UNPUBLISHED

UNITED STATES COURT OF APPEALS

FOR THE FOURTH CIRCUIT

PRECON CORPORATION; ALLIANCE

CONTRACTING, INCORPORATED,

Plaintiffs-Appellees,

v. No. 95-2480

G & B ENVIRONMENTAL,

INCORPORATED,

Defendant-Appellant.

Appeal from the United States District Court

for the District of Maryland, at Greenbelt.

Peter J. Messitte, District Judge.

(CA-93-2432-PJM)

Argued: September 25, 1996

Decided: December 5, 1996

Before MURNAGHAN and HAMILTON, Circuit Judges, and

MICHAEL, Senior United States District Judge for the Western

District of Virginia, sitting by designation.

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Affirmed in part, vacated in part, and remanded by unpublished per

curiam opinion.

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COUNSEL

ARGUED: Roger Cavenaugh Jones, HUDDLE & JONES, P.C.,

Columbia, Maryland, for Appellant. Timothy Guy Smith, TIMOTHY

GUY SMITH, P.C., Woodbine, Maryland, for Appellees.

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Unpublished opinions are not binding precedent in this circuit. See

Local Rule 36(c).

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OPINION

PER CURIAM:

This appeal involves a contract dispute between appellant, G&B

Environmental, Inc. (G&B), a Delaware corporation, and appellees,

Precon Corporation (Precon) and Alliance Contracting, Inc. (Alliance), Maryland corporations.1 G&B contends that the district court

erred when, following a bench trial, it entered judgment in favor of

Precon and Alliance in the amount of $204,788. G&B asks this court

to reverse the judgment in favor of Precon and Alliance and award

judgment in favor of G&B in the amount of $43,525. In the alternative, G&B asks this court to modify the judgment of the district court

by reducing the amount of the judgment in favor of Precon and Alliance. For the reasons provided below, we affirm in part, vacate in

part, and remand for modification of the judgment consistent with this

opinion.

I.

This dispute involves two agreements between the parties for the

performance of work on a construction project in Washington, D.C.,

known as the Veteran Affairs Building (the Project). The first agreement was a written agreement between G&B and Precon for the performance of asbestos removal work on the Project. The second

agreement was a verbal agreement between G&B and Alliance for the

performance of demolition work on the Project.

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1 Because there is complete diversity of citizenship between the parties

and the amount in controversy exceeds $50,000, the district court properly exercised diversity jurisdiction over this dispute under 28 U.S.C.

§ 1332.

 2
A.

These agreements originated early in 1991 when Ronald Hsu, the

general contractor for the Project, approached Duane Massingale,

president and owner of Precon and Alliance, about performing the

asbestos removal and demolition work on the Project. Because Precon

and Alliance did not have the bonding capacity for the bid, Massingale approached G&B to help finance the Project. Negotiations

between the parties followed.

During at least one meeting at which the agreements were being

formulated, both K.C. Goel, president of G&B and the person who

entered into the agreements on behalf of G&B, and Asha Goel, K.C.

Goel's wife, were present. Asha Goel was actively involved in the

negotiations at that meeting and indicated that it was her money that

was being advanced for the Project.

The parties eventually reached agreements with respect to both

parts of the Project, and work on the Project began in mid-1991. With

one exception, the parties are in accord that the agreements for both

phases of the Project were identical. Because the agreement between

Precon and G&B was eventually reduced to writing 2 and executed in

the State of Maryland, we will consider its provisions as representative of both agreements and then discuss the single provision contained in the written contract between Precon and G&B that G&B

asserts is different from that orally agreed upon by Alliance and

G&B.

First, the parties agreed that the profits from both the asbestos

removal and demolition phases were to be split between Precon and

G&B and between Alliance and G&B, respectively. In addition, the

parties agreed that no payment would be made for services rendered

by the stockholders of G&B, Precon, or Alliance, and that if any sal-

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2 Although the agreement between Precon and G&B is dated September 3, 1991, G&B contends that it was actually prepared and executed

in January 1992 and backdated at Massingale's request to September 3,

1991. Precon does not dispute this characterization of the facts. We do

not need to decide the effective date of the written contract, however,

because this date is not material for purposes of the issues on appeal.

