see Pl.'s Req. for Entry of Default, Docket No. [5], which the Clerk of the Court subsequently entered on or about February 3, 2009, see Clerk's Entry of Default, Docket No. [6]. Thereafter, Plaintiff moved this Court for entry of judgment by default. See Pl.'s Mot. for Default J., Docket No. [7]. Before the Court had an opportunity to consider and rule upon Plaintiff's motion, Defendant filed a Motion to Set Aside Entry of Default and Opposition to Motion for Entry by Default, asserting that it did not have actual notice of the lawsuit prior to learning of Plaintiff's motion. See Def.'s Mot. to Set Aside Default, Docket No. [10].*fn8 On November 9, 2009, finding, inter alia, that Defendant had sufficiently demonstrated a lack of willfulness on its part, the Court granted Defendant's Motion to Set Aside Entry of Default and denied Plaintiff's Motion for Entry of Judgment by Default. See Nov. 9, 2009 Mem. Op., Docket No. [14].

Unfortunately, Defendant's active participation in this action was short lived. Prior to making any meaningful inroads into discovery, the Court referred this case to the Court's Mediation Program pursuant to the Parties' request. See Dec. 14, 2009 Order, Docket No. [17]. When Defendant's counsel failed to participate in the Court's Mediation Program, and also failed to appear at a Court-ordered Initial Scheduling Conference, Defendant was ordered to file written notice explaining why Defendant's counsel should not be held in contempt.*fn9 See Mar. 5, 2010 Order, Docket No. [19]. In so doing, the Court noted that the aforementioned conduct "continue[d] a pattern of indifference towards the defense of this lawsuit that began with Defendant's failure to timely file an answer and a subsequent entry of default against Defendant (which was later set aside by the Court)." Id. at 1. That pattern has continued unabated.

The Parties proceeded to the initial stages of discovery in this action, undertaking to serve any written discovery upon each other on or before April 12, 2010, with responses to be provided in accordance with the Federal Rules of Civil Procedure and the Court's Local Rules. See Joint Report as to Disc. Plan, Docket No. [23], at 1; see also Joint Local Civ. Rule 16.3(c) Stmt., Docket No. [16], at ¶ 8(b).On April 12, 2010, consistent with these strictures, Plaintiff properly and timely served upon Defendant 132 Requests for Admission. See Pl.'s Stmt. Ex. C (Reqs. for Admis.) at 18. Plaintiff failed to respond or object to Plaintiff's Requests for Admission within the allotted thirty-day period, see Fed. R. Civ. P. 36(a)(3), or at any time thereafter. Nor does it appear that Defendant has ever sought any discovery from Plaintiff.

On June 11, 2010, Plaintiff proceeded to file the present Motion for Summary Judgment. See Not. of Pl.'s Mot. for Summ. J., Docket No. [26]. Defendant once again failed to respond, prompting Plaintiff to file a notice with the Court indicating that Defendant's time to file opposition papers had expired, thus rendering the motion ripe for adjudication. See Praecipe regarding Pl.'s Mot. for Summ. J., Docket No. [27], at 1. While a copy of the notice was served upon Defendant's counsel via the Court's ECF system, id. at 2, Defendant has nevertheless failed to provide a response of any kind to the present motion. Defendant's failure cannot be for want of time, as well over three months have elapsed since Plaintiff's motion was first filed with the Court.


Summary judgment is proper when "the pleadings, the discovery [if any] and disclosure materials on file, and any affidavits show that there is no genuine issue as to any material fact and that the movant is entitled to judgment as a matter of law." Fed. R. Civ. P. 56(c). Under this standard, the moving party bears the "initial responsibility of informing the district court of the basis for its motion, and identifying those portions of the pleadings, depositions, answers to interrogatories, and admissions on file, together with the affidavits, if any, which it believes demonstrate the absence of a genuine issue of material fact." Celotex Corp. v. Catrett, 477 U.S. 317, 324 (1986) (internal quotation marks omitted). In response, the non-moving party must "go beyond the pleadings and by [its] own affidavits, or by the depositions, answers to interrogatories, and admissions on file, designate specific facts showing that there is a genuine issue for trial." Id. at 324 (internal quotation marks omitted). All underlying facts and inferences are analyzed in the light most favorable to the non-moving party. Anderson v. Liberty Lobby, Inc., 477 U.S. 242, 247 (1986).

