Argued
February 14, 2018
Appeal
from the Superior Court of the District of Columbia
(CAB-8963-15) (Hon. Maurice A. Ross, Trial Judge)
Edmond
M. Amorosi, with whom Zachary D. Prince was on the brief, for
appellant.
Erik
H. Beard, with whom Timothy A. Diemand was on the brief, for
appellees.
Before
Fisher and Thompson, Associate Judges, and Farrell, Senior
Judge.
Thompson, Associate Judge
Appellant
Tiger Steel Engineering, LLC ("Tiger Steel")
challenges (1) a March 3, 2017, order of the Superior Court
entering summary judgment in favor of appellees Symbion
Power, LLC and Symbion Power Services U.S., Inc. (together,
"Symbion") on the ground that Tiger Steel's
action for breach of contract was time-barred, and (2) the
court's October 4, 2016, order awarding Tiger Steel only
$500 in attorney's fees and expenses for its efforts in
pursuing a successful motion to compel discovery.
For the
reasons stated herein, we hold that Tiger Steel's action
on Symbion's failure to pay as Symbion promised in a debt
acknowledgment letter is subject to the general three-year
limitations period applicable to actions for breach of
contract rather than the four-year limitations period
applicable to actions for breach of contracts for sale under
the Uniform Commercial Code ("UCC"), even though
the debt arose out of the parties' contract for the sale
of goods.[1] We also agree with the Superior
Court's determination that Symbion did not lull Tiger
Steel into inaction so as to excuse Tiger Steel's failure
to file its Complaint before the end of the three-year
limitations period. We therefore affirm the trial court's
grant of summary judgment. However, we vacate the October 4,
2016, order and remand for further proceedings with respect
to the award of Tiger Steel's reasonable expenses,
including attorney's fees, incurred in connection with
its motion to compel.
I.
Factual and Procedural Background
Between
December 2008 and March 2009, Tiger Steel, a manufacturer of
steel goods used in construction projects, and Symbion, the
general contractor for a power plant construction project,
executed three purchase orders and a related change order,
under which subcontractor Tiger Steel was to fabricate and
deliver, and Symbion was to purchase, steel products for the
project, at a total price of approximately $3.2 million.
Symbion did not pay as agreed, and Tiger Steel stopped
performing between May and June 2009 after Symbion failed to
honor its requests for payment.
On
September 15, 2009, the parties agreed that Symbion would pay
Tiger Steel $666, 988.60, in addition to "compensation .
. . for the current late payment/delay," i.e., interest
(at a rate of 6% per annum). In the months that followed,
Symbion continued to default on payment. In 2011, Tiger Steel
asked Symbion to send it a letter confirming its intent to
pay the debt to address concerns expressed by Tiger
Steel's auditors. On November 23, 2011, Symbion sent
Tiger Steel a letter (the "debt acknowledgment
letter") signed by "Group Financial Director"
Mike Madden acknowledging its indebtedness. The debt
acknowledgment stated:
This letter serves as confirmation that Symbion Power LLC
owes an amount of USD 707, 007.92 [t]o Tiger Steel
Engineering.
Such amount is correctly recorded within the Company's
financial statements and will be paid in full and in due
course.
We will appraise you of any developments periodically and in
the meantime will ensure that full settlement is effected
soonest.
The
acknowledged amount, rounded to $711, 008, is the amount that
the record shows had been the "final account
agreed" to by the parties on September 15, 2009.
Symbion
had still not paid any of the acknowledged debt amount when,
on September 28, 2013, Symbion sent Tiger Steel a letter that
discussed the financial difficulties Symbion had experienced
from the collapse of a major project and the four years of
arbitration that had followed, and that set out what Symbion
called a "final settlement offer." Writing that
"[i]t is quite frankly a miracle that Symbion
survived" and that the company had "lost a
significant amount of money . . . and is still losing
money," Symbion stated that it was "in the
unavoidable circumstance of urging [Tiger Steel] to take a
'hair cut' on the original amount due" and
offered Tiger Steel $300, 000. Tiger Steel rejected that
offer. On November 20, 2013, Symbion informed Tiger Steel
that it could not "realistically make any improvement on
the offer at this time."
From
late 2013, through May 2014, Tiger Steel repeatedly reached
out to Symbion's CEO Paul Hinks and other Symbion
representatives by email, in the expressed hope that Symbion
"would come up with a better proposal." Symbion
staff informed Tiger Steel on multiple occasions that Hinks
was "traveling" and therefore unavailable. On
January 8, 2015, Symbion's in-house counsel contacted
Tiger Steel regarding "the pending settlement
offer." Tiger Steel asserts that it was only at this
point that it realized that Symbion would never voluntarily
repay the debt it had acknowledged in the November 23, 2011,
debt acknowledgment letter. Tiger Steel filed its Complaint
in this matter, alleging breach of contract, ten months
later, on November 18, 2015.
In its
Answer and in subsequent discovery responses, Symbion denied
that Madden had actual authority to sign the debt
acknowledgment letter. Tiger Steel moved to compel discovery
relating to the issue, and the trial court granted Tiger
Steel's motion (and Symbion eventually stipulated that it
would not contest that Madden had apparent authority to issue
the debt acknowledgment letter). Without seeking input from
the parties relating to reasonable attorney's fees
expenses and without explaining its reasoning, the court
issued an order awarding Tiger Steel $500 in "costs and
fees."
After
the close of discovery, Symbion filed a motion for summary
judgment arguing, inter alia, that Tiger Steel's
complaint was time-barred. Both sides agreed that the
November 23, 2011, debt acknowledgment letter had extended
the statutory limitations period. See D.C. Code
§ 28-3504 (2012 Repl.). The parties disagreed, however,
as to the length of that extension. Symbion argued that the
debt acknowledgment had extended the limitations period only
by three years, the limitations period generally applicable
to actions for breach of a simple contract (with the result
that the November 18, 2015, Complaint was untimely), while
Tiger Steel contended that the extension was for four years,
the limitation period that applies with respect to claims of
breach of a contract for the sale of goods under § 2-275
of the UCC. See D.C. Code § 28:2-725 (1) (2012
Repl.) ("An action for breach of any contract for sale
must be commenced within four years after the cause of action
has accrued."). Tiger Steel argued in the alternative
that Symbion was estopped from raising the
statute-of-limitations bar because its conduct had lulled
Tiger Steel into inaction.
On
March 3, 2017, the Superior Court granted Symbion's
motion for summary judgment, concluding that Tiger
Steel's claim was time-barred. The court reasoned that
"a debt acknowledgment . . . becomes a new contract,
with a new [three-year] statute of limitations[, ]" that
had run by the time Tiger Steel filed suit, and also that the
lulling doctrine did not apply. This appeal followed.
II.
Analysis
This
court reviews the trial court's grant of summary judgment
de novo. Farmer-Celey v. State Farm Ins.
Co., 163 A.3d 761, 765 (D.C. 2017) (citing Young v.
U-Haul Co., 11 A.3d 247, 249 (D.C. 2011)). Summary
judgment is proper if "the pleadings, depositions,
answers to interrogatories, and admissions on file, together
with the affidavits, if any, show that there is no genuine
issue of material fact ...