Magistrate Judge Lisa Pupo Lenihan

ECF No. 234 MEMORANDUM OPINION ON PLAINTIFF'S MOTION FOR JUDGMENT PURSUANT TO FEDERAL RULE OF CIVIL PROCEDURE 52(c)

I. SUMMATION

For the reasons set forth below, the Court will grant Plaintiff's Motion for Judgment Pursuant to Federal Rule of Civil Procedure 52(c), ECF No. 234, as Defendants have failed - in their pleadings and evidentiary filings, and through evidence and argument presented during the limited-issue bench trial held on November 1^st and 2^nd, 2016 (the "Bench Trial") - to meet the requisite evidentiary standards for a prima facie showing of the element of reasonable reliance as to any of their counterclaims sounding in fraud or negligent misrepresentation . In so holding, the Court observes that it has granted Defendants great leeway in continuing judicial consideration of these counterclaims, including, e.g. (a) conditionally accepting - in the interest of efficiency and economy, in hopes of advancing the parties' understanding and resolution of this protracted litigation, and for purposes of the limited-issue bench trial - all other elements of fraud or negligent misrepresentation despite current serious inadequacies in the evidentiary record and, indeed, evidence suggesting the unlikelihood of their ultimate establishment; and (b) considering claims and last-minute theories of tort liability despite significant questions of waiver and/or estoppel. At bottom, no matter how vigorously or inventively Defendants may rub the brass lamp of their residential-development relationship with Plaintiff, tort liability is not a genie which can be summoned by incanting even egregious breaches of contract; nor is it one whose scope of recovery may be attained without reasonable reliance, as it is just that reliance which must supply the causation element in a misrepresentation cause of action.

II. RELEVANT FACTUAL AND PROCEDURAL HISTORY

The extensively documented factual and legal history in this case arising from disputes between the parties with regard to (a) construction material purchases and (b) sub-contracted construction of housing in Defendants' multi-duplex residential developments - Timberlake Village (hereafter "Timberlake") and Cedar Creek - located near Deep Creek Lake, in Garrett County, Maryland was most recently summarized by this Court in its October 11, 2016 Memorandum Opinion on Contractual Damage Limitations (the "Damage Limitations Opinion"), ECF No. 214.

The determination of Defendants' ability to make out the elements of their tort-based counterclaims was rendered more critical to the parties' accurate assessment of their litigation positions by this Court's October 11, 2016 Opinion. In the Damage Limitations Opinion, ECF No. 214, and subsequent January 3, 2017 Order, ECF No. 237, this Court concluded that the parties' contractual limitation of damage provision of the Subcontract Agreements' Paragraph 15, was an enforceable and independent provision, precluding "any consequential, indirect, exemplary or punitive damages of any type" as to those contract claims encompassed by the parties' clear language, i.e., damages "under this paragraph" and therefore those claims related to/flowing from "defects in workmanship or materials." See ECF No. 214 at 1-2, ECF No. 237.

As explicated in previous Opinions, Defendants' Second Amended Counterclaim, ECF No. 44, theories of tort liability were:

(a) claims by each of the Defendants for (i) unspecified negligent misrepresentations (implicitly and by incorporation those misrepresentations made to Mortimer and underlying Count I), and (ii) fraud/intentional misrepresentation/concealment expressly with regard to Summer, 2009 representations to Mortimer regarding faulty construction issues and Plaintiff's intent to correct/purported correction of them (Counts II and III, respectively); and

(b) claims by Mortimer for fraud in the inducement (Count I) by both (i) misrepresenting that improper CCA charges made in 2007 by a subsequently-fired Maryland manager would not recur and that a Fall 2008 internal audit was conducted and showed no improper CCA charges, and (ii) misrepresenting that subcontracted work would be performed by 84 Lumber's national "install program" construction experts/specialists.

And these claims remained as set forth above throughout subsequent pleadings, including, e.g., Defendants' October 18, 2016 Amended Pretrial Statement, ECF No. 224 and Amended Offer of Proof, ECF No. 222.

