REPORTED 

IN THE COURT OF SPECIAL APPEALS

OF MARYLAND 

 

No. 226 

September Term, 2014 

______________________________________ 

YOUNG ELECTRICAL CONTRACTORS, 

INC., 

v. 

DUSTIN CONSTRUCTION, INC. 

______________________________________ 

 Eyler, Deborah S., 

 Reed, 

 Salmon, James P., 

 (Senior Judge, Specially Assigned), 

JJ.

______________________________________ 

Opinion by Reed, J.

______________________________________ 

 Filed: December 28, 2016 
1

Appellant, Young Electrical Contractors, Inc. (“Young”), entered into a 

subcontractor agreement with appellee, Dustin Construction, Inc. (“Dustin”) to perform all 

required electrical work for a prime contract Dustin entered into with George Mason 

University in Virginia. Due to a number of delays in the project, Young was unable to meet 

the agreed-upon date for substantial completion of the work. As a result, Young 

experienced a number of cost overruns and sought payment for those overages via a 

number of change requests. When Young did not receive those payments from the 

university via Dustin, Young sued Dustin in the Circuit Court for Montgomery County for 

breach of the subcontract. 

Dustin’s defense of the suit centered on the subcontract’s “pay-when-paid” clauses, 

a set of clauses that provided Young would be paid when Dustin received payment from 

the university. The circuit court agreed with Dustin and granted summary judgment on 

Young’s breach of contract claim, explaining that, under the pay-when-paid clauses, Dustin 

was not liable to Young for the change requests because George Mason had not yet paid 

Dustin for those amounts.

We are asked to review the trial court’s grant of summary judgment to Dustin. 

Appellant poses four questions for our consideration, which we have consolidated and 

rephrased in three questions below:1

 

1 Appellant originally presented the following two questions in its brief: 
2

I. Whether the circuit court erred in its determination of the 

validity of the “pay-when-paid” clauses of the parties’ 

agreement; 

II. Whether the circuit court erred where it determined the 

“pay-when-paid” clauses applied to the present dispute;

III. Whether the circuit court erred where it did not find a 

genuine dispute of material fact that the changes to the 

project were owner-initiated. 

We hold the circuit court committed no error in finding the pay-when-paid clauses 

applied to the present dispute, which allowed for the entry of summary judgment on the 

 

I. Did the lower court err when it entered its summary judgment 

in favor of a defendant general contractor pursuant to a “paywhen-paid” clause, prior to any discovery in the case, in 

reliance on the wrong “pay-when-paid” language of the 

subcontract?

II. If appellate review were not limited to the reasons relied upon 

in the lower court, and the lower court had applied the 

potentially applicable “pay-when-paid” language advanced by 

the defendant general contractor in its Motion for Summary 

Judgment, was summary judgment precluded by material 

factual disputes over whether all of the claims underlying 

Plaintiff’s breach of contract action were limited to ownerinitiated changes?

III. If appellate review were not limited to the reasons relied upon 

by the lower court, did the prevention doctrine preclude the 

entry of summary judgment prior to the opportunity for 

discovery in the case on the basis that the general contractor 

did not make the administrative procedure for disputes 

available to the subcontractor?

IV. Did the lower court err when it interpreted the “pay-whenpaid” clause as equivalent to a “paid-if-paid” clause? 
3

breach of contract claim in favor of Dustin. Accordingly, we affirm the judgment of the 

circuit court and shall explain.

2

FACTUAL AND PROCEDURAL BACKGROUND

Appellant, Young Electrical Contractors, Inc., is an electrical contracting firm based 

in Laurel, Maryland, which specializes in the installation of electrical equipment for 

construction projects. Appellee, Dustin Construction, Inc., is a construction firm based in 

Ijamsville, Maryland, and is primarily engaged in the construction industry as a general 

contractor.

 George Mason University (“George Mason” or “Owner”), is a public university 

located in Fairfax County, Virginia. George Mason sought to renovate and construct an 

addition to Building Two of its Student Union (the “Project”). Dustin bid on and was 

 

2 On August 11, 2016, the appellee (Dustin Construction) filed a Suggestion of 

Bankruptcy with this Court, arguing that the present appeal should be stayed pursuant to 

11 U.S.C. § 362 based on a pending involuntary bankruptcy case against the appellant 

(Young Electrical) that was filed in the United States Bankruptcy Court for the District of 

Maryland on October 23, 2014, by certain alleged, non-party creditors. 

