Barufaldi v. Ocean City

EYLER, DEBORAH S., J. This appeal and cross-appeal arise from an employment contract dispute between the Ocean City Chamber of Commerce (“the Chamber”), the appellee/cross-appellant, and its former executive director, Daniel J. Barufaldi, the appellant/cross-appellee. Barufaldi resigned from the Chamber in January of 2007 and thereafter brought an action in the Circuit Court for Worcester County against the Chamber and members of its Board of Directors (“the Board”). He alleged breach of contract and violations of the Maryland Wage Payment and Collection Law (“WPCL”), Md.Code (2008 Repl. Vol., 2009 Supp.), §§ 3-501 et seq. of the Labor and Employment Article (“LE”), and, as to the individual defendants, negligent misrepresentation.

All of Barufaldi’s claims related to the Chamber’s failure to pay incentive-based compensation under his employment contract (“the Agreement”). The Chamber counterclaimed for breach of contract premised on Barufaldi’s alleged failure to perform his duties and his premature termination of the Agreement. After several of the individual defendants were dismissed, the case was tried to a jury for three days. At the close of Barufaldi’s case, the trial court granted judgment in favor of the remaining individual defendants on all counts.

At the close of all the evidence, the trial court granted judgment for Barufaldi on the Chamber’s counterclaim. Barufaldi’s breach of contract and WPCL claims against the Chamber went to the jury. The jury found that the Chamber had breached the Agreement and that Barufaldi was owed $60,000 in unpaid wages. It further found that the Chamber had violated the WPCL and that its failure to pay Barufaldi was not the result of a bona fide dispute.

The jury declined, however, to award ⁷ Barufaldi treble damages under the WPCL. 1 The Chamber filed post-trial motions for judgment notwithstanding the verdict (“JNOV”), for remittitur or a new trial on damages, and for a new trial. All were denied. Barufaldi filed a post-trial motion for attorneys’ fees under the WPCL. His motion was denied in its entirety.

Barufaldi timely appealed from the denial of his motion for attorneys’ fees. He presents one question for review, which we have rephrased: Did the trial court err in denying his motion for attorneys’ fees made pursuant to the WPCL? The Chamber timely cross-appealed from the denial of its post-trial motions, the jury’s finding that there was no bona fide dispute as to Barufaldi’s entitlement to incentive pay, and the trial court’s denial of certain requested jury instructions. It presents five questions for review on cross-appeal, which we have reworded and reordered: I. Did the trial court err in dismissing the Chamber’s counterclaim?

II

Did the trial court err in failing to instruct the jury on the effect of Barufaldi’s alleged breach of the Agreement on his entitlement to recover?

III

Did the trial court err in failing to instruct the jury on rescission and novation?

IV

Did the trial court err in denying the Chamber’s motion for judgment and JNOV motion on the issue of a bona fide dispute under the WPCL? V. Did the admission into evidence of an unredacted letter, contrary to an order of the trial court, deprive the Chamber of a fair trial? ⁸ For the reasons to follow, we answer the Chamber’s questions in the negative and therefore shall affirm the judgments. We answer Barufaldi’s question in the affirmative and therefore shall remand for further proceedings on the motion for attorneys’ fees. FACTS AND PROCEEDINGS The Chamber is an association of businesses in Ocean City.

Its purpose is to increase tourism and business opportunities in the community for the benefit of its members. It is composed of a non-profit entity operating a visitor center funded primarily by membership dues and grants and a for-profit entity selling the Ocean City Guide Book (“the Guide”). Sales of the Guide and advertisements in the Guide are the Chamber’s major source of revenue. In the fall of 2005, the Chamber interviewed and hired Barufaldi as its new executive director, at a base salary of $52,000 per year.

He began work on November 1, 2005. Immediately prior to accepting the Chamber’s offer of employment, Barufaldi was working as executive director of the Ken-Tom Chamber of Commerce in upstate New York. A little over two months after beginning his employment, Barufaldi and the Chamber executed the Agreement. It was backdated to November 1, 2005.

In its introductory paragraph, the Agreement defines “Employer” to mean the Board, the executive committee of the Board, and officers of the Chamber. Paragraphs 1 and 2 set forth Barufaldi’s job responsibilities by reference to an attached job description and a list of duties. They obligate Barufaldi to perform these duties diligently and in good faith. Paragraph 3 states that the Agreement is for a three-year term — from November 1, 2005, until October 31, 2008 — and provides for automatic renewal absent written notice by either party to the Agreement.