As with its detailing of the nature and basis of Defendants' tort claims, the Court has repeatedly recounted its concerns regarding apparent evidentiary insufficiencies as to the elements of these claims. Hence, e.g., the Court's direction that Defendants provide an Offer of Proof, and thereafter an Amended Offer of Proof. Of particular significance, the problematic nature of a showing of reasonable reliance was highlighted by the Court in its Damage Limitations Opinion footnotes on Defendants' factual representations. See supra nn. 4-8; see also ECF No. 214 at 21-22 (parsing, with reference to previous factually-detailed footnotes, Defendants' basis for alleged fraudulent inducement). Despite the continuing inadequacies of Defendants' Amended Offer of Proof, ECF No. 222, the Court permitted Defendants an opportunity to show reasonable reliance through the presentation of evidence and legal argument during the limited-issue Bench Trial.

III. APPLICABLE STANDARDS ON MOTION FOR JUDGMENT UNDER FED. R. CIV. P. 52(C) AND FOR PRIMA FACIE SHOWING ON TORT CLAIMS

A. Rule 52(C)

As Plaintiff correctly notes, Rule 52(c) provides that this Court may make dispositive findings of fact based on the burden of proof, evidence admitted and the Court's credibility determinations thereof. See Plaintiff's Memorandum in Support of Judgment, ECF No. 235 at 2-3. More particularly, "[i]f a party has been fully heard on an issue during a nonjury trial and the court finds against the party on that issue, the court may enter a judgment against the party on a claim or defense that, under the controlling law, can be maintained or defeated only with a favorable finding on that issue." Id. (quoting Rule 52(c))

B. Tort Claims

As Defendants correctly set forth, the elements of fraud require that they show, by clear and convincing evidence, that: (1) Plaintiff made a false representation to them, (2) with knowledge of its falsity or reckless indifference to its truth, (3) and for the purpose of defrauding Defendants, (4) Defendants justifiably relied on the misrepresentation, and (5) they suffered compensable injury as a result. See Defendants' Amended Offer of Proof, ECF No. 222, at 2-3 (citing Hoffman v. Stamper, 385 Md. 1, 28, 867 A.2d 276, 292 (2005)). As they also correctly set forth, the elements of negligent misrepresentation require them to establish, by a preponderance of the evidence, that: (1) Plaintiff, owing a duty of care to Defendants, negligently asserted a false statement; (2) intending that it would be acted upon by Defendants; (3) with knowledge that Defendants would probably rely on the statement, which, if erroneous, would cause loss or injury; (4) Defendants justifiably took action in reliance on the statement; and (5) they suffered damage proximately caused by Plaintiff's negligence. See Defendants' Amended Offer of Proof, ECF No. 222, at 3 (citing Lloyd v. Gen. Motors Corp., 397 Md. 108, 135-36, 916 A.2d 257, 273 (2007); White v. Kennedy Krieger Inst., Inc., 221 Md. App. 601, 648, 110 A.3d 724, 751, cert. denied sub nom. White v. Kennedy Krieger Inst., 443 Md. 237, 116 A.3d 476 (2015)). See also Plaintiff's Memorandum in Support of Judgment, ECF No. 235, at 3 (Plaintiff's concurring statement that "[i]n the context of their negligent misrepresentation claim, Defendants must establish reasonable reliance by a preponderance of the evidence; . . . in both fraud claims, Defendants must prove reasonable reliance by clear and convincing evidence") (emphasis in original) (citations omitted).

IV. ANALYSIS

As preface to its analysis of reasonable reliance on alleged misrepresentations, Plaintiff appropriately notes the relevance of both (1) Defendants' extensive business experience in the local construction industry - over two decades and approximately 200 primarily residential projects, with revenues in excess of $60 million, and millions of dollars in loans from various banks; and (2) Defendants' (a) own inquiry as to construction materials invoicing misbillings/improprieties, and (b) own inquiry and retention of third-party experts/consultants as to construction defects and repair. See ECF No. 235 at 5-7 (citing to specific portions of Mortimer's Bench Trial testimony). See also discussion supra, including nn. 4-8, and infra. Cf. ECF No. 235 at 10 (quoting Mortimer's testimony that "in construction, there's always issues"); id. (noting that "where the means of knowledge are open and at hand or furnished to the [relying party] . . . and no effort is made to prevent the [relying party] from using them, and especially where the [relying party] undertakes examination for himself, he will not be heard to say that he has been deceived to his injury by the misrepresentations of the [inducing party]") (quoting Piper v. Jenkins, 113 A.2d 919 (Md. 1955)). See further discussion, infra.

