Document ID: s3://data.kl3m.ai/documents/govinfo/USCOURTS/USCOURTS-ca4-15-01975/USCOURTS-ca4-15-01975-0/pdf.json

Parties Involved:
Civista Health, Incorporated
Appellant
Civista Medical Center, Inc
Appellant
Gilbane Building Company
Appellee
Travelers Property Casualty Company of America

Document Text:

UNPUBLISHED

UNITED STATES COURT OF APPEALS

FOR THE FOURTH CIRCUIT

No. 15-1975

CIVISTA HEALTH, INCORPORATED; CIVISTA MEDICAL CENTER, INC.,

Plaintiffs – Appellants,

v.

GILBANE BUILDING COMPANY,

Defendant – Appellee,

and

TRAVELERS PROPERTY CASUALTY COMPANY OF AMERICA,

Defendant.

Appeal from the United States District Court for the District of 

Maryland, at Greenbelt. Alexander Williams, Jr., District 

Judge. (8:13-cv-00284-RWT)

Submitted: October 4, 2016 Decided: November 23, 2016

Before KEENAN, DIAZ, and FLOYD, Circuit Judges.

Vacated and remanded by unpublished per curiam opinion.

Gary R. Jones, Danielle M. Vranian, BAXTER, BAKER, SIDLE, CONN & 

JONES, P.A., Baltimore, Maryland, for Appellants. Charles M. 

Asmar, John J. McKenna, Jr., ASMAR, SCHOR & MCKENNA, PLLC, 

Washington, D.C., for Appellee.

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Unpublished opinions are not binding precedent in this circuit.

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PER CURIAM:

Civista Health, Inc., and Civista Medical Center, Inc., 

(collectively “Civista”) appeal the district court’s order 

granting summary judgment in favor of Gilbane Building Company

(“Gilbane”) and dismissing Gilbane as a named defendant prior to 

the completion of any discovery. In its amended complaint, 

Civista alleged breach of contract, negligence, breach of 

express and implied warranties, and fraud/misrepresentation for 

work related to a construction contract that Gilbane performed. 

Gilbane moved for summary judgment on the ground that suit was 

barred by the statute of limitations as determined by an accrual 

clause contained in the contract. The district court agreed 

that the accrual clause was valid, held that fraud as an 

exception to its enforceability applied only to fraud in the 

inducement of a contract, and granted Gilbane’s motion for 

summary judgment, ruling that the claims against Gilbane were 

barred by the statute of limitations. The court also denied 

Civista’s Fed. R. Civ. P. 56(d) motion for discovery, concluding 

that any additional evidence would be insufficient to create a 

genuine issue of material fact.

On appeal, Civista argues that the district court erred in 

concluding that the evidence was insufficient to establish 

equitable estoppel of the statute of limitations, and that the 

court erred in denying its Fed. R. Civ. P. 56(d) motion. With 

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regard to Civista’s second claim, we have emphasized that, 

“[g]enerally speaking, ‘summary judgment must be refused where 

the nonmoving party has not had the opportunity to discover 

information that is essential to his opposition.’” Harrods 

Ltd. v. Sixty Internet Domain Names, 302 F.3d 214, 244 (4th Cir. 

2002) (quoting Anderson v. Liberty Lobby, Inc., 477 U.S. 242, 

250 n.5 (1986) (brackets omitted)). Reversal of the district 

court’s denial of a Rule 56(d) motion is only appropriate where 

there was “a clear abuse of discretion or . . . there is a real 

possibility the party was prejudiced by the denial of” more time 

for discovery. Ingle ex rel. Estate of Ingle v. Yelton, 439 

F.3d 191, 195 (4th Cir. 2006) (internal quotation marks 

omitted).

In the Rule 56(d) affidavit that Civista submitted to the 

district court, Civista’s counsel stated that Civista’s 

investigation “uncovered evidence of serious deficiencies in 

Gilbane’s construction” of an addition to the medical center. 

Civista asserted that it “wish[ed] to inquire into Gilbane’s 

communications and interaction with its subcontractors and the 

various inspectors who visited the construction site,” as well 

as “Gilbane’s record of competence in performing its contractual 

supervisory duties during construction and, in particular, how 

violations as notorious [sic] as are described by the Fire 

Marshall [sic] were either missed, ignored, or covered up.” 

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Counsel’s affidavit asserts that Civista identified, on 

account of the effects of an earthquake and hurricane that 

impacted the hospital, significant defects in the construction 

that Gilbane must have noticed, raising an inference that 

Gilbane knew of the defects but intentionally failed to disclose 

and correct the defects as it was contractually obligated to do. 

The fact that Gilbane had previously identified many of these 

issues and certified that they had been corrected, when serious

issues remained, supports an inference that Gilbane 

intentionally concealed the deficiencies. Although this 

suggestion of fraud is not strong, the evidence, while 

insufficient standing alone to avoid summary judgment, is 

sufficient to warrant further discovery. See Pearson v. First 

NH Mortg. Corp., 200 F.3d 30, 35 n.2 (1st Cir. 1999) (“[i]n most 

fraud cases, plaintiffs rarely obtain possession of the smoking 

guns until a lawsuit is filed and discovery of the defendant’s 

internal records becomes available” (internal quotation marks 

and ellipses omitted)).

We disagree with the district court’s conclusion that the 

requested discovery could not create a genuine issue of material 

fact, as evidence of Gilbane’s knowledge of, and response to,

the construction deficiencies would directly bear on whether 

Gilbane fraudulently concealed the deficiencies. If Gilbane did 

engage in fraudulent concealment, such action may warrant 

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equitable estoppel and prevent Gilbane from asserting a statute 

of limitations defense in reliance on the accrual clause, rather 

than the state’s discovery rule. See Poffenberger v. Risser, 

431 A.2d 677, 680 (Md. 1981) (noting Maryland has applied 

discovery rule “in a case involving faulty construction”). 

Thus, the district court’s denial of Civista’s Rule 56(d) motion 

created “a real possibility the party was prejudiced by the 

denial of” more time for discovery, as Civista was left unable 

to defend against Gilbane’s affirmative defense. Ingle, 439 

F.3d at 195.

Accordingly, we vacate the district court’s grant of 

judgment and remand for further proceedings consistent with this 

opinion. We dispense with oral argument because the facts and 

legal contentions are adequately presented in the materials 

before this court and argument would not aid the decisional 

process.

VACATED AND REMANDED

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