Hellenic Ministry Defense v. Eagle Van Lines, Inc.

THE HELLENIC MINISTRY OF NATIONAL DEFENSE, et al. v. EAGLE VAN LINES, INC.

Civil Action No. DKC 13-0828

UNITED STATES DISTRICT COURT FOR THE DISTRICT OF MARYLAND

February 6, 2015

MEMORANDUM OPINION

Presently pending and ready for resolution in this contract case are cross motions for partial summary judgment filed by Plaintiffs and/or Counterdefendants the Hellenic Ministry of National Defense, the Hellenic Armed Forces, and the Hellenic Air Force Procurement Service (collectively, "HAF" or "Plaintiffs") (ECF No. 30) and Defendant and/or Counterplaintiff Eagle Van Lines, Inc. ("EVL" or "Defendant") (ECF Nos. 35 & 36). The issues have been fully briefed, and the court now rules, no hearing being deemed necessary. Local Rule 105.6. For the following reasons, Plaintiffs' motion will be granted in part. Defendant's motion will be denied.

I. Background

A. Factual Background

Unless otherwise noted, the following facts are undisputed. Plaintiffs are units of the Greek government. The Hellenic Ministry of National Defense is a government cabinet department responsible for managing the armed forces for the HellenicRepublic. The Hellenic Armed Forces are the combined military forces of Greece. Hellenic Air Force Procurement Service is a government agency that engages vendors to transport and store military goods for the Hellenic Ministry of National Defense. (ECF No. 3 ¶¶ 1-3). EVL is a freight forwarding company based in Maryland. (ECF No. 3 ¶ 4).¹ Beginning in 2005, Plaintiffs entered into a series of contracts with EVL to transport military goods and equipment from Greece to the United States, within the United States, and from the United States to Greece. (ECF No. 30-4 ¶ 4). Regardless of the channels used by the Hellenic Armed Forces to purchase particular goods, the goods were shipped to EVL, which would receive them on Plaintiffs' behalf and ship them to the appropriate branch of the Armed Forces in Greece. (Id.). The military goods included items acquired from the United States via foreign military sales ("FMS") or items purchased from vendors in the United States through direct commercial sales ("DCS"). (ECF No. 35-2 ¶ 5).

George Georgakopoulos is the President of EVL. He explained:

It was Eagle Van Lines' responsibility, at times, to receive goods shipped from overseas and transport them to its warehouses, receive goods shipped by vendors and store the goods in its warehouses, receive goods from the United States under the foreign sales and receive the items in its warehouses. Eagle Van Lines would pay for the delivery if a third party shipped the items to the warehouse or provide the transportation[,] incurring the costs if it picked up the goods from an international shipment or from a vendor.

(Id. ¶ 7). "Throughout the time that EVL acted as freight forwarder for the Armed Forces, EVL would be paid for its services with respect to a given item only after that item had been received by the contractually determined Unit of each Armed Forces' Branch in Greece, in accordance with the payment terms of the contracts and Hellenic Legislation." (ECF No. 30-4 ¶ 5).

In early 2009, Plaintiffs and EVL entered into Contract No. 100/09, which covered EVL's provision of freight-forwarding services from March 1, 2009 through November 30, 2009.² (Id. ¶ 6; ECF No. 30-6, at 36). Article 3.1 of Contract 100/09 states:

The subject of this Contract is the transfer - forwarding (FREIGHT FORWARDER) of air transported materials of the HAF from Greece to the U.S.A. overseas (OVERSEAS), within the U.S.A. (DOMESTIC) and vice versa by the CONTRACTOR.

(ECF No. 30-6, at 6). Under Article 4.5.1.4 of Contract 100/09, Defendant's obligations included forwarding the materials withinthree (3) days from their arrival to their final recipient within the U.S. (Id. at 9). Article 8.3. of Contract No. 100/09 states:

The Military Attaches will repay the CONTRACTOR in U.S. dollars for the services rendered by the contractor, within two (2) months at the latest from the date they received the required supporting documents, as the case may be, which the competent Services will receive in Greece, provided that a relevant inspection determines that they are appropriate.

(Id. at 19) (emphasis added). Contract No. 100/09 was set to expire on September 30, 2009, "but the contract provided that EVL was obligated to continue to receive and forward materials for two months after that expiration date, under the same terms and conditions." (Id.) (emphasis added). Thus, Contract No. 100/09 was in effect until November 30, 2009.

