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Middle East Broadcasting Networks, Inc. v. Mbi Global, LLC

United States District Court, E.D. Virginia, Alexandria Division

July 28, 2015

MIDDLE EAST BROADCASTING NETWORKS, INC., Plaintiff,
v.
MBI GLOBAL, LLC, Defendant.

MEMORANDUM OPINION AND ORDER

GERALD BRUCE LEE, District Judge.

THIS MATTER is before the Court on Plaintiff/Counterdefendant Middle East Broadcasting Networks, Inc.'s ("MEBN") Motion for Summary Judgment (Doc. 31). This case concerns MEBN's claim that Defendant/Counterclaimant MBI Global, LLC ("MBI"), breached a contract between the parties when it failed to timely deliver and install a Blast Resistant Building ("BRB") to MEBN's Baghdad, Iraq office. The issue before the Court is whether the Court should grant MEBN's Motion for Summary Judgment on (1) MEBN's breach of contract claim, (2) MEBN's unjust enrichment claim, (3) MBI's breach of contract claim, and (4) MBI's breach of the implied covenant of good faith and fair dealing claim.

The Court GRANTS MEBN's Motion for Summary Judgment for two reasons. First, the Court GRANTS MEBN's Motion for Summary Judgment on MEBN's breach of contract claim and MBI's breach of contract claim because MBI failed to timely deliver and install the BRB at MEBN's Baghdad office and the force majeure contract provision does not apply. Second, the Court GRANTS MEBN's Motion for Summary Judgment on MBI's breach of the implied covenant of good faith and fair dealing claim because Virginia law does not recognize an independent cause of action for this claim. The Court DENIES MEBN's Motion for Summary Judgment as to its unjust enrichment claim because an unjust enrichment claim cannot be brought in the face of an express contract.

I. BACKGROUND

MEBN is a broadcasting company that provides news and information, in Arabic, to countries in the Middle East and North Africa. (Compl. ¶ 1.) "[MEBN's] mission is to provide objective, accurate, and relevant news and information to the people of the Middle East about the region, the world, and the United States." ( Id. ¶ 5.) MEBN is fully-funded by the United States government. ( Id. ) Though headquartered in Springfield, Virginia, MEBN also has branches in Dubai, Beirut, Jerusalem, Cairo, Washington, D.C., and Baghdad. The Baghdad office has been open since 2004 and employs 77 news professionals, technicians, and administrative staff. ( Id. ¶ 6.)

Since its opening, the Baghdad office rented space in the Palestine Hotel. ( Id. ¶ 7.) In 2013, after facing eviction from the Palestine Hotel space for reasons not relevant here, MEBN rented office space elsewhere. ( Id. ¶ 9.) However, this space was insufficient because it did not have space for a television studio. ( Id. ) MEBN decided to buy a BRB where it could assemble and house a television studio. ( Id. ¶ 10.) MEBN sent out a Request for Quote ("RFQ") to various American manufacturers for suitable BRBs, noting that delivery and installation of the BRB in Baghdad was to be done by December 31, 2013. ( Id. ¶¶ 10-11.) According to MEBN, the companies submitting quotes for the BRB knew that timing was being driven by MEBN's pending eviction from the Palestine Hotel and that it was "critical[ly] important" that MEBN's Baghdad news operation continue unabated. ( Id. ¶ 12.)

MBI received MEBN's RFQ. MBI billed itself as an expert "in the construction of BRBs" and as an "expert in the delivery of BRBs to locations in the Middle East." (See Doc. 32-2 at 266.) On September 23, 2013, MEBN and MBI entered into a contract ("the Agreement"), under which MEBN was to pay $473, 611 to MBI and MBI was to deliver and install the BRB at MEBN's Baghdad office. ( See Doc. 32 ¶ 6; Doc. 32-3.) The Agreement required delivery and installation of the BRB by December 31, 2013. (Doc. 32 ¶ 6.) The Agreement also required MBI to prepare a notarized progress report to accompany each invoice. MEBN had no obligation to pay MBI until it received the proper invoices from MBI. ( Id. ¶ 9.) Finally, the Agreement included a waiver clause, which provided that "(n)either party's failure to enforce, nor waiver of, any right or term hereof, shall be considered a continuing waiver of any of that party's rights or right to enforce said term." (Doc. 32-3 at 14, ¶ 19.)

On September 24, 2013, MBI prepared a progress report and invoice that conformed to the agreement. MBI submitted these documents to MEBN and requested a $187, 001 down payment, which MEBN tendered on October 2, 2014. (Doc. 32 ¶ 12.) MBI failed to submit any additional progress reports or invoices to MEBN. ( Id. )

According to the Agreement, the BRB was to be delivered to MEBN in Baghdad by December 31, 2013. On December 6, 2013, MBI represented that the delivery date would be met. However, on December 20, 2013, MBI informed MEBN that the manufacture, delivery, and installation of the BRB were four-to-five weeks behind schedule. ( Id. ¶ 22-23.) MBI estimated that the new delivery date would be in late-February or early-March, which is eight-to-eleven weeks after the original due date. ( Id. ¶ 27.) The BRB was not delivered by December 31, 2013.

On January 23, 2014, the parties executed an Amendment to the Agreement ("First Amendment"), under which MBI agreed to manufacture, deliver, and install the BRB at MEBN's Baghdad office by April 16, 2014. ( Id. ¶¶ 29, 32.) The First Amendment included a $100, 000 credit to MEBN and shifted to MBI the risk of loss of the BRB. ( Id. ¶¶ 30-31.) On April 10, 2014, MBI informed MEBN that the April 16th deadline would not be met. ( Id. ¶ 35.) On April 15, 2014, MBI sent a revised delivery schedule to MEBN, including a new deadline of June 3, 2014, for the delivery and installation of the BRB. MBI also missed this deadline. ( Id. ¶¶ 36-38.) However, MBI sent MEBN photos of what appeared to be a completed BRB. ( Id. ¶ 40.)

On July 3, 2014, MEBN extended a final written offer to MBI ("July 3rd Letter"). The offer stated that MEBN would accept delivery of the BRB at its Baghdad office provided that the delivery was completed by August 3, 2014. ( Id. ¶ 41.) The offer also stated that the August 3rd deadline was not flexible and that it "would not be waived or excused for any reason whatsoever." (Doc. 32-19.) MBI accepted this offer in writing on July 7, 2014. (Doc. 32 ¶ 42.)

MBI failed to deliver the BRB by August 3, 2014. MBI claims that it was unable to deliver the BRB because the delivery routes were blocked due to the ongoing conflict involving ISIS, invoking a "force majeure" defense. (Doc. 39 ¶ 47.)

On September 11, 2014, MEBN filed this case against MBI, asserting claims of breach of contract and unjust enrichment. On December 19, 2014, MBI asserted counterclaims of breach of contract and breach of the implied covenant of good faith and fair dealing against MEBN. On May 22, 2015, MEBN filed a ...


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