Manekin Construction v. Dept. of Gen. Servs. , 233 Md. App. 156 ( 2017 )

REPORTED
IN THE COURT OF SPECIAL APPEALS
OF MARYLAND
No. 600
September Term, 2016
______________________________________
MANEKIN CONSTRUCTION, INC.
v.
MARYLAND DEPARTMENT OF GENERAL
SERVICES
______________________________________
Woodward, C.J.
Berger,
Kenney, James A., III
(Senior Judge, Specially Assigned),
JJ.
______________________________________
Opinion by Berger, J.
______________________________________
Filed: June 28, 2017
This appeal arises from the circuit court’s order affirming the decision of the
Maryland Board of Contract Appeals (the “Board”) to grant summary decision in favor of
the Department of General Services of Maryland (“DGS”), appellee. On June 9, 2010,
appellant Manekin Construction, LLC (“Manekin”) was awarded a contract with DGS to
construct a two-story barrack and a one-story garage for the Maryland State Police in
Hagerstown, Maryland. The contract price totaled more than eight million dollars and was
subject to mutually agreed upon Proposed Change Orders (“PCOs”). As we discuss in
detail below, Manekin submitted PCO No. 68 to DGS requesting additional compensation
during the construction of the project. After the project was complete, Manekin submitted
a “Request for Equitable Settlement” on March 18, 2013. After DGS’s procurement officer
denied Manekin’s claim for compensation, Manekin appealed to the Board. On September
17, 2016, during a hearing on the merits of the claim, the Board stopped the proceedings
and granted DGS’s Third Motion for Summary Decision. The Circuit Court for Howard
County affirmed the Board’s decision. This appeal followed.
The primary issue we must decide on appeal is whether the Board erred when it
stopped the evidentiary hearing and granted summary decision in favor of DGS. More
specifically, we must decide whether the Board improperly made findings of fact on
disputed issues, including whether Manekin knew or should have known that DGS disputed
or rejected Manekin’s request for compensation detailed in PCO No. 68. For the reasons
explained below, we hold that the Board erred in its decision to grant summary decision in
favor of DGS.
BACKGROUND AND PROCEDURAL HISTORY
Construction of the barrack and garage took place from June 21, 2010 until the
project was substantially complete on or around July 26, 2012. Approximately every two
weeks throughout the construction process, Manekin and DGS officials held meetings
(“Progress Meetings”) to discuss Manekin’s progress and other issues. During
performance of the construction, Manekin encountered certain difficulties that it attributed
to delays caused by DGS (among other reasons) and submitted numerous PCOs, thereby
requesting additional compensation. On November 2, 2011, Manekin notified DGS of the
“cumulative impact and ripple effect of” certain factors. On December 7, 2011, Manekin
submitted PCO No. 68, requesting compensation for the “additional time, and associated
general conditions costs resulting from changes” discussed in the November 2, 2011 letter.
A letter attached to PCO No. 68 detailed the changes requested, including the five “impact
factors” that affected the cost of the project. Manekin and DGS discussed PCO No. 68 at
three Progress Meetings, during which the issue was designated as “void” in the minutes
for Progress Meetings and in the “PCO Log.”
After the completion of the project, on or around March 18, 2013, Manekin sent a
“Request for Equitable Settlement” to DGS requesting compensation for additional time
caused by the same five impact factors as outlined in PCO No. 68. DGS denied the request
in a letter dated April 3, 2013. DGS indicated in its letter, “if you wish to further pursue
this matter, you may do so in accordance with COMAR [Code of Maryland Regulations]
21.10.04 and the Contract Documents, General Conditions, Section 6.13, ‘Disputes and
Contract Claims.’” On April 10, 2013, Manekin submitted its notice of claim, and on
2
April 29, 2013, submitted its formal claim to the procurement officer. The procurement
officer denied Manekin’s claim on November 12, 2013, finding that the notice of claim
was not submitted within thirty days of when Manekin knew or should have known of the
basis of a claim. Manekin timely appealed to the Board.
On September 17, 2016, the Board stopped the proceedings and granted DGS’s
pending Third Motion for Summary Decision, finding that Manekin knew of the basis of
its claim by no later than March 1, 2012, which was more than thirty days before Manekin
submitted its notice of claim. On September 21, 2015, the Board issued a written order.
Manekin filed a petition for judicial review in the Circuit Court for Howard County. After
a hearing on April 21, 2016, the circuit court affirmed the Board’s grant of summary
decision in a written opinion issued on April 27, 2016.
DGS Contract & Relevant COMAR Provisions
The “Department of General Services General Conditions for Construction
Contracts (Revised March 2007)” contains the conditions of the contract between DGS and
Manekin. As required, the contract incorporates the language of COMAR 21.07.02.05-1. 1
Under a section of the contract entitled “6.13 Disputes and Contract Claims (COMAR
21.07.02.05-1),” the contract provides that it is “subject to the provisions of State Finance
1
Similarly, COMAR 21.10.04.02 provides the following:
Unless a lesser period is prescribed by law or by contract, a
contractor shall file a written notice of a claim relating to a
contract with the appropriate procurement officer within 30
days after the basis for the claim is known or should have been
known, whichever is earlier.
3
and Procurement Article, Title 15, Subtitle 2, Annotated Code of Maryland, and COMAR
21.10.” The following are other pertinent provisions incorporated in the contract from
COMAR 21.07.02.05-1:
B. Except as otherwise provided in this contract or by law,
all disputes arising under or as a result of a breach of this
contract that are not disposed of by mutual agreement shall be
resolved in accordance with this clause.
C. As used herein, claim means a written demand or
assertion by one of the parties seeking, as a legal right, the
payment of money, adjustment or interpretation of contract
terms, or other relief, arising under or relating to this contract.
