Case Title: Driggs Corp. v. MD Aviation

Citation: 348 Md. 389

Docket Number: 68/97

State: maryland

Court: Maryland Supreme Court

Date: 1998-01-14T00:00:00Z

Document:
The Driggs Corporation v. Maryland Aviation Administration
No. 68, September Term, 1997
Administrative Law: party who does not have burden of proof does not lose right to judicial
review of final administrative decision by resting after losing motion challenging legal
sufficiency of evidence presented by party having burden of proof.
IN THE COURT OF APPEALS OF MARYLAND
No. 68
September Term, 1997
______________________________________
THE DRIGGS CORPORATION
v.
MARYLAND AVIATION
ADMINISTRATION
______________________________________
Bell, C.J.
Eldridge
Rodowsky
Chasanow
Raker
Wilner
Karwacki, Robert L. (retired,
specially assigned),
   JJ.
______________________________________
Opinion by Wilner, J.
______________________________________
Filed:  January 14, 1998
The underlying dispute that generated this appeal arises from the termination by
appellee, Maryland Aviation Administration (MAA), of an $11.5 million contract it had
entered into with appellant, The Driggs Corporation (Driggs), to extend and upgrade Runway
10-28 at Baltimore-Washington International Airport.  We are not directly concerned here
with the merits of that dispute — whether MAA acted properly in terminating the contract
with Driggs.  After an extensive hearing, the Maryland State Board of Contract Appeals
(BCA) held that MAA did not act unlawfully in doing what it did.
The issue presented to us by the parties is whether the Circuit Court for Anne Arundel
County erred in dismissing Driggs’s petition for judicial review of the BCA decision on the
ground that, by declining to produce evidence after BCA had denied its motion for summary
disposition, Driggs had acquiesced in the decision.  We shall hold that  the court did err in
that ruling.  There is, unfortunately, another issue, not addressed by the parties but apparent
from the record, that requires consideration as well and that will ultimately govern this
appeal.  The fact is that the petition for judicial review was premature.  As we shall explain,
there remained at issue the question of damages, which (1) was part of MAA’s claim, (2) had
been bifurcated by BCA, and (3) had not apparently been resolved by BCA when the petition
was filed.  Ordinarily, only final administrative decisions resolving the entire claim before
the agency are appropriate for judicial review, and the order sought to be reviewed in this
case did not qualify either as a final decision or as the kind of special interlocutory order for
which immediate judicial review is available.
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FACTUAL BACKGROUND
The contract in question was approved by the Board of Public Works on April 14,
1993.  It called for Driggs to complete certain work (Phases 1 and 2) on Runway 10-28
within 200 days after  issuance of a Notice to Proceed.  The completion date was eventually
extended by MAA to December 31, 1993.  The contract also incorporated two clauses
mandated by a State Procurement Regulation.  One, required by COMAR 21.07.02.07, was
a Termination for Default clause, authorizing MAA to terminate the contract “[i]f the
Contractor refuses or fails to prosecute the work, or any separable part thereof, with such
diligence as shall insure its completion within the time specified in this contract, or any
extension thereof . . . .”  In the event of such a termination, the clause made Driggs and its
surety liable for any damage to the State resulting from Driggs’s failure to complete the work
within the specified time.  The other clause, mandated by COMAR 21.07.02.09, was a
Termination for Convenience provision, authorizing the State to terminate the contract
“whenever the procurement officer shall determine that such termination is in the best
interest of the State.”  If the State invoked that clause, it would be liable to Driggs for certain
costs and expenses enumerated in the clause.
On October 21, 1993, MAA invoked the Termination for Default clause and
terminated the contract on the grounds that Driggs had (1) “failed to prosecute the contract
work with such diligence as would have assured completion of Phases 1 and 2 within the
time and as required by the terms of the contract” and (2) also failed “in its obligation to
submit a schedule by August 13, 1993 showing a realistic plan to complete Phases 1 and 2
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by December 31, 1993.”