On August 19, 2016, the appellant filed a Motion to Strike and/or Disregard the 

Suggestion of Bankruptcy filed by the Appellee. Among other things, the appellant asserts 

that “the statute providing for an automatic stay following the filing of a bankruptcy 

petition [(11 U.S.C. § 362)] applies only to actions ‘against the debtor.’” Because the 

present case involves an action brought by the bankruptcy debtor, not against it, the 

appellant contends that an automatic stay would be improper. 

Upon consideration of 11 U.S.C. § 362 and the relevant case law, we agree with the 

appellant’s argument that the automatic stay does not apply because this case does not 

involve an action against the bankruptcy debtor. Moreover, Dustin did not argue that 

because of the bankruptcy filing, the right to assert Young’s claims belongs to a bankruptcy 

trustee rather than to Young itself. See Morton v. Schlotzhauer, 449 Md. 217, 224 (2016). 

Therefore, we hereby grant the appellant’s Motion to Strike the Suggestion of Bankruptcy 

filed by the Appellee. 
4

awarded the contract for the Project as general contractor. Dustin and George Mason 

executed this contract (the “Prime Contract”) on or about July 20, 2010. Needing a 

subcontractor for the electrical work required under the Prime Contract, Dustin entered into 

a subcontract with Young on or about October 15, 2010 (the “Subcontract”) for this work.

 Per George Mason’s Notice to Proceed, work on the Project commenced on July 30, 

2010. Although the Prime Contract set November 15, 2010, as the date for substantial 

completion of the Project, the Notice to Proceed extended the substantial completion date 

to November 30, 2010. Young, however, achieved substantial completion on March 8, 

2011—more than three months after the date set by George Mason. 

 The delays in completion of the work prompted Young to submit three Change 

Requests; two of those three requests—Nos. 1066 and 1067—are at issue in this appeal.3

Young submitted Change Request No. 1066 to Dustin on September 14, 2011, which 

sought $259,034.99 for “extended overhead costs associated with [George Mason]’s 

extension of the contract.” Dustin then submitted Change Request No. 1066 along with its 

own delay claim to George Mason on November 16, 2012. Per George Mason’s request, 

Dustin separated Change Request No. 1066 from its own claim, and also reduced the 

amount requested in No. 1066 to $180,010.21. That amount reflected the removal of costs 

that were not covered under the Subcontract. No. 1066 was then resubmitted to George 

Mason on March 4, 2013.

 

3 The first of the three change requests, No. 1046, was resolved on February 5, 

2014, when Dustin paid Young the requested amount of $23,843.00. 
5

About a year-and-a-half later, on February 15, 2013, Young submitted Change 

Request No. 1067, which sought $274,812.33 because of “owner initiated . . . design 

changes, design errors, unforeseen conditions and additions/deletions of the work 

originally required.” Young explained that it experienced an “overrun of hours” because it 

was “forced to accelerate the electrical activities by adding additional manpower, 

supervision, tools, equipment, overtime and shift work.”

 Young filed its Complaint in the Circuit Court for Montgomery County on 

September 3, 2013, alleging a single count of breach of contract against Dustin.4

 The 

complaint alleged that Young was not responsible for the three month delay in achieving 

substantial completion of its work. It further alleged that, because of the delays to the 

Project, it had to work overtime and, as a result, incurred additional costs. Young contended

that it submitted its claims arising from the additional work, but that Dustin failed to 

provide Young with any information or documentation demonstrating that Young’s claims 

 

4

 The subcontract provides a mechanism by which Young could have gone after the 

Owner for the additional payment. That mechanism, which is delineated in Section 27 of 

the subcontract and, by incorporation, Section 47 of the general contract, is to first have 

the general contractor submit a claim to the Owner for the Owner’s approval. Then, if the 

Owner has denied the subcontractor’s claim (which the general contractor would have 

brought on its behalf), the subcontractor can take legal action against the Owner as 

permitted under Section 47 of the general contract. Unfortunately for Young, the first 

sentence of the third paragraph of Section 47 reads: “The decision of the agency head or 

other signatory on the Contract shall be final and conclusive unless the Contractor within 

six (6) months of the date of the final decision on a claim, initiates legal action as provided 

in § 2.2-4364 of the Code of Virginia.” (Emphasis added). Thus, Young could have gone 

after the Owner within six months of the final decision on its claim, but instead chose to 

pursue an action against the general contractor.
6

were submitted to George Mason. Young further contended that Dustin failed to process 

its claims, and that Dustin had not paid and pursued Young’s claims against George Mason. 