A voucher, invoice, or request for payment that is not in dispute
when submitted is not a claim under this clause. However, if
the submission subsequently is not acted upon in a reasonable
time, or is disputed as to liability or amount, it may be
converted to a claim for the purpose of this clause.
D. Within 30 days after Contractor knows or should have
known of the basis for a claim relating to this contract,
Contractor shall file a written notice of claim with the
procurement officer.
* * *
F. The claim shall set forth all the facts surrounding the
controversy. Contractor, at the discretion of the procurement
officer, may be afforded an opportunity to be heard and to
offer evidence in support of the claim.
PCO No. 68
On December 7, 2011, Manekin submitted PCO No. 68 providing two methods for
calculating the amount of compensation it asserted to be due for the five impact factors
discussed in PCO No. 68 -- a “Change Order Analysis” and a “Measured Mile Approach.”
Manekin notes in the PCO that, although these two methods produced two different time
4
calculations, they were intended to provide a basis for further negotiations. Manekin relied
on its “General Requirements Costs” of $1,315.00 per day, as provided in the original
contract with DGS, and requested 96 days of “Contract Time Extension” plus other
expenses, for a total of $128,134.00. Within the PCO, however, Manekin “reserve[d] the
right to request compensation for all direct and indirect costs attributable to this delay
impact.” At the end of PCO No. 68, Manekin added, “We believe our calculations to be
reasonable and an appropriate representation of the impacts to Manekin on this project.
However, we are willing to meet and negotiate an acceptable compromise without this
matter escalating to another level.” Thereafter, the parties’ representatives discussed PCO
No. 68 at multiple Progress Meetings.
PCO Log
The PCO Log is a record of all PCOs as well as each PCO’s status. The status of
each PCO is indicated in the “Remarks/Days” column. Some of these status designations
include “VOID,” “REJECTED,” “CREDIT,” and various phrases such as “No charge
VOID,” “Located in PCO #13 VOID,” or “G.C. agrees to amt.” Additionally, in the date
column, either the date of the action is indicated or, if the PCO’s status is “VOID,” only
the word “VOID” is listed in place of the date. A column labeled “PCO AMT.” lists the
amount requested for each PCO, and a column labeled “DGS EST.” lists the amount to be
added to the total amount due to Manekin. For any item designated as “VOID,” the “DGS
EST.” is either blank or has a value of “$0.00.” At the end of the PCO Log, the total “DGS
EST.” indicated is $1,232,918.00.
5
For PCO No. 68, which is described as “Time Extension Request to justify new
schedule,” the table indicates a “PCO AMT.” of $128,134.00, and the term “VOID” is
included under the “REMARKS/DAYS” column and in the date column. For comparison
purposes, PCO No. 22 (“Soil Fill Material Phase #1), which had a “PCO AMT.” of
$117,642.00, is recorded as “REJECTED” in the “REMARKS/DAYS” column. PCO No.
70 (“Revise Membrane @ Phse Chimney Caps”), on the other hand, is listed as “No charge
VOID” and no amount was added to the total.
Progress Meetings
The record before the Board contained the minutes for each relevant Progress
Meeting, including Progress Meetings 37, 38, and 39. The minutes for each Progress
Meeting include the names of persons attending, who would receive a copy of the minutes,
a synopsis of the progress of the project as of that date, and notes of the topics discussed at
the meeting. The minutes from Progress Meeting 37, held on January 5, 2012, include a
section entitled “Time Extension PCO Discussion” containing eighteen points of
discussion. The relevant portion of the minutes from Progress Meeting 37 includes the
following:
14. J. Rohrbach tentatively said that with correct back-up:
a. PCO 63 -- 6 days
b. PCO 68 -- VOID
c. PCO 73 -- 10 days
15. Dan Sharpe offered March 1, 2012 and leave open on
compensational [sic]. 2
2
As we discuss infra, whether the notation indicated that Manekin had committed
to providing the fragnets by March 1, 2012 was not established at the evidentiary hearing
as an undisputed fact.
6
* * *
18. Tentative Schedule:
-- February 15, 2012 -- Develop ‘work list’
-- March 1, 2012 -- Substantial Completion Punch List
and begin Barrack move
-- Within 60 days (May 1, 2012) the following items will
be placed on punch list and complete:
- Abatement
- Demo
- Landscape
- Paving
- Fuel System
The revised minutes for Progress Meeting 38, which was held on January 19, 2012,
reference the need for “fragnets” for PCO No. 68. A fragnet is a detailed analysis of how
particular factors impacted the construction project, such as when and how the contractor
lost scheduled time. The minutes indicate that the parties continued to discuss PCO No.
68., referenced by the following notation:
VOIDED AA. PCO 068 -- Rock extension is not approved
to April 14, 2012.
Day after Jan. 27, 2012 Liquidated Damages
will be accessed [sic].
Fragnets must be submitted and part of the
time extension.
01-05-12 VOIDED.
Finally, the minutes from Progress Meeting 39, held on February 2, 2012, included
the same notations under points 14, 15, and 18 as the minutes from Progress Meeting 37,
with the addition of the following notes added to point 18:
01-19-12 52 days currently being allowed for extension.
02-02-12 Substantial Complete is now May 1st (Added
131 days)
7
Hearing Before the Board and the Board’s Decision
In a letter dated August 7, 2015 from Board Member Dana Dembrow, the Board
notified the parties of the trial date for Manekin’s appeal of the procurement officer’s denial
of its claim. The brief letter included the following:
As you know, there are three (3) Motions pending for Partial
Summary Decision in this matter, which is currently scheduled
for trial on September 14, 2015.
Counsel understand that the pending Motions must be based on
factual matters as to which there is no genuine dispute, and that
all factual inferences must be resolved in favor of the adverse
party at this point in the proceeding.
At the present time, the Board does not anticipate making any
decision on the pending Motions until after evidence is
presented at trial. Of course, counsel are also free to renew
Motions during the course of trial as evidence is adduced.