A. Fraudulent or Negligent Misrepresentations as to Improper Billings under the Commercial Credit Agreement and Plaintiff's Audit

As noted supra, Defendants' Second Amended Counterclaim basis for their tort claim(s) on billing misrepresentations are: misrepresenting that (a) improper Commercial Credit Agreement ("CCA") charges made in 2007 by a subsequently-fired Maryland manager were not recurring/would not recur and (b) a Fall 2008 internal audit was conducted and showed no improper CCA charges. See ECF No. 44. Defendants cannot maintain a tort action requiring reasonable reliance on either misrepresentation where none was justifiable and/or even evidenced.

As noted supra, Defendants assert there were misbillings related to construction of Mortimer's Holy Cross residence both leading up to and immediately following the parties' October, 2007 settlement agreement, i.e., prior to entry into the April, 2008 Subcontract Agreement. Their evidence is that Mortimer and his spouse were (a) well-acquainted with the particulars of Plaintiff's CCA invoices over years of extensive business dealings, (b) regularly reviewing those invoices (governed by the parties' 1997 CCA) and identifying erroneous/disputed charges, (c) discussing invoices with Plaintiff's representative(s), and (d) having payments due adjusted. In other words, Defendants were not relying on asserted "misrepresentations"/promises that there would be no further improper CCA charges, but were independently reviewing and seeking correction of those charges. This, of course, was not only Defendants' actual conduct, but the reasonable business conduct of a professional residential or commercial developer, particularly one of Mortimer's years and extent of experience. And Defendants' evidence is that they continued to review their construction materials bills prior to paying them during 2008 and 2009. Defendants allege that an increased volume of invoice documents affected their ability to "catch mistakes" or alleged deliberate premature or misbillings. But this simply does not turn a breach of contract under the CCA into liability for tortious misrepresentations on which Defendants reasonably relied. Defendants' evidence indicates that they did not (nor could they reasonably have) consider their decade-long CCA business relationship with Plaintiff to have - by contract terms or representations of honest conduct/intent - ever abrogated any further responsibility to engage in their customary billings review. To the contrary, the element of "reasonable reliance" encompasses the essence of its adjective. The Court observes, but does not incorporate as necessary to its holdings, that the record indicates Defendants were making business decisions to continue their relationship with Plaintiff despite awareness of misbillings, and ongoing invoice negotiation and correction issues.

As to the store-wide "broad" audit requested by Mortimer in August, 2008 and conducted by Plaintiff (assertedly improperly), with its outcome reported to Mortimer: the record indicates that Defendants entered into another Subcontract Agreement on August 25, 2008. This apparently occurred in the interim between Mortimer's (a) independent ongoing awareness of CCA misbillings and monthly negotiations/adjustments, and being told - "during August" by Plaintiff's own employees at Defendants' construction site - of alleged improper materials charges (see supra, n. 5); and (b) obtaining, in a September, 2008 meeting, verbal representation of the result of Mortimer's requested "complete audit of the [entire] store". The Court observes that the first Timberlake Subcontract Agreement was executed in April, 2008; construction began in Spring; and Defendants' evidence is of ongoing review and negotiation/credit issuance on invoices. See generally, discussion supra. It observes Defendants' testimony that the day after he received documentation related to alleged misbillings from Plaintiff's employees at his construction site, Mortimer drove to Pittsburgh and requested a comprehensive inventory and invoicing store-wide audit. See ECF No. 230 at 58-59. That Defendants apparently did not elect to await the results of inquiry arising from information being obtained "during August" and Plaintiff's audit - verbally or in writing - before proceeding to enter the Subcontract Agreement for Timberlake #12 affects the credibility of their assertion that subsequent October, 2008 Subcontract Agreements were entered into in material reliance on audit representations. Cf. ECF No. 230 at 151 (testimony that work on 3-4 of the projects was started before the subcontracts were signed); id. at 44-45 (discussing approximately month-early start to construction of some Fall 2008 project(s), e.g., Timberlake 11). The Court further notes that despite the audit's asserted materiality, Defendants never requested, obtained or reviewed any underlying audit result information/data, but received a verbal assurance at a restaurant meeting in September and, on October 1, 2008, a single-page letter.

