Appellate Court of Maryland: VEQ clause, unreasonable risk of harm, redevelopment

Municipal; VEQ clause

BOTTOM LINE: Where a vendor claimed it was entitled to an equitable adjustment in its contract with the state, because the state purchased less than 75 percent of estimated labor and equipment, its claim was rejected. Its decision to buy more items than the state purchased, and to let them sit idle, was not compensable.

CASE: In the Matter of Brawner Builders, Inc., No. 1451, Sept. Term, 2024 (filed May 29, 2026) (Judges FRIEDMAN, Shaw, Kehoe).

FACTS: When the state government enters into a procurement contract, it may provide estimates of the items that it will purchase from the contractor. If it does, it is required by law to insert a Variations in Estimated Quantities, or VEQ, clause into the contract. If the government purchases so much less of an item that the cost per unit increases, the VEQ clause allows the contractor to demand an equitable adjustment to the contract price for its increased actual costs.

In this case, Brawner Builders Inc. entered into a procurement contract with the State Highway Administration, or SHA, to provide labor and equipment for highway maintenance. At the end of the two-year term, Brawner invoked the VEQ clause to demand an equitable adjustment from SHA. Brawner claimed that SHA had purchased less than 75 percent of the estimated quantities of various contract items, and that these underruns had increased Brawner’s actual costs per unit. SHA denied Brawner’s demand. It asserted that Brawner had not established its claim that its actual costs per unit had increased.

The Maryland State Board of Contract Appeals, or MSBCA, denied Brawner’s appeal. It determined that, although Brawner had established that there was an underrun, Brawner had failed to establish that its actual costs per unit increased as the VEQ clause requires. The circuit court, however, determined that Brawner established that the underrun caused its actual costs per unit to increase. The circuit court reversed the decision of the MSBCA and remanded the case to the MSBCA with instructions to award Brawner an equitable adjustment.

LAW: This court has established a four-prong test for an underrun situation that a contractor must satisfy to prove their entitlement to an equitable adjustment under a VEQ clause: (1) the government purchased less than 75 percent of the estimated quantity of a contract item; (2) the actual cost per unit of the item that the government purchased exceeds the contract cost per unit; (3) the actual cost per unit of the item that the government purchased is greater than the per unit cost would have been for units purchased absent the underrun and (4) the underrun is the sole reason that the actual cost per unit increased.

The MSBCA determined that, based on Brawner’s calculations, SHA had purchased less than 75 percent of the estimated contract quantities of 13 items. This evidence satisfied the first prong. SHA concedes that this determination was correct.

The MSBCA determined that Brawner’s calculation failed to satisfy prongs (2) and (3). This court agrees with the MSBCA’s conclusion. Brawner’s calculation does not mention contract costs per unit or the cost of units purchased absent an underrun. Without these amounts, Brawner’s calculation cannot satisfy prongs (2) and (3) and show that its actual costs per unit exceeded these amounts.

Furthermore, the MSBCA determined that Brawner failed to satisfy prong (4). The MSBCA concluded that Brawner’s claimed “increased actual costs per unit” were caused not by the underrun, but by Brawner’s decision to buy more items than SHA purchased and to let them sit idle. This court agrees with the MSBCA. Brawner’s complex calculation obscures the fact that its “increased actual costs” were not caused by the underrun.

The contract provided that SHA would not pay Brawner for idle time. These costs are therefore not caused by an underrun in estimated contract quantities, but by Brawner’s decision to buy things that were excluded from payment under the contract. Brawner failed to satisfy prong (4).

By failing to satisfy the last three prongs, Brawner failed to establish the only basis for an equitable adjustment under the VEQ clause—that its actual costs per unit increased as a result of the underrun. Instead, Brawner demands payment for a bid that proved unwise in hindsight. That isn’t the function of the VEQ clause.

Thus, the MSBCA’s decision that Brawner failed to establish entitlement to an equitable adjustment under the VEQ clause was legally correct and was supported by substantial evidence. The decision of the circuit court is reversed and remanded with instructions to reinstate the decision of the MSBCA.