Young alleged that Dustin committed a breach of contract where it directed Young to 

perform the additional overtime work, but failed and refused to pay for that work and its 

associated costs. 

 George Mason denied both Change Request No. 1066 and Change Request No. 

1067 on September 17, 2013. These requests implicated the “pay-when-paid” provisions 

of the Subcontract, which explained that Young’s payment was contingent upon, as a 

condition precedent, Dustin’s receipt of payment from George Mason. Because George 

Mason denied both Change Requests, Dustin was not paid the requested amounts and, in 

turn, pursuant to the pay-when-paid provisions, Dustin did not pay Young its requested 

amounts. 

 Dustin filed its Answer to the Complaint, along with a motion for summary 

judgment (the “Motion”), on October 21, 2013. The Motion argued, among other things, 

that Dustin was not liable to Young for the requested amounts because of the pay-whenpaid provisions of the Subcontract. 

 The circuit court heard the parties on the Motion on January 22, 2014, and delivered 

its oral opinion on February 11, 2014. The court explained that its review of the record 

demonstrated that Dustin had, in fact, submitted both Change Requests to George Mason. 

In addition, the court held that summary judgment was appropriate because George Mason 

refused both of the requests and did not pay Dustin, making the pay-when-paid provision 

of the Subcontract applicable to the present dispute. 
7

 The circuit court entered summary judgment by Order dated February 18, 2014. 

Young moved the court for reconsideration on February 21, 2014, but the court denied the 

motion on April 7, 2014. 

Young timely noted its appeal on April 11, 2014. 

DISCUSSION

(i) Validity of Pay-When-Paid Clauses

A. Parties’ Contentions

 Young argues that the circuit court misinterpreted the Subcontract to grant summary 

judgment in favor of Dustin. It explains that the court cabined its analysis solely within 

Section 2(c) of the Subcontract, which, it claims, applies only to amounts found due and 

owing and not to disputed claims as in the present case. The circuit court’s interpretation 

of the contract, Young contends, ignores other applicable paragraphs, including but not 

limited to Sections 13(d), 27, 28, and 39, in contravention of principles of contract 

interpretation.

Dustin responds that there are several provisions within the Subcontract that would 

act to bar Young’s claim. Specifically, Sections 2(c), 13(c), and 27(f) each contain a 

condition precedent that requires payment from George Mason before Young is paid. 

Therefore, according to Dustin, because each of these three potentially applicable Sections 

contains the same condition precedent, Young’s claim under the Subcontract is barred. 

B. Standard of Review

 The interpretation of written contractual terms is a question of law we review de 

novo. Nova Research, Inc. v. Penske Truck Leasing Co., 405 Md. 435, 448 (2008). Unlike 
8

the factual determinations of a circuit court, its legal determinations are not afforded 

deference on appeal. Thomas v. Capital Med. Mgmt. Assocs., LLC, 189 Md. App. 439, 453 

(2009). Such legal determinations, i.e., determination based on Maryland statutory or case 

law, are reviewed de novo for legal correctness. See id. at 454. 

Maryland courts apply an objective interpretation of contracts. Id. If the terms of a 

contract are unambiguous, the plain meaning of the agreement will prevail and the court 

will not consider the parties’ subjective intent at the time of formation. Id. If a reasonably 

prudent person finds that the contract is susceptible of more than one meaning, the court 

will determine the contract is ambiguous. Id. The terms of the contract are interpreted in 

context, each of them interpreted together with contract’s other provisions. Atlantic 

Contracting & Material Co., Inc. v. Ulico Cas. Co., 380 Md. 285, 301 (2004) (Ulico); 

Jones v. Hubbard, 356 Md. 513, 534–35 (1999). We give the terms of the contract their 

customary, ordinary, and accepted meaning. See Ulico, 380 Md. at 301. 

C. Analysis

 The pay-when-paid clauses in the Subcontract are valid contractual provisions, and 

we will consider their applicability in turn. We note initially that the present dispute is 

governed by Virginia law per the choice of law provision in Section 31 of the Subcontract. 

 In Virginia, as in Maryland, issues of contract interpretation are reviewed de novo. 

Bailey v. Loudoun Cnty. Sheriff’s Office, 762 S.E.2d 763, 766 (Va. 2014); accord Ocean 

Petroleum, Co., Inc. v. Yanek, 416 Md. 74, 86 (2010). 