 3
ary was paid, it would be treated as a distribution of profits. The

agreements provided further that Massingale would provide the direction and day-to-day management of the Project, while G&B, through

K.C. Goel and/or Asha Goel, would provide financial management

and record keeping. In addition, under the agreements, no person

other than Massingale, K.C. Goel, or Asha Goel would have the

authority to commit any expenditure related to the Project. With

regard to the rental of equipment, the contract between Precon and

G&B stated that "each entity [would] charge the [P]roject its lowest

rate, typically eighty percent of the market rate." (J.A. 14). The contract between Precon and G&B was silent with regard to other items

of overhead.

Although the written agreement between Precon and G&B states

clearly that both profits and losses would be divided equally between

them, G&B and Alliance dispute whether they agreed to divide

equally any losses incurred during the demolition phase of the Project

in their oral agreement. G&B insists that they agreed that Alliance

would be responsible for 100% of any loss incurred during the

demolition phase of the Project, while Alliance contends that they

agreed that any loss during the demolition phase would be divided

equally, just as the profits were to be divided equally.

On January 14, 1992, K.C. Goel and Massingale executed an

Amendment to the Agreement between Precon and G&B. This

amendment provided: "It now appears that the Demolition Phase of

the [P]roject will lose money instead of generating profits. Precon

Corporation agrees to bear the loss incurred during the Demolition

phase for Alliance Contracting's share of the loss." (J.A. 15 (emphasis added)). The underlined portion of the quoted language was handwritten and initialled by both Massingale and K.C. Goel. The rest of

the amendment was typewritten.

An identical amendment to the one set forth above was prepared

for the agreement between G&B and Alliance but was never executed

by G&B. There is no evidence, however, that G&B refused to execute

the amendment because of its handwritten portion.

The work on the Project was completed by January 1992. Thereafter, Precon and Alliance received a profit distribution in the amount

 4
of $359,506.00. As part of its calculation of the profit due Precon and

Alliance, G&B included in its total project costs $10,000 paid to P.K.

Goel, K.C. and Asha Goel's son, and $12,000 paid to Asha Goel for

work ostensibly performed for the Project. Although Precon and Alliance repeatedly asked to see the financial records from the Project,

G&B failed to make any financial records available to Precon and

Alliance.

B.

On August 20, 1993, Precon and Alliance filed suit against G&B

in the United States District Court for the District of Maryland. Precon and Alliance alleged causes of action for breach of contract and

for conversion. In their complaint, Precon and Alliance alleged that

they had completed all of their obligations with respect to the Project

and that G&B had not paid them the full amount of the profit due

them. G&B denied liability and subsequently filed a counterclaim

alleging that it had overpaid Precon and Alliance and that judgment

should be rendered in its favor in the amount of $192,260.84.

Some time after Precon and Alliance filed suit, G&B computed

that it was entitled to receive compensation for general office overhead attributable to the Project at the rate of 31.87%. Just prior to

trial, this figure was reduced to 14.3%, and at trial, it was further

reduced to 13.8%.3

As support for its contention that it overpaid Precon and Alliance,

G&B submitted to the district court its financial statement with regard

to the Project. According to this statement, the asbestos removal

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3 At trial, G&B introduced the testimony of Harry Papeleo, an expert

witness in accounting. Papeleo testified that the overhead rate to be

charged to a particular project is calculated by dividing the total company operating expenses by the total project expenses. The total project

expenses are then multiplied by that rate, and the result is the amount of

overhead attributable to the project.

In this case, G&B now asserts that it is entitled to overhead at a rate

of 13.8%. Multiplying 13.8% by the total direct costs of the Project, calculated by G&B to be $2,302,195, results in $317,703 that G&B is

attempting to charge the Project for general office overhead.

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phase of the Project resulted in a profit to the parties of $612,692,

while the parties incurred a $97,799 loss during the demolition phase

of the Project. This statement also reflects a charge of $113,584 to the

demolition phase of the Project for G&B general office overhead.

C.

On July 5 and 6, 1995, the district court conducted a two-day bench

trial. Although most of the testimony elicited the facts as stated above

and, therefore, need not be recited here, G&B particularly relies on

two portions of the trial testimony on appeal.

