Court Opinion

ID: 4102117
Source: CourtListenerOpinion
Date Created: 2016-11-23 21:01:07.23313+00
Date Added: 2024-06-11T17:35:30.435907
License: Public Domain

UNPUBLISHED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Vacated and remanded by unpublished per curiam opinion.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.
Unpublished opinions are not binding precedent in this circuit.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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