Driggs filed a complaint with BCA, asking that the termination be overturned because
of excusable delays, waiver by MAA of its right to terminate for default, and material
breaches by MAA.  It also asked that the termination for default be converted to a
termination for convenience and that it be awarded damages accordingly.  MAA answered
the complaint, asking that Driggs’s claim challenging the termination for default be
dismissed.  In an accompanying counterclaim, MAA asserted that, because of its default,
Driggs was responsible to MAA “for all damages occasioned by [Driggs’s] default” and
asked that BCA affirm the termination.  
On October 18, 1994, after some discussions between BCA and the parties, BCA
decided that, as the procurement officer had not yet resolved the question of what damages
MAA would be entitled to because of the termination for default, that issue was not properly
before BCA but, when resolved by the procurement officer, would be dealt with by BCA in
a separate proceeding.  The pending proceeding would therefore be limited to “entitlement,
i.e., the propriety of the procurement officer’s final decision terminating Driggs’ contract for
default.”  That was confirmed when the hearings actually commenced and MAA advised that
it was not planning to offer any evidence as to damages but intended to proceed only on the
issue of liability.  That bifurcation decision set the stage for the prematurity problem noted
above.
 With the concurrence of the parties and in accordance with BCA’s past practice and
with established Federal procurement law, the termination for default was treated as an MAA
There is no dispute with respect to that point.  MAA has conceded in its brief before us that
1
“[b]ecause the termination for default was the State’s claim, MAA had the burden of proving that
Driggs had defaulted, i.e., that MAA reasonably believed that Driggs would not complete by
December 31, 1993 and that Driggs had refused to meet that date.”  It made the same concession in
the circuit court and clearly acquiesced before BCA in that procedure.  No objection was made when
the Chairman of BCA ruled that, because it was dealing with an “affirmative claim” by MAA, the
agency would proceed first, to establish, at least prima facie, the appropriateness of the termination
for default.  As we indicated, that approach is in conformance with established Federal procurement
law and practice.  See Lisbon Contractors, Inc. v. U.S., 828 F.2d 759, 764 (Fed. Cir. 1987):  “[I]t
is long-established government contract law in cases brought to the boards of contract appeals
(BCA’s) that the government bears the burden of proof on the issue of the correctness of its actions
in terminating a contractor for default.”  That burden is placed on the government regardless of
whether the action before the BCA is instigated by the government or the contractor.  As the Lisbon
court observed, imposition of the burden of proof of default in BCA cases “falls naturally on the
government inasmuch as the government is only being made to bear the burden of proof on its own
‘claim’ of default.  Only after the default issue is resolved, does the board turn to any ‘claim’ by the
government or the contractor for monetary compensation.”  Id.  See also SMS Data Products Group,
Inc. v. U.S., 17 Cl. Ct. 1 (1989);  J. Parr Const.  Design, Inc. v. U.S., 24 Cl. Ct. 228 (1991); Daff
v. U.S., 31 Fed. Cl. 682 (1994); Hannon Elec. Co. v. U.S., 31 Fed. Cl. 135 (1994); Appeal of Walsky
Construction Co., ASBCA No. 41,541, 94-1 BCA ¶ 26,264 (1993), modified, 94-2 BCA ¶ 26,698
(1994); Appeal of Custodial Guidance Systems, Inc., GSBCA No. 6531, 83-1 BCA ¶ 16,278 (1983);
Appeal of System Development Corporation, VABCA No. 1976R, 87-3 BCA ¶ 20,167 (1987);
Appeals of Air-O-Plastik Corp., GSBCA No. 4925, 81-2 BCA ¶ 15,338 (1981).