First, in response to a question on cross-examination that was

apparently asked in an effort to establish that the parties did not intend

to enter into a "joint venture" and, therefore, that the rules applying

to joint ventures would not apply in resolving the parties' dispute,

Massingale testified that the subcontract for the Project was between

the general contractor, Ronald Hsu, and G&B, not between Ronald

Hsu and a joint venture, consisting of G&B, Precon, and Alliance. In

addition, Massingale acknowledged that while the parties had a profit

sharing arrangement, they were not a joint venture as that term is

commonly used.

Second, in an effort to explain overhead expenses G&B alleged

should be included when calculating the profit to be shared by the

parties, K.C. Goel testified that included in the general office overhead figure were depreciation costs for equipment G&B provided to

the Project. K.C. Goel presented evidence that G&B had provided

various pieces of equipment to the Project and that 80% of the market

rental rate of all of the equipment was $63,432. According to K.C.

Goel, G&B never submitted a bill for the rental equipment, but rather,

included those costs in its general office overhead figure.

D.

The district court recited its findings and conclusions of law from

the bench on July 6, 1995. After defining a joint venture under Maryland law as an operation of two or more persons in a single transaction for profit, the district court concluded that the agreements in this

 6
case constituted a joint venture between G&B, Precon, and Alliance.

Therefore, the district court stated that in the absence of a specific

agreement as to how the transaction was to be conducted, the principles of joint ventures would apply and determine the outcome of the

case.

The district court next interpreted the agreements to provide that

Alliance would bear 50% of the losses as well as 50% of the profits

from the demolition phase of the Project, as evidenced by the language in the amendment to the Precon-G&B contract providing that

Precon would be liable for Alliance's "share" of the loss in the

demolition phase of the Project. According to the district court, had

G&B and Alliance intended Alliance to bear 100% of any demolition

phase loss, the contract could have stated so explicitly.

The district court next held that because the parties had entered into

a joint venture, they owed each other a fiduciary duty to account. The

district court found that Precon and Alliance had repeatedly asked to

see G&B's books, but G&B ignored their requests. According to the

district court, G&B thereby violated its fiduciary duty toward Precon

and Alliance.

The district court then considered the salaries paid to Asha Goel

and to P.K. Goel and held that these payments were made in violation

of G&B's fiduciary duty to Precon and Alliance. The district court

acknowledged that Asha Goel claimed to have provided sixty hours

a week of bookkeeping service to the Project. However, the district

court expressed skepticism with regard to this claim, noting that Asha

Goel also testified to having worked full-time as an elementary school

teacher during the time period in question. In addition, the district

court found that the extent of Asha Goel's participation in the initial

negotiations and her behavior in connection with the transaction suggested that she was some sort of equity owner in the business. The

district court found that Asha Goel had participated actively in the

negotiations between the parties and discussed putting money into the

Project and that while neither K.C. nor Asha Goel was ever asked

whether Asha Goel was a shareholder, neither disclosed that she was

not a shareholder. Because it would have been reasonable for Massingale to assume that Asha Goel was an equity owner, the district court

concluded that she should not get a separate salary which would

 7
reduce the profit from the Project. With regard to the salary payments

to P.K. Goel, the district court found that he performed no services

and concluded, therefore, that salary payments to him were a clear

breach of fiduciary duty.

The district court next considered G&B's claimed entitlement to

overhead. The district court first held that overhead items that are not

specifically tied to the joint venture may not be charged to the Project

in the absence of a specific agreement that overhead expenses would

be charged to the Project. In this case, the district court held that the

items of overhead for which G&B wanted to charge the Project could

not be tied to the joint venture. Therefore, the district court concluded

that they are not recoverable.

Precon and Alliance also submitted at trial a claim for equipment

and supplies totalling $26,000 and $20,000, respectively. The district

court concluded that they had not proved by a preponderance of the

evidence that the equipment was taken or bought by the job. Therefore, the district court denied this claim, and Precon and Alliance

have not appealed that decision.

Finally, the district court decided to award prejudgment interest to

Precon and Alliance in the amount of 6% per annum on the base

amount of $170,535 it determined G&B owed to Precon and Alliance.