 The seminal case on pay-when-paid clauses is a 1962 opinion of the U.S. Court of 

Appeals for the Sixth Circuit. In Thos. J. Dyer Co. v. Bishop International Engineering 
9

Co., 303 F.2d 655 (6th Cir. 1962), the Sixth Circuit considered the enforceability of a paywhen-paid clause in a subcontracting agreement. In the ordinary course, a general 

contractor assumes a degree of credit risk related to the owner’s solvency, and there exist 

protections against this risk that a general contractor may employ, e.g., mechanic’s liens or 

installment payments. See id. at 660. The subcontractor need not incur that credit risk 

unless the parties agree to it. See id. at 660–61. The Sixth Circuit explained that, in order 

for that risk to be shifted from the general contractor to the subcontractor, the parties must 

agree to an express condition in their subcontract that demonstrates their intent. Id. at 661. 

That Court ultimately held that the pay-when-paid provision at issue did not shift the credit 

risk to the subcontractor, and that the language of the provision afforded the general 

contractor a period of time to receive payment from the owner in order to pay the 

subcontractor. See id.

 The Supreme Court of Virginia first considered pay-when-paid clauses and the 

associated defense in Galloway Corp. v. S.B. Ballard Construction Co., 464 S.E.2d 349 

(Va. 1995). The Court held that pay-when-paid clauses will be upheld as valid if the 

contract “on its face reasonably contemplates eventual payment by the general contractor 

to the subcontractor” or the parties clearly intended that a condition precedent be fulfilled 

before the general contractor pays the subcontractor. Id. at 501. 

To reach its holding on conditions precedent, the Galloway Court relied on our 

opinion in Gilbane Building Co. v. Brisk Waterproofing Co., Inc., 86 Md. App. 21 (1991). 

There, we held that for a valid condition precedent to exist within a pay-when-paid clause, 

courts will look to the unambiguous language of the contract to see whether such a 
10 

condition is established. See id. at 27–28. We explained that the inclusion of conditions 

precedent in a subcontracting agreement involves a shift in the credit risk from the general 

contractor to subcontractor: 

A provision that makes receipt of payment by the general 

contractor a condition precedent to its obligation to pay the 

subcontractor transfers from the general contractor to the 

subcontractor the credit risk of non-payment by the owner 

for any reason (at least for any reason other than the general 

contractor's own fault), including insolvency of the owner.

Id. at 28–29 (emphasis in original). This shift in risk accordingly demands an express 

reference in the subcontract to a condition precedent. See id. (explaining that Atlantic States 

Constr. Co. v. Drummond & Co., Inc., 251 Md. 77, 81–84 (1968) (Drummond) and its 

consideration of the Dyer opinion is construed to require a subcontract to make an express 

reference to a condition precedent, regardless of reason for the condition, as long as 

subcontractor understands there is a shift in credit risk). We determined the condition 

precedent in the parties’ contract was unambiguous and allowed for the objective 

interpretation that the subcontractor would not receive payment from the general contractor 

“unless and until” the owner paid the general contractor. Id. at 28.

 Section 2(c) is a valid pay-when-paid clause under Virginia law, as it comports with 

the Galloway Court’s acceptance of our holding in Gilbane. Section 2(c) is the subsection 

of the “Payments to Subcontractor” section that is relevant to this dispute. Section 2 sets 

forth the understandings between the parties and the procedures for Dustin’s payments to 

Young for the electrical work under the Subcontract. The clause in Section 2(c) states, in 

relevant part: 
11 

It is specifically understood and agreed that the Contractor’s 

obligation to pay all or any portion of the Subcontract Sum to 

Subcontractor, whether as a progress payment, retainage, or a 

final payment, is contingent, as a condition precedent, upon 

the contractor’s receipt of payment from the Owner of all 

amounts due Contractor on account of the portion of the Work 

for which the Subcontractor is seeking payment. 

(Emphasis added). 

 The Subcontract explicitly establishes that George Mason’s payment to Dustin is 

the condition precedent to Dustin’s payment of Young. This contract language is virtually 

the same as the language in Gilbane that we found to constitute a valid condition precedent 

within a pay-when-paid clause. Id. at 25, 28. (holding that the following language 

established a condition precedent to the subcontractor’s payment: “It is specifically 

understood and agreed that the payment to the trade contractor is dependent, as a condition 

precedent, upon the construction manager receiving contract payments, including retainer 

from the owner.” (emphasis added)). The Galloway Court accepted our reasoning on 

conditions precedent, which permits us to determine that Section 2(c) is a valid pay-whenpaid clause under Virginia law. See Galloway, 464 S.E.2d at 354 (“If . . . as in Gilbane, the 

parties clearly intend there to be a condition precedent fulfilled before payment comes due, 

the contract will be construed as written . . . .”). 