Paragraph 4, titled “COMPENSATION OF EMPLOYEE,” reads as follows: ⁹ a) As compensation for the services provided and duties performed by Employee under this Agreement, Employer shall pay Employee an annual base salary of fifty-two thousand dollars ($52,000.00) for each of the three (3) years covered by this Agreement. Such annual base salary shall be paid to Employee in bi-monthly installments. b) As additional compensation, Employee shall be entitled to incentive-based compensation for each quarter in accordance with the terms of this subparagraph. Employer and Employee shall, within sixty (60) days after the effective date of this Agreement, agree upon a base line net revenue figure, based upon historical financial documentation, for each quarter. Employee’s incentive compensation for the first quarter of each year shall be equal to actual net revenue for the first quarter minus the base line net revenue figure established for the first quarter, multiplied times .25.

Employee’s incentive compensation for the second quarter of each year shall be equal to [ (actual year-to-date net revenue) minus (year-to-date base line net revenue) -r 2] multiplied by 25%. Employee’s incentive compensation for the third quarter of each year shall be equal to [ (actual year-to-date net revenue) minus (year-to-date base line net revenue) 3] multiplied by 25%. Employee’s incentive compensation for the fourth quarter of each year shall be equal to [ (actual year-to-date net revenue) minus (year-to-date base line net revenue) -r 4] multiplied by 25%. This incentive compensation shall be paid to Employee on a quarterly basis within a reasonable period of time after the close of each quarter.

Such incentive compensation shall be in lieu of any increases in the annual base salary and performance bonuses. Employee shall not be entitled to any compensation other than the annual base salary set forth in paragraph 4(a) and the incentive compensation set forth in this subparagraph. For purposes of this provision, “net revenue” shall mean revenue net of operating expenses and other deductions from gross revenue that are customarily made from an accounting standpoint to reach a net revenue figure. Major capital investment expenditures of a ¹⁰ non-recurring nature shall not be included for purposes of determining net revenue hereunder (i.e., shall not be deducted from gross revenue to arrive at net revenue).

In addition, increases in dues rates shall not be included in gross revenue for purposes of determining Employee’s incentive compensation hereunder. From the effective date of this Agreement through August 31, 2006, Guide and Chamber dues shall not be included as income or revenue for purposes of determining “net revenue” and calculating incentive-based compensation hereunder. Employee acknowledges and understands that achieving increases in net revenue is an objective which shall not be given priority by Employee over the duties and services which Employee agrees to diligently provide pursuant to paragraphs 1 and 2 above. Employee’s activities shall not be disproportionately geared toward increasing quarterly net revenues in a way that is detrimental to Employee’s diligent and full performance of the duties and services listed in Exhibit A.

(Emphasis added.) Subparagraphs “c” and “d” further state that any incentive-based compensation ceases immediately if the Agreement is terminated for cause, that Barufaldi may participate in the Chamber IRA plan, and that Barufaldi and his wife would receive health insurance coverage through the Chamber. The language of the Agreement allowed it to be terminated by the Chamber for cause only. There was no such corresponding termination right for Barufaldi. Barufaldi asserts that he repeatedly asked then-Board president Neil Hitchcock to meet with him to determine the “base line net revenue figure” required under the Agreement, but Hitchcock refused to do so.

In September of 2006, Kathy Panco replaced Hitchcock as president of the Board. Barufal-di then attempted to reach an agreement about this figure with her. While Panco initially seemed willing to work with Barufaldi to determine the “base line net revenue figure,” no agreement was reached. There is no dispute that a “base line net revenue figure” never was established during Barufaldi’s employment by the Chamber. ¹¹ On October 31, 2006, Barufaldi met with the members of the Board and they presented him with the proposed terms of a new contract.

The parties hotly dispute the genesis of this meeting and what occurred there. According to the Chamber, Barufaldi had requested a new contract because he had concluded that the Agreement’s compensation provisions were unworkable. The Chamber offered him the choice to continue under the Agreement or enter into the new contract. According to Barufaldi, he wanted the Chamber to honor the terms of the Agreement and did not request a new contract.

The Board, unwilling to pay him the incentive compensation to which he was entitled under the Agreement, gave him an ultimatum: “take it or leave it.” He understood this to mean that the Board members had no intention of honoring his existing Agreement and that he would have no choice but to accept the new contract terms. Under the pertinent terms of the proposed new contract, Barufaldi’s base salary would increase to $65,000 annually, with no opportunity to earn incentive pay, and the Chamber would be permitted to terminate his employment without cause with 30 days’ notice. Also, his wife no longer would be maintained on the Chamber health insurance policy. According to the Chamber, Barufaldi indicated his willingness to accept the new contract.