The district court reasoned that the amounts owed to Precon and Alliance were liquidated sums that were due and payable at least by

March 1, 1992, following the completion of the Project. The district

court found further that G&B had acted improperly in not immediately giving Precon and Alliance an accounting when asked. On July

6, 1995, the district court entered judgment in favor of Precon and

Alliance in the amount of $204,788. From this judgment, G&B now

appeals.

II.

On appeal from a bench trial, we may only set aside findings of

fact if they are clearly erroneous, and we must give due regard to the

opportunity of the district court to judge the credibility of the witnesses. See FED. R. CIV. P. 52(a). "A finding is `clearly erroneous'

when although there is evidence to support it, the reviewing court on

 8
the entire evidence is left with the definite and firm conviction that

a mistake has been committed." United States v. United States Gypsum Co., 333 U.S. 364, 395 (1948). We review the district court's

conclusions of law de novo. Resolution Trust Corp. v. Maplewood

Inv., 31 F.3d 1276, 1281 n.7 (4th Cir. 1994).

III.

The first issue raised by G&B on appeal is whether the district

court erred when it held that the agreements between the parties in

this case constituted a joint venture under Maryland law. Because

many of the district court's conclusions of law depended on its holding that the agreements constituted a joint venture, we will address

this issue first.

A.

A joint venture exists under Maryland law4 "when two or more persons combine in a joint business enterprise for their mutual (benefit

with the understanding that they are to share in profits or losses and

that each is to have a voice in its management." Brenner v. Plitt, 34

A.2d 853, 857 (Md. 1943). Thus, "[m]ere agreement to share in profits, of itself, constitutes neither a partnership nor a joint [ ]venture."

Id. In addition, the determination of whether a joint venture exists

"depends upon the intentions of the parties which is to be determined

from the facts of the case and in accordance with ordinary rules governing interpretation of contracts." Finch v. Hughes Aircraft Co., 469

A.2d 867, 890 (Md. Ct. Spec. App.), cert. denied , 469 A.2d 864

(Md.), and cert. denied, 475 A.2d 1200 (Md. 1984).

B.

Applying these principles to the facts in this case, we agree with

the district court that the agreements between the parties in this case

constituted a joint venture. With regard to the agreement concerning

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4 The parties do not dispute that Maryland law applies to the interpretation of the agreements at issue in this case. See Kramer v. Bally's Park

Place, Inc., 535 A.2d 466, 467 (Md. 1988) ("[T]he law of the jurisdiction

where the contract was made controls its validity and construction.").

 9
the asbestos removal phase of the Project, the written contract entered

into between Precon and G&B provided explicitly that both profits

and losses from the asbestos removal phase of the Project were to be

"shared equally" between them. In addition, the agreement provided

for each party to have a voice in the management of the venture: Precon and Alliance owner Mr. Massingale was to provide the direction

and day-to-day management of the Project, while G&B, through

either K.C. or Asha Goel, was to provide the financial management

and record keeping. Further, the agreement explicitly provided that

any of the three individuals named above had the authority to commit

expenditures related to the Project. Because the agreement provided

for the sharing of profits and losses and for each party to have a voice

in the management of the enterprise, the district court correctly held

that the agreement constituted a joint venture between Precon and

G&B for the asbestos removal phase of the Project.

Determining whether the agreement between Alliance and G&B

constituted a joint venture under Maryland law is a closer question

because the parties dispute whether Alliance and G&B agreed to

share losses. G&B asserts that Alliance agreed to assume liability for

all losses incurred during the demolition phase of the Project. However, neither G&B nor Alliance disputes the fact that they agreed to

share profits, nor does either dispute that they both had a voice in the

management of the enterprise. Therefore, the enterprise constitutes a

joint venture under Brenner. See Brenner , 34 A.2d at 857 (defining

joint venture as an association in which "two or more persons combine in a joint enterprise for their mutual benefit with the understanding that they are to share in profits or losses and that each is to have

a voice in its management").