We hope this correspondence is useful to your trial preparation.
Hearings before the Board were held on September 14, 16, and 17, 2016. The only
witness to testify before the Board ended the proceedings by granting DGS’s motion for
summary decision was Daniel Sharpe, Vice President and Project Manager for Manekin.
Sharpe testified regarding when he became aware that DGS had denied the request
contained in PCO No. 68. The following colloquy between the Presiding Member of the
Board and counsel for DGS ensued:
PRESIDING MEMBER DEMBROW: . . . Now, frankly, . . .
there’s nothing in this affidavit that says what Mr. Rohrbach
intended by the word void or voided. And that’s the crux of
the issue. [ . . . ] We’re still trying to figure out what was meant
by void. So hopefully we’ll get to that point. [ . . . ] [Y]ou’ve
made a very effective point that the State told the Appellant
this PCO 68 was void. Okay.
8
[COUNSEL FOR DGS]: Mr. Dembrow, . . . I gave you a
Daniel Webster’s Dictionary definition of the word void. [
. . . ] You’re not going to get anything more from the State. We
just -- we use English words . . . . And [counsel for Manekin]
will agree with me, the word void isn’t defined anywhere in the
contract.
PRESIDING MEMBER DEMBROW: . . . I’ve been waiting
to hear from Mr. Rohrbach. In this affidavit he . . . reiterates
that he uses the word void. It seems odd that he doesn’t say
PCO 68 was rejected. What it says is it was void. And it further
says that it was void with the opportunity to submit or the
request and requirements to submit fragnets. And Mr. Sharpe,
if we can [direct] your attention to the progress meeting on
January 5, 2012 . . . that’s where the progress meeting reports
say, quote, Dan Sharpe offered March 1, 2012 and leave
discussion open on compensational. Whatever that means . . . .
Counsel for DGS returned to questioning Sharpe and asked whether his belief “in
his mind” that the issue in PCO No. 68 was left open had been documented. After Sharpe
pointed to the Progress Meeting minutes notation “leave open on compensational [sic],”
Presiding Member Dembrow added the following:
PRESIDING MEMBER DEMBROW: I think he has . . . I
think that the progress meeting notes are consistent with what
he said. He’s saying that he asked for the compensation to be
left open, and the minutes of the progress meeting say leave
discussion open.
Thereafter, Presiding Member Dembrow interrupted cross-examination to ask a
question directed at counsel for DGS:
PRESIDING MEMBER DEMBROW: . . . Mr. Rohrbach is
not going to testify, is that correct?
[COUNSEL FOR DGS]: I haven’t made that decision yet, sir.
9
PRESIDING MEMBER DEMBROW: I’m curious to know
why it says in the affidavit that he never told anyone that they
could wait until a later date, but all the notes reflect that they’re
asking for fragnets. They’re requiring fragnets. They want
proof that it’s on the critical path. Obviously there was an
anticipation that [Manekin was] going to submit something or
[DGS] wouldn’t have required and requested it. And . . . that’s
sort of a mystery at this point. [ . . . ] [H]e voided and asked
for fragnets. That’s the dilemma. That’s the dichotomy.
[COUNSEL FOR DGS]: No, no, no, that’s not what his . . . if
you . . . Mr. Dembrow, it says that he repeatedly had questions
-- conversations with Chris Mento where Dan Sharpe was not
present and he repeatedly said this is what I need, and they
never came forward. [ . . . ]
PRESIDING MEMBER DEMBROW: That makes your claim
clearer. I’m sure [counsel for Manekin] has a different point
of view. We’re going to hear evidence about that. [ . . . ]
I interjected. I’m putting the State on fair notice where we
need, where at least I need clarification. And that goes to the
question of what they meant when they said voided give us
fragnets. We’re trying to get to that, and the parties have
opposite points of view. So let’s just try to go through the . . .
evidence as we should with the next, with another question of
Mr. Sharpe.
* * *
[Redirect by counsel for Manekin]
Q. . . . Your request for payment . . . for ripple effects, was
that in dispute at the time you submitted it?
A. No.
Q. Was PCO 68 in dispute at the time you submitted it?
A. No.
10
Chairman Collins interjected during redirect with additional questions directed at
Sharpe, which were focused primarily on why Sharpe had not filed a claim after PCO No.
68 was marked “VOID.”
A. . . . I didn’t feel that I had any claim or anything at the
time when I was going through these things initially ‘cause we
were trying to work through them.
* * *
CHAIRMAN COLLINS: . . . Because you thought in your
mind we can do it all at the end. When in reality the general
conditions said you had to do it within 30 days of when you
should have known. [ . . . ] That’s the trouble I’m having as a
Board Member here --
A. But Mr. Collins, what I would like to answer back --
CHAIRMAN COLLINS: Yeah, [p]lease do.
A. -- is I really . . . didn’t know . . . I had a dispute going
on. I was asked to try to produce a fragnet which I worked
vigorously to try to do, and I was -- because I never could really
produce that fragnet that stated all these different things, that’s
the reason why I felt that . . . I wasn’t like in a . . . claim mode
or this major dispute mode ‘cause I was still trying to figure a
way to produce the evidence or the backup that the State was
asking for. [ . . .]
CHAIRMAN COLLINS: Yeah, but even though you knew,
you knew that it was gone.
A. Well, it wasn’t . . . really gone.
CHAIRMAN COLLINS: Well, yeah, it was really gone. Mr.
Mento acknowledged it was really gone, and so did Mr.
Rohrbach in this deposition say it was really gone. What he
did say, so we are going to void this, and you can come back
later. This is null and void. This is gone. But you know if you
can produce that fragnet down the road show me another PCO.
11
Well when someone says that to me . . . you got to say to
yourself at that point, there’s a potential claim.
[By counsel for Manekin]
Q. . . . [The] question to you is was there a dispute that had
arisen during this process that you could file a notice of claim?
