By Rolf Garcia-Gallont

The Fourth Circuit, in Projects Management Co. v. Dyncorp International LLC, affirmed summary judgment in favor of the Defendant in a breach of contract action because the Plaintiff did not offer sufficient proof of the benefits it had received from Defendant’s deficient performance.

Projects Management Co. (“PMC”) sued DynCorp International LLC (“DynCorp”) for breach of contract after DynCorp mistakenly made payments totaling approximately 1.2 million dollars to the personal bank account of PMC’s Managing Director, Hussein Fawaz, rather than to PMC.

The evidence indicated that Fawaz had used at least some of the money that DynCorp deposited in his account to benefit PMC (by paying subcontractor and supplier expenses related to the contract). Still, PMC sought damages for the full amount it had deposited in Fawaz’s account, and refused to provide information that could have established how much of the money had been used to benefit PMC.

After DynCorp moved for summary judgment based in part on PMC’s failure to provide a proper measure of actual damages, PMC changed their demand for damages to $ 103,000. PMC claimed that this new amount took into account the money that Fawaz had used to PMC’s benefit. The only support for this assertion was a “conclusory affidavit” from the same PMC representative who had initially insisted that the proper measure of damages was the full 1.2 million dollars.

Applying Virginia law, the Fourth Circuit reiterated that the plaintiff in a breach of contract action has the burden to establish damages “with reasonable certainty.” To meet this burden, PMC would have had to offer evidence of the benefit it received, so that it could have been subtracted from the total amount deposited in Fawaz’s account to establish actual damages. At trial, PMC failed to offer evidence of the amount of benefit, relying instead on a “conclusory affidavit” that simply presented a final number. The Fourth Circuit did not consider this sufficient to establish damages to a reasonable certainty, and it affirmed the district court’s decisions to grant summary judgment and to deny reconsideration.

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