G&B argues, however, that the testimony provided by the parties

during the trial suggests that the parties did not intend to enter into

a joint venture. In particular, G&B cites Massingale's testimony that

there was no contract between Ronald Hsu and a joint venture and his

testimony that while the parties had a profit sharing arrangement, they

were not a joint venture as that term is commonly used. The question

in this case, however, is not whether the parties believed that they had

entered into a joint venture as that term is commonly used, but rather

it is whether the parties intended to enter into an association that constitutes a joint venture as that term is defined under Maryland law. In

 10
answering this question, we look not only to the facts of the case, but

also to the contracts agreed upon, interpreting them in accordance

with ordinary rules governing the interpretation of contracts. See

Finch, 469 A.2d at 890. In this case, because it is undisputed that the

parties intended to share profits and the management of the venture

and because the written contract between Precon and G&B states so

explicitly, we agree with the district court that the parties intended to

enter into an association that constitutes a joint venture under Maryland law.

IV.

The next issue raised by G&B on appeal is whether the district

court erred when it excluded G&B's home office overhead expenses,

salaries to non-shareholders, and equipment rental costs in calculating

the profit to be shared by the parties. Before we address each of these

contentions in turn, we find it helpful to summarize the nature of a

joint venture relationship.

A.

Partners in a joint venture stand in a fiduciary relationship toward

one another. Herring v. Offutt, 295 A.2d 876, 879 (Md. 1972).

According to the Maryland Court of Appeals, "[t]he partnership relationship is of a fiduciary character which carries with it the requirement of utmost good faith and loyalty and the obligation of each

member of the partnership to make full disclosure of all known information that is significant and material to the affairs or property of the

partnership." Id.; see also Geo. Bert. Cropper, Inc. v. Wisterco Investments, Inc., 399 A.2d 585, 592 (Md. 1979) (law of partnership applies

to joint ventures). In addition, "the principle of utmost good faith covers not only dealings and transactions occurring during the partnership but also those taking place during the negotiations leading to the

formation of the partnership." Allen v. Steinberg, 223 A.2d 240, 246

(Md. 1966). A joint venture has been described as"`a partnership for

a single transaction,'" Herring, 295 A.2d at 597 (citation omitted),

and, thus, differs from a traditional partnership in its limitation to a

discrete project.

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B.

We first address G&B's argument that the district court erred when

it excluded G&B's home office overhead expenses from the calculation of the profit to be shared by the parties.

1.

Although we have found no Maryland case directly addressing the

impact of the nature of the joint venture relationship on the ability of

a party to charge home office overhead expenses to the joint venture,

we follow the general rule that a partner in a joint venture may not

charge the joint venture for home office overhead expenses. As stated

above, the joint venture relationship is akin to a partnership, but it is

a partnership "for a single transaction." See Herring, 295 A.2d at 879

(internal quotation marks and citation omitted) (emphasis added).

Unlike in a general partnership, in which every expense incurred by

one partner affects the other partners, in a joint venture, only expenses

incurred with respect to the particular project affect the other partner.

Therefore, only expenses directly attributable to the specific project

undertaken may be charged to the joint venture. Of course, the parties

may enter into an agreement explicitly permitting home office overhead to be charged to the joint venture. However, in the absence of

such an agreement, only those charges that are directly attributable to

the specific project may be charged to the joint venture.

The Delaware Supreme Court reached this same conclusion in

Commercial Metals Co. v. Pan Am. Trade & Inv. Corp. , 163 A.2d

264 (Del. 1960). In Commercial Metals, the Delaware Supreme Court

held that general overhead expenses were properly excluded from the

gross profit of the joint venture where the overhead"represented an

attempt by one joint venturer to charge compensation for services in

providing capital and in providing the organization to handle the

transaction." Id. at 268. According to the Commercial Metals court,

"[t]he general rule is that a coadventurer is not entitled to interest on

capital which he is bound to furnish, nor to general overhead costs

representing an allocation of cost of rendering services in furtherance

of the joint venture." Id. (emphasis added).

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2.

Applying these principles to the facts of this case, we note first that

the written contract between Precon and G&B is silent with regard to

home office overhead expenses. Since partners in a joint venture may

not charge the joint venture for costs that are neither permitted by

their agreement nor directly attributable to the joint venture, we agree

with the district court that G&B should not be able to charge the joint

venture for its home office overhead costs. Therefore, the district

court correctly excluded these costs when it calculated the profits to

be divided between the parties.