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claim against Driggs, upon which MAA had the burden of proof.   Accordingly, MAA
1
proceeded first with its case, to establish sufficient grounds for its decision to terminate the
contract.  In hearings extending over 40 days, it produced 11 fact witnesses, three expert
witnesses, and 281 exhibits.  Driggs not only cross-examined the MAA witnesses but, either
through them or otherwise, placed into evidence 217 exhibits of its own.  In addition to
certain procedural defenses, it vigorously contested the accuracy of many of the assertions
made by MAA with respect to Driggs’s diligence and its ability to complete the work within
the allotted time.  It pressed the point that, at the time of the termination, it still had 135 days
 MAA never denied that Driggs had that amount of time left to complete the contract.  It
2
pointed out, however, that, when asked to supply schedules showing projected work progress and
completion dates, Driggs produced schedules indicating that the work would not, in fact, be
completed by December 31.
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left to complete the work.   
2
Near the end of MAA’s case, Driggs indicated, as it had at the outset of the hearing,
that it would be filing a motion for summary disposition, i.e, a motion testing whether MAA
had presented a prima facie case establishing the validity of the termination.  The BCA
Chairman explained that, although BCA used the administrative terminology “motion for
summary disposition,” the motion would be in the nature of a motion for judgment, asserting
that Driggs was entitled to prevail as a matter of law on the issues covered by the motion.
He advised that
“the Board will review the evidence of the record compiled up
to the time that the motion is made in the light most favorable to
the party against whom the motion is directed, and will resolve
reasonable inferences from conflicts in the oral and written
testimony comprising the record compiled to the date of the
motion.  It will resolve such inferences in the favor of the party
against whom the motion is directed, and if, having done so,
there is lacking a factual predicate pursuant to which, as a
matter of law, the moving party is entitled to prevail, the motion
will be denied.”
When Driggs suggested that, in a non-jury court proceeding, the court, entertaining
a motion for judgment at the end of the plaintiff’s case, was not required to view the
evidence in a light most favorable to the non-moving party, the Chairman iterated that the
proceeding was an administrative one and that  BCA would apply the standard of review he
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had announced.  He further advised, however:
“The party who made that motion could then stand up and rest,
at which point in time another motion could be presented in
which the standard of review, if you will, by the Board of the
evidence of record would be somewhat different.  There we
would be focusing on whether the State had met its burden to
demonstrate that the termination for default was appropriate in
the context that the hearing and notice was mandated by the
Administrative Procedure.”
  Presumably on that premise, Driggs orally moved for summary disposition at the end
of MAA’s case.  BCA initially took the motion under advisement but, in a 22-page
memorandum opinion filed January 2, 1996, it denied the motion.  In its memorandum, BCA
reiterated that, in considering a motion for summary disposition, the Board determines only
whether there are material facts in dispute and what legal principles govern the issues in
dispute.  It once again made clear that, in ruling on such a motion, it must resolve “all
conflicting evidence and all legitimate inferences raised by the evidence . . . in favor of the
party . . . against whom the motion is directed” and that “[t]he purpose of summary
disposition is not to resolve factual disputes nor to determine credibility, but to decide
whether there is a dispute over material facts which must be resolved by the Board as trier
of fact.”  Accordingly, it confirmed that summary disposition was not appropriate “if a
genuine issue of material fact is in dispute” or if undisputed facts are susceptible of more
than one permissible factual inference.
With that introduction, BCA proceeded to examine the issues raised by Driggs, the
positions taken by the parties with respect to those issues, and some of the evidence bearing
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on the issues.  In the course of that examination, BCA identified a number of specific and
substantial factual conflicts.  Its overall conclusion was that “there are material facts in
dispute concerning whether [Driggs] was in breach of the contract concerning timely
performance and whether [Driggs] would have cured any such breach of its contract had its
contract not been terminated for default.”  Resolving all reasonable inferences in favor of
MAA, BCA concluded that MAA had a reasonable belief that (1) Driggs would not or could
not complete Phases 1 and 2 by December 31, 1993, (2) December 31 was the appropriate
completion date for Phases 1 and 2, and (3) completion of Phases 1 and 2 by December 31
was critical.  Accordingly, BCA determined that “the record at this juncture may be read to
continue to support prima facie the State’s belief in the summer of 1993 that the contractor
refused or failed to prosecute Phases 1 and 2 with such diligence as to insure their
completion by December 31, 1993, and that such failure was material and, if not deliberate,
was not excusable . . . .”  (Emphasis added.)  After considering and rejecting certain other
procedural defenses raised by Driggs, BCA therefore denied the motion.