 Section 13(c) is most relevant to the present dispute, as it addresses payments arising 

from owner-initiated changes. That subsection provides, in relevant part:

In the event a change is made to this Contract as a result of the 

Owner’s change to the Prime Contract and such change causes 

an increase or decrease in the cost of and/or the time required 

for performance under this Subcontract, Subcontractor may 

submit to Contractor in writing in accordance with the 
12 

requirements of the Changes Clause of the General Contract a 

request for an equitable adjustment in the Subcontract Sum 

and/or the Subcontract Time, or both . . . . Contractor shall pay 

to Subcontractor that amount paid by the Owner to Contractor

on account of any such change to this Subcontract, less any 

markup and other amounts due Contractor on account of such 

change. Contractor shall have no liability to Subcontractor on 

account of any such Owner initiated change except for such 

amount, if any. 

(Emphasis added). 

 Section 13(c) is similar to the pay-when-paid provision in Dyer in that it does not 

contain an express condition precedent, but rather simply explains that Dustin “shall pay” 

to Young the amount Young incurred because of an Owner-initiated change. Dustin is 

made liable to Young only for the change amounts that Young requested from George 

Mason and that George Mason paid. There is no timeframe, however, attached to Dustin’s 

payment of Young under this clause. See Gilbane, 86 Md. App. at 25 (explaining that, 

without an express condition, a pay-when-paid clause “postpones the time for payment 

until the happening of a certain event or for a reasonable period of time if such event does 

not occur.”). Also, there is no apparent shift in the credit risk arising from this Section 

because of the lack of express conditional language. Accordingly, Section 13(c) by itself 

operates as a standard pay-when-paid clause because of the lack of conditional language. 

See id. at 25–26 (citing Drummond, 251 Md. at 79, 82–83 for proposition that for standard 

pay-when-paid clause to shift normal credit risk and provide for payment at specific time 

or occurrence, there must be an express condition in the clause). 

 We cannot, however, review Section 13(c) in isolation. See Ulico, 380 Md. at 301 

(explaining that the terms of the contract are interpreted in context, with each of them 
13 

interpreted together with contract’s other provisions). To do so would ignore the effect of 

Section 2(c), which is a payments clause of general applicability. Although Section 13(c) 

does not contain an express condition precedent, it does contemplate payments to Young 

where George Mason has initiated a change in the Project. As Section 2(c) sets forth the 

procedure for payments to Young, its applicability to 13(c) should not be ignored. 

Accordingly, when both sections are read together, Dustin’s receipt of a change payment 

from George Mason is the condition precedent that must be met if Young is to receive that 

payment. By consenting to Section 2(c), Young has accepted the credit risk and cannot 

hold Dustin liable for non-payment if it does not receive its change payment. See Gilbane, 

86 Md. App. at 28–29. 

 Because the Galloway Court adopted the reasoning of the Dyer court, we think that 

Dyer’s reasoning is applicable to the present case. See Galloway, 464 S.E.2d at 353–54. 

Section 13(c) is enforceable as a pay-when-paid clause subject to a condition precedent in 

Section 2(c) because Young agreed, by operation of Section 2(c), that all payments were 

subject to the condition of George Mason’s payment of Dustin. Read together, Young 

agrees to the shift in credit risk when it seeks payment arising from change orders.

 Section 27(f) is similar to Section 13(c) insofar as it contemplates payments arising 

from certain scenarios. Section 27 applies to the resolution of disputes involving George 

Mason, and subsection (f) places limits on Dustin’s liability to Young for Owner-involved 

disputes. Section 27(f) provides: 

Contractor shall have no liability to Subcontractor on account 

of any claim, suit or appeal arising under or relating to the 

Prime Contract, or the Owner’s conduct thereunder except that 
14 

recovered by Contractor from the Owner on Subcontractor’s 

behalf, if any, less any markups and other amounts due 

Contractor on account of such claim, suit or appeal. 

(Emphasis added). 