According to Barufaldi, he never agreed to the new contract. The parties agree that Barufaldi never signed the new contract, which was not drafted until after the Board meeting at which its proposed terms were presented to Barufaldi. A little less than three months later, on January 23, 2007, Barufaldi tendered his letter of resignation, effective immediately, to Panco. Unbeknownst to the Chamber, prior to his resignation, Barufaldi had accepted an offer of employment from the Charles County Chamber of Commerce.

On April 3, 2008, Barufaldi filed the instant action against the Chamber, Hitchcock, and five other Board members, asserting, inter alia, breach of contract and violations of the WPCL. Both counts were premised on Barufaldi’s claim that ¹² the Chamber wrongfully had withheld incentive-based compensation due and owing under the Agreement. He sought treble damages, costs, and attorneys’ fees pursuant to the WPCL. On January 30, 2009, the Chamber filed its counterclaim asserting breach of contract and anticipatory breach of contract.

The Chamber alleged that Barufaldi had materially breached the Agreement by failing to perform his duties, actively seeking employment elsewhere during the term of the Agreement, and failing to complete the three-year term. The anticipatory breach count was premised on Barufaldi’s application for employment with the Charles County Chamber of Commerce. On April 15-17, 2009, the case was tried to a jury. As noted, supra, Barufaldi voluntarily dismissed three of the individual defendants from the case at the start of trial and the court granted a motion for judgment in favor of the remaining two individual defendants at the close of Barufaldi’s case.

Barufaldi testified and called three witnesses: John Gehrig, a Board member; Panco; and Andrew Smith, a CPA who was qualified as an expert in accounting. At the close of Barufaldi’s case, the Chamber moved for judgment on the WPCL claim, arguing that there was no competent evidence from which a reasonable juror could find the absence of a bona fide dispute as to whether Barufaldi was owed wages. The Chamber argued the absence of a bona fide dispute is an essential element of the WPCL claim. 2 The Chamber did not move for judgment on the breach of contract count. The motion was denied.

The Chamber called five current and former Board members, including the former president of the Board, Hickman; Cindy Wood, the Chamber’s bookkeeper during Barufaldi’s tenure; the current executive director of the Charles County Chamber of Commerce; Tracy Lukasik, the executive director of the Ken-Tom Chamber of Commerce, who had replaced ¹³ Barufaldi; and its own expert in accounting, Luis Ruebel-mann. Barufaldi also testified in rebuttal and the Chamber recalled Lukasik in surrebuttal. The major issues at trial were the meaning of the term “net revenue” under the Agreement and whether Barufaldi was entitled to receive any incentive-based pay under the express terms of the contract, ie., whether he increased “net revenue” as the parties understood that term. 3 At the close of all the evidence, Barufaldi moved for judgment on the Chamber’s counterclaim, arguing that the Chamber had failed to prove it incurred any damages as a result of the alleged breach. The court granted the motion on that basis.

The Chamber moved for judgment on the breach of contract count and renewed its motion for judgment on the WPCL. The court denied both motions. The remaining counts went to the jury. The jury deliberated for a little over two hours before returning a verdict in favor of Barufaldi on both counts, awarding him $60,000 in damages.

As discussed, supra, it also decided in favor of Barufaldi on the bona fide dispute question, finding that there had not been a bona fide dispute as to his entitlement to incentive-based compensation. We shall include additional facts in our discussion of the issues. Because it is logical to do so, we shall begin our analysis with the cross-appeal. ¹⁴ CROSS-APPEAL I. & II. Counterclaim and Material Breach Doctrine The first two issues are interrelated, so we shall consider them together.

The Chamber argues that the circuit court erred in granting judgment in favor of Barufaldi on its counterclaim for breach of contract and anticipatory breach premised on Barufaldi’s premature termination of the Agreement. 4 The Chamber also argues that the trial court erred by declining to instruct the jury that, to find it liable for breach of contract, the jurors first had to find that any failure on its part to pay incentive compensation under the Agreement was a material breach of the Agreement. Barufaldi counters that the circuit court correctly determined that the Chamber did not prove that any damages flowed from his alleged breach of the Agreement and thus properly granted judgment in his favor on the counterclaim. Moreover, he maintains that, even if the Chamber did prove damages, it could not recover because, after the Chamber breached its obligation to pay incentive pay, Barufaldi no longer was obligated to perform under the Agreement. As to the proposed jury instruction on material breach, Barufaldi argues that the instructions actually given fully covered the relevant legal authority. ¹⁵ As noted above, at the close of all of the evidence, counsel for Barufaldi moved for judgment on the counterclaim, arguing that the Chamber had not proven that it had sustained any damages as a result of his alleged breach of the Agreement.