Three weeks after the filing of the memorandum opinion, Driggs informed BCA that
it saw no “economic benefit to continuing the administrative proceeding and deferring our
remedy in the courts until next fall,” and it therefore decided to rest its case.  It asked for an
expeditious decision.  It is clear, however, that neither the parties nor BCA expected that a
final decision would be rendered without further input from the parties and that Driggs was
in no way acquiescing in any conclusion that MAA acted properly in terminating the contract
for default.  On February 2, 1996, BCA set a schedule for the filing of post-hearing briefs,
 In replacing the former Chapter 1100 Rules with the Title 7, Chapter 200 Rules in July,
3
1993, we made clear, even through the new nomenclature, that those actions are not “appeals,” as
they do not seek review of any judicial decision, but rather invoke the statutory original jurisdiction
of the circuit courts to exercise a limited review of Executive Branch decisions.  See Gisriel v. Ocean
City Elections Board, 345 Md. 477, 693 A.2d 757 (1997) and Colao v. County Council, 346 Md.
342, 697 A.2d 96 (1997).
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and, indeed, extensive briefs were filed.  Driggs filed an initial brief of 74 pages; MAA filed
a 114-page brief; Driggs then filed a 24-page reply brief, which was met with a 25-page reply
brief from MAA.  Each of those briefs addressed the myriad of factual disputes in the record.
On June 25, 1996, BCA rendered a 56-page opinion in which it made specific findings with
respect to the disputed matters and held that MAA acted reasonably in terminating the
contract.
From that decision, Driggs sought judicial review in the Circuit Court for Anne
Arundel County.  MAA responded with a motion to dismiss Driggs’s “appeal,” asserting that
“Driggs, by its words and conduct, consented to the final decision by [BCA]” and that, “[o]n
the authority of Osztreicher v. Juanteguy, 338 Md. 528, 659 A.2d 1278 (1995), Driggs’
consent bars it from invoking the appellate jurisdiction of this Court.”    (Emphasis added.)
3
MAA’s position was that, when BCA denied the motion for summary disposition, “[t]he
burden shifted to Driggs to controvert the State’s case” and that, when it rested without going
forward with any evidence, it tacitly accepted BCA’s ruling and therefore acquiesced in the
final decision.  The court apparently accepted MAA’s interpretation of both Osztreicher and
the respective burdens of proof, for it granted MAA’s motion and dismissed the petition.
The written order dismissing the petition was filed on January 13, 1997.  On January 23,
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Driggs filed a motion to alter or amend that order, complaining that the court had
misconstrued Osztreicher.  The motion was denied on February 25, and, on March 7, Driggs
noted an appeal to the Court of Special Appeals.  Before any significant proceedings in that
court, we granted certiorari on our own initiative to consider the singular issue raised.
DISCUSSION
(A) Motion To Dismiss
It would appear that the Attorney General’s Office has been laboring under the
misimpression that an action for judicial review of an administrative agency’s final order is
in the nature of an “appeal,” invoking the appellate jurisdiction of the circuit court.  Based
on that misunderstanding, it has, on behalf of MAA, moved to dismiss this appeal from the
judgment of the circuit court on the ground that the notice of appeal was untimely.  As noted,
the order dismissing Driggs’s petition was filed on January 13, 1997.  Driggs filed a motion
to alter or amend that order on January 23 — the tenth day after the order was filed.  By
virtue of Maryland Rules 2-534 and 8-202(c), the filing of that motion suspended the
allowable time for noting an appeal from the January 13 order until 30 days after the date
upon which the post-judgment motion was denied.  The motion was denied on February 25,
and the appeal was noted on March 7, 1997.
