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IN THE UNITED STATES DISTRICT COURT FOR THE DISTRICT OF MARYLAND PT ENTERPRISES, INC., et al., Plaintiffs : : : v. : : KENOVA CONSTRUCTION CORP., : Defendant : ...o0o... MEMORANDUM Now pending before the court is defendant's motion for summary judgment. The issues have been fully briefed and no hearing is necessary. Local Rule 105.6 (D.Md. 1999). For the reasons set forth herein, I shall grant the motion and dismiss this case for lack of subject matter jurisdiction. Plaintiff PT Enterprises, Inc. entered into a written contract with defendant Kenova Construction Corporation effective June 20, 1996 ("the 1996 agreement"), pursuant to which PT Enterprises agreed to sell and deliver and Kenova agreed to purchase up to 100,000 cubic yards of topsoil at a price of $6/cy, or a total of $600,000, in connection with the construction of a golf course at Rocky Gap, Maryland. In the course of performance of the contract, a dispute arose surrounding, inter alia , alleged non-payment by Kenova for topsoil which had been delivered to the jobsite and the actual quantity, as well as the quality, of the delivered topsoil. In the spring of 1998, counsel for PT Enterprises made demand upon Kenova for payment of disputed amounts in excess of $200,000, and threatened to withhold future deliveries. Counsel for Kenova responded by denying any liability and with an offer to resolve the dispute as follows: Kenova would pay $4.50/cy for an additional 34,000 cubic yards of topsoil. Before counsel could consummate any agreement on behalf of their clients, the principals of PT Enterprises and Kenova, without input from counsel, entered into a new written agreement ("the 1998

CIVIL NO. AMD 99-912

agreement"). Under the 1998 agreement, Kenova promised to pay "$20,000 on or before March 26, 1998 . . . $50,000 on or before April 15, 1998 . . . [and] a final sum of $163,963.86 within thirty days of a final invoice being received." Furthermore, PT Enterprises and Kenova agreed as follows: Both parties agree the total amount of monies received by PT under both this agreement and the agreement of June 20, 1996, shall be seven hundred thousand dollars ($700,000.00), and that this provision supersedes the limit of six hundred thousand dollars ($600,000) contained in the June 20, 1996 contract. Counsel for PT Enterprises immediately transmitted a copy of the 1998 agreement to counsel for Kenova, stating "I believe this contract reflects the agreement our clients have reached amongst [sic] themselves and resolves the current dispute." Thereafter, topsoil was delivered in regular intervals during the spring and summer of 1998 as requested by Kenova. Often, payment for a series of loads was made by Kenova in advance. In due course, performance was complete; however, for reasons the parties have not explicated, final payment was not tendered to PT Enterprises. By letter dated November 2, 1998, the principal of PT Enterprises wrote to the general contractor on the golf course project and stated as follows: [H]ere is the sheet showing the money owed to P.T. Enterprises, Inc. by Kenova Construction for the topsoil hauled to Rocky Gap, Maryland. The total amount owed to P.T. Enterprises, Inc. is $27,240.00. Thus, according to PT Enterprises, Inc., the total amount due and unpaid for topsoil was $27,240. When payment was not forthcoming after several months, PT Enterprises filed this lawsuit in the Circuit Court for Allegany County, Maryland, on or about March 15, 1999. Inexplicably, in the complaint filed in state court, counsel for PT Enterprises alleged a claim for $202,446.20. This amount was calculated by adding together the $27,240 set forth as the amount due in the November 1998 letter from PT

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Enterprises' principal to the general contractor and an amount (exceeding $174,000) allegedly unpaid under the 1996 agreement. In light of the allegations contained in the state court complaint, Kenova timely removed the case to this court on the basis of diversity of citizenship. At my insistence during the pre-trial conference, Kenova filed the instant motion for summary judgment. Kenova contends that as a matter of law, the maximum recovery PT Enterprises might obtain is $27,240, i.e., the amount as to which PT Enterprises made a binding admission in the November 1998 letter to the general contractor and also because, as a matter of law, the 1998 agreement extinguished PT Enterprises' claim under the 1996 agreement, which counsel has attempted to revive here. I agree with Kenova. The summary judgment record is barren of even a scintilla of evidence that PT Enterprises, let alone Kenova, intended PT Enterprises' claim for alleged unpaid deliveries under the 1996 agreement to survive the execution of the 1998 agreement. Specifically, the record contains no affidavit or any other proper Rule 56 material that would enable a fact finder to conclude by a preponderance of the evidence that the 1998 agreement was, as PT Enterprises argues, a "conditional novation" whereby PT Enterprises' release of its claim under the 1996 agreement for unpaid deliveries was "conditioned" upon full payment of all amounts due under the 1998 agreement. The argument is specious and I reject it out of hand. Thus, to a legal certainty, both PT Enterprises and Kenova knew when PT Enterprises filed suit in state court and when Kenova removed the case to this court that the $75,000 jurisdictional amount was not in issue. PT Enterprises spurious complaint is precisely the kind of fantastic pleading which negates any suggestion of good faith. See generally 28 U.S.C.A.

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Maryland Law