The Chamber countered that there was testimony from Panco that she “donated” her time to the Chamber in the almost six months between Barufaldi’s resignation in January of 2007 and the hiring of his replacement in July of 2007. That led to the following colloquy: THE COURT: Well, that is a rather ... there[ ] is no doubt that people had to put in extra time. But as far as any specific damages, the case is lax on that. So Pm going to grant the motion. [COUNSEL FOR THE CHAMBER]: Well, there is one item of damage, and that is, there was testimony from Todd Ferrante and Ms. Panco, that the person they did employ had to be employed at a higher salary because of the loss of Mr. Barufaldi.

And the previous [administrative assistant], Sandee Sharp, had a salary of $39,000, and they had to hire somebody for $45,000. So there is a $6,000 damage issue right there. THE COURT: I’ll grant the motion. We review the decision to grant the motion for judgment on the counterclaim under the following standard: When determining whether there is sufficient evidence to submit an issue to the jury, the trial court views the evidence and all inferences fairly deducible therefrom, in a light most favorable to the party opposing the motion.

Impala Platinum Ltd. v. Impala Sales, 283 Md. 296, 327 , 389 A.2d 887 (1978). If there is any competent evidence, however slight, legally sufficient as tending to prove [damages], the weight and value of such evidence should be left to the jury. Beahm v. Shortall, 279 Md. 321, 324 , 368 A.2d 1005 (1977). Schreiber v. Cherry Hill Constr.

Co., Inc., 105 Md.App. 462, 494-95 , 660 A.2d 970 (1995). Thus, we must determine whether the Chamber introduced any competent evidence that it ¹⁶ incurred damages as a result of Barufaldi’s resignation. If it did, the motion for judgment should not have been granted on that basis. Evidence about the Chamber’s damages was adduced during the testimony of Panco and Todd Ferrante, respectively president and vice-president of the Board at the time of Barufaldi’s resignation.

Panco testified that she was completely surprised when Barufaldi resigned and that she immediately had to step in to keep the Chamber running. To do so, she had to divert time away from her real estate business, spending four or five hours a day working on Chamber business instead. She valued the “[d]onat[ion of her] life and services and time to the Chamber” at more than $50,000. In addition, Panco testified that the Chamber hired a replacement for its administrative assistant, 5 Sandee Sharp, in the interim between Barufaldi’s resignation and the hiring of his replacement.

According to Panco, the Chamber offered Sharp’s replacement an annual salary of $45,000 — $6,000 more than Sharp had been earning — because the replacement would have to “assume some of the [executive director’s] duties to help me out.” Todd Ferrante testified consistent with Panco concerning the replacement of Sharp. He also testified that Barufaldi’s resignation “took a toll on the Chamber as far as its financial capabilities.” He was unable to testify to an “exact figure[ ],” however. Similarly, he testified that Chamber revenues declined in the interim between Barufaldi’s resignation and the hiring of his replacement, but was unable to offer even a “ballpark figure” as to how much the revenues had declined. We agree with the trial court that the evidence of Panco’s “donated” time was not probative of damages to the Chamber.

While Panco personally may have suffered a loss ¹⁷ as a result of her decision to step in and take over the role of executive director, the Chamber did not suffer damages as a result. Thus, the sum of the evidence presented by the Chamber on damages was that it had hired a new administrative assistant at a slightly higher salary because she might have to take on additional duties owing to Barufaldi’s departure. We are persuaded that this evidence was legally sufficient to establish damages and Barufaldi’s motion for judgment should not have been granted on the basis offered. Our inquiry is not over, however, because, for the Chamber to have been prejudiced by the court’s ruling, there also must have been evidence of liability on Barufaldi’s part.

Barufaldi maintains that the Chamber’s breach of the incentive pay provisions of the Agreement was material and thus ended his obligation to continue performing under the Agreement so that, as a matter of law, his resignation was not a breach of the Agreement. The Chamber counters that, even if it breached the Agreement by not paying incentive pay, its breach was not material and Barufaldi’s subsequent termination of the Agreement was a breach that caused it to sustain damages. It further asserts that Barufaldi’s material breach deprived him of any right to recover under the Agreement. The latter argument is the subject of the Chamber’s claim of error with respect to the jury instructions.