Judgment of the Circuit Court for Baltimore County reversed.

Negligence; unreasonable risk of harm

BOTTOM LINE: Where a woman who was struck by a vehicle that crashed through the store door alleged that the CVS pharmacy created an unsafe condition by keeping parking spaces near the entrance without devices to protect store patrons from vehicles, the circuit court erred when it granted the store’s summary judgment motion. The record evidence was sufficient to allow a reasonable jury to conclude that it knew, or by the exercise of reasonable care, could have discovered that the layout presented an unreasonable risk of harm to invitees using the entrance.

CASE: Moore v. CVS Pharmacy, Inc., No. 371, Sept. Term, 2025 (filed May 29, 2026) (Judges ARTHUR, Shaw, Meredith).

FACTS: Ashley Moore suffered injuries inside a CVS pharmacy store when a driver failed to stop a vehicle in a parking space and crashed through the glass entrance doors. She claimed that the alleged owners and operators of the store created an unsafe condition by keeping parking spaces near the entrance without bollards or other devices to protect store patrons from vehicles.

CVS Pharmacy Inc. moved for summary judgment, arguing that there was no evidence that it owned or operated the store premises. Maryland CVS LLC moved for summary judgment, arguing that there was no evidence that it received actual or constructive notice of an unsafe condition on the store premises. The circuit court granted both motions.

LAW: Ms. Moore claims that the store owners and operators created an unsafe condition by keeping parking spaces directed at the entrance without bollards or other measures to protect against vehicles. The relevant focus, therefore, is whether the evidence supports a conclusion that Maryland CVS knew or should have known that the existing layout presented a hazardous condition.

The record included expert testimony that supported an inference of constructive knowledge. At his deposition, John Boyd, an expert civil and environmental engineer with personal experience designing retail stores and parking lots, including a CVS store and a Walgreens store in other states, testified that the design of the Salisbury CVS store violated the standard of care for the engineering design of a commercial property.

A factfinder would be entitled to credit the expert testimony establishing that, at the time of the crash at the Salisbury CVS store, it was a standard practice to avoid placing or keeping head-in parking spaces directed at store entrances used by pedestrians at a high frequency without installing a bollard or other vehicle-stopping barrier. Accordingly, one could reasonably conclude that Maryland CVS knew or should have known about the standards described by Mr. Boyd and about dangers that might arise from failing to comply with those standards. Knowledge of standards “as common and fundamental” as Mr. Boyd described “could well be imputed to” Maryland CVS.

This court thus concludes that Maryland CVS was not entitled to judgment in its favor as a matter of law. Maryland CVS was not entitled to summary judgment merely because the parking space had a wheel stop—something which, by all accounts, would not impede a moving vehicle.

Maryland CVS was not entitled to summary judgment merely because there were no prior vehicle crashes at the same store or at certain nearby CVS stores. The evidence in the record was sufficient to allow a reasonable jury to conclude that Maryland CVS knew, or by the exercise of reasonable care, could have discovered that the arrangement of the parking spaces and entrance of the Salisbury CVS store presented an unreasonable risk of harm to invitees using the entrance.

CVS Pharmacy moved for summary judgment based on the assertion that it does not own or operate the Salisbury CVS store. The circuit court was persuaded by CVS Pharmacy’s argument that Maryland CVS was the sole operator of the store. This too was wrong. Considered in the light most favorable to Ms. Moore, the evidence adequately supported the conclusion that CVS Pharmacy operates, manages or controls the Salisbury CVS store.

CVS Pharmacy contends that the evidence failed to establish that this agency relationship extends to the design or maintenance of the parking lot. This court disagrees. Testimony indicated that the control that CVS Pharmacy exercises over individual CVS stores includes, at a minimum, decisions about repairs and maintenance of physical structures and facilities inside and outside the store.

The evidence in the record, considered in the light most favorable to Ms. Moore, thus generated a genuine dispute of material fact about whether CVS Pharmacy operated or managed the Salisbury CVS store at the time of the accident. The actual extent of CVS Pharmacy’s control over the store is a triable issue of fact.