A. Defendant's Failure to File an Opposition to Plaintiff's Motion

At the outset, the Court observes that, as of the date of this opinion, Defendant has failed to file a Memorandum of Points and Authorities in opposition to Plaintiff's Motion for Summary Judgment. As a result, the Court may elect to treat the present motion as conceded. See LCvR 7(b) ("If [a memorandum of points and authorities in opposition to the motion] is not filed within the prescribed time, the Court may treat the motion as conceded.").*fn10 The D.C. Circuit Court of Appeals has explained that this rule "is a docket-management tool that facilitates efficient and effective resolution of motions by requiring the prompt joining of issues." Fox v. Am. Airlines, 389 F.3d 1291, 1294 (D.C. Cir. 2004). Ultimately, however, the determination of whether to enforce the rule is "highly discretionary," Yelder v. Gates, Civ. A. No. 09-1301 (RJL), 2010 WL 2521718, at *2 (D.D.C. June 22, 2010), and the decision "lies wholly with the district court," Fed. Deposit Ins. Co. v. Bender, 127 F.3d 58, 68 (D.C. Cir. 1997) (reviewing a predecessor to Local Civil Rule 7(b)). Here, although it would much prefer the benefit of the refinement of issues that accompanies a contested motion, the Court declines to invoke the rule, and will instead engage in an independent review of the record and authorities relied upon by the Plaintiff to satisfy itself as to the merits of the present motion.

B. Defendant's Failure to File a Statement of Material Facts at Issue

While the Court has elected not to exercise its discretion to treat Plaintiff's motion as conceded as a result of Defendant's failure to submit a Memorandum of Points and Authorities, this is hardly Defendant's only failing. Here, the Court notes that the District Court for the District of Columbia has supplemented Federal Rule of Civil Procedure 56 with Local Civil Rule 7(h), which requires that each party submitting a motion for summary judgment attach a statement of material facts to which that party contends there is no genuine issue, with specific citations to those portions of the record upon which the party relies in fashioning the statement. The party opposing such a motion must, in turn, submit a statement enumerating all material facts which the party contends are at issue and thus require litigation. See LCvR 7(h)(1). Where the opposing party fails to discharge this obligation, a court may take all facts alleged by the movant as admitted. Id.; see also Arrington v. U.S., 473 F.3d 329, 335 (D.C. Cir. 2006) (holding that non-compliance with Local Civil Rule 7(h) permits the district court to assume the facts identified by the moving party as admitted, though the court retains the discretion to review the entire record).

This well-reasoned rule "places the burden on the parties and their counsel, who are most familiar with the litigation and the record, to crystallize for the district court the material facts and relevant portions of the record." Jackson v. Finnegan, Henderson, Farabow, Garrett & Dunner, 101 F.3d 145, 151 (D.C. Cir. 1996) (citing Twist v. Meese, 854 F.2d 1421, 1425 (D.C. Cir.), cert. denied, 490 U.S. 1066 (1988); Guarino v. Brookfield Twp. Trs., 980 F.2d 399, 406 (6th Cir. 1992)). Because of the significance of this task and the potential hardship placed on the courts if parties are derelict in their duty, courts require strict compliance with the Rule. Indeed, this Court strictly adheres to the text of Local Civil Rule 7(h) when resolving motions for summary judgment, a matter previously brought to the Parties' attention. See Scheduling and Procedures Order, Docket No. [20], at ¶ 6.

In this case, whereas Plaintiff filed a statement in conformance with Local Civil Rule 7(h)(1), Defendant has failed to discharge its corresponding burden to come forward and submit a statement enumerating all material facts allegedly at issue and thus requiring litigation. As such, although discretionary in the text of Local Civil Rule 7(h), this Court shall "assume[] that facts identified by [Plaintiff] in its statement of material facts are admitted" in resolving the present summary judgment motion. LCvR 7(h). The Court concludes that Defendant has been given more than adequate opportunity to be heard, but has repeatedly failed to take advantage of its opportunities to defend itself in this action. See also supra. Part I.B. The Court has reviewed the record citations to ensure that the representations made in Plaintiff's statement are accurate, and, where possible, the Court cites to Plaintiff's Statement of Material Facts filed in accordance with Local Civil Rule 7(h)(1).