 This clause makes clear that Young cannot sue Dustin directly for any issues related 

to the Prime Contract or George Mason’s conduct under that agreement. Under this 

provision, Dustin is liable to Young only where Dustin has recovered an amount under this 

Section of the Subcontract on Young’s behalf. Section 27(f) operates like Section 13(c) in 

that it limits Dustin’s exposure to Young to only certain amounts and claims. Without such 

an Owner-involved claim for which Dustin has already recovered from George Mason, 

Young cannot lodge a separate claim against Dustin. Section 27(f) is, therefore, a paywhen-paid clause in that it contemplates a valid claim against Dustin only where Dustin 

has received payment from George Mason. There is no conditional language here, but like 

Section 13(c), it must be read in tandem with Section 2(c). Because 2(c) does contain an 

express condition on payments to Young, it will apply to those claims Young makes against 

George Mason via Section 27(f). Where Section 27(f) creates a “remedy” for Young 

against George Mason, Section 2(c) provides the procedure for Young’s payment for a 

valid claim under 27(f). 

(ii) Applicability of Pay-When-Paid Clauses

A. Parties’ Contentions

 Young further argues that the circuit court erred in applying Section 2(c) of the 

Subcontract to dismiss its claim. It explains that Section 2(c) was not relied on by either of 

the parties and that Dustin chose to rely on Section 13(c) in support of its Motion. Young 
15 

further explains that the differences between the Sections are critical because they each 

apply to distinct sections. It contends that Section 13(c)—rather than Section 2(c)—is the 

provision appropriate to the present scenario because it concerns changes to the 

Subcontract. 

 Dustin contends that Sections 2(c), 13(c), and 27(f) are each applicable to the 

present case and each serve to bar Young’s claim. Dustin argues that Section 2(c)’s paywhen-paid provision applies because 2(c) governs the payment of “all or any portion of the 

Subcontract Sum,” which is what Young’s Change Requests sought. It further argues that 

Section 13(c) applies because that section of the Subcontract governs owner-initiated 

changes, which were at issue here. Last, Dustin argues that Section 27(f) is potentially 

applicable because that provision governs claims arising from a dispute. If Young’s claims 

are characterized as arising from a dispute, Dustin explains, then the pay-when-paid 

provision of Section 27(f) should apply. 

B. Standard of Review 

A party may seek summary judgment on all or part of an action, provided there is 

no genuine dispute as to any material fact and that party is entitled to judgment as a matter 

of law. Md. Rule 2-501(a). Whether the trial court properly granted summary judgment is 

a question of law. Boland v. Boland, 423 Md. 296, 366 (2011) (internal quotation marks 

and citations omitted). Accordingly, we conduct a de novo review of the trial court’s grant 

of summary judgment. Id. We engage in an independent review of the record to determine 

whether there existed a genuine dispute of material fact and, if not, whether judgment as a 

matter of law was appropriate. Id. The record is reviewed in the light most favorable to the 
16 

non-moving party, and any reasonable inferences drawn from the facts are construed 

against the moving party. Id.

C. Analysis

 The circuit court properly granted summary judgment on Young’s claims to the 

amounts owed for the Change Requests. Sections 2(c), 13(c), and 27(f) of the Subcontract 

are each applicable to the instant dispute. Because Dustin received no payments from 

George Mason for the Change Requests, Dustin was unable to pay Young under any 

applicable Section of the Subcontract.

 Section 37 of the Prime Contract provides the requirements and procedures for 

payments made by Dustin to subcontractors or suppliers. In relevant part, Section 37(a) 

provides: 

[T]he Contractor is obligated to: 

(a) Within seven (7) days after receipt of amounts paid to the 

Contractor by the Owner for Work performed by the 

Subcontractor or Supplier under this Contract, 

(1) Pay the Subcontractor or Supplier for the 

proportionate share of the total payment received 

from the Owner attributable to the Work performed 

by the Subcontractor or the materials furnished by 

the Supplier under this contract . . . .

(Emphasis added). 

 This section of the Prime Contract clearly envisions a conditional pay-when-paid 

scheme for all subcontractor or supplier payments by George Mason. Although we do not 

require certain language to create a condition precedent in a contract, “words and phrases 

such as ‘if,’ ‘provided that,’ ‘when,’ ‘after,’ ‘as soon as’ and ‘subject to’” are often 
17 

associated with the establishment of conditions. Richard F. Kline, Inc. v. Shook Excavating 

& Hauling, Inc., 165 Md. App. 262, 274 (2005). Section 37(a) sets forth a discrete time 

period in which payments must be made to the subcontractor or supplier, and the condition 

is denoted by the word “after,” indicating that Dustin’s receipt of payment is the applicable 

condition. Furthermore, Section 37(b) contemplates an incentive scheme to encourage 

prompt payments to a subcontractor when the Owner has paid Dustin. That section requires 