A. Not at the time . . .
Q. Why not?
A. Because we didn’t receive any official thing. Except I
understand the conversations that were had, but we were still
having basically ongoing meetings, ongoing discussions about
a lot of different things on the project, and I didn’t get, until I
got that letter slammed back at me[,] that was when I realized
I didn’t really have a --
Q. Which letter?
A. . . . It was a letter that came back from the State which was
from DGS that basically denied . . . everything. . . .
Q. . . . Mr. Collins’ point was that you knew that there was at
least that PCO 68 was void. [ . . .]
A. Well it didn’t mean to me it was off the table. It meant to
me that I still had to come back, . . . and once I produced the
additional backup that I could bring that thing back up.
Near the conclusion of Sharpe’s testimony, the Board stopped the proceedings and
granted DGS’s Third Motion for Summary Decision. Presiding Member Dembrow
provided the following rationale for the Board’s Decision:
Okay. At this time there will not be a need for recross-
examination because the Board has unanimously determined to
grant the State’s Motion for Partial Summary Judgment
Number 3. After listening carefully to the testimony of Mr.
Sharpe, who is the Vice President of the Appellant
Construction Company, Manekin, and the Project Manager on
12
this job, it is clear that even giving the Appellant the benefit of
all doubt the ripple effect claim was first raised to the State by
correspondence November 2, 2011. It was formally submitted
as a proposed change order on December 7, 2011. And the
very next day the State indicated to Appellant that that PCO
was, quote, void, end quote. Now that was clear in the mind of
some of the Members of the Board that that meant reject. But
giving Appellant the benefit of all doubt, because there is a bit
of a nuance in that DGS also noted on that voiding of that PCO
that they wanted fragnets. The Board notes that the last
request, and there are a couple of them at least, that the State
made of the Appellant to submit the fragnets needed to support
PCO 68, the last reference to fragnet was made on January 19,
2012.
There was a progress meeting on February 2, 2012, and in the
minutes of that progress meeting, the minutes being dated
February 7, 2012, there is reference that Mr. Sharp[e] stated or
at least the minutes state, quote, Dan Sharpe offered March 1,
2012 and leave discussion open on compensational, period.
That’s certainly not an example of the greatest grammar
because it’s somewhat difficult to know what that even means.
But it does appear beyond a shadow of a doubt that on February
2, 2012, when PCO 68 was marked void there was no reference
to fragnets at that point. There had not been a reference for the
need for further documentation by way of fragnets since
January 19, 2012. At least as of February [2nd] Mr. Sharpe
was saying we’ll do this by March 1, 2012.
[COMAR 21.10.04.02] says . . . a contractor shall file a written
notice of a claim relating to a contract with the appropriate
procurement officer within 30 days after the basis for the claim
is known or should have been known. It appears that the basis
of the claim was initially known back in November of 2011. It
certainly was known as of February 2012. But this claim was
not filed until a year later. So even if we give the . . . Appellant
the benefit of all doubt and give them [until] March 1, 2012, as
the trigger date for the beginning of that 30-day statute of
limitations, we’re still a year late. And the Board is directed
by [COMAR 21.10.04.02C], quote, a notice of a claim or a
claim that is not filed within the time prescribed shall be
dismissed. Emphasis on the word shall.
13
Fair or unfair, that [is] what the regulation requires. [. . .] The
Board has no choice but to not address the substantive merits
of a claim that is filed a year late. And the Board concludes
that that is the correct categorization of this appeal. Therefore,
it will be dismissed at this time without the necessity of further
testimony.
Presiding Member Dembrow confirmed that the other Board Members concurred in the
decision before adding the following:
We wanted to hear testimony from Mr. Sharpe and give the
Appellant the benefit of all doubt. We are comfortable that
we’ve done that now. So this was not a decision made in haste,
but one that we’ve been thinking about for a long time. And
the testimony . . . confirmed the view of some of the Board
Members a long time ago.
The Circuit Court’s Affirmance of the Board’s Decision
On April 27, 2016, the Circuit Court for Howard County affirmed the Board’s
decision to grant summary decision. The written opinion of the circuit court provides, in
pertinent part:
The parties’ first dispute is over the standard of review to be
applied by the Circuit Court in reviewing the decision of an
administrative agency. . . . Specifically, Manekin argues that
the VOID notation indicated it was to provide more
documentation or information, and that it’s right to appeal did
not attach until its more formal claim letter was denied 14
months later. [ . . . ]
DGS reminds the Court that because of the MSBCA members’
familiarity with the subject matter, state procurement law, and
expertise in that area, the appellate decisions and statutes allow
the Court a very limited scope of review. [ . . . ]
When the Court is reviewing a final decision of an
administrative agency, the Court determines the legality of the
decision and whether there was “substantial evidence” from
the record as a whole to support the decision. [ . . . ]
14
Case law is clear that the Circuit Court[] is not to make findings
of fact. That function is entirely within the realm of the agency,
as is determining the inferences to be drawn from those facts.
[ . . . ] Even though the final decision was reached by way of
a ruling on a motion for summary decision, and not as the result
of a contested hearing, the analysis is the same. . . . The Court
must determine if the findings of fact are supported in the
record by substantial evidence, and if so, whether the decision
of the agency was legally correct.
(Citations omitted).
After articulating this standard of review, 3 the circuit court analyzed the Board’s
decision and characterized the Board’s findings regarding notice as a “finding of fact.”