C. Defendant's Failure to Respond to Plaintiff's Requests for Admission

In any event, even if Defendant had hypothetically submitted a statement in compliance with Local Rule 7(h), it would be of little avail in light of its separate and independent failure to respond to Plaintiff's properly served Requests for Admission within the time allotted by the Federal Rules of Civil Procedure. Pursuant to Fed. R. Civ. P. 36(a)(1), a party may serve on any other party written requests to admit the truth of any matters relating to facts, the application of law to fact, or opinions about either, and the genuineness of any described documents. If the party served fails to respond within thirty days of service, either by written answer or objection, the matters described are deemed admitted. Fed. R. Civ. P. 36(a)(3). Moreover, once a matter is deemed admitted under the Rule, it is to be considered "conclusively established" unless the party moves to amend or withdraw. Fed. R. Civ. P. 36(b); see also Anchorage-Hynning & Co. v. Moringiello, 697 F.2d 356, 363 (D.C. Cir. 1983) ("By force of Rule 36, matter subjected to [a request for admission] is admitted for purposes of the litigation pending unless answered or objected to"); Rainbolt v. Johnson, 669 F.2d 767, 768 (D.C. Cir. 1981) (district court "erred in failing to give binding and conclusive effect to . . . unanswered requests for admissions."); Baker v. Potter, 212 F.R.D. 8, 11 (D.D.C. 2002) (absent a timely response or objection, "matters contained in the requested admissions are automatically admitted"). This well-reasoned rule is designed to serve the purpose of reducing trial time by defining and narrowing the matters in controversy between the parties. Baker, 212 F.R.D. at 11 (citing Foretich v. Chung, 151 F.R.D. 3, 4 (D.D.C. 1993)).

As set forth above, Plaintiff properly and timely served upon Defendant 132 Requests for Admission, and Defendant failed to respond within the allotted thirty-day period or at any time thereafter. By automatic operation of Rule 36, each of the matters set forth therein are "conclusively established" for purposes of the present litigation. Fed. R. Civ. P. 36(b). Such deemed admissions may properly support a motion for summary judgment. See, e.g., Unitronics (1989) (R"G) Ltd. v. Gharb, 511 F. Supp. 2d 123, 135 (D.D.C. 2007); Russell v. Comm'r of Patents and Trademarks, 695 F. Supp. 572, 573 (D.D.C. 1988). Indeed, where the "facts that are admitted under Rule 36 are 'dispositive' of the case, then it is proper for the district court to grant summary judgment." Quasius v. Schwan Food Co., 596 F.3d 947, 950-51 (8th Cir. 2010); see also Praetorian Ins. Co. v. Site Inspection LLC, 604 F.3d 509, 514 (8th Cir. 2010) (providing that affidavits and depositions entered in opposition to summary judgment cannot refute deemed admissions). Thus, because nearly all of the material facts enumerated in Plaintiff's Statement of Material Facts rest upon such "deemed" or "default" admissions, Defendant's separate and independent failing in this regard would nevertheless have led to the same result even if Defendant had hypothetically fulfilled its obligation to submit a statement of material facts at issue in conformance with Local Civil Rule 7(h).


Plaintiff seeks judgment as a matter of law on each of its causes of action for breach of contract, unjust enrichment, and fraud -- the only claims Plaintiff has asserted in this action. Plaintiff contends that the undisputed facts demonstrate that Defendant (1) breached the terms of the Credit Agreement and Terms and Conditions or, in the alternative, has been unjustly enriched due to its failure to pay for the cement suppled to it by Plaintiff,*fn11 and (2) has committed fraud against Plaintiff based upon Defendant's allegedly false representations that it would convert a CD to pay amounts owed to Plaintiff by a certain date. The Court shall consider each of these contentions in turn below.

A. Plaintiff's Claim for Breach of Contract

1. Choice-of-Law

Because this is a diversity case, the Court must first determine which state law to apply to Plaintiff's cause of action for breach of contract. In resolving this question, the Court applies the District of Columbia's choice-of-law rules. Klaxon Co. v. Stentor Elec. Mfg. Co., 313 U.S. 487, 496 (1941). The District of Columbia courts have "adopted the general rule 'that parties to a contract may specify the law they wish to govern, as part of their freedom to contract, as long as there is some reasonable relationship with the state specified.'" Ekstrom v. Value Health, Inc., 68 F.3d 1391, 1394 (D.C. Cir. 1995) (quoting Norris v. Norris, 419 A.2d 982, 984 (D.C. 1980)); accord America's Choice, Inc. v. Bienvenu, 700 F. Supp. 2d 1, 5 (D.D.C. 2010); Elemary v. Philipp Holzmann A.G., 533 F. Supp. 2d 144, 155 n.3 (D.D.C. 2008).