Dustin to pay interest to a subcontractor for any payment made more than seven days after 

receipt of payment from George Mason. These provisions demonstrate a clear intent of the 

parties to the Prime Contract to pay subcontractors upon Dustin’s receipt of payment from 

George Mason. See Kline, 165 Md. App. at 273 (“[W]hen the language is clear and 

unambiguous we must presume that the parties meant what they expressed, leaving no 

room for construction.” (internal quotation marks omitted)); see also Gilbane, 86 Md. App. 

at 25 (pay-when-paid clauses postpone time for payment “until the happening of a certain 

event or for a reasonable period of time.”). This intent is underscored by the fact that there 

is no language in Section 37 that Dustin may pay a subcontractor at any point, regardless 

of whether it receives payment from George Mason or not. 

 Section 2(c) establishes a pay-when-paid clause with a condition precedent that is 

applicable to all subcontractor payments. Nevertheless, we need not conduct an 

examination of the relevant clause within Section 2(c) for conditional language because, 

as explained in section (i).C of our discussion supra, that part of the Subcontract expressly 

mentioned payment by George Mason to Dustin as a condition precedent to Dustin’s 

payment of Young. This makes clear Section 2(c)’s objective meaning—that Dustin is 
18 

under no obligation to pay Young until Dustin receives payment from George Mason. See 

Gilbane, 86 Md. App. at 28 (holding that unambiguous language in subcontractor 

agreement established condition precedent indicating general contractor was not obligated 

to pay subcontractor until general contractor received payment from owner). 

 The placement of this language near the beginning of the agreement is additionally 

persuasive. Section 2 immediately follows the description of the scope of the agreement 

and the work to be performed, and the Section’s title is general in nature. Section 2 does 

not provide payment instructions for any specific factual scenarios. Rather, by virtue of its 

placement in the agreement and non-specific language, we think that Section 2 

contemplates general applicability to performance of the Subcontract. Accordingly, 

because George Mason did not pay Dustin for the Change Requests, it is impossible for 

Dustin to follow the letter of the agreement. It did not receive the money from George 

Mason, which is the necessary condition precedent in Section 2(c). Therefore, the circuit 

court’s grant of summary judgment was entirely appropriate. 

The general applicability of Section 2(c) to the agreement means that it applies to 

the scenarios encompassed by Sections 13 and 27. Section 13 sets forth the parties’ 

understanding regarding changes to the scope and progress of the work. Specifically, 

Section 13(c) discusses Owner-initiated changes and explains that, as long as Young 

follows the procedure for seeking an equitable adjustment for Owner-initiated changes, 

George Mason will pay Dustin that adjusted sum and Dustin will, in turn, pay Young the 

requested amount. Although Section 13(c) does not possess an explicit reference to 

conditions precedent, the subsection’s language makes clear the procedure envisioned for 
19 

the payment of change requests. Dustin and Young agreed that “[Dustin] shall pay to 

[Young] that amount paid by [George Mason] to [Dustin] on account of any such change 

to this Subcontract[.]” (emphasis added). Reading just that clause in isolation, we think it 

difficult to envision a payment scheme under this subsection where Young would receive 

payment from Dustin regardless of whether Dustin received payment from George Mason. 

The clause’s language conveys a temporal sequence where Dustin will pay Young once it 

receives payment from George Mason. 

Nevertheless, the general payment procedure in Section 2(c) applies to the change 

payment procedure in Section 13(c) because we must construe contractual provisions in 

such a way that no part of the agreement is rendered meaningless. Ulico, 380 Md. at 301; 

see also DIRECTV, Inc. v. Mattingly, 376 Md. 302, 320 (2003). The temporal sequence for 

payments arising from Owner-initiated changes in Section 13(c) mirrors the general 

payment procedure in Section 2(c)—change payments must be made to Dustin by George 

Mason before the former can pay Young for that same amount. Without any change 

payments received from George Mason, Dustin could not pay Young per their agreed-upon 

payment arrangement. To hold Dustin liable to Young for the Change Requests absent any 

payment from George Mason would contravene the parties’ contractual intent and render 

the pay-when-paid clauses meaningless. 