MAA’s motion to dismiss is based upon the erroneous supposition that, because
Driggs’s petition to the circuit court invoked the appellate, rather than the original,
jurisdiction of that court, Rules 2-534 and 8-202(c) have no application and that, as a result,
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(1) the post-judgment motion did not suspend the time for noting an appeal and (2) the time
for noting an appeal expired 30 days after January 13.  In support of its motion, MAA cites
Pollard v. State, 339 Md. 233, 661 A.2d 734 (1995).  Unfortunately, it has misconstrued that
case as well.   Pollard dealt with a true appeal to the circuit court— from a judgment of the
District Court — and the issue was whether, in a criminal appeal to be tried de novo in the
circuit court, the court had authority under Rule 7-112 to reinstitute the appeal after having
dismissed it for failure of the defendant to appear for trial.  We held that the court did have
such authority — that the reference in Rule 7-112 to Rules 2-534 and 2-535 was not intended
to limit the court’s post-judgment revisory power to civil appeals.  Pollard in no way
supports the notion that Rule 2-534 does not apply in an action for judicial review of an
administrative agency order.  As we have made clear, a petition for judicial review of an
administrative agency order invokes the original, not the appellate, jurisdiction of the circuit
court, and, accordingly, Rule 2-534 applies to the action.  MAA’s motion to dismiss this
appeal is denied.
(B) Validity of Order Dismissing Petition for Judicial Review
As we have observed, the sole basis for MAA’s motion to dismiss Driggs’s petition
for judicial review in the circuit court and the sole basis for the court’s granting of that
motion, was the view that, by resting its case after the denial of its motion for summary
disposition, Driggs effectively invited and therefore acquiesced in the decision of BCA and,
as a result, is not allowed to challenge that decision on “appeal.”  For that proposition, MAA
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cites only Osztreicher v. Juanteguy, supra, 338 Md. 528, 659 A.2d 1278.  The precise basis
of MAA’s theory is somewhat unclear; its argument can be cast either as a misconstruction
of Osztreicher or as a misinterpretation of the burden it had before BCA.  We shall address
both possibilities.
(1) Osztreicher and Motion for Judgment
Osztreicher arose from a medical malpractice case filed in the circuit court after a
waiver of proceedings before the Health Claims Arbitration Office.  While the case was still
before the Health Claims Arbitration Office, the plaintiff had named three possible expert
witnesses, among them a Dr. Stewart Battle, but later indicated that he did not intend to call
Dr. Battle to testify.  When the case reached the circuit court, despite the absence of any
further communication from the plaintiff with respect to his expert witnesses, the defendant
deposed Dr. Battle.  In the course of the deposition, he inquired as to the amount of income
Dr. Battle earned from forensic endeavors and was given an approximate figure.  The day
before trial was to commence, the defendant served a subpoena on Dr. Battle, directing him
to produce at trial certain financial records, including tax records indicating the amount of
income received in the prior two years from “medical/legal and/or forensic activities.”  The
court denied the plaintiff’s motion to quash the subpoena, offering instead to review in
camera the documents produced, to determine which of them might be suitable for use in
cross-examination.
The plaintiff responded that Dr. Battle would refuse to testify if required to produce
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those documents and that, without Battle’s testimony, he would be effectively precluded
from putting on a case.  He moved for a mistrial, and, when that motion was denied, he
declined to present any evidence, notwithstanding that he did have another expert witness
who was prepared to testify.  On that state of affairs, the court granted the defendant’s
motion for judgment, following which the plaintiff noted an appeal.
We dismissed the appeal, beginning our discussion by confirming the well-established
principle that “[t]he right to appeal may be lost by acquiescence in, or recognition of, the
validity of the decision below from which the appeal is taken or by otherwise taking a
position which is inconsistent with the right of appeal.”  Id. at 534, quoting from Rocks v.
Brosius, 241 Md. 612, 630, 217 A.2d 531, 541 (1966).  We then recounted some of the
circumstances that, in earlier cases, we had determined to constitute acts of acquiescence.