Here, the Terms and Conditions governing all of the sales at issue includes the following choice-of-law provision:

The laws of the Commonwealth of Pennsylvania, including the UCC, shall govern any dispute between Essroc and [Defendant] arising from or in connection with this invoice or its terms and conditions, and payment [t]hereof.

Pl.'s Stmt. Ex. B (Terms and Conditions) at 1. Plaintiff's status as a Pennsylvania corporation with its principal place of business within that state, see Pl.'s Stmt. ¶ 1, more than suffices to meet the "reasonable relationship" threshold required to support the express choice-of-law provision set forth in the Parties' agreement. See, e.g., Ekstrom, 68 F.3d at 1394 ("undisputed connection" to chosen jurisdiction where one party operated principally within that jurisdiction). This conclusion is bolstered by the fact that the Parties' contractual relationship, including the disputes at issue in this case, was overseen at least in part by Plaintiff's personnel in Pennsylvania. See Pl.'s Stmt. ¶¶ 54, 56.*fn12 The Court shall therefore honor the Parties' agreement and proceed to apply Pennsylvania law to Plaintiff's claim for breach of contract.

2. Merits of Plaintiff's Breach of Contract Claim

Under Pennsylvania law, in order to successfully maintain a cause of action for breach of contract, the plaintiff must establish: (1) the existence of a contract, including its essential terms; (2) the defendant's breach of a duty imposed by the contract; and (3) resultant damages. Gorski v. Smith, 812 A.2d 683, 692 (Pa. Super. Ct. 2002), appeal denied, 856 A.2d 834 (Pa. 2004); see also McShea v. City of Philadelphia, 995 A.2d 334, 340 (Pa. 2010) ("The necessary material facts that must be alleged . . . are simple: there was a contract, the defendant breached it, and plaintiff[] suffered damages from the breach."). Plaintiff has met its burden in all respects.

First, it is undisputed that Plaintiff and Defendant entered into the Credit Agreement, whereby Plaintiff agreed to supply to Defendant cement products on credit. Pl.'s Stmt. ¶¶ 5-6 and Ex. A (Credit Agreement). The Credit Agreement, in turn, expressly contemplated that all future sales by Plaintiff to Defendant would be subject to the additional Terms and Conditions. Id. at 1. During the course of the Parties' relationship, each sale was accompanied by an invoice, which set forth the identical Terms and Conditions, and it is undisputed that Plaintiff provided Defendant cement products "[p]ursuant to the Credit Agreement and the Terms and Conditions." Id. ¶¶ 10, 12, 42.

Second, pursuant to the terms of the Credit Agreement and the Terms and Conditions, Defendant was obligated to render payment on each invoice "not later than the last day of the month following the month in which shipments were made." Pl.'s Stmt. Ex. B (Terms and Conditions) at 1. Where Defendant failed to meet that obligation, overdue balances would be "subject to a service charge of one and one half percent (1-1/2%) per month or the highest rate permissible by law." Id. Despite these unambiguous terms, Defendant repeatedly breached the Credit Agreement and Terms and Conditions over the course of the Parties' relatively short commercial relationship. Indeed, Defendant has never paid any of the invoices issued by Plaintiff, all while never disputing or questioning their validity. Id. ¶¶ 41-44. The Court finds it difficult to conjure a more obvious breach.

Finally, Plaintiff has also carried its burden of establishing an entitlement to damages, though its submissions have hardly eased the Court's task of calculating those damages. Specifically, in connection with its claim for breach of contract, Plaintiff seeks damages in the amount of $552,577.77 in past due balances for cement invoiced and $185,816.01 in service charges accruing at 1.5% per month through the week prior to Plaintiff's motion. Pl.'s Mem. P.&.A. at 7-8. Although there is ample support in the record for Plaintiff's contention that the principal amount due totals $552,577.77, see Pl.'s Stmt. ¶¶ 44, Ex. C (Pl.'s Req. for Admis.) ¶ 7 and Sub-Exs. A-AA, EE, the same is not true for the latter figure.