The Court expressly noted the chronology of their evidence and the apparently-problematic matter of foreknowledge and subcontract execution to this claim, see supra (discussing prior Opinions). Yet Defendants have failed to provide any evidence in support of a contrary understanding of the time frame of: Defendants' ongoing invoice-review awareness of misbillings, Mortimer's August on-job-site conversations with Plaintiff's employees regarding misbillings, his contact with Plaintiff's representatives at other location(s), Plaintiff's audit, and Mortimer's meeting to receive oral audit representations in September. To the contrary, Defendants' Bench Trial testimony on this subject omitted evidence of a contrary relevant timing of events. See generally ECF No. 230-231.

As with their asserted justifiable/reasonable reliance on Plaintiff's alleged billing misrepresentations, Defendants simply cannot make out reasonable reliance on Plaintiff's alleged audit representations. Defendants (a) had performed, and continued to perform, customary commercial business review of invoices prior to payment, (b) were ongoingly aware of and negotiating correction of misbillings, (c) requested an audit but had not yet obtained/reviewed any audit information, and (d) continued and expanded their subcontract relationships with Plaintiff. The Court again notes that Defendants indicate their continuation and extension of Subcontractor Agreements was an informed and weighed business decision. For example, Plaintiff's participation was generally advantageous, or even necessary, for Defendants to obtain/ensure bank financing for their expanding construction projects. Moreover, Defendants testified that Plaintiff's involvement was essential to a bank's offering/approving Defendants' take-over of construction on the bank-foreclosed Cedar Creek project. See generally ECF No. 230-231 (Mortimer's Bench Trial testimony); ECF No. 230 at 35 (testimony that bank approved Cedar Creek loan package, when Defendants had numerous other projects, on basis of subcontracts with Plaintiff).

In sum, Defendants have failed to make a sufficient showing - under the applicable standards for either fraudulent or negligent misrepresentation - that they justifiably relied on alleged misrepresentations regarding misbillings or audit results. See Plaintiff's Brief in Support, ECF No. 235, at 3, n. 4 (observing that "[a]mong the five elements of negligent misrepresentation is that a plaintiff must show she justifiably takes action in reliance on the statement") (quoting Dynacorp Ltd. v. Aramtel Ltd., 56 A.3d 631 (Md. App. 2012)); id. at n. 5 ("To recover on a claim for fraud, including fraud in the inducement, a plaintiff must show, inter alia that she not only relied upon the misrepresentation, but had a right to rely upon it in the full belief of its truth, and would not have done the thing from which the injury had resulted had not such misrepresentation been made.") (quoting Parker v. Columbia Bank, 604 A.2d 521 (Md. App. 1992)); id. at 10 ("[W]here the means of knowledge are open and at hand or furnished to the [relying party] . . . and no effort is made to prevent the [relying party] from using them, and especially where the [relying party] undertakes examination for himself, he will not be heard to say that he has been deceived to his injury by the misrepresentations of the [inducing party].") (quoting Piper v. Jenkins, 113 A.2d 919 (Md. 1955)).

B. Fraudulent or Negligent Misrepresentations as to Use of Skilled Crews as Part of National Install Program; New Theories of Misrepresentations Based on Failure to Supervise the Job Site

Defendants appear to now abandon their claim of misrepresentation premised until quite recently on performance of the contracted work by "friends and family" rather than subcontractors who were part of an 84 Lumber National Install Program. See Defendants' Memorandum of Law in Support of Opposition, ECF No. 238 (omitting any argument on this claim); id. at 6 (acknowledging Mortimer's testimony that he visited job site and recognized local subcontractors, and stating "Court noted that this testimony effectively foreclosed any claim Mortimer might have that he relied on representations that 84 Lumber would use a national team of installers"). This adjustment in their litigation position is prudent given the record.

