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Tuesday, September 17, 2019

Under Armour must pay $62K to architectural firm over Baltimore project

By Melissa Busch | May 12, 2017

ANNAPOLIS, Md. (Legal Newsline) – A Maryland appeals court recently affirmed that an architectural firm will receive more than $60,000 for the income-producing time it lost enforcing a project management service contract connected to the construction of a visitor center in Baltimore.

On April 27, the Court of Special Appeals of Maryland upheld a lower court’s decision ordering Under Armour Inc. to pay $62,190 in losses to architectural firm Ziger/Snead LLP.

In connection with the construction of a visitor center at Under Armour’s corporate campus in Baltimore City, it entered into a design and professional management services contact with Ziger/Snead. When Under Armour withheld $56,249 allegedly due under the contract, Ziger/Snead filed suit in the Circuit Court for Baltimore City to collect the unpaid fees plus accrued interest on those fees. 

Under Armour filed a counterclaim for losses and damages suffered as a result of Ziger/Snead’s alleged substandard design work and inadequate management.

A jury found in favor of Ziger/Snead and awarded $58,940. In June 2016, a final judgment of $287,920, which included $62,190 in losses, was entered by the circuit court.

Under Armour paid everything but the $62,190 in losses, alleging there was no basis for such an award.

Ziger/Snead LLP argued that it was unable to bill its time for other active projects because it had to spend its time helping its attorneys prepare for a lawsuit to collect wrongfully withheld fees and to defend against “a meritless lawsuit” filed by Under Armour.

Under Armour argued that Ziger/Snead offered no evidence that the time the employees spent on the litigation would otherwise have been spent on income-producing work.

This court rejected this, noting that Steve Ziger, a principal of the firm, said in an affidavit that the time dedicated to the enforcement of the contract with Under Armour prevented his employees from billing their time to other active projects. 

As a result, Ziger stated, “each employee’s time billed at the employee’s hourly rate reflects a loss of revenue to Ziger unless Ziger recovers the value of this time.”

The court noted that if Under Armour didn’t accept that statement, it could have sought discovery with respect to what Ziger’s employees would have been doing at relevant times.

Also, Ziger/Snead produced evidence, which was unchallenged in this appeal, that as of Dec. 11, 2015, its employees diverted a total of more than 300 hours of their time at hourly rates ranging from $100 to $200 from income-producing work to assist counsel in preparing with the lawsuit.

“(It) certainly constitutes a measure of injury or harm incurred by the firm, not to mention a detriment, disadvantage, or deprivation from failure to keep, have, or get. The circuit court did not err in allowing the claim for $62,190 as a loss," according to court documents.

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Maryland Court of Appeals