In support of the claimed service charges figure, Plaintiff cites to two paragraphs from its Statement of Material Facts; those paragraphs unhelpfully set forth broad sections of the Parties' agreements and provide that Defendant has failed to render payment on any invoices. Pl.'s Stmt. ¶¶ 11, 43. Indeed, the Court can find no support in the record submitted by Plaintiff pointing to the proper measure of service charges as of June 4, 2010 (or at the time of the filing of Plaintiff's motion). Instead, the only concrete figure supported by the record appears in a Service Charge Invoice sent by Plaintiff to Defendant on or about November 11, 2008. See Pl.'s Stmt. Ex. C (Pl.'s Req. for Admis.) Sub-Ex. EE. That document identifies the service charges outstanding as of that date as $33,925.72. Id. at 2. Although the Court does not doubt that the figure has grown in the intervening months, Plaintiff has failed to bring to this Court's attention sufficient documentation demonstrating the proper calculation of service fees as of today, and it is not this Court's burden to hunt down the pertinent materials and attempt a calculation of Plaintiff's damages.*fn13 Accordingly, the Court finds that Plaintiff has only established its entitlement to damages in the amount of $586,503.49, representing the principal amount and service charges outstanding as of November 2008.

3. Attorney's Fees and Costs

In addition to compensatory damages, Plaintiff seeks to recover attorney's fees and costs in connection with its breach of contract claim. Under Pennsylvania law, which applies to Plaintiff's breach of contract claim, "a litigant cannot recover counsel fees . . . unless there is express statutory authorization, a clear agreement of the parties, or some other established exception." Trizechahn Gateway LLC v. Titus, 976 A.2d 474, 482-83 (Pa. 2009) (citing Mosaica Acad. Charter Sch. v. Commonwealth Dep't of Educ., 813 A.2d 813, 822 (Pa. 2002)); see also Precision Door Co., Inc. v. Meridian Mut. Ins. Co., 353 F. Supp. 2d 543, 558 (E.D. Pa. 2005) ("courts [may] award attorney's fees when there is a clear agreement between the parties that [such] fees will be awarded").

Here, there is no ambiguity in the Parties' agreements. The Credit Agreement provides: "Customer agrees to pay any collection costs incurred by Essroc whether by suit or otherwise, including any attorney's fees." Pl.'s Stmt. Ex. A (Credit Agreement) at 1. Indeed, even if this language had not expressly contemplated Plaintiff's recovery of attorney's fees in the course of prosecuting a lawsuit against Defendant, at least one Pennsylvania court has concluded that the term "collection costs" is sufficiently broad to encompass both attorney's fees and costs. See Wrenfield Homeowners Ass'n, Inc. v. DeYoung, 600 A.2d 960, 963 (Pa. Super. Ct. 1991) (trial court properly imposed attorney's fees when it found that such fees were included in the phrase "costs of collection" in relevant agreement). Based upon the Parties' clear agreement, the Court therefore concludes that Plaintiff is entitled to reasonable attorney's fees and costs.*fn14

B. Plaintiff's Claim for Unjust Enrichment

Plaintiff further contends that, "were the Court to somehow determine that the Credit Agreement is invalid," it would nevertheless be entitled to recover the value of the goods and services it provided to Defendant under the theory of unjust enrichment. Pl.'s Mem. P.&A. at 8. As Plaintiff has prevailed on its cause of action for breach of contract, the Court need not address its alternative argument that recovery should be had under the theory of unjust enrichment. See Reiman & Co. v. Eromanga Investments, N.V., 622 F. Supp. 13, 21 (D.D.C. 1985) (finding it unnecessary to address plaintiff's alternative argument under the theory of quantum meruit where plaintiff had already prevailed on parallel breach of contract claim).

C. Plaintiff's Claim for Fraud

1. Choice-of-Law

Because the choice-of-law provision in the Parties' agreements does not extend to Plaintiff's cause of action for fraud, the Court must separately determine the applicable law pursuant to the District of Columbia's choice-of-law rules. Klaxon, 313 U.S. at 496; see also Jaffe v. Pallotta TeamWorks, 374 F.3d 1223, 1228 (D.C. Cir. 2004) ("[d]ifferent law may apply to different issues in a lawsuit" depending upon the facts and legal claims at issue in a particular case) (internal quotation marks omitted). Under those rules, a court first determines whether a "true conflict" exists between the laws of competing jurisdictions. GEICO v. Fetisoff, 958 F.2d 1137, 1141 (D.C. Cir. 1992). Where no true conflict exists, a court applies the law of the District of Columbia by default. Id.; see also America's Choice, 700 F. Supp. 2d at 7 (applying District of Columbia law where no conflict with competing jurisdiction).Only where a true conflict exists should a court apply the District of Columbia's "constructive blending" of the "governmental interests" and the "most significant relationship" test. Hercules & Co., Ltd. v. Shama Rest. Corp., 566 A.2d 31, 41 n.18 (D.C. 1989); see also Drs. Groover, Christie & Merritt, P.C. v. Burke, 917 A.2d 1110, 1117 (D.C. 2007).*fn15