 Section 27(f) of the Subcontract operates as a pay-when-paid clause only to the 

extent that Young has a claim against George Mason arising from the latter’s conduct under 

the Prime Contract. Section 47 of the Prime Contract, entitled “Contractual Disputes,” 

explains that claims under that agreement include either money or other relief. Per Section 
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27(b), Young’s claims against George Mason entail monetary claims. Therefore, whether 

Section 27(f) operates as a pay-when-paid clause depends on whether Young’s claims are 

considered Owner-involved disputes. 

 We think the claims to Change Requests 1066 and 1067 are indeed Owner-involved 

disputes. Both of the Change Requests cite George Mason’s changes as the cause for 

submission of the requests. It is George Mason’s denial of the Change Requests, however, 

that is at the heart of the present dispute. Young’s claims are ultimately against George 

Mason. As stated supra, Section 27(f) limits Dustin’s exposure to those amounts it recovers 

on behalf of Young for Owner-involved claims. The circuit court made findings that Dustin 

had indeed submitted the Change Requests to George Mason. Dustin followed the requisite 

procedures and is not liable for George Mason’s declination of the Change Requests. 

Section 27(f) states that Dustin will only be liable to Young for amounts recovered from 

George Mason in any Owner-involved dispute. Without that recovery, however, Young 

cannot seek payment from Dustin in those amounts. 

 We hold that summary judgment was appropriate in this case. Sections 2(c), 13(c), 

and 27(f) operate to preclude Young’s recovery of the Change Request amounts from 

Dustin because they are pay-when-paid clauses subject to an enforceable condition 

precedent of payment from George Mason to Dustin. Without satisfaction of this condition, 

Young is unable to hold Dustin liable for those amounts.
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(iii) Existence of Factual Dispute Regarding Owner-Initiated Changes

A. Parties’ Contentions 

Young contends that there were several factual disputes preventing the entry of 

summary judgment. It argues that there was a genuine dispute as to whether the Change 

Requests were the product of Owner-initiated changes. Young considers the 

characterization of the changes as an attempt to rely on the pay-when-paid language in 

Section 13(c). It contends that it disputed this characterization of the changes and, 

accordingly, summary judgment was not appropriate.

 Dustin argues that Young attempts to construct an alternate theory of events from 

allegations in the Complaint and statements made by its counsel. Dustin contends that in 

so doing, however, Young has not met its burden of production to demonstrate that there 

was a dispute of fact, necessitating our reversal of the grant of summary judgment. Dustin 

argues the evidence and affidavits it submitted supported the grant of summary judgment 

and, furthermore, the Change Requests themselves demonstrate Young stated that the 

claims were the result of owner-initiated actions.

B. Standard of Review 

As discussed in section (ii).B supra, we review the trial court’s record to discern 

whether there was a genuine dispute of material fact that would preclude the entry of 

summary judgment. We shall review the record in a light most favorable to the non-moving 

party and shall construe any reasonable inferences from the facts against the moving party. 
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C. Analysis

Young’s contention that the Change Requests were not the product of Ownerinitiated changes does not comport with the record in this case. The body of evidence 

presented to the circuit court cannot support a factual dispute that would preclude the 

operation of the pay-when-paid clauses. 

 The Change Requests were the result of Owner-initiated changes, which Young 

fully recognized. Young explains in Change Request 1066 that its request for additional 

payment was for “extended overhead costs associated with the owner’s extension of the 

contract.” In Change Request 1067, Young provides an extended narrative regarding its 

request for additional payment. Young attributed the overrun in hours to “unforeseen 

problems and design related issues” as well as “numerous owner initiated changes which 

were issued that redesigned the work as the project proceeded.” (emphasis added). 

Nowhere else in the record is it demonstrated with any degree of persuasion that 

Dustin was responsible for the overages. Young’s Change Requests remain the best 

explanation of the change orders. Young, therefore, is unable to demonstrate that there 

exists a genuine factual dispute as to whether the change orders were not owner-initiated. 

 It was undisputed that the Change Requests were the result of Owner-initiated 

changes. As a result, Sections 2(c), 13(c), and 27(f) operate to bar Young’s claims against 

Dustin. All costs Young incurred were the result of Owner-initiated changes, and the 
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Subcontract requires Young to seek payment for these claims from George Mason via 

Dustin. Dustin is not liable to Young for the Change Requests.

APPELLANT’S MOTION TO STRIKE 

SUGGESTION OF BANKRUPTCY GRANTED. 

JUDGMENT OF THE CIRCUIT COURT FOR

MONTGOMERY COUNTY AFFIRMED. COSTS 

TO BE PAID BY APPELLANT.