Citing a number of out-of-State cases, we concluded, at 535, that “[a] party who does not
offer evidence on an issue as to which that party has the burden of proof acquiesces in the
adverse judgment entered on that issue.”  (Emphasis added.)  Examining then the
circumstances of the particular case, we observed that the denial of Ozstreicher’s motion to
quash the subpoena did not leave him without a case to present.  Implicit, of course, was the
fact that, had he proceeded with the case and lost, he could have challenged on appeal the
validity of the court’s ruling on the motion to quash.  By refusing to present any evidence,
however, when it was he, as the plaintiff, who had the burden of both production and
persuasion, he effectively “acquiesced in, if not consented to,” the entry of the judgment he
then sought to challenge.  Id. at 535.
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The case now before us is significantly different from the circumstances in
Osztreicher.   MAA contends in its brief that “the Osztreicher doctrine of acquiescence . . .
does not depend upon . . . who has the burden of proof.”  That assertion is palpably wrong;
the doctrine of acquiescence very much depends on who has the burden of proof.  There is
nothing strained, unfair, or illogical in a conclusion that, when a party who has the burden
of producing persuasive evidence on an issue deliberately declines to do so, that party
necessarily acquiesces in an adverse judgment, for, through that deliberate conduct, the party
leaves the court with no other choice than to enter that judgment; the party effectively invites
the judgment.  That is not the case, however, when it is the adverse party who has the burden
of producing the persuasive evidence.  Maryland law, and, indeed, civil procedure generally
throughout the country, has long recognized the ability of the party not having the burden of
proof (B) to test the legal sufficiency of the evidence produced by the party having that
burden (A) through a motion made at the end of A’s case.
In Maryland court proceedings, such a motion is now termed a motion for judgment
(Md. Rule 2-519); formerly, it was known as a motion to dismiss, if made in a non-jury case,
or a motion for directed verdict, if made in a jury case.  See former Md. Rules 535 and 552.
At earlier times, it was often referred to as a demurrer to the evidence.  Rwy. & Elec. Co. v.
Anderson, 168 Md. 224, 227, 177 A. 282 (1935).  The purpose of such a motion, whatever
its denomination, is “to allow a  party to test the legal sufficiency of his opponent’s evidence
before submitting evidence of his own.”  Smith v. State Roads Comm., 240 Md. 525, 539,
214 A.2d 792, 799-800 (1965); J. Whitson Rogers, Inc. v. Board, 285 Md. 653, 660, 402
As was pointed out by Driggs to BCA, in adopting Rule 2-519 in 1984, this Court made a
4
significant change in practice when such a motion is made by B at the close of A’s case in a non-jury
action.  In that one situation, the Rule no longer requires the court to view the evidence in a light
most favorable to A and to consider only the legal sufficiency of the evidence, so viewed, but allows
the court to proceed as the trier of fact to make credibility determinations, to weigh the evidence, and
to make ultimate findings of fact.  As the BCA chairman responded, BCA, as an administrative
agency not directly subject to Rule 2-519, treated the motion for summary disposition — the
functional equivalent of a motion for judgment — in the more traditional manner.  No one objected
to that approach.
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A.2d 608, 612 (1979).
The issue traditionally presented by such a motion is a purely legal one — whether,
as a matter of law, the evidence produced during A’s case, viewed in a light most favorable
to A, is legally sufficient to permit a trier of fact to find that the elements required to be
proved by A in order to recover have been established by whatever standard of proof is
applicable.  To frame the legal issue, the court must accept the evidence, and all inferences
fairly deducible from that evidence, in a light most favorable to A; it is not permitted to make
credibility determinations, to weigh evidence that is in dispute, or to resolve conflicts in the
evidence.  
4
It has always been understood and recognized, however, that a party who makes and
loses such a motion has an option.  The party (B) may proceed to present additional evidence
in an effort to controvert, or further controvert, the evidence produced in A’s case, in which
event B effectively withdraws the motion for judgment and may not complain on appeal
about the denial of it (Md. Rule 2-519(c)), or B may rest on the denial of the motion and