Plaintiff asserts that Pennsylvania governs its fraud count, arguing in essence that, because it is a Pennsylvania corporation and because Pennsylvania has an interest in protecting its citizens from fraud, application of the District of Columbia's "governmental interests" test calls for the application of Pennsylvania law. Plaintiff, however, neglects to address the antecedent question: i.e. whether there is any true conflict at all between the laws of Pennsylvania and the District of Columbia with respect to Plaintiff's cause of action for fraud. The Court, having found no such conflict based upon its independent review of the laws of the respective jurisdictions, will therefore apply the law of the District of Columbia by default. GEICO, 958 F.2d at 1141.

2. Merits of Plaintiff's Fraud Claim

Plaintiff contends that Defendant fraudulently represented to Plaintiff that it would convert a $240,000 CD to partially pay its outstanding debt, thereby inducing Plaintiff to supply additional cement to Defendant.*fn16 See Pl.'s Mem. P.&A. at 10. To prevail on its claim for fraud, a plaintiff must establish each of the following essential elements: (1) the defendant made a false representation; (2) in reference to material fact; (3) with knowledge of its falsity; (4) with the intent to deceive the plaintiff; (5) the plaintiff acted in reasonable reliance on that representation; (6) which consequently resulted in provable damages. C & E Servs., Inc. v. Ashland, Inc., 498 F. Supp. 2d 242, 255 (D.D.C. 2007) (citing, inter alia, Atraqchi v. GUMC Unified Billing Servs., 788 A.2d 559, 563 (D.C. 2002)).*fn17 Although Plaintiff has arguably met its burden with respect to five of these elements -- a question the Court does not reach -- it has nevertheless failed to establish that, in providing additional cement, there is no genuine issue as to whether Plaintiff reasonably relied upon Defendant's assurances.

Mindful that Plaintiff's motion is uncontested, the Court nevertheless concludes that myriad undisputed facts on the record, elided by Plaintiff in its moving papers, militate against a finding in Plaintiff's favor on this point. First, by early September 2008, approximately three weeks before the assurances at issue, Defendant had already incurred approximately half a million dollars in debt, failing to remit payment on any one of the sixteen invoices issued by Plaintiff as of that point in time. Pl.'s Stmt. ¶¶ 13-28, 43. Second, it is undisputed that, by September 8, 2008, Plaintiff had become sufficiently concerned as to Defendant's ability to meet its financial obligations that it began requiring Defendant to purchase cement on the basis of cash-on-delivery. Id. ¶ 45. Third, in the period between September 11, 2008 and September 18, 2008 (approximately eleven days prior to the assurances at issue), Defendant proceeded to write a series of bad checks to Plaintiff, each of which was returned for insufficient funds.*fn18 Id. ¶¶ 47-53. Fourth, Plaintiff's submissions leave unexplained why Plaintiff continued to supply Defendant with cement products between September 19, 2008 and September 22, 2008, the time intervening between Defendant's issuance of checks returned for insufficient funds and the time of Defendant's alleged representations regarding the conversion of the CD, without any apparent further inducement. Id. ¶¶ 35-37. Fifth, the record supports the inference that Plaintiff, a corporation in the business of providing cement to clients nationally and internationally, id. ¶ 3, is a sophisticated commercial actor, and Plaintiff does not suggest that it and Defendant ever interacted at anything other than arm's length. Finally, although Plaintiff had means at its disposal to verify Defendant's financial condition, see Pl.'s Stmt. Ex. A (Credit Agreement) at 1 ("Customer further agrees to supply such information as may be required by Essroc to . . . warrant the future extension of credit"), the record is devoid of any evidence that Plaintiff ever exercised that right.

