ARCO National Construction, LLC v. MCM Management Corp.

CourtDistrict Court, D. Maryland
DecidedJuly 11, 2023
Docket1:20-cv-03783
StatusUnknown

This text of ARCO National Construction, LLC v. MCM Management Corp. (ARCO National Construction, LLC v. MCM Management Corp.) is published on Counsel Stack Legal Research, covering District Court, D. Maryland primary law. Counsel Stack provides free access to over 12 million legal documents including statutes, case law, regulations, and constitutions.

Bluebook
ARCO National Construction, LLC v. MCM Management Corp., (D. Md. 2023).

Opinion

IN THE UNITED STATES DISTRICT COURT FOR THE DISTRICT OF MARYLAND

ARCO NATIONAL CONSTRUCTION, LLC * f/k/a ARCO NATIONAL CONSTRUCTION COMPANY, INC. *

Plaintiff/Counter-Defendant, * Case No. 1:20-cv-03783-JRR v. *

MCM MANAGEMENT CORP., *

Defendant/Counter-Plaintiff. *

* * * * * * * * * * * * *

MEMORANDUM OPINION This matter comes before the court on Plaintiff/Counter-Defendant ARCO National Construction, LLC’s (“ARCO”) Motion for Summary Judgment (ECF No. 44; the “ARCO Motion”) and Defendant/Counter-Plaintiff MCM Management Corp.’s (“MCM”) Cross Motion for Summary Judgment (ECF No. 45; the “MCM Motion”). The parties’ submissions have been reviewed; no hearing is necessary. Local Rule 105.6 (D. Md. 2021). For the reasons set forth herein, the ARCO Motion will be granted and the MCM Motion will be denied. BACKGROUND A comprehensive factual background is set forth in the court’s memorandum opinion of September 10, 2021, (ECF No. 21), which addressed MCM’s Motion to Dismiss at ECF No. 10. Therefore, the court here summarizes the relevant procedural history and salient undisputed facts relevant to its analysis of the instant cross motions. I. Procedural History This action arises out of a contract dispute between a general contractor, ARCO, and one of its subcontractors, MCM. At the center of the parties’ dispute are two contracts – a subcontract for work on a construction project and a subsequently executed settlement agreement. On December 30, 2020, ARCO filed its Complaint against MCM. The Complaint sets forth one count for breach of contract. (ECF No. 1.) MCM moved to dismiss ARCO’s Complaint, which motion was denied by Judge Hollander by opinion and order issued September 10, 2021. (ECF Nos. 10

and 21.) On October 13, 2021, MCM filed an amended answer and counterclaim against ARCO. MCM’s Amended Counterclaim sets forth three counts: breach of contract (Count I); tortious interference with contract (Count II); and tortious interference with prospective economic advantage (Count III). (ECF No. 24; the “Counterclaim.”) ARCO asserts it is entitled to judgment because MCM released the claims set forth in its Counterclaim. The MCM Motion reasserts an argument raised in its previously denied motion to dismiss – that ARCO’s breach of contract claim is untimely. On this basis, MCM asserts that it is entitled to judgment as a matter of law on ARCO’s claim.1 II. Undisputed Material Facts On or about August 10, 2015, the parties entered into a subcontract agreement (the

“Subcontract”) pursuant to which MCM agreed to perform excavation and utility installation services on the FedEx Ground-Sparrows Point project in Baltimore, Maryland (the “Project”). (ECF Nos. 1-1, 44-3 at No. 2.) During the course of the Project, a dispute arose between the parties pertaining to the balance ARCO owed MCM under the Subcontract. (ECF No. 9.) On May 9, 2017, the parties executed a “Settlement Agreement” resolving the disputes regarding the Project.2 Id.; ECF No. 44-3 at Resp. No. 1. Paragraph 3 of the Settlement Agreement details the parties’ obligations:

1 The MCM Motion seeks summary judgment in its favor per Rule 56, but also requests that the court “dismiss ARCO’s lawsuit with prejudice.” (ECF No. 45 at 2.) The court construes the MCM Motion as a Rule 56 motion. 2 “MCM and ARCO have now agreed to settle their dispute in connection with the Project, the Subcontract and the Lawsuits.” (ECF No. 9, ¶ H.) 2. Changes to Subcontract Sum & Scope of Work:

a. Previously unsigned Change Order Numbers 25 and 26 shall be deemed revoked and of no further force or effect (“Prior Unsigned Change Orders”); and

b. ARCO and MCM shall execute Change Order #25-S, the form of which is attached hereto as Exhibit A and Incorporated herein by this reference (“CO #25-S”), which provides for an adjustment of the aggregate Subcontract Sum to $10,105,908.23, and adds work to the Subcontract Scope of Work to be performed by MCM as set forth in CO #25-S.