Judgment of the Circuit Court for Wicomico County reversed.

Zoning; redevelopment

BOTTOM LINE: Where parties challenged the proposed redevelopment of property near the Forest Glen Metro station, but each of their arguments was rejected by the court, the resolutions were affirmed.

CASE: Forest Grove Citizens Association v. Forest Glen Medical Center, LLP, No. 2475, Sept. Term, 2024 (filed May 29, 2026) (Judges LEAHY, Reed, McDonald).

FACTS: Forest Grove Citizens Association, Nandini Arunkumar, Pamela Stanziani and Friends of Sligo Creek filed the underlying petitions for judicial review in the circuit court. Appellants challenged a set of resolutions by the Montgomery County Planning Board of the M-NCPPC, approving a preliminary plan, site plan and forest conservation plan.

These plans, submitted by developer JLB Realty LLC, involve the proposed redevelopment of a 3.78-acre property on Georgia Avenue owned by Forest Glen Medical Center LLP, or FGMC. After a hearing, the circuit court affirmed the resolutions.

LAW: As a preliminary matter, appellants contend that the Planning Board’s resolutions were “void as a matter of law.” Appellants claim that FGMC’s Aug. 23, 2022, letter, which authorized JLB Realty to act on FGMC’s behalf, expressly limited such authorizations to JLB Realty’s actions as a contract purchaser of the property. Therefore, according to appellants, “there was no legally cognizable applicant” after JLB Realty’s purchase contract with FGMC expired on March 5, 2024—two days before the board hearing—and, by extension, “there was no valid application for the Planning Board to consider, let alone approve.” This court disagrees.

At the outset, this court finds no legal authority—statutory or otherwise—to support appellants’ contention that a subdivision or site plan applicant who happens to be the contract purchaser of the property in question is precluded from pursuing the subdivision or site plan application upon the expiration of the purchase contract. Similarly, appellants can point to no law that requires that the developer of a property must have any ownership interest in the property, or any contract or option to purchase the property. Rather, when read as a whole, the County Code consistently tethers a non-owner’s standing as an “applicant” to the party’s authorization to file the application.

The regulations similarly contemplate that the entities involved in a project may shift over time—and even ownership of the land itself may change—without undermining the validity of the application. Furthermore, the County Code does not contain any provision authorizing, much less requiring, the Planning Board to dismiss a site plan or preliminary plan when an applicant loses an interest in the project after filing the application. Because there is no dispute that JLB Realty was properly authorized by FGMC to file the plans, the expiration of the purchase contract did not preclude the Planning Board from considering and approving the plans.

Above all, the record in this case established that at the time of the Board Hearing, JLB Realty maintained the actual authority to pursue—and otherwise act in furtherance of—the plans as the developer and agent of FGMC. For all of these reasons, the expiration of JLB Realty’s purchase contract with FGMC did not extinguish JLB Realty’s authority to pursue any and all applications and approvals on behalf of FGMC in connection with redevelopment of the property. Accordingly, the circuit court’s determination that the Planning Board’s Resolutions are not void as a matter of law is affirmed.

Appellants next claim that neither the site plan nor the preliminary plan “substantially conform[ed]” to the recommendations of the sector plan, which, according to appellants, “must be treated as a true regulatory device and interpreted in a similar manner to any other authoritative statute.” This court concludes that the plain language of the governing statutes in this appeal does not reflect a legislative intent to mandate that the plans at issue strictly comply with the sector plan; but rather, that the plans “substantially conform” to the sector plan.

Returning to the record on appeal, substantial evidence supports the Planning Board’s determination that the preliminary plan and site plan substantially conformed to the sector plan’s recommendations. Accordingly the approval of the preliminary plan and site plan is affirmed.

Appellants finally contend that there is not substantial evidence in the record to support the Planning Board’s grant of the tree variance request associated with the forest conservation plan. The court again disagrees. This court finds substantial evidence in the record to support the Planning Board’s determination that the denial of the requested variance would deprive FGMC of “a use of the property that is both significant and reasonable.”

Judgment of the Circuit Court for Montgomery County affirmed.