Stromberg Metal Works, Inc. v. University of Maryland

DAVIS, Judge. Stromberg Metal Works, Inc., appellant, appeals from an order of the Circuit Court for Prince George’s County, Shepherd, J. presiding, denying appellant’s motion for an award of attorney’s fees after the Court of Appeals granted appellant access to documents from the University of Maryland and document custodians, John Mitchell and Joyce Hinkle (collectively, hereinafter the University), pursuant to the Maryland Public Information Act (MPIA). Appellant filed this appeal, in which it presents the following issue: Whether the circuit court erred as a matter of law and abused its discretion in denying [appellant’s] Motion for Award of Attorney’s Fees[.] Because we perceive no abuse of discretion or legal error, we shall affirm the judgment of the circuit court. FACTUAL BACKGROUND 1 This appeal arises from a complaint filed by appellant for the University to produce reports from the University’s Department of Architecture, Engineering and Construction, “AEG Reports.” Appellant was a construction subcontractor ¹⁹² on a renovation project for the University’s Stamp Student Union, located in College Park, Maryland.

Specifically, appellant was hired to fabricate and install duct work for the mechanical contractor, John J. Kirlin, Inc., who was a subcontractor for Grunley Construction Co., Inc., the general contractor. During the renovation, Grunley Construction Co., Inc. filed a claim against the University seeking nearly 16 million dollars in additional compensation for its work, which included a claim in the amount of $400,000 for appellant. On August 14, 2002, under the MPIA, codified at § 10-611 et seq. of the State Government Article, appellant sought to inspect and copy monthly AEC reports “for and after January 2002.” 2 The University subsequently turned over the AEC Report copies to appellant with information redacted, particularly, “... the dollar amounts for the estimated cost to complete the [Stamp] project, the final cost forecast, the estimated budget variance, forecasted surplus or shortfall, and the current percentage of completion ...” Stromberg Metal Works, Inc. v. Univ. of Maryland, et al., 382 Md. 151, 156 , 854 A.2d 1220 (2004). Appellant filed a Complaint to Compel Production of Public Records For Inspection and Copying and Other Relief in November of 2002 to “enjoin the University, Mitchell and Hinkle from withholding the requested information [and], to permit [appellant] to inspect the monthly AEC Reports, ...” Id.

The University argued that the redacted information in the AEC Reports was protected by executive privilege and the deliberative process privilege and, additionally, constituted confidential commercial information that was also protected, and thus exempt from disclosure. Id. at 156-57 , 854 A.2d 1220 . The circuit court granted the University’s motion for summary judgment, and entered judgment for the University. Appellant appealed and the Court of Appeals granted certio-rari on its own initiative before briefing or argument in this ¹⁹³ Court.

Stromberg Metal Works, Inc. v. Univ. of Maryland, et al., 382 Md. 151, 156 , 854 A.2d 1220 (2004). The Court narrowed its focus to consider “whether the number on the AEC Report for total cost of the Stamp Project is subject to the asserted privileges ...” Id. at 158 , 854 A.2d 1220 . The Court of Appeals, in its opinion, detailed the AEC reports and their contents. The AEC Reports were prepared by John Mitchell, an employee in the AEC Department and project manager for the project.

He and Joyce Hinkle, a procurement employee in the Department of Procurement and Supply, were custodians of the reports. The AEC Report is in the form of two spread sheets detailing certain information about all of the University’s on-going construction projects and one spread sheet for each project that contains additional information regarding that project. The individual project report for the Stamp project shows such things as (1) the original funding authorization and budget for planning, construction, equipment, and other items, (2) approved funding and budget changes, (3) the current funding and budget for each category of expense, (4) the amount of the budget that is encumbered and liquidated to date, (5) the estimated amount needed to complete the project, (6) the final cost forecast, (7) any budget variance, and (8) the target and actual dates of the start of construction, substantial completion, and project completion. One of the consolidated spread sheets shows the projected budget for the project, the final cost forecast, the amount and percentage that the project is over budget, and how many weeks the project is behind or ahead of schedule.

Id. at 154-55 , 854 A.2d 1220 . In an opinion filed July 27, 2004, the Court held that the privileges did not apply to the redacted information within the documents appellant requested. Id. at 163-66 , 854 A.2d 1220 . Focusing specifically on executive privilege, the Court concluded, “[t]he records at issue do not contain any diplomatic, military, or security secrets and do not involve the deliberative ¹⁹⁴ process of the President or Governor.” Id. at 162 , 854 A.2d 1220 .

