EDI Precast, LLC v. Carnahan, Jr.
8:12-cv-00122
D. MarylandNov 12, 2013Background
- EDI Precast, LLC (EDI) is a Maryland precast concrete installer; Raymond K. Carnahan Jr. was a senior project manager/field superintendent for EDI and signed a 2007 noncompete/non‑disclosure agreement with the company.
- While employed by EDI, Carnahan formed Northern Virginia Erectors, LLC (NVE) and performed precast jobs for Arban Precast and others, sometimes using EDI employees and once using an EDI welding machine at the National Zoo; he did not inform EDI he was doing the work independently.
- EDI sued Carnahan and NVE asserting 14 counts (including breach of duty of loyalty, breach of contract, fraud by concealment, trespass/conversion, unjust enrichment, and civil conspiracy) and obtained a consent injunction that currently bars Carnahan/NVE from precast work until Feb. 2, 2014.
- EDI moved for partial summary judgment on several counts; the court reviews undisputed facts in favor of defendants and resolves legal issues on the record.
- The court found undisputed evidence that Carnahan, a high‑level employee, took for himself opportunities from an EDI customer without informing EDI, but many other asserted violations lacked sufficient record support or were legally deficient.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Breach of duty of loyalty (Count I) | Carnahan competed for and performed precast work for EDI customers while employed and used EDI resources; liable for usurping corporate opportunities | Carnahan did not actively solicit work; merely accepted offers | Granted for plaintiff — undisputed facts show senior employee took an opportunity from an EDI customer without disclosure and breached loyalty |
| Breach of contract (Noncompete, Count XIII) | Carnahan breached the 2007 agreement by competing while employed | Agreement either did not bind EDI Precast, LLC or applies only post‑termination | Denied for plaintiff; court finds agreement binds EDI Precast, LLC but most restrictive prohibitions apply post‑termination, so summary judgment for plaintiff is improper and court may enter summary judgment for defendants unless plaintiff shows cause |
| Fraud by concealment/non‑disclosure (Count III) | Carnahan had a fiduciary duty to disclose side work; his silence was fraudulent and caused damages to EDI | No evidence Carnahan intended to deceive or that EDI justifiably relied to its detriment | Denied — material elements (intent, reliance, damages) not established for summary judgment |
| Trespass / Conversion (Count VII) | Defendants used EDI equipment/materials and employees for NVE work; trespass or conversion | Use was limited, sometimes with employee possession or rental; no evidence of title transfer or complete exclusion | Denied — only one undisputed instance (welding machine use) and factual ambiguity about possession prevents summary judgment |
| Unjust enrichment (Count XIV) | EDI entitled to recover Carnahan’s salary/benefits because he was paid while competing | Salary paid for work Carnahan actually performed for EDI; disgorgement improper | Denied for plaintiff; court finds unjust enrichment theory misconceived and will grant summary judgment for defendant absent plaintiff showing cause |
| Civil conspiracy (Count V) | NVE conspired with Carnahan to damage EDI | NVE was never EDI’s fiduciary and cannot be liable for conspiracy based on fiduciary breach | Denied — conspiracy requires an underlying tort that NVE could have committed; NVE not subject to fiduciary duty, so plaintiff must show cause why summary judgment for defendants should not be entered |
Key Cases Cited
- Ricci v. DeStefano, 557 U.S. 557 (U.S. 2009) (summary judgment and viewing facts for non‑movant)
- Weichert Co. of Md., Inc. v. Faust, 19 A.3d 393 (Md. 2011) (duty of loyalty implied in employment)
- Md. Metals, Inc. v. Metzner, 382 A.2d 564 (Md. 1978) (employee must not solicit business belonging to employer)
- Shapiro v. Greenfield, 764 A.2d 270 (Md. Ct. Spec. App. 2000) (corporate opportunity doctrine)
- Celotex Corp. v. Catrett, 477 U.S. 317 (U.S. 1986) (summary judgment burden shifting)
- Anderson v. Liberty Lobby, Inc., 477 U.S. 242 (U.S. 1986) (scintilla rule and reasonable jury standard)
- Blondell v. Littlepage, 991 A.2d 80 (Md. 2010) (elements of fraudulent non‑disclosure)
- Shenker v. Laureate Educ., Inc., 983 A.2d 408 (Md. 2009) (civil conspiracy requires capacity to commit underlying tort)