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IN THE UNITED STATES DISTRICT COURT FOR THE DISTRICT OF MARYLAND SOUTHERN DIVISION IN RE: THE MAXIMA CORPORATION f/d/b/a MAXIMA COMPUTER SYSTEMS CORPORATION, Janet M. Meiburger, Plan Trustee Appellant, vs. World Computer Systems, Appellee.

Civil Action No. AW-02-CV-203

MEMORANDUM OPINION This is an appeal from a summary judgment order entered by the Bankruptcy Court in favor of Appellee, World Computer Systems ("World Computer"). See Meiburger v. World Computer ( In Re Maxima Corporation), No. 98-1850-PM, Adv. No. 98-1366-PM (Bankr. D. Md. September 24, 2001). Appellant, Janet M. Meiburger, a trustee in bankruptcy for Maxima Corporation ("Maxima"), appeals the judgment, asserting that the Bankruptcy Court erred in its finding that Maryland's three-year statute of limitation for breach of contract had expired. The issues have been fully briefed by all parties. On April 9, 2002, the Court heard oral argument. Finding the Bankruptcy Court's judgment correct, this Court affirms. I. BACKGROUND In the mid 1980s, World Computer signed a contract with the federal government to provide computer support. In 1986 and 1987, World Computer subcontracted with Maxima to provide technical assistance on the contract. The subcontract with Maxima was a "cost plus fixed fee"

contract, meaning that Maxima was entitled to payment for the costs it incurred while performing the contracts, as well as a fixed fee for its services. Under this type of contract, indirect costs were to be billed initially based on estimated or "provisional" rates, and "final" rates were to be billed after government approval. World Computer contractually agreed to pay according to this system. The parties agreed that Maryland law applied, and that Appellee would pay each "approved" invoice within thirty days. Maxima completed its work pursuant to the subcontracts in 1988. Soon thereafter, Maxima submitted invoices with provisional rates to World Computer. World Computer paid those invoices. Maxima's records show that it was not until October 18, 1993, and January 4, 1994, that Maxima sent the final rates, approved by the federal government, to World Computer, along with notice that the payments were due within thirty days. World Computer did not acknowledge receipt of these invoices, nor did it pay these invoices. Maxima's records also show that on October 24, 1994, and November 28, 1995, Maxima sent duplicate originals of the final invoices to World Computer. Again, World Computer did not pay the invoices. After November 1995, Maxima made many phone calls to World Computer to collect the debt, all without success. On June 26, 1998, Maxima filed for Chapter 11 protection in United States Bankruptcy Court for the District of Maryland, Southern Division. On August 27, 1999, World Computer closed-out its contract with the federal government and released the government of further liability under the contract. On October 8, 1999, the President of Maxima contacted a representative of World Computer regarding the outstanding invoices. The representative stated that he was aware of the final invoices. On June 1, 2000, the Court appointed Appellant trustee for Maxima. On June 23, 2000, Maxima filed its complaint for breach of contract against World Computer, asserting that 2

payment for $27,369.01 was due for the work completed under the subcontracts. After limited discovery, World Computer moved for summary judgment, arguing that the statute of limitations for this action had expired. In response, Appellant argued that the contract language and custom between the parties tolled the statute of limitations, and that the limitations period had not expired before the filing of bankruptcy on June 26, 1998.1 Additionally, Appellant argued that World Computer had to first "approve" and acknowledge receipt of the invoices before the statute of limitations began to accrue. In Appellant's view, the earliest possible date of accrual was November 28, 1995. The parties agreed to postpone further discovery, pending the outcome of Appellee's motion. On September 24, 2001, the bankruptcy court granted summary judgment and dismissed the adversary proceeding. In re Maxima Corporation, at 15. Chief Judge Paul Mannes of the bankruptcy court found that no dispute of fact existed regarding whether Maxima sent the invoices on October 18, 1993, and January 4, 1994. Id. at 2. Judge Mannes also found that Appellant's assertion that Maxima waived the thirty-day grace period had nothing to do with the accrual of the statute of limitations period. Id. at 14. Judge Mannes further found that the final invoices were "approved" pursuant to the subcontracts, because the invoices reflected billing rates that the federal government
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11 U.S.C.

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Maryland Law