G&B argues, however, that its contract with Precon was not silent

with regard to overhead expenses. According to G&B, salaries paid

to stockholders are normally carried in the general overhead of a project, and since its contract with Precon explicitly excludes such payments from the calculation of gross profit, the agreement implicitly

permits the inclusion of other forms of overhead in the calculation.

However, salaries paid to stockholders for services rendered to the

joint venture are costs directly attributable to the specific project

undertaken, even if not allowed, while overhead expenses such as

home office expenses are not directly attributable to the project.

Rather, home office expenses are a cost of doing business in general.5

Therefore, even if the contract can be construed as permitting the parties to charge the joint venture costs other than shareholder salaries

that are directly attributable to the venture, it is silent with regard to

home office overhead expenses. In the face of such silence, these

expenses must be excluded from the calculation of profit.

C.

Bearing in mind the fiduciary nature of the relationship between

partners in a joint venture, we also agree with the district court that

the $10,000 paid to P.K. Goel and the $12,000 paid to Asha Goel as

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5 This point is illustrated by G&B's method of calculating general overhead expenses which is to divide the total company operating expenses

by the total project expenses. In this case, the overhead rate to be charged

was initially calculated at 31.87%, was reduced to 14.3% just prior to

trial, and was further reduced to 13.8% at trial.

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salary payments should not be considered an expense to the Project

when calculating the profit to be shared by the parties. As noted

above, the district court found that P.K. Goel provided no services to

the Project. Therefore, there is no question but that G&B violated its

fiduciary duty toward Precon and Alliance when it used revenue from

the Project to pay P.K. Goel for services that he never provided.

Similarly, we agree with the district court that the salary payments

made to Asha Goel should be excluded when calculating the profit to

be shared by the parties. As noted above, according to the provisions

of the written contract between G&B and Precon, no payment would

be made for services rendered by the shareholders of G&B and Precon. Instead, any salary paid to shareholders would be treated as a distribution of profits. On the other hand, payments to non-shareholders

would be treated as an expense when calculating profit and, therefore,

would reduce the amount of net profit.

In this case, the district court found that Asha Goel held herself out

as an equity owner in G&B by participating actively in the negotiations between the parties and by telling Massingale that she was providing funds for the Project. In addition, the written agreement

between Precon and G&B places Asha Goel on par with the corporations' presidents and shareholders by giving her the authority to commit expenditures on behalf of the joint venture and by naming her,

along with K.C. Goel, as responsible for the financial management of

the Project.

Given that the agreement included a provision expressly excluding

shareholder salaries as an expense that could be charged to the Project

when calculating profit and the district court's finding that Asha Goel

held herself out as an equity owner of G&B, we agree that K.C. Goel,

as the president of G&B and as G&B's primary representative during

the negotiations, had a fiduciary duty to disclose that Asha Goel was

not a shareholder of G&B. As the Maryland Court of Appeals has

stated, "the principle of utmost good faith covers not only dealings

and transactions occurring during the partnership but also those taking

place during the negotiations leading to the formation of the partnership." Allen, 223 A.2d at 246. In addition, the fiduciary relationship

between partners includes "the obligation of each member of the partnership to make full disclosure of all known information that is signif-

 14
icant and material to the affairs or property of the partnership."

Herring, 295 A.2d at 879.

In this case, K.C. and Asha Goel did not act according to the principle of utmost good faith during the negotiations when they held

Asha Goel out as a shareholder of G&B and then failed to clarify her

status, despite contractual provisions under which her status as nonshareholder would affect the profits of the joint venture. Therefore,

the district court correctly excluded the $12,000 paid to her as salary

from the calculation of profit to be shared by the parties.

D.

G&B's final contention with regard to the district court's exclusion

of certain costs from the calculation of the shared profit is that the district court improperly excluded G&B's equipment rental costs when

it calculated the profit to be shared by the parties. Although G&B

acknowledges that it initially included its equipment costs in its home

office overhead, which we have held was properly excluded by the

district court, G&B contends that it submitted alternative evidence to

the district court detailing the various pieces of equipment sent to the

Project by G&B and the equipment rental cost of each piece of equipment at 80% of the market rate. These costs, G&B argues, should

have been included in the calculation of the profit, even if other portions of the home office overhead were properly excluded, because

the written contract between Precon and G&B expressly provides that

"[f]or rental of equipment, each entity will charge the [P]roject its

lowest rate, typically eighty percent of the market rates." (J.A. at 14).