As this Court has previously observed in Opinions and Plaintiff largely correctly reiterates in the Memorandum in Support of its pending Motion: (1) with the exception of enumerated specifications as to decking (requiring "trained and experienced personnel"), the Subcontract Agreements contain no language specifying composition of the workforce; and (2) Mortimer was personally aware of subcontractors who would be and/or were working under the Subcontract Agreements prior to/or shortly after execution of each (between April and October, 2008). See ECF No. 235 at 13.

Plaintiff well-presents the analysis of the effect of the parties' contract language with citations to this Court's prior Opinions (including the Damage Limitations Memorandum, ECF No. 214, and Memorandum Opinion on the Parties' Multiple Motions and Cross-Motions for Summary Judgment, ECF No. 166), the evidence and case law. See ECF No. 235 at 14-17 (explaining that written contract terms (and, alternatively silence/absence as to alleged material misrepresentations) are relevant to reasonableness of reliance) (citations omitted). See also Central Truck Ctr., Inc. v. Central GMC, Inc., 4 A.3d 515 (Md. App. 2010).

Similarly, Plaintiff provides an apt analysis of the evidence and the law as to the timing and extent of Defendants' knowledge of the subcontractors employed. See ECF No. 235 at 10 ("Evidence presented at trial revealed Mortimer was far from an absentee general contractor."); id. at 11 ("Mortimer was involved in the projects and was present at the job sites to witness work by subcontractors he knew . . . .") (quoting Mortimer's testimony that prior to signing August [and subsequent] Subcontract Agreements, he observed local subcontractors who worked on his prior residential construction projects now working at the Subcontract construction site); ECF No. 231 at 5 (Mortimer's testimony that "I actually preferred they used local that were qualified because we are a small community. So, anything we could keep business-wise in the community was very fair to me, I preferred that, as long as they were vetted and qualified with proper licenses and insurance."). Defendants' testimony thus indicates they considered the alleged workforce representations related to the contractual guarantee of work product standards, and not as material representations of national/non-local subcontractors. See also supra n. 8 (quoting Defendants' Amended Pretrial Statement, ECF No. 224, stating, as to the "material facts to be offered at trial": "In 2008, 84 Lumber convinced Mortimer to use its installed sales program by representing it had qualified and skilled construction workers to perform the work."); ECF No. 231 at 13 (Mortimer's testimony that if he were unhappy with the personally-observed subcontract workforce, he could have raised it with Plaintiff then (i.e., in the early months of initial construction), and would have had he been aware of any construction issues).

Nor can Defendants' comparatively-recent allegations of Plaintiff's failure to supervise - presented both as breach of contract, see supra, and as an alternative tort claim - avail them in opposition to Plaintiff's motion. The Court notes, as in its Memorandum Opinion on Defendants' Motion to Reconsider, ECF No. 236, serious considerations of waiver as to new allegations and theories of liability in an almost six (6) year old litigation. See ECF No. 236 at 9-10. Moreover, Defendants' repeated assertions of the breach of contract nature of their new claims regarding Plaintiff's supervisory obligations raise considerations of estoppel as well. See discussion, supra.

Even momentarily setting aside the likely applicability of waiver and/or estoppel, and considering this asserted tort claim, the Court finds it subject to a ruling in Plaintiff's favor:

Defendants contradict their own assertions regarding Plaintiff's representations of supervisory responsibility. More specifically, Mortimer himself presented somewhat conflicting testimony regarding whether Plaintiff represented that it was assuming supervision of the entire construction site (as, e.g, a "project manager") or supervision of its own Subcontract Agreement workforce (by, i.e., a "site superintendent" as referenced in the parties' contracts). See ECF No. 230 at 32 (Mortimer's testimony that he doesn't recall if Guthrie ever said Mortimer "didn't need to hire a project manager when [he] used [the] Install Program", but "talked to" Mortimer about having freedom); id. at 28-29 (testimony that Plaintiff represented Mortimer could save the expense of a project manager and could focus on other projects); id. at 49-50 (testimony that Plaintiff specifically represented to Mortimer during the "early 2008 timeframe" that Guthrie "was going to manage these projects" and Defendants only learned during Guthrie's deposition that he did not); id. at 49 (testimony that Guthrie only came when Mortimer raised issues with leaks at units).