The [Board] made a finding of fact that Manekin was on notice
of DGS’s denial of its requests under PCO 68 by the end of
February 2012 when Presiding Member Dana Dembrow
stated, “It appears that the basis of the claim was initially
known back in November of 2011. It certainly was known as
of February 2012. But this claim was not filed until a year
later. So even if we give the [] Appellant the benefit of all
doubt and give them [until] March 1, 2012, as the trigger date
for the beginning of that 30-day statute of limitations, we’re
still a year late.” [ . . . ] This finding of fact was supported in
the record by the Progress Meeting Notes for January 5, 2012,
January 19, 2012, and February 2, 2012 which were received
as evidence at the [Board] hearing. Reasoning minds
examining this evidence could reasonably reach the conclusion
that Manekin was on notice (knew or should have known) that
DGS denied its claim for costs under PCO 68 by the end of
February 2012. Inferences were resolved in Manekin’s favor
when the Presiding Member gave Manekin until March 1,
2012.
Thereafter, the circuit court affirmed the Board’s determination finding that DGS
was entitled to summary decision as a matter of law.
3
We note, preliminarily, that the circuit court relied upon an incorrect standard of
review, as we discuss in further detail below.
15
DISCUSSION
I. Judicial Review of an Agency’s Conclusions of Law
The Court of Appeals has explained that we “look[] through the circuit court’s . . .
decision[], although applying the same standards of review, and evaluate[] the decision of
the agency.” People’s Counsel for Baltimore Cnty. v. Surina, 400 Md. 662, 681 (2007). In
other words, we “review[] the agency’s decision, not the circuit court’s decision.” Long
Green Valley Ass’n v. Prigel Family Creamery, 206 Md. App. 264, 273 (2012) (citation
omitted). We review questions of law de novo. See Assateague Coastkeeper v. Md. Dep’t
of the Env’t, 200 Md. App. 665, 690 (2011).
We note that “[a]n administrative agency’s interpretation of a statute that the agency
administers should ordinarily be given considerable weight by reviewing courts,” Piney
Orchard Cmty. Ass’n, 231 Md. App. at 92 (citation omitted); however, we owe no
deference to an agency’s erroneous conclusions of law. See Bd. of Cnty. Comm’rs for St.
Mary’s Cnty. v. S. Res. Mgmt., Inc., 154 Md. App. 10, 34 (2003) (citations omitted)
(“[W]here an administrative agency renders a decision based on an error of law, we owe
the agency’s decision no deference.”). “In contrast to administrative findings of fact,
questions of law, including the proper construction of a statute, are subject to more plenary
review by the courts.” Md. Office of People’s Counsel v. Md. Pub. Serv. Comm’n, 226
Md. App. 483, 501 (2016) (quoting Office of People’s Counsel v. Md. Pub. Serv. Comm’n,
355 Md. 1, 14 (1999)).
Although we “review[] the agency’s decision, not the circuit court’s decision,”
Long Green Valley, supra, 206 Md. App. at 273, we note that the circuit court’s recitation
16
of the “substantial evidence” standard of review as the appropriate review of an
administrative agency’s summary decision was incorrect. The circuit court noted that the
Board’s “finding of fact that Manekin was on notice of DGS’s denial of its requests under
PCO 68 by the end of February 2012 . . . . March 1, 2012 at the latest” was supported by
“substantial evidence.” Further, the circuit court found the Board’s finding of March 1,
2012 as an “inference[] . . . resolved in Manekin’s favor.” The circuit court, therefore,
erred in determining whether there was substantial evidence in the record to support the
Board’s findings of fact. That error compounded the Board’s error in making findings of
fact on disputed issues prior to the conclusion of Manekin’s presentation of evidence on
the issue. Although DGS attempts to provide us with support for the circuit court’s review
and argues that “this Court should apply a more deferential ‘substantial evidence’ standard
of review,” we reject this assertion. The correct standard of review, at both the circuit court
level as well as for this Court, is whether the Board’s decision to grant summary decision
in favor of DGS was correct as a matter of law. See Eng’g Mgmt. Servs. v. State Highway
Admin., 375 Md. 211, 228-29 (2003) (citations omitted) (“The standard for appellate
review of a summary judgment is whether it is “legally correct. [ . . . ] This is the same
standard of review we apply to the question of the legal correctness of an administrative
agency’s decision.”). Because the Board made its decision on a motion for summary
decision, we examine whether the Board’s decision was correct as a matter of law.
17
II. Summary Decision Standard & State Procurement Contract Framework
Critically, only when there is no genuine dispute of material fact may the Board
determine whether a party is entitled to summary decision as a matter of law. COMAR
21.10.05.06D provides the following:
(1) A party may move for summary decision on any
appropriate issue in the case.
(2) The Appeals Board may grant a proposed or final summary
decision if the Appeals Board finds that:
(a) After resolving all inferences in favor of the party
against whom the motion is asserted, there is no genuine
issue of material fact; and
(b) A party is entitled to prevail as a matter of law. [4]
The Board’s two-step process in deciding a motion for summary decision begins with the
determination of whether there is any “genuine issue of material fact.” COMAR
21.10.05.06D(2)(a). If the moving party is unable to demonstrate that no material fact is
in dispute, the analysis ends and summary decision is not appropriate. Only “[a]fter
resolving all inferences in favor of the party against whom the motion is asserted” and
finding that “there is no genuine issue of material fact” should the Board determine whether
the moving “party is entitled to prevail as a matter of law.” COMAR 21.10.05.06D(2). 5
4
This standard for summary decision in administrative decisions provided by
COMAR 21.10.05.06D is similar to the standard for summary judgment, as provided by
Maryland Rule 2-501(a): “Any party may file a written motion for summary judgment on
all or part of an action on the ground that there is no genuine dispute as to any material fact
and that the party is entitled to judgment as a matter of law.”
5
The Board itself acknowledged these criteria in its letter of August 7, 2015,
reminding the parties that “the pending Motions must be based on factual matters as to
18
Put differently, the Board is not authorized to make findings of fact on material issues that
remain in dispute. To the extent the court considers a disputed fact, the court must view
that fact in favor of the nonmoving party and determine whether the moving party is
entitled to summary decision.