We agree with G&B that the district court erred when it failed to

include rental equipment costs at 80% of the market rate in the calculation of the profit to be shared by the parties. As correctly noted by

G&B, the written contract between Precon and G&B expressly provides that each entity would charge the Project its lowest rate for the

rental of equipment to the Project, typically 80% of the market rate.

In this case, G&B has submitted unrefuted evidence that it loaned a

significant amount of equipment to the Project and that 80% of its

rental market rate was $63,432. While G&B initially included these

costs in its home office overhead and, thus, did not submit a separate

claim for them to either Precon or Alliance, the agreements between

 15
the parties expressly provide that such costs may be charged to the

Project. Therefore, the district court should have included these costs

when calculating the profit to be shared by the parties in this case.

V.

G&B next asserts that the district court erred when it interpreted

the agreements to require that Precon assume only 50% of the losses

attributable to the demolition phase of the Project. According to

G&B, Alliance agreed to bear 100% of any losses incurred during the

demolition phase of the Project, and Precon later assumed that

responsibility when it agreed to bear responsibility for Alliance's

share of any losses in the amendment to its agreement with G&B. As

a result of this alleged misinterpretation, G&B argues that the district

court failed to allocate 100% of the losses incurred during the demolition phase of the Project to Precon and Alliance.

This dispute is moot, however, under our earlier holding that G&B

is not permitted to charge the Project for home office overhead.

According to G&B's own calculations presented to the district court,

it charged $113,584 in home office overhead to the demolition phase

of the Project, and that phase of the Project incurred losses totaling

$97,799. If home office overhead is omitted as a cost charged to the

Project, the demolition phase of the Project incurred no losses, but

rather generated a profit of $15,785. Since no losses can, therefore,

be attributed to the demolition phase of the Project, the allocation of

responsibility for any such losses is a moot point.

VI.

Finally, G&B asserts that the district court abused its discretion

when it awarded Precon and Alliance prejudgment interest. The district court awarded prejudgment interest at a rate of 6% per annum

based on its conclusion that G&B had breached its fiduciary duty

toward Precon and Alliance and had withheld payment on a sum that

was liquidated and due at least as of March 1, 1992. G&B argues that

the district court's choice of March 1, 1992 as the date from which

prejudgment interest would be calculated was arbitrary and that the

sum owed to Precon and Alliance was not liquidated until after the

district court issued its decision. We disagree.

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A.

The award of prejudgment interest is recoverable as a matter of

right in some circumstances. See I.W. Berman Prop. v. Porter Bros.,

Inc., 344 A.2d 65, 75 (Md. 1975) (prejudgment interest recoverable

as matter of right under contracts in writing to pay money on certain

day). However, "[t]he award of prejudgment interest is generally left

to the discretion of the trial judge" and is"based on the `equity and

justice appearing between the parties and a consideration of all the

circumstances.'" Agnew v. Maryland, 446 A.2d 425, 447 (Md. App.

1982) (citation omitted).

B.

We hold that the district court acted within its discretion when it

awarded 6% per annum prejudgment interest to Precon and Alliance

from March 1, 1992. In accordance with the principles set forth

above, the district court explicitly based its award of prejudgment

interest on a consideration of all of the circumstances in this case and

on its conclusion that G&B had violated its fiduciary duty toward Precon and Alliance. We affirm both the award and the date from which

interest is to be calculated as properly within the district court's discretion.

VII.

For the reasons set forth above, we affirm in part the district court's

judgment in favor of Precon and Alliance. We hold, however, that the

judgment should be modified to take into account equipment rental

costs incurred by G&B and expressly permitted by the agreements at

issue. Therefore, we affirm in part, vacate in part, and remand for the

district court to modify the judgment consistent with this opinion.

AFFIRMED IN PART, VACATED IN PART,

AND REMANDED

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