Considered together, these facts -- which are undisputed based on Plaintiff's own submissions to the Court -- compel the Court to conclude that there remains a genuine issue as to whether Plaintiff acted reasonably in relying upon Defendant's alleged assurances. See C & E Servs., 498 F. Supp. 2d at 261 ("[t]he reasonableness of a plaintiff's reliance is a 'question of fact, for which disposition by summary judgment is generally inappropriate.'") (quoting Cassidy v. Owen, 533 A.2d 253, 256 (D.C. 1987)); accord Isaac v. Mnemonic Sys., Inc., Civ. A. No. 97-0988 (JHG), 1998 WL 151286, at *8 (D.D.C. Mar. 25, 1998).*fn19 Accordingly, Plaintiff has not established its entitlement to judgment as a matter of law on its fraud claim.

3. Punitive Damages

While Plaintiff's failure to make out an underlying claim for fraud precludes an award of damages sought in connection with that claim, the Court pauses to note that, even if Plaintiff had hypothetically prevailed on its fraud claim, Plaintiff has independently failed to meet the heightened standard required to justify an award of punitive damages at this stage of the proceedings.

Under District of Columbia law, "[p]unitive damages may be awarded 'only if it is shown by clear and convincing evidence that the tort committed by the defendant was aggravated by egregious conduct and a state of mind that justifies punitive damages.'" Chatman v. Lawlor, 831 A.2d 395, 400 (D.C. 2003) (quoting Jonathan Woodner Co. v. Breeden, 665 A.2d 929, 938 (D.C. 1995), cert. denied, 519 U.S. 1148 (1997)). Where the underlying tort sounds in fraud, this "stringent" standard, Caston v. Butler, Civ. A. No. 08-1656 (JDB), 2010 WL 2505591, at *1 (D.D.C. June 22, 2010), assumes a more particularized form. In such cases, a plaintiff is "required to demonstrate aggravating circumstances beyond mere fraud in order to support [a] plea for punitive damages." BWX Electronics, Inc. v. Control Data Corp., 929 F.2d 707, 713 (D.C. Cir. 1991). Specifically, the defendant's fraudulent conduct must be "accompanied by 'outrageous conduct such as maliciousness, wantonness, gross fraud, recklessness and willful disregard of another's rights." Chatman, 831 A.2d at 400 (quoting Riggs Nat'l Bank v. Price, 359 A.2d 25, 28 (D.C. 1976)); accord BWX Electronics, 929 F.2d at 712-13.*fn20 Stated differently, fraud alone is insufficient to render an award for punitive damages justifiable; there must be something more.

Plaintiff contends that punitive damages are mandated because Defendant "had actual knowledge of the fact that it was issuing bad checks, had actual knowledge that it would not be converting the $240,000 CD to pay off a portion of its past due balance and made willful misrepresentations to secure the Cement." Pl.'s Mem. P.&.A. at 14. In this regard, Plaintiff offers nothing more than a restatement of the facts supporting its underlying claim for fraud. See, e.g., C & E Servs., 498 F. Supp. 2d at 255 (identifying the defendant's knowledge of the falsity of its representation, and its intent to deceive the plaintiff, as essential elements of a claim for fraud). Indeed, Plaintiff's argument reduces to a contention that this Court should award punitive damages solely on a finding that Defendant made an intentional misrepresentation to Plaintiff. However, District of Columbia law is clear: a plaintiff seeking punitive damages in fraud must show more. See Dist. Cablevision L.P. v. Bassin, 828 A.2d 714, 725-26 (D.C. 2003) ("in the absence of 'gross fraud' or comparable wrongdoing, proof of even intentional misrepresentation may not suffice to justify punitive damages."); Boynton v. Lopez, 473 A.2d 375, 377-78 (D.C. 1984) (award of punitive damages not supported by the evidence where record merely supported finding of "intentional misrepresentation," not willful and outrageous conduct or gross fraud). In short, because the undisputed facts identified in Plaintiff's submissions fall woefully short of demonstrating the sort of outrageous and malicious conduct required to support an award of punitive damages, Plaintiff cannot recover such damages here.


For the foregoing reasons, the Court shall GRANT-IN-PART Plaintiff's [26] Motion for Summary Judgment with respect to Plaintiff's claim for breach of contract and award Plaintiff damages in the amount of $586,503.49, along with reasonable attorney's fees, costs, and post-judgment interest calculated at the statutory rate, and DENY-IN-PART Plaintiff's motion with respect to its claims for unjust enrichment and fraud. An appropriate Order accompanies this Memorandum Opinion.

Buy This Entire Record For $7.95

Official citation and/or docket number and footnotes (if any) for this case available with purchase.

Learn more about what you receive with purchase of this case.