The Court also pointed to the fact that the AEC reports were prepared for the Director of the AEC, who the Court determined was not directly involved in the decision-making process, a vital factor in upholding the privilege. Id. at 163 , 854 A.2d 1220 . In regard to the deliberative process privilege, the Court referred to federal courts’ construction of the federal Freedom of Information Act, and noted that a communication will be protected if it is “pre-decisional,” meaning the records must be “reflecting advisory opinions, recommendations and deliberations comprising part of a process by which governmental decisions and policies are formulated.” Id. at 165 , 854 A.2d 1220 (quoting NLRB v. Sears, Roebuck & Co., 421 U.S. 132, 150 , 95 S.Ct. 1504 , 44 L.Ed.2d 29 (1975)). The Court held the redacted cost figure to be pre-decisional, but, because it was “largely factual in nature” and not indicative of deliberative and decision-making processes, the information could be disclosed. 3 Id. at 166 , 854 A.2d 1220 .

The Court then remanded the matter to the circuit court for it to order the University to allow appellant to inspect the specific information pertaining to the forecasted total cost of the Stamp Student Union project. Id. at 170 , 854 A.2d 1220 . On September 21, 2004, appellant filed in the circuit court a Motion for Award of Attorney Fees against the University under the MPIA, § 10 — 623(f) of the State Government Article. Appellant claimed that, since it substantially prevailed in its public information action against the University, it was eligible for and entitled to an award of reasonable attorney’s fees and litigation costs in the amount of $62,546. 4 The University ¹⁹⁵ countered that appellant did not demonstrate it was entitled to an award of attorney’s fees and costs.

At the motions hearing, held on December 10, 2004, appellant delineated the factors the court was to consider, and argued: The first factor being the benefit to the public. This was a significantly large publically [sic] funded construction project. That was the context in which the requests were made. The information was clearly a public record.

There’s no dispute about that. There never was a dispute that the information was a matter of the public record. What the University had done was requested, or applied erroneously specific exemptions to the Public Information Act. In this case, the benefit to the public was that there were significant cost and schedule overruns that were being incurred on this project, ....

And they were of a particular interest to the University community, to other contractors that were working on the project, as well as the media and the public at large.... Both [Appellant] and the public benefitted from exposing the fiscal problems and the significant schedule overruns that were being incurred on the project. And again, this was a large public construction project that was situated directly in the middle of the University’s flagship campus over in College Park.... As to the second factor, that’s the nature of [Appellant’s] interest in the records.

Again, [Appellant’s] interest in ¹⁹⁶ these records was legitimate. It wasn’t frivolous as the University suggests. [Appellant] was a sub-subcontractor not involved in the loop of the prime contract discussions that were going on under this project.... It had a desire to confirm whether or not the University had sufficient authorized public funding in place for a public construction project that was spiraling out of control. The project ... now that the records have been revealed, was ... more than 22 months behind schedule ... [and] approaching 30 percent overrun....

And the University is trying to suggest ... now that we have authorized funding after the fact, [Appellant] didn’t need to be worried about that at the time, even though it was working on the project and was unsure of how it would ultimately be paid, and, of course, the public’s interest in knowing how the management of this project was ongoing.... And then the last factor, ... is whether the University’s withholding of public records, ... had a reasonable basis in law,.... In this regard, the Court of Appeals’ decision is quite clear.... [W]hen the redacted data was revealed, [the Court held] it was impossible to tell what the individual’s views were. And, therefore, the redacted data was not subject to shielding under the deliberative process privilege that was claimed by the University. ... [T]he Court of Appeals unequivocally stated that there was no basis, not my words, the Court of Appeals’ words, no basis for mandatory denial existed under Section 106151 of the Public Information Act....

The University contended, in opposition: The first [factor] I’d like to mention is the nature of [Appellant’s] interest in the material.... It’s clear here that [Appellant’s] primary interest in this material was for its own commercial interest. Throughout all of the pleadings, all the filings, all the memos in this case, right up until the quote to the daily record [sic] after the Court of Appeals came out, [Appellant] has said, “We are interested in this information because we want to know if we’re going to get ¹⁹⁷ paid for our work.” It is very clear that [Appellant’s] interest in this case was commercial. And the case law says typically, in that situation, fees are not awarded, because the whole purpose of awarding fees is to motivate people who don’t have a commercial interest to seek public information ....