III. The Board Erred In Granting DGS’s Third Motion for Summary Decision.
We have explained that contract claims arising out of state procurement contracts
are subject to statutorily-prescribed administrative procedures. See McLean Contracting
Co. v. Md. Transp. Auth., 70 Md. App. 514, 523-24 (1987). The mandatory claims process
is set forth in Maryland Code (2009, 2015 Repl. Vol.), State Finance & Procurement
Article (SFP), Title 15 and COMAR 21.10. COMAR 21.07.02.05-1D provides, “[w]ithin
30 days after contractor knows or should have known of the basis for a claim relating to
this contract, contractor shall file a written notice of claim with the procurement officer.”
Further, “[a] notice of claim or a claim that is not filed within the time prescribed in
Regulation .02 of this chapter shall be dismissed.” COMAR 21.10.04.02C.
A. Knowledge Of A Basis For Submitting A “Request for Payment” That
Is Not In Dispute When Submitted Does Not Establish Knowledge Of “A
Basis For A Claim.”
To determine whether Manekin failed to comply with the timing requirements, the
Board was required to consider whether Manekin “[knew] or should have known of the
basis for a claim” more than thirty days before it submitted its notice of claim to the
which there is no genuine dispute, and that all factual inferences must be resolved in favor
of the adverse party at this point in the proceeding.” Thereafter, the letter provides that the
parties should prepare for trial accordingly.
19
procurement officer on April 10, 2013. See COMAR 21.07.02.05-1D. To apply this
provision correctly, therefore, the Board was required to make a finding of fact, accurately
identifying “a basis for a claim” pursuant to COMAR 21.07.02.05-1. A “claim” is defined
in the following provision:
As used herein, claim means a written demand or assertion by
one of the parties seeking, as a legal right, the payment of
money, adjustment or interpretation of contract terms, or other
relief, arising under or relating to this contract. A voucher,
invoice, or request for payment that is not in dispute when
submitted is not a claim under this clause. However, if the
submission subsequently is not acted upon in a reasonable
time, or is disputed as to liability or amount, it may be
converted to a claim for the purpose of
this clause.
COMAR 21.07.02.05-1C (emphasis added).
Pursuant to COMAR 21.07.02.05-1C, a contractor’s knowledge of the basis for
“request[ing] payment that is not in dispute when submitted” is not the same as having
knowledge of the basis of a “claim.” Manekin’s submission of a PCO, therefore, is not
dispositive evidence of having knowledge of the basis for a claim. Once a request for
payment is disputed, however, a claim arises. The thirty-day limitations period under
COMAR 21.07.02.05-1D would begin, therefore, once the contractor knows or should
have known of a dispute or denial of its request.
As we have explained supra, although we attribute some weight to an agency’s
expertise and its interpretation of a statute that it administers, we review questions of law
de novo. See Assateague Coastkeeper, supra, 200 Md. App. at 690. Here, however, the
Board in its decision provided no interpretation of COMAR 21.07.02.05-1. Indeed, in
20
explaining the Board’s decision, Presiding Member Dembrow stated, “[i]t appears that the
basis of the claim was initially known back in November of 2011,” referring to the date
that Manekin first raised the issues contained in PCO No. 68 in a letter to DGS prior to
submitting PCO No. 68. It is not clear, therefore, whether the Board equated having
knowledge of a basis for submitting a request for payment that was not in dispute when
submitted with a “basis for a claim.”
Although the Board’s prior interpretations of a statute do not create mandatory
authority for this Court, we note that the Board’s application of the timing provisions in
COMAR 21.07.02.05-1 in this case is inconsistent with the Board’s own interpretations in
some of its prior decisions. For example, in Info. Sys. & Networks Corp., MSBCA No.
2225 (March 4, 2004), the Board found that the thirty-day limitations period began upon
the appellant’s receipt of the procurement officer’s letter denying the appellant’s change
order request (i.e. a “PCO”). On January 22, 1999, after the parties had contemplated an
increase to the contract ceiling during weekly progress meetings, the appellant submitted a
formal request for a change order. Thereafter, the appellant sent the agency two follow-up
requests for a decision on its January 22, 1999 request and did not receive a response until
the procurement officer’s July 23, 1999 denial letter. The Board concluded that the thirty-
day limitations period did not begin until the appellant received the procurement officer’s
denial letter. Id. at 13. In its written decision, the Board reached the following conclusions:
Until [the procurement officer’s] letter of July 23, 1999
rejecting Appellant’s change order request, Appellant had no
reason to believe that its change order was in dispute.
Appellant timely filed a notice of claim and claim regarding
the Procurement Officer’s . . . July 23, 1999 rejection of its
21
change order request, which was confrontational and put
Appellant on notice that it must file a claim.
Id.
Similarly, in David A. Bramble, Inc., MSBCA No. 2823 (July 5, 2013), the Board
found that the contractor’s notice of claim was not timely because the contractor admitted
that he had actual notice of the agency’s rejection of his proposal more than thirty days
before filing a notice of claim. In Syscom, Inc., MSBCA No. 2268 (July 5, 2002), the
Board found that a dispute triggering the limitations period did not arise prior to the
procurement officer’s decision that the agency’s additional reporting directives to the
contractor were within the scope of the underlying contract. Id. at 8. Notably, in that case,
the contractor had previously sent a letter to the agency, refusing to carry out the directives
without an approved change order. Id. at 2.
In these decisions, the Board’s findings are consistent with our interpretation in this
case of COMAR 21.07.02.05-1C and D -- that the thirty-day limitations period begins
when the contractor has notice that the agency disputes the contractor’s request. In
determining whether Manekin complied with the timing requirements, the Board was
charged with deciding whether Manekin had notice from DGS that DGS disputed or denied
its request contained in PCO No. 68 more than thirty days before Manekin filed its notice
of claim.
22
B. The Board Made Findings of Fact on Disputed Issues by Determining
the Meaning of “Void” and that Manekin was to Provide Additional
Information by March 1, 2012.