The evidence indicates that Plaintiff was supervising its own subcontractors (many of whom were known to, some of whom were previously directly employed by, Defendants). Defendants' own evidence indicates that Mortimer was present at/visited the construction sites and observed the workforce (including those known to him from direct-hire on prior projects and his long construction dealings in the local community). It also indicates Mortimer interacted with Plaintiff's designated supervisor Gary Uphold (with whom Mortimer had a long acquaintance) and other individuals/employees on location (who were, by Defendants' assertions, speaking directly to Mortimer regarding alleged construction materials misbillings and construction defects). See e.g., discussions of Defendants' evidence regarding construction sites, supra; ECF No. 231 at 19-20 (Mortimer's testimony that during initial project construction and Summer, 2008, he was in contact with Gary Uphole and called him "I don't know how many times a week"). See also ECF. No. 231 at 116 (Uphold's trial testimony that during Plaintiff's "subcontract scope of work" , Uphold was at both Timberlake and Cedar Creek once or twice daily "to observe and supervise the subcontractor work").

To the extent Defendants' "national install program" tort claim could now be recognized as a "failure to supervise the project site" tort claim, Defendants fail to make sufficient showing of the requisite element of reasonable reliance. First, the evidence demonstrates Mortimer's extensive construction experience in the community, presence on the project sites, familiarity and indeed interaction with at least some number of subcontractor workers, knowledge of and contact over the extended construction periods with Uphold as site superintendent of the subcontract work, and simultaneous absence of contact with Guthrie despite Plaintiff's purported express representation that he would be managing the projects. Second, the actual contract terms are again relevant to Defendants' reasonable reliance. The negotiated terms indicate Plaintiff's responsibility to supervise its own subcontract workers but do not provide that Plaintiff was also assuming the usual general contractor's role as project manager. Nor do the Subcontract Agreements exempt Mortimer from any responsibility for the construction sites other than/until final "punch list"/walk through. To the contrary, they provide in relevant part:

General Conditions

1. The Subcontractor shall furnish all labor, material equipment, taxes, insurance, dues, contributions, services, and all other incidentals, including but not limited to, competent supervision, and tools as are necessary for proper performance of the Subcontract work described in this agreement . . .
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6. The Subcontractor and Contract will walk the job together and perform a final inspection of the work.
7. Subcontractor will complete all punch list items provided at final walk through.
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12. Contractor shall only communicate with 84 Lumber's site superintendent, and not give instructions or orders directly to 84's laborers or Subcontractors.
13. Contractor is responsible for coordination of the site, schedule, materials storage and other trades work.
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15. 84 guarantees that the Work performed hereunder will conform to the specifications, complies [sic] with all Laws, and will be free from defects in workmanship and materials. . . .

C. Fraudulent Misrepresentations as to Repair of Construction Defects

As discussed at the outset of this Opinion, Defendants' Second Amended Counterclaim, ECF No. 44, alleged fraud/intentional misrepresentation/concealment expressly with regard to Summer, 2009 representations to Mortimer regarding faulty construction issues and Plaintiff's intent to correct/purported correction of them. See supra at 4. See also id. at n. 4 (quoting Defendants' Combined Statement of Material Facts, ECF No. 153, at 20 (stating that in Spring and Summer 2009, Mortimer received "numerous reports of leaks at units at both Timberlake and Cedar Creek" and notified 84 Lumber, and that Mortimer "retained multiple engineers and construction professionals to investigate the issues", made written demands for repair and 84 Lumber "repeatedly represented that [it] would correct all construction defects"); id. at 21 (recounting that in August through mid- September, 2009 84 Lumber retained other construction contractors to investigate and repair the defects and falsely represented they were corrected)).

As Plaintiff has observed, Defendants' independent investigations of the construction defects, and communication/consultations with Plaintiff's representatives at various levels regarding the causes, remedies and attempts at repair, are significant to the element of reasonable reliance. See ECF. No. 235 at 10 (noting that under Maryland law where one "undertakes examination for himself, he will not be heard to say that he has been deceived to his injury by the misrepresentations . . . .") (quoting Piper v. Jenkins, 113 A.2d 919 (Md. 1955)).