The second factor is the public benefit from the suit. And what [Appellant] is trying to do here is sort of refer generally to the public’s interest in the cost of a public project. And I agree absolutely the public has an interest in the cost of the project, but none of that information was withheld here. All that was withheld was this one subjective assessment of the project manager.

The factual information has all been produced.... There’s no public interest in this number [which represents the cost] that changes from month-to-month, which was the project manager’s assessment of what the claims might be worth here.... The final factor is [sic] the court should look at whether the position of the state agency in withholding the information was reasonable, or was it unreasonable? 5 ... As far as being legally reasonable, it’s clear that just because you lose does not mean you’re unreasonable.

If that were the case, then an award of fees would be automatic. But the cases, again, the Maryland cases and the federal cases state repeatedly it’s not whether you win or lose, it’s whether the position you took, the words used are was it a colorable position? Was it a position that was not entirely unjustified? And I would certainly argue here that clearly under those standards the position that the University took was not unreasonable.

And I say this by looking at the Court of Appeals’ opinion. ¹⁹⁸ The Court of Appeals actually agreed with much of the University’s reasoning. It agreed that the document, the information, could be protected by the deliberative process privilege, but agreed that the documents were pre-decisional. It said that — as I said, this was an instance where the project manager is making a subjective assessment of possibility about the claim. And the Court of Appeals said if it could separate out the project manager’s opinion, it would.

It would allow that to be protected. This whole ease turned on one subjective judgment, and that was the court’s belief that this number would not reveal the project manager’s subjective thinking about the claim.... And under those circumstances, I can’t believe that there’s any argument that the University did not take a reasonable, colorable, position in this case.... The court issued its Memorandum, Opinion and Order dated January 4, 2005, in which it determined: Awarding counsel fees, in an action such as this, involve [sic] a two-step process.

First, the Court must determine that [Appellant] has substantially prevailed in its action. Here, this Court finds that the requirement has been satisfied and [Appellant] is eligible for an award of reasonable attorneys [sic] fees. The second step in the process requires the Court to examine three factors to determine whether [Appellant] is entitled to reasonable attorneys [sic] fees. Those factors, set out in Kirwan v. The Diamondback, 352 Md. 74 , 721 A.2d 196 (1998), are: (1) the benefit to the public, if any, derived from the suit; (2) the nature of the complainant’s interest in the released information; and (3) whether the agency’s withholding of the information had a reasonable basis in law.

This Court, examining the aforesaid factors in light of the facts in this case, determines that: 1. There is no benefit to the public apart from what [Appellant] derived from this suit; ¹⁹⁹ 2. The nature of [Appellant’s] interest in the released information is private and pecuniary; and 3. The agency’s withholding of the information had a reasonable basis in the law.

Accordingly, the Court declines to award counsel fees to [Appellant].... ORDERED that the Motion for Counsel Fees ... be and hereby is DENIED. From the court’s Memorandum and Order dated January 6, 2005, appellant’s timely appeal followed. LEGAL ANALYSIS Appellant contends that the circuit court abused its discretion when it did not award attorney’s fees associated with appellant’s MPIA request.

It claims that the court misapplied the law and misconstrued the applicable factors in determining that appellant should not receive an award. The University counters that the court did not abuse its discretion in that it properly applied the factors to the instant case, and simply found that appellant was not entitled to an award of attorney’s fees. “A decision on whether to award counsel fees to an eligible party [under the MPIA] resides in the discretion of the trial judge.” Kline v. Fuller, 64 Md.App. 375, 388 , 496 A.2d 325 (1985). Accordingly, “absent a showing of abuse of that discretion or a predicate erroneous legal conclusion, the determination to award or deny such fees generally will not be disturbed on appeal.” Caffrey v. Dep’t of Liquor Control for Montgomery County, 370 Md. 272, 290 , 805 A.2d 268 (2002). The Court of Appeals summarized the General Assembly’s intent in its enactment of the MPIA: The [MPIA] establishes a public policy and a general presumption in favor of disclosure of government or public documents. [Sections 10-612(a) and (b) of the State Government Article] provide: (a) General Right to information. — All persons are entitled to have access to information