In addition to finding that Manekin knew of the issues raised in PCO No. 68 as early
as November 2, 2011, the Board found, alternatively, that Manekin should have known
that DGS disputed the request contained in PCO No. 68 by February 2012. In so doing,
the Board relied primarily on notations in the PCO Log and Progress Meeting minutes to
make at least two improper findings of fact prior to a full hearing on the merits. Critically,
both of these factual conclusions were determinative in its decision.
First, the Board relied, in part, upon the fact that PCO No. 68 was designated as
“VOID” in the PCO Log to conclude that Manekin knew or should have known of the basis
of a claim by December of 2011, and “certainly . . . as of February 2012.” Presiding
Member Dembrow explained the Board’s reliance on the “VOID” notation in the following
portion of the Board’s decision:
[I]t is clear that even giving the Appellant the benefit of all
doubt the ripple effect claim was first raised to the State by
correspondence November 2, 2011. It was formally submitted
as a proposed change order on December 7, 2011. And the
very next day the State indicated to Appellant that the PCO
was, quote, void, end quote. Now that was clear in the mind of
some of the Members of the Board that that meant reject. [ . . . ]
* * *
It appears that the basis of the claim was initially known back
in November of 2011. It certainly was known as of February
2012. But this claim was not filed until a year later.
At various points during the evidentiary hearing, however, Presiding Member
Dembrow emphasized the need for additional clarification. Presiding Member Dembrow
23
found the term “void” particularly troubling in relation to the undisputed fact that the
minutes from Progress Meetings 37 and 39 reference a comment by Sharpe to “leave
discussion open on compensational [sic],” which the Board acknowledged is difficult to
interpret. Further, in addition to the term “void,” the PCO Log included the term “rejected”
as the status for other PCOs. Presiding Member Dembrow pointed out that Rohrbach
admitted during his deposition that there was a difference between the terms “void” and
“rejected, explaining that “void” meant “you can come back later.” During the evidentiary
hearing, Presiding Member Dembrow stated to counsel for DGS, “I’ve been waiting to hear
from Mr. Rohrbach. In this affidavit he . . . reiterates that he uses the word void. It seems
odd that he doesn’t say PCO 68 was rejected.” He later added, “Now, frankly, . . . there’s
nothing in this affidavit that says what Mr. Rohrbach intended by the word void . . . .”
Thereafter, Presiding Member Dembrow informed counsel for DGS, “I’m putting the State
on fair notice where we need, where at least I need clarification. And that goes to the
question of what they meant when they said voided give us fragnets. We’re trying to get
to that, and the parties have opposite points of view.” As Presiding Member Dembrow
stated, “[T]hat’s the crux of the issue. [ . . . ] We’re still trying to figure out what was meant
by void.”
The only evidence presented at trial that was relevant to the meaning of the term
“void,” however, was Sharpe’s testimony concerning his understanding of the term.
Sharpe testified that he interpreted “void” to mean that the issue would be left open to raise
again at a later date, and in this case, not until Manekin had compiled and submitted the
information requested. Further, Sharpe testified that he was not aware that DGS disputed
24
Manekin’s request until DGS denied Manekin’s “Request for Equitable Settlement” on
March 18, 2013.
The blurring of the line between a hearing on the motion for summary decision and
the evidentiary hearing, during which testimony had already begun, presents procedural
challenges. Without hearing Rohrbach’s testimony on the merits of the claim, certain
Board Members found his deposition testimony and affidavit convincing enough to draw
conclusions of fact regarding the meaning of the “void” notation. For instance, Chairman
Collins stated to Sharpe during his cross-examination, “Mr. Rohrbach in this deposition
[said PCO No. 68] was . . . gone.” Chairman Collins paraphrased his understanding of
Rohrbach’s deposition testimony, in which Rohrbach explained his interpretation of the
meaning of “void,” in the following way: “[W]e are going to void this, and you can come
back later. This is null and void. This is gone. But you know if you can produce that
fragnet down the road show me another PCO.” Based, in part, on Rohrbach’s explanation,
Chairman Collins added that Manekin should have known there was a dispute. This factual
finding, however, was not permitted at this stage of the proceeding. The parties disputed
the meaning of the term “void,” which was not defined in relevant statutes or the parties’
contract. The Board erred, on a motion for summary decision, in determining whether the
notation of “void” indicated that Manekin knew or should have known that DGS had
rejected PCO No. 68, and thus, that the basis of a claim had arisen more than thirty days
before Manekin submitted its notice of claim.
The Board further erred in finding that Manekin had committed to providing the
fragnets for PCO No. 68 by March 1, 2012. The Board reached this finding based on a
25
vague notation contained in the minutes from Progress Meeting 39 held on February 2,
2012. 6 Presiding Member Dembrow stated as follows:
[I]n the minutes being dated February 7, 2012,[7] there is [a]
reference that Mr. Sharpe stated or at least the minutes state,
quote, Dan Sharpe offered March 1, 2012 and leave discussion
open on compensational, period. . . . [I]t’s somewhat difficult
to know what that even means. [ . . . ] [But] [t]here had not
been a reference for the need for further documentation by way
of fragnets since January 19, 2012. At least as of February 2nd,
Mr. Sharpe was saying we’ll do this by March 1, 2012.
* * *
So even if we give the, the Appellant the benefit of all doubt
and give them [until] March 1, 2012[] as the trigger date for
the beginning of that 30-day statute of limitations, we’re still
a year late.
During the hearing, however, the Board raised questions regarding why DGS
continued to ask for fragnets while designating PCO No. 68 as void. Indeed, Presiding
Member Dembrow acknowledged during Sharpe’s testimony that, although Rohrbach
stated in his affidavit that he did not tell Manekin that they could later return to PCO No. 68,
the minutes reflect that DGS had continued to ask for fragnets while simultaneously
marking it as “void.” Presiding Member Dembrow stated, “They’re requiring fragnets.