3. Payments to MCM & Its Lower Tiers: a. Upon full execution of this Settlement Agreement, the Parties shall comply with the following obligations and deliver the checks, affidavits, Change Orders and other documents and checks required of the Parties under this Settlement Agreement (“Settlement Documents”) to Tracy Steedman, Esq., at Adelberg, Rudow, Dorf & Hendler, LLC, 7 Saint Paul Street, Suite 600, Baltimore, MD 21202 (“Escrow Agent”), who shall hold for the benefit of ARCO and distribute the Settlement Documents in accordance with the terms of this Settlement Agreement.

b. MCM hereby represents and certifies, under penalty of perjury, that there are no other persons or entities entitled to payment of any amounts in connection with or arising out of MCM’s subcontract work, except those Payees and amounts listed in Exhibit B.

c. MCM: MCM shall deliver the following to the Escrow Agent: i. CO #25-S executed by MCM; ii. Two (2) copies of this Settlement Agreement, executed by MCM; iii. Two (2) copies of the [sic] each Dismissal with Prejudice of the Lawsuits,3 filed with the Court,

3 The Recitals of the Settlement Agreement provide in relevant part: inclusive of the Court’s date stamp.

1. The Carter Dismissal Must be Filed before Thursday May 11, 2017; and 2. The Rinker Dismissal Must be filed before Wednesday May 17, 2017.

iv. “Subcontractor final Payment Affidavit, Release and Waiver of Liens” executed by all of the subcontractors and suppliers listed on Exhibit B (“Payees”), in the form attached hereto as Exhibit C, and incorporated herein by this reference.

v. “Subcontractor Final Payment Affidavit, Release and Waiver of Liens” executed by MCM, in the form attached hereto as Exhibit D. d. ARCO: ARCO shall deliver to the Escrow Agent

i. Joint Checks made payable to MCM and each of the Payees4 in the amounts specified on Exhibit B.

Although the parties agree that MCM performed its obligations under the Settlement Agreement, MCM disputes that ARCO performed all of its obligations. (ECF Nos. 44-1 at 2; 45-1 at 5.) The Settlement Agreement incorporates by reference Change Order #25-S (ECF No. 9 at 7; “CO 25-S”) which provided for an adjustment of the “Subcontract Sum” and added to MCM’s scope of work under the Subcontract:

ARCO and the Project owner and others received Notices of Intent to Lien from Carter Paving & Excavating, Inc. (“Carter”), Belair Road Supply Co., Inc. (“Belair”), Hydro Conduit Corporation, dba Rinker Materials Concrete Pipe Division (“Rinker”) and Crouse Construction Co., Inc. (“Crouse”) alleging that MCM had not fully paid them for the labor and/or materials provided to the Project.

Carter and Rinker each filed Petitions to Establish and Enforce Mechanic’s Lien (“Lawsuits”)

(ECF No. 9, ¶¶ E, F.) 4 Exhibit B to the Settlement Agreement identifies ten construction entities, including MCM, that were “[t]o be paid immediately” specified amounts upon execution of the Settlement Agreement. (ECF No. 9 at 8.) ARCO National Construction Company, Inc. 8150 Co11_Jorate Park Drive Cincinnati, OH 45242 Phone: 513-272-2333 Fax: 513-272-1795

CHANGE ORDER

Subcontractor PM: Brandon Bonanno Email: bbonanno@mcmdemo.com TO: MCM Management Corp. DATE: 05/04/2017 1430 Sparrows Point Boulevard CO# 25S Sparrows Point, MD 21219-1014 PROJECT: Scannell FedEx Ground - Baltimore PHONE: 443-823-9944 101 Bethlehem Blvd. FAX: 410-388-9844 Baltimore, MD, 21219 VENDOR# 55567 JOB# N449- SUBCONTRACT#: 449-1001 REFERENCE:

YOU ARE DIRECTED TO MAKE THE FOLLOWING CHANGES IN THIS SUBCONTRACT:

Item# Phase Description Amount 1 02-1100- Settlement amount payable pmsuant to Settlement Agreement dated May 2017 between Contractor and $100,000.00 Subcontractor.

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ARCO National Construction, LLC v. MCM Management Corp., Counsel Stack Legal Research, https://law.counselstack.com/opinion/arco-national-construction-llc-v-mcm-management-corp-mdd-2023.