On August 18, 2009, EVL lost the procurement for freight-forwarding services for the period after November 30, 2009. (ECF No. 30-4 ¶ 8). The new contract was awarded to EVL's competitor, Imperio-Argo Group. (Id.). George Georgakopoulos testified during his deposition that "in 2009[,] there was a procurement for freight forwarding services [] that permitted a number of freight forwarding companies to make a bid on [] Contract 05/09." (ECF No. 30-26, at 5). EVL submitted a bid, but the Greek government awarded the contract to Imperio-Argo. (Id.). EVL objected to the procurement award by filing anappeal to the State Legal Council of the Hellenic Republic, which suspended the commencement of the new contract with Imperio Argo until the appeal could be resolved. (ECF No. 3 ¶ 13).

In order to service Plaintiffs' transport requirements after November 30, 2009 and during the pendency of the procurement appeal, Plaintiffs engaged in negotiations with EVL regarding the terms of a contract that would govern from December 1, 2009 until the activation of a new contact with Imperio-Argo. (ECF No. 30-4 ¶ 10). The parties continued to negotiate a draft contract - Contract No. 47/10. Mr. Georgakopoulos stated that "[a] draft for negotiations only of a working document referred to as 47/10 had been initialed by representatives of the parties in January 2010. There were additional issues and discussions that remained unresolved which discussions never resumed." (ECF No. 35-2, at 6) (emphases added). The parties disagree whether they were governed by the terms of Contract No. 47/10 after Contract No. 100/09 terminated on November 30, 2009. George Georgakopoulos gave the following testimony during his deposition:

Q: When did [] any contract between Eagle Van Lines and any branch of the Hellenic government end? Was it November 30, 2009?

A: The last one, yes.

Q: And there has been since then no contract?

A: Absolutely no contract.

(ECF No. 30-26, at 7). Mr. Georgakopoulos also testified:

Q: Now looking at 47/10, at any point in January of 2010[,] did Eagle Van Lines agree to the terms of this contract?

A: Agreed? It was negotiated. It was never agreed.

(ECF No. 30-26, at 5).³ Konstantinos Katirtzidis, Captain in the Hellenic Air Force General Staff, declared that "[a]lthough the draft contract [Contract No. 47/10] that had been signed by EVL [] was still subject to final approval by the Minister of National Defense, both [Hellenic Air Force] (on behalf of the Armed Forces) and EVL proceeded on [the] basis that it was in effect. EVL continued to provide freight-forwarding services, and [Hellenic Air Force] continued to accept the benefit of those services, with the knowledge that EVL expected to be compensated for them." (ECF No. 30-4 ¶ 13).

Plaintiffs assert that on January 25, 2010, they learned that "EVL had included a counterfeit document (a 'Letter of Guarantee' that had supposedly been issued by Eagle Bank) in its unsuccessful application during the procurement for the contract that had been awarded to [Imperio Argo]." (Id. ¶ 14). Plaintiffs maintain that as a result of that discovery, they terminated EVL's services as freight forwarder. (Id. ¶ 15). Specifically, Plaintiffs provide as an exhibit to their motion a decision from Evangelos Venizelos, the Minister of National Defense, dated February 12, 2010, which states:

We approve the discontinuation, effective upon receipt of the present resolution, of the air transportation of materials of the Armed Forces (A.F.) from Greece to the U.S.A., within the U.S.A. and vice-versa by the company "EAGLE VAN LINES" due to their attempt to defraud the public sector, according to the rationale of the present resolution.

(ECF No. 30-11, at 4) (emphasis added). EVL contends that it received Plaintiffs' February 12, 2010 letter terminating its services on February 24, 2010. (ECF No. 35-2, ¶ 13, declaration of George Georgakopoulos) ("On February 24, 2010, I received by hand delivery and by email the letter from the Minister of National Defense from Mr. Nikolasos Klothakis who was the liaison officer placed in the offices of Eagle Van Lines by the Hellenic Air Force as a direct attache authorized to approve transportation and resolve issues that might arise under thefreight forwarding contracts.")). EVL also denies submitting a fraudulent letter of guarantee. (See ECF No. 35-2 ¶ 10 ("Eagle Van Lines did not author nor submit an alleged letter of credit purporting to be from Eagle Bank bearing a date of April 11, 2009.")).⁴

There is some disagreement between the parties about the chain of events following the termination of EVL's services. Plaintiffs contend that they "instructed EVL that all unclassified goods in its possession belonging to the Hellenic Armed Forces were to be forwarded to another contractual freight forwarder of the Ministry of Defense, Stellar Maritime." (ECF No. 30-4 ¶ 17). According to Plaintiffs, "EVL refused to comply with that instruction unless the Armed Forces first paid on all EVL invoices that EVL claimed it was owed and storage fees charged by EVL since February 12, 2010." (Id.). On February 24, 2010, George Georgakopoulos wrote the following letter to Nikolaos Klothakis, Wing Commander for the Hellenic Air Force:

In response to the subject matter of your letter, we hereby inform you that we accept the decision of your Service, that is, for our company to deliver all materials that are in our

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