It is beyond possibility that Defendants reasonably relied on "misrepresentations" about the existence and remediation of construction issues, such as leaks, where: (a) Mortimer personally observed or was notified by site workers of defects and was actively engaged in ongoing communication with Plaintiff regarding particular defects; (b) Defendants and Plaintiff were on site and repairs were attempted; and (c) both parties brought in inside and/or outside counsultants/experts, and discussed possible sources of the construction problems (e.g., materials vs. installation). See, e.g., ECF No. 231at 46-47, 52 (Mortimer's testimony recounting communications with Plaintiff beginning when leaks occurred (which he first observed in Spring, 2009), that Plaintiff "brought some people in" and "they were trying to fix it" over a period of 18-20 months); id. ("They brought in other contractors. So there were multiple different people they brought in to fix these problems."); id. at 47 (testifying, as to recurrence of leaks, that "when we saw the leaking [perhaps "a few months" after Plaintiff said it was fixed], we would notify the store . . . and they would come in and address those issues); id. at 47-50 (testimony that "in many instances" Plaintiff undertook repair endeavors it promised and that it brought in consultants and engineers with regard to construction problems); id. at 53-54 (Mortimer's testimony that he "didn't just rely on" Plaintiff but "allowed" Plaintiff's "store level" employees a "reasonable amount of time", i.e., a "couple months" and "a couple times" to repair leaks and, "when they couldn't fix them", Mortimer "went up [with Plaintiff's higher-level employee(s)] to several different crews to try to fix these leaks through a period of time"); id. at 54-55 (testimony that during Spring and Summer 2009 Mortimer promptly reported leaks he observed and was given repeated assurances that Plaintiff would bring in proper professionals to fix them); id. at 58 (recounting, as an example, leak that could have been installation or manufacturing problem, in which "everyone thought it was the doors at the time" so Plaintiff "brought the door company out"); id. at 62-63 (testifying that Mortimer had two independent inspections/observations done "by professional experts" and provided report(s) to Plaintiff).

The Court observes Defendants' express testimony that Plaintiff made ongoing attempts at repair, and that Defendants and Plaintiff were undertaking independent inquiry and exchanging information. See, e.g., ECF No. 230, Defendants' Ex. G (Defendants' August 28, 2009 "breach of contract" letter to Plaintiff documenting construction defects and attaching independent inspect report/recommendations of Highland Engineering); id. Defendants' Ex. J (Defendants' email of January 28, 2009 attaching an independent inspection report from Megco Inspections); id. at 154 (Mortimer's testimony that he immediately provided his reports from independent investigations of defects to Plaintiff to "just kind of help out and give direction and try to fix these problems"). Plaintiff's alleged - and substantially evidenced - protracted failure to successfully repair construction defects to the standard guaranteed under the Subcontract Agreements' Paragraph 15 gives rise to liability for breach of contract; but it does not in the circumstances of record give rise to a tort of misrepresentation as to which Defendants have sufficiently shown the requisite element of reasonable reliance.

V. CONCLUSION

In the end, although there is substantial evidence that Plaintiff's performance of its contractual undertakings was lacking, nothing in this record can serve to convert Plaintiff's substandard construction, however substantial, from breach of contract into a tort of misrepresentation. To the contrary, the evidence indicates that Defendants, sophisticated developers, knew - throughout their relevant contractual relationships with Plaintiff - what they were getting and indeed took care to know. Defendants were undoubtedly disappointed in their hopes; but as to what has been sufficiently supported in the record, they were not misled. Rather than relying uncritically on Plaintiffs' statements, communications, and reports, Defendants made business decisions informed by their own factual reviews and investigations.

For the reasons set forth in this Opinion above, the Court will grant Plaintiff's Motion for Judgment on Defendants' Tort Counterclaims , ECF No. 234, requesting judgment on Counts I through III of Defendants' Second Amended Counterclaim, ECF No. 44. Order to follow.

/s/_________

Lisa Pupo Lenihan

United States Magistrate Judge Dated: February 23, 2017 cc: All counsel of record