6
The circuit court’s review of the Board’s decision supports our finding that the
Board made findings of fact that were material to the Board’s decision to grant summary
decision in favor of DGS. Indeed, we agree with the circuit court that “[t]he [Board] made
a finding of fact that Manekin was on notice of DGS’s denial of its requests under PCO 68
by the end of February 2012,” because Manekin had not produced the requested fragnets.
7
The minutes for Progress Meeting 39 were finalized on February 7, 2012.
26
They want this information. [ . . . ] Obviously there was anticipation that they were going
to submit something or they wouldn’t have . . . requested it.”
The Board’s conclusion that Manekin’s Vice President had offered March 1, 2012
as the deadline by which Manekin would provide the fragnets involves a finding of fact on
a disputed issue. The Board acknowledged during the proceedings that the notation “Dan
Sharpe offered March 1, 2012 and leave discussion open on compensational [sic]” required
further clarification. Manekin did not concede that the parties had discussed a particular
deadline for Manekin’s submission of the fragnets for PCO No. 68. Instead, Sharpe
explained during his testimony only that he had requested that the parties leave the issue
open. 8 Additionally, other notations within the minutes for Progress Meeting 39, under
the same points of discussion, refer to “March 1, 2012” in relation to the notation
“Substantial Completion Punch List and begin Barrack move.” In other words, whether the
notation indicated that Sharpe had agreed to a March 1, 2012 deadline to produce fragnets
for PCO No. 68 was not a permissible finding at this stage of the proceedings.
Furthermore, although March 1, 2012 is later than the other dates considered by the
Board as potentially starting the limitations period, the finding that the thirty-day period
began on March 1, 2012 was not sufficient to “resolv[e] all inferences in favor of the party
against whom the motion is asserted.” COMAR 21.10.05.06.D(2)(a). Manekin argued
that the limitations period did not begin until April 3, 2013, when DGS denied Manekin’s
8
Additionally, when the notation was raised during the cross-examination,
Presiding Member Dembrow agreed that Sharpe’s testimony -- that he had requested the
parties keep the issue of PCO No. 68 open -- was consistent with his own interpretation of
the meeting minutes.
27
“Request for Equitable Settlement.” The Board inferred that Manekin was required to
provide fragnets by March 1, 2012, and therefore, that Manekin knew or should have
known of a dispute on that date. This inference was not permitted since the relevant
COMAR provision directed the Board to resolve all inferences at this stage of the
proceeding in favor of Manekin. Based on the Board’s determination of March 1, 2012 “as
the trigger date for the beginning of [the thirty-day] statute of limitations,” however, the
Board concluded that Manekin had submitted its notice of claim more than a year late. The
Board’s conclusion that Sharpe was required to provide the fragnets for PCO No. 68 by
March 1, 2012 was, therefore, an improper finding of fact at this stage of the proceeding.
The point at which the thirty-day limitations period began, as the Board has
indicated in several prior decisions noted supra, is the moment Manekin knew or should
have known that DGS rejected or denied the request contained in PCO No. 68. The point
in time when Manekin should have known of a denial of its request involves a disputed
material fact, which the Board was not authorized to resolve via summary decision. The
Board’s task was, first, to determine if there existed any “issue[s] of material fact,” after
resolving all reasonable inferences in favor of Manekin. The Board, therefore, was required
to hear the merits of the case and apply the appropriate meaning of “a basis for a claim”
under COMAR 21.07.02.05-1 in its final determination.
The Board erred by terminating the proceedings after hearing from only one of
Manekin’s witnesses. The Presiding Member of the Board stated:
At this time there will not be a need for recross-examination
because the Board has unanimously determined to grant the
State’s Motion for Partial Summary [Decision] Number 3.
28
After listening carefully to the testimony of Mr. Sharpe, . . . it
is clear that even giving the Appellant the benefit of all doubt
the . . . claim was first raised to the State by correspondence
November 2, 2011.
Presiding Member Dembrow concluded, “We wanted to hear testimony from Mr. Sharpe
and give [him] the benefit of all doubt. We are comfortable that we’ve done that now.”
Presiding Member Dembrow added that “the testimony . . . confirmed the view of some of
the Board Members a long time ago.” Sharpe made no explicit concession during his
testimony, however, that was dispositive on the issue of when Manekin knew or should
have known that DGS disputed Manekin’s request for additional compensation contained
in PCO No. 68.
The Board’s error in this case stems, primarily, from its failure to adhere to
procedural processes. The standards for summary decision as opposed to a merits hearing
are fundamentally different. The Board should not consider a motion for summary decision
during an evidentiary hearing, unless the rules expressly provide for it. The only evidence
presented at the evidentiary hearing at the time the Board stopped the proceedings was
testimony that served to confirm that the parties disputed a material fact. The Board,
however, made findings of fact on those disputed issues and then granted summary
decision. In doing so, the Board blurred the line between determining whether a disputed
fact existed and making findings of fact based on the evidence presented at the evidentiary
hearing. The Board’s consideration of whether to grant summary decision during the
proceedings on the merits creates confusion and, as shown here, increases the chance for
error by both the Board and the circuit court.
29
Accordingly, we hold that the Board erred in its decision to terminate the
proceedings and grant summary decision in favor of DGS. We, therefore, remand to the
Board to decide, after hearing all of the evidence, when DGS communicated a dispute or
denial of PCO No. 68 to Manekin such that it knew or should have known that it was
required to submit a notice of claim to DGS within 30 days.
JUDGMENT OF THE CIRCUIT COURT FOR
HOWARD COUNTY REVERSED. CASE
REMANDED TO THE BOARD OF CONTRACT
APPEALS FOR FURTHER PROCEEDINGS
CONSISTENT WITH THIS OPINION. COSTS
TO BE PAID BY APPELLEE.
30