The trial court instructed the jury as follows with respect to Barufaldi’s breach of contract claim: A contract is an agreement between two or more parties creating rights or obligations. A contract is to be interpreted so as to give effect to the parties’ intentions at the time the contract was made. Usually these intentions are shown by the words and terms used in the contract. These words and terms are to be given their ordinary meaning unless such meaning will have an unreasonable result.

Each sentence of the contract should be interpreted in view of the other sentences of the contract. Those words and terms of a contract which have a technical meaning or are used in the trade or by custom to mean something ¹⁸ different from the meaning the words or terms have in ordinary usage should be given the technical trade or custom meaning if the contract was made in view of this technical meaning or trade or custom usage, and the technical meaning or trade or custom usage was either generally used or was actually known to the parties. In an action for a breach of contract, the Plaintiff may recover those damages which naturally arise from the breaking of the contract. Those damages are the consequences of breaking the contract which the Defendant had reason to foresee would take place or such damages as [ ] may reasonably be supposed to have been contemplated by both parties when they made the contract.

At the conclusion of the instructions, counsel for the Chamber objected as follows: We requested an instruction as to the breach of contract that we allege that Mr. Barufaldi committed at the time that he precipitously left the contract, which was in breach of the term of the contract, which is a breach. We requested an instruction to the effect that Mr. Barufaldi’s breach should be considered by the jury in terms of whether he should be entitled to any money, assuming that the jury also found that there is a breach on behalf of the employer. The Court declined to give that instruction. Second, we asked for an instruction that the alleged breach that [ ] the Chamber [ ] failed to live up to the contract was not a material breach pursuant to the terms of the contract.

The terms of the contract state, in paragraph 4(b), that [“]the employee acknowledges and understands that achieving increases in net revenue is an objective which shall not be given priority by the employee over the duties and services which the employee agrees to diligently provide pursuant to paragraph[s] 1 and 2 above. The employee’s activities shall not be disproportionately geared to increasing quarterly net revenues in a way that is detrimental to ¹⁹ the employee’s diligent and full performance of the duties and services listed in Exhibit A.[”] We would suggest that the failure, alleged failure to pay any incentive quarterly payments is incidental and not material, and consequently, would not relieve the Plaintiff from breach of contract. We will not reverse a judgment for a court’s refusal to give a requested instruction “so long as the law is fairly covered” by the instructions as given. Farley v. Allstate Ins.

Co., 355 Md. 34, 46 , 733 A.2d 1014 (1999); see also Md. Rule 2-520(c) (“The court need not grant a requested instruction if the matter is fairly covered by instructions actually given.”). Our inquiry on appeal is, thus, “ “whether the requested instruction was a correct exposition of the law, whether that law was applicable in light of the evidence before the jury, and finally whether the substance of the requested instruction was fairly covered by the instruction actually given.’” Farley, supra, 355 Md. at 47 , 733 A.2d 1014 (quoting Wegad v. Howard St. Jewelers, 326 Md. 409, 414 , 605 A.2d 123 (1992)). It is undisputed that Barufaldi contracted for employment with the Chamber for a term of three years and that the Agreement permitted the Chamber to terminate him for cause, but included no corresponding right for Barufaldi to terminate the Agreement prior to the conclusion of its term. Thus, absent a material breach by the Chamber excusing further performance on his part, Barufaldi’s resignation a little more than a year into the Agreement would establish liability on his part.

The Chamber contends that any breach on its part of the incentive pay provisions of the Agreement was immaterial. It relies on the doctrine of substantial performance, arguing that because it compensated Barufaldi at his base rate for the 14 months it employed him, it substantially complied with the Agreement. It further contends that language in the Agreement stating that “achieving increases in net revenue is an objective which shall not be given priority by Employee over ²⁰ the duties and services which Employee agrees to diligently provide,” makes plain that the incentive pay provisions were not central to the purpose of the Agreement. Thus, according to the Chamber, even if it committed a partial breach by failing to set a “base line net revenue figure” and not paying incentive compensation, Barufaldi remained obligated to perform.

