PFB, LLC v. Trabich

UNPUBLISHED
UNITED STATES COURT OF APPEALS
FOR THE FOURTH CIRCUIT
No. 08-1627
PFB, LLC,
Plaintiff - Appellant,
v.
NEAL TRABICH; RONALD CORUZZI; GOLF PARTNERS, LLC,
Defendants – Appellees.
Appeal from the United States District Court for the District of
Maryland, at Baltimore. William D. Quarles, Jr., District
Judge. (1:07-cv-00961-WDQ)
Submitted: December 1, 2008 Decided: December 29, 2008
Before NIEMEYER and KING, Circuit Judges, and HAMILTON, Senior
Circuit Judge.
Affirmed in part, vacated in part, and remanded by unpublished
per curiam opinion.
Steven B. Gould, BROWN & GOULD, LLP, Bethesda, Maryland, for
Appellant. Neal Trabich, Appellee Pro Se. Richard L. Costella,
John Robert Fischel, MILES & STOCKBRIDGE, PC, Baltimore,
Maryland, for Appellees Ronald Coruzzi and Golf Partners, LLC.
Unpublished opinions are not binding precedent in this circuit.
PER CURIAM:
PFB, LLC (“PFB”) appeals from the district court’s
order granting summary judgment in favor of Neal Trabich, Ronald
Coruzzi, and Golf Partners, LLC (collectively, “Defendants”).
The district court held that Defendants’ allegedly fraudulent
representations did not constitute a warranty under Maryland
law, that PFB’s lost income projections on its claims for fraud
and breach of contract were speculative, and that PFB failed to
prove it had incurred any recoverable out-of-pocket expenses.
We have thoroughly reviewed the record and find the district
court did not err in concluding that PFB could not recover
benefit-of-the-bargain or lost profit damages on its fraud and
breach of contract claims, as PFB failed to establish such
damages with reasonable certainty. Furthermore, we find the
district court did not err in holding that PFB failed to provide
sufficient evidence to permit recovery of out-of-pocket
expenses. Accordingly, we affirm these rulings for the reasons
stated by the district court. See PFB, LLC v. Trabich, No.
1:07-cv-00961-WDQ (D. Md. Apr. 24, 2008). However, for the
reasons stated below, we vacate the district court’s dismissal
of PFB’s breach of contract claim and remand for further
proceedings.
The district court dismissed PFB’s fraud and breach of
contract claims on the ground that PFB failed to prove it
2
suffered any actual damages. However, while other jurisdictions
require proof of actual damages to sustain a breach of contract
action, Maryland courts have held that “[i]t is well settled
that every injury to the rights of another imports damage, and
if no other damage is established, the party injured is at least
entitled to a verdict for nominal damages.” Cottman v.
Maryland, Dep’t of Natural Res., 443 A.2d 638, 640 (Md. Ct.
Spec. App. 1982) (internal quotation marks and citations
omitted); see also Planmatics, Inc. v. Showers, 2002 WL 312516,
at *1 (4th Cir. Feb. 28, 2002) (No. 01-1520) (unpublished)
(citing Stueber v. Arrowhead Farm Estates Ltd. P’ship, 519 A.2d
816, 818 (Md. Ct. Spec. App. 1987)). Accordingly, even though
PFB failed to provide evidence sufficient to support its claims
for lost profits or out-of-pocket expenses, its cause of action
for breach of contract cannot fail as a matter of law because
PFB is entitled to, at the very least, nominal damages, if the
fact-finder determines there was a breach. See Planmatics,
Inc. v. Showers, 137 F. Supp. 2d 616, 624 (D. Md. 2001).
In this case, the district court made no finding as to
whether Defendants committed fraud or breached the operating
agreement, as PFB’s action was dismissed due to its failure to
provide sufficient and reliable evidence of actual damages.
Therefore, we remand this matter to the district court to
determine whether Defendants were in breach of their contractual
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obligations and, as a result, are liable for nominal damages.
Furthermore, we leave for the district court on remand to
address whether PFB is entitled to attorneys’ fees pursuant to
the terms of the parties’ operating agreement, 1 as well as the
issue of whether punitive damages are available and warranted in
this case. 2
Accordingly, we affirm the district court’s ruling as
to PFB’s failure to establish compensatory damages in regard to
its claims of fraud and breach of contract, vacate the district
court’s dismissal of PFB’s contract action, and remand for
further proceedings consistent with this opinion. We dispense
with oral argument because the facts and legal contentions are
1
Under the terms of the operating agreement, any party who
“breaches or threatens to breach this Agreement shall pay the
costs, expenses and fees (including, without limitation,
attorneys fees) of the other Persons bound by this agreement
that are incurred as a result of or in connection with, such
breach or threatened breach.”
2
See Shell Oil Co. v. Parker, 291 A.2d 64, 71 (Md. 1972)
(to award punitive damages, “there must first be an award of at
least nominal compensatory damages”); Miller Building Supply,
Inc. v. Rosen, 485 A.2d 1023, 1027-28 (Md. Ct. Spec. App. 1985)
(while not available for “mere breach of contract,” punitive
damages may be awarded “when the tort of fraud and a contract
action are merged into a single lawsuit”).
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adequately presented in the materials before the court and
argument would not aid the decisional process.
AFFIRMED IN PART,
VACATED IN PART,
AND REMANDED
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