Accordingly, Barufaldi’s subsequent breach of the Agreement deprived him of a right to recover. The flaw in this argument is that Barufaldi’s right to compensation earned prior to his resignation did not depend upon any future performance on his part. “[A]n employee who has performed services required in an employment contract has a vested right to the compensation he or she has earned[.]” Richard A. Lord, 19 Williston on Contracts 54:35 at 520 (4th ed.2001). 6 Thus, regardless of whether the Chamber’s breach was material, justifying Barufaldi’s termination of the Agreement, or incidental, meaning that Barufaldi materially breached the Agreement by terminating it, he would be entitled to any compensation already earned prior to his resignation. The jury calculated his earned, but unpaid, incentive compensation to be $60,000. The Chamber’s reliance upon the substantial compliance doctrine also is misplaced.

The Court of Appeals explained this doctrine as follows in Speed v. Bailey, 153 Md. 655, 660-61 , 139 A. 534 (1927): “It is not every partial failure to comply with the terms of a contract by one party which will entitle the other party to abandon the contract at once. In order to justify an abandonment of it and of the proper remedy growing out ²¹ of it, the failure of the opposite party must be a total one — the object of the contract must have been defeated or rendered unattainable by his misconduct or default. For partial derelictions and non-performance in matters not necessarily of first importance to the accomplishment of the object of the contract, the party injured must seek his remedy upon the stipulations of the contract itself. Before partial failure of performance of one party will give the other the right of rescission, the act failed to be performed must go to the root of the contract, or the failure to perform the contract must be in respect to matters which would render the performance of the rest a thing different in substance from that which was contracted for.” “When a covenant goes only to a part of the consideration of a contract, is incidental and subordinate to its main purpose, and its breach may be compensated in damages, such a breach does not warrant a rescission of the contract, but the injured party is still bound to perform his part of the agreement, and his only remedy for the breach consists of the damages he has suffered therefrom.” By this rule, compensation in damages for slight breaches is substituted for the remedy afforded by rescission of the whole contract.

The rule rests upon the principle that greater equity will be maintained between the parties by compelling the one, injured by slight variances or failure to comply literally with all of the terms of the contract, to accept the contract as performed and recover such damages occasioned by the breach as he may be able to show. A departure from this rule would result in permitting any deviation, no matter how minute or unimportant, to be made the basis for the rescission of the contract, and allowing the one so rescinding to obtain an unfair and unconscionable advantage by electing to rescind or retain the bargain, as self-interest might dictate. The great weight of authority shows a recognition of this principle by the courts, although they are not entirely harmonious. The real and substantial ²² difficulty has been in applying the principle to the varying facts of each particular case.

The rule has been more ■widely applied to building contracts, for the reason that it was found to be inequitable to allow the owner of the land to rescind a contract for the erection of a building upon his land, and thereby retain the benefits resulting from a substantial performance of the building contract, without any obligation to pay therefor. (Quoting 6 R.C.L. 926-927.) (Emphasis added.) In the instant case, the Agreement was not rescinded, 7 it was canceled. See Sarah Howard Jenkins 13 Corbin on Contracts § 67.2 at 8-9 (2003) (defining “cancellation” as when either party puts an end to a contract because of a breach by the other). Whether Barufaldi was entitled to rescind the Agreement never was at issue.

As is clear from the above discussion, however, he maintained his right to seek damages for the breach of the compensation provisions of the Agreement regardless of whether he also possessed a right of rescission or a right of cancellation. See also Hartford Accident & Indem. Co. v. Sherwood Brands, Inc., 111 Md.App. 94 , 119 n. 13, 680 A.2d 554 (1996) (“The remedy for a partial breach is the damages suffered as a result of that breach.”), rev’d on other grounds, 347 Md. 32 , 698 A.2d 1078 (1997). That he also may have subsequently breached the Agreement and caused damages is properly the subject of the Chamber’s counterclaim and does not affect his independent right to recover for a breach of the compensation provisions for work already performed. ²³ The Chamber’s right to recover on the counterclaim, however, is dependent upon whether its breach was material.

If the Chamber materially breached the Agreement, Barufaldi was excused from further performance and, accordingly, could not have breached the Agreement when he resigned in January of 2007. Barufaldi maintains that the jury verdict as returned in his favor is decisive on this point. We disagree. The jurors were not instructed on material breach.

They were instructed merely that Barufaldi “may recover those damages which naturally arise from the breaking of the contract.” Their verdict may not fairly be understood to pass on the issue of materiality. A breach is material when it “is such that further performance of the contract would be ‘different in substance from that which was contracted for’.” Dialist, supra, 42 Md.App. at 178, 399 A.2d 